City of Perth Amboy, New Jersey

Mayor Joseph Vas

Population: 42,262
Service Area Population: 42,262

City Contact:
Mayor Joseph Vas
City of Perth Amboy
260 High St.
Perth Amboy, NJ 08861
732-826-7121

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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