Water systems Privitized in New Jersey

NJ Star-Ledger:

The Bayonne Municipal Utilities Authority has struck a $150 million deal with United Water to have the private company take over operations of the city's water and sewerage system for the next 40 years.

Once the agreement is ratified by both parties, city residents will be socked with immediate 8.5 percent hikes on both their water and sewerage bills, according to the over 105-page agreement scheduled for a public hearing at Tuesday's BMUA commissioners meeting, 6 p.m., at City Hall, 630 Avenue C.

The 40-year-contract would be between the BMUA and Bayonne Water Joint Venture, LLC, a joint venture between United Water Operations Contract and the investment firm, Kohlberg Kravis Roberts & Co.

Under the proposed agreement, Bayonne Water Joint Venture will collect water and sewerage tariffs from customers and take over the operation, maintenance and repairs for the authority's water, sewerage and sanitation systems.

The BMUA will continue to have oversight over the contract, and purchase water and pay sewerage treatment fees.

"The people of the city will continue to own the utility and it is not being sold," BMUA Executive Director Stephen Gallo said yesterday. "It is a long-term contract and public officials, accountable to the public, will continue oversee the contract."

The 8.5 percent bump, the first increase since 2006, would be applied to the first quarterly billing cycle after the deal is finalized.

Customers who use less than 82,280 gallons each quarter, would see the cost of 748 gallons increase from $4.29 to $4.65, according to the contract. Larger volume customers will see rates increase from $4.72 to $5.12 for 748 gallons.