2001 Public/Private Partnership Awards

MAYOR GEORGE A. SPADORO, CITY OF EDISON

OUTSTANDING ACHIEVEMENT AWARD

E'TOWN WATER COMPANY/ THAMES WATER
WATER SYSTEM LONG-TERM PARTNERSHIP

On November 22, 1996 E'town Water Company (EWC) responded to a Request for Proposals and Qualifications from the Township of Edison, New Jersey, for the operation and maintenance of its water system under long-term contract.  The township was looking for the private sector to address long-standing discolored water and low pressure complaints that it neither had the financial wherewithal nor technical expertise to address on its own.

EWC was awarded the contract effective July 1, 1997, and the Edison Water Company was created to operate the municipal system.  Determining factors in awarding the contract to EWC were our ability to address the technical needs of the system while freezing rates for a period of five years, stabilizing rate increases thereafter, and providing tax relief for the residents of Edison through initial and annual concession fees, as well as significant capital improvements to the system. 

The Edison/E'town public/private partnership is successful and a model for other municipalities because the contract:

Improved delivery of services - EWC offered a capital and operating solution which no other competitor offered that involved:  1) cleaning and relining of water mains and eliminating dead ends in the system at a cost substantially lower than the township’s estimates, and 2) operating protocols that eliminated daily flow reversals.  Discoloration and low pressure complaints virtually have been eliminated.

ź         Provides cost savings - EWC paid an initial concession fee of $5,076,599, which saved Edison taxpayers 7.4 cents on the property tax rate, along with $620,000 to pay off the township’s outstanding water system debt. Additionally, over the 20 years of the contract, EWC will make annual payments totaling $9,593,000 (for an additional 13.93 cents savings on the tax rate using 1999 property valuation data).

ź          Provides an economic benefit to the township -  EWC will provide $9,454,000 in capital improvements to the water system over the life of the contract with $6,083,000 expended in the first 3 years, which addressed the immediate needs of the township (such as main cleaning and cement lining, replacement of 4" mains with 8" mains on two streets, and a meter replacement program throughout the township).  EWC also built a new booster station in the township. The improved water pressure from these projects also addressed long-standing health and safety concerns related to fire service.

ź         Is innovative and creative - Because of the manner in which the contract was structured and because EWC is able to operate the municipal system at a cost lower than the township’s operating costs, the rate of increase in water rates under the public/private partnership over the life of the contract is less than it would have been had the township continued to run the system.

ź         Benefits the community - EWC’s new relationship with the township has prompted additional financial support from Elizabethtown. EWC provides free water service for 17 municipal facilities, such as 2 firehouses, the community center and the municipal complex.  EWC has become a very active corporate member of the Edison Chamber of Commerce.  The Edison Water Company provides significant financial support to the Edison Arts Council.  The Company has also contributed to the restoration efforts of the Edison Memorial Tower Museum, which will help keep the township’s namesake, Thomas Alva Edison, historically respected and a valuable education destination for all.

ź         Protected jobs - EWC protected jobs by agreeing to hire 8 employees, with 12 other municipal employees provided for in the first and second year of the concession schedule.

ź         Is sustainable and can be replicated in other communities - In EWC’s experience, as borne out by the public private partnership in Edison, the most successful of these partnerships exist when the municipality begins the privatization process with clearly defined goals, and has identified very specific problems which require solutions.  The township’s water customers expected reliable service, reasonable rates, and prompt, courteous and professional responses.  The Edison partnership allows these benefits to be realized and provides the municipality with the substantial resources and management expertise of a large organization focused on water services.  This model is one that should be and can be replicated in any community wishing to solve an operational problem.