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City of Perth Amboy, New Jersey
Mayor Joseph Vas
Population: 42,262 City Contact:
DESCRIPTION
OF PARTNERSHIP ARRANGEMENT Perth Amboy entered into a Partnership agreement with Middlesex Water Company
(MWC) in 1998 for a 20-year term. The Partnership arrangement calls for MWC to
operate and maintain the collection and pumping facilities that are joined to
the regional county treatment plant, and includes fixed fees as well as fixed
rate components. Perth Amboy utilized existing State enabling legislation to
proceed with long-term Public/Private contracting for water supply (N.J.S.A.
58:26-19), and wastewater treatment (N.J.S.A. 58-27-19). The legislation
requires that concession fees be used to offset local taxes, and also allows
rate setting without regulatory agency approval. The State legislation also
allows a private vendor to use publicly issued debt to make capital upgrades to
the system. Perth Amboy retains ownership of the plants. ESTIMATED/ACTUAL COST SAVINGS— Capital
Upgrades, Consumer Rates, and Fees Middlesex Water Company is responsible for making $18 million in combined
water and wastewater capital improvements. They also are responsible for
spending $13 million in annual system maintenance. The city will achieve greater
savings by restructuring of $12.3 million in existing debt, under the agreement,
by extending maturities. Consumer rates are frozen for eight of the 20 years, including years one
through five and 18 through 20. Rates are scheduled to increase by four percent
for years six through 17. The city plans to devote the concession fee ($39 million) and revenue sharing
from bulk sale of surplus water ($29 million) to tax stabilization. The city has
calculated the total economic benefit derived from the Partnership is equal to
$111 million over the 20-year term.
LABOR
RELATIONS All 39 employees are leased from the City of Perth Amboy to Middlesex Water
Company. They have the same job descriptions and contractual benefits under the
new management by the private utility operator. The employees are still
represented by the same union, which is affiliated with AFSCME.
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J. Thomas Cochran, Executive Director
1620 Eye Street, NW, Washington, DC 20006
Telephone (202) 293-7330, FAX (202) 293-2352
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