A state audit found the water and sewer authority that supplies Jersey City hiked rates big time over a nine-year period even as they piled up a multi-million dollar surplus.

New Jersey State Comptroller Phillip Degnan says the Jersey City Municipal Utilities Authority did not set annual water and sewer rates after examining whether a rate hike is required.

"The utilities authority agreed with us on that, and is committed to changing their practice in that regard."

The state audit took a look at the utility's operations and finances from 2006 to 2015. The audit found that sewer rates increased by 93.8 percent and water rates increased by 38.9 percent. During that same time, the comptroller says the JCMUA's year-end net position grew from $10.1 million in 2006, to $86.4-million in 2015. That is a whopping 755 percent increase.

The audit also revealed the former authority executive director gave himself raises and started a buy-back program for unused sick and vacation time for administrative employees, including himself.

"Customers paid more for their water and sewer services each year, when JCMUA's board and management failed to ensure sufficient justification or need for any of these rate increases," Degnan said.

Degnan says the JCMUA will submit a corrective action plan within 90 days "detailing how they plan to address each of the issues that were identified in the audit report. And we will examine that."

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