The United States Conference of Mayors
J. Thomas Cochran, Executive Director
1620 Eye Street, NW, Washington, DC 20006
Telephone (202) 293-7330, FAX (202) 293-2352
Copyright © 1996-97, U.S. Conference of Mayors, All rights reserved.
Excerpt from:
Public/Private Partnerships in Municipal Water and Wastewater Systems
Case Studies of Selected Cities
The Urban Water Council - A Program of the U.S. Conterence of Mayors
DESCRIPTION OF PARTNERSHIP ARRANGEMENT
In early 1996, the City of Hawthorne awarded a 15 year lease for the management of its municipal water system. This type of lease was one of the first of its kind awarded at public auction in California. California Water Service Company (Cal Water) will integrate the operation of the Hawthorne system with its neighboring Hermosa-Redondo district. Cal Water will be responsible for providing all water supply services to Hawthorne customers and will make all needed capital improvements to the system.
ESTIMATED/ACTUAL COST SAVINGS -- IMPACT ON RATES
Under California law, leases such as that of the Hawthorne water system are limited to 15 years and must be conducted by auction. Cal Water's winning bid was $6.525 million. In addition, Cal Water will pay the City an annual lease payment of at least $100,000. Rates to Hawthorne customers will be the same as those for customers of the Hermosa-Redondo district, subject to approval of the Hawthorne council. Capital improvements are also subject to the approval of the Hawthorne council.
LABOR RELATIONS
All six employees of the Hawthorne water system were hired by Cal Water, and receive pay and benefits at least equal to those received from the City.
The United States Conference of Mayors
J. Thomas Cochran, Executive Director
1620 Eye Street, NW, Washington, DC 20006
Telephone (202) 293-7330, FAX (202) 293-2352