CITY OF NEWARK, NJ
DESCRIPTION OF PARTNERSHIP ARRANGEMENT
The City of Newark manages a drinking water system which includes a 36,000 acre watershed in northwest New Jersey, transmission and distribution systems and a $4.8 million treatment facility completed in 1993. The annual revenue from the operation is $40 million. In March 1993, the City of Newark and Professional Services Group, Inc. (PSG) of Houston, Texas entered into a five year contract for the daily operation, maintenance and management of the City's 80 MGD Pequannock Water Treatment Facility in West Milford Township. The City of Newark continues to own all system components, retains rate setting authority, and retains control and responsibility for capital investment.
ESTIMATED/ACTUAL COST SAVINGS -- IMPACT ON RATES
The City of Newark pays PSG a service fee for managing the water system. Over the term of the contract, the City expects to realize approximately $2.5 million in operational savings. PSG has also saved the City of Newark over $100,000 on matters related to the operation and upgrade of the treatment facility.
At the start of the contract, PSG was required to retain all eight City employees working within the treatment facility. PSG has also agreed to an affirmative action plan to provide Newark residents with the opportunity to become employees of the company.