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2001 Public/Private Partnership Awards MAYOR GEORGE A. SPADORO, CITY OF EDISON OUTSTANDING ACHIEVEMENT
AWARD E'TOWN WATER COMPANY/ THAMES WATER 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. |