CITY OF BUFFALO, NY
DESCRIPTION OF PARTNERSHIP ARRANGEMENT
On July 1, 1997 the City of Buffalo Water Board and American Anglian Environment Technologies entered into a five year contract, with a five year renewal at the City's option for the operation of the City's water system. American Anglian commenced operation of Buffalo's water system on September 1, 1997. Under this agreement, American is responsible for the management of the entire system, including treatment, pumping, distribution, metering, billing and collections, and customer service. The Buffalo Water Board continues to own the system, will retain rate setting responsibilities, and along with the Buffalo Water Finance Authority is responsible for capital improvements over $10,000. American Anglian is responsible for attaining all water treatment requirements.
ESTIMATED/ACTUAL COST SAVINGS -- IMPACT ON RATES
Assuming normal operation, without a contract operator, the Water Board estimated the 1997-98 operation and maintenance budget to be $14.4 million. By utilizing American Anglian the 1997-98 budget is set at $9.8 million. Additional increased payments to American will be tied to the Consumer Price Index. The savings realized will be passed on to the ratepayers in the form of an eight percent rate reduction in the first year of the contract. Projections indicate that rates would then stabilize despite a $15 million annual capital improvement program.
The agreement reached with American Anglian allows all employees to remain public Civil
Service employees of the City of Buffalo. American will manage these employees. American
guarantees that no employees will be laid-off for the full term of the contract, although
they will reduce the work force by attrition. Employees will continue to receive current
compensation and benefits. The four labor unions representing the Water Division employees
have agreed to negotiate changes in their work rules.