OF JERSEY CITY, NEW JERSEY
When it was signed in 1996, the five-year agreement between the City of Jersey City and United Water Resources for the complete management, operation and maintenance of the City's water utility represented the nation's largest public-private management contract for a municipal water utility. Today, according to Jersey City officials, it also stands as a model of innovation, quality and efficiency.
The partnership that was created gave United Water responsibility for the daily operation and management of 5,700 acres of watershed, two reservoirs with capacity of 11.3 billion gallons, an 80-million-gallon-per-day water treatment plant, and maintenance of a 23-mile-long aqueduct, 275 miles of water mains, 3,500 fire hydrants, and 32,000 meters, as well as billing, collections and customer service. The water system, which serves 240,000 people, is owned by Jersey City, and the City continues to set the water rates.
The partnership contains innovative incentive clauses for increasing collections . revenue to the City . and for the sale of wholesale water to new customers. Another cost-saving feature is a subcontract with Public Service Electric & Gas for meter reading services: The agreement with the electric and gas utility eliminates the need for multiple visits to a residence for meter readings.
Through United Water's improvements in meter reading, billing and collections, $20.9 million in additional water and sewer revenue has been generated for the City. Over the first 29 months of the contract, this represents a 20 percent revenue increase.
Jersey City residents also enjoy better water quality since the implementation of the United Water agreement. For the first time since new regulations were imposed in 1992, the City's water complies with the U.S. Environment Protection Agency's rules on lead and copper.
Other New Jersey Department of Environmental Protection compliance issues which have been addressed at the water treatment plant include the provision of standby power and the reconstruction of the plant effluent vault which protects the filtered water from potential contamination by the unfiltered raw water.
Another major accomplishment under this contract was the creation of a unique employee protection package. City employees are allowed to retain their City pensions and benefits . essentially remaining City employees . while working for United Water. Employees assigned to the water project are Aleased@ to United Water, and the company reimburses the City for their wages and benefits.
Since the formation of this partnership with United Water, Jersey City's financial benefit totals $30 million . a combination of the initial concession fee of $2.5 million, increased revenue, and operational savings of $3.5 million annually. These savings have resulted from selling excess water to neighboring utilities, enhancing bill collection, managing the system more efficiently, and installing a computerized maintenance management system.
Not surprisingly, the Jersey City contract has become a model for United Water Resources: The company now has similar contracts in Indianapolis, Gary, Milwaukee, San Antonio and, most recently, Atlanta.
The United States Conference of Mayors
J. Thomas Cochran, Executive Director
Copyright © 1999, US Conference of Mayors, All rights reserved.