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Posted by Steven Glazer, Urban Times News on January 05, 2004 at 17:37:09:

Urban Times News

By Steven Glazer, E-mail:

Jersey City—Back when Jersey City’s Municipal Utility Authority was first privatized in 1996 the contract was a forward-looking document that became a model for others to follow. It was a first in a number of areas and at the time it started in May 1996 it was the largest public private partnership in the United States.

The idea was to help Jersey City realize a combination of reduced costs and increased revenues to enhance operating results by $38.5 Million over the original five-year life of the contract. But United Water beat the clock by meeting projections in three years instead of the expected five and the contract was rebid and renewed for an additional eight-year term in January 2000.

Part of the cost savings to the city was the transition of some 140 municipal water department workers to United Water’s payroll. United Water had permanent positions for only 80 of the workers but took all 140 employees for the entire first year and worked closely with Jersey City to reposition the 60 workers not needed by United Water back to vacancies in other City departments. Some workers did opt for a buy-out funded by United Water. All but 17 employees have become permanent and regular employees of United Water of Jersey City.

In the process, United Water worked closely with the unions involved and the New Jersey Department of personnel to come up with a pilot program to broaden job titles and eligibility to ease the transition. This program was so successful in helping the company make good its obligations under the contract that it is now available to any municipality in the State.

United Water then also replaced the entire fleet of vehicles in use before the privatization. The older vehicles were returned to the city for use by other departments or disposal and an entire new fleet was leased and put in service. The upgrades went way beyond skin deep as United Water installed a state of the art billing system to get the collection rate up and delinquency down, improving cash flow. All water meters, large and small, have been replaced.

Officials of United Water Jersey City are most proud of the improvement in cash flow these new meters and billing system have created. Macula says that the percentage of actual meter readings is way up and the percentage of collections year-over-year has climbed from a dismal 50 percent to 66, to 85, to 92 percent and up from there. United Water has worked closely with the City’s tax collector and officials of the MUA to cut down the mountain of outstanding and delinquent accounts to a more manageable size and number. There have been a number of successful tax sales and the last one, in November, was just $1.3 Million, according to Tax Collector Maureen Cosgrove. Each sale of tax liens gets progressively smaller as the backlog of delinquencies dwindle and collections become more timely.

In addition, the water quality, reflecting certification of the treatment plant say United Water officials, has been certified by the State Department of Environmental Protection for the first time ever since United Water has had the contract. Besides all that, United Water is the system’s biggest bulk customer, putting revenues back into the system. That is a result of the synergy of United Water’s other contracts in neighboring towns such as Hoboken where Jersey City water is distributed by United water, who also has a similar contract there.

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