Jersey City Approves Public-Private Partnership Contract With United Water for Water Operations

HARRINGTON PARK, NJ, February 15, 1996 -- The city of Jersey City last night approved a public-private partnership contract with United Water Resources (NYSE:UWR) for the operation of the city's water department. The agreement will form the largest public-private partnership of water operations in the United States.

"We look forward to providing excellent service to the city's residents and enhancing the fine tradition established by the Jersey City Water Department," said Donald L. Correll, chairman and chief executive officer of United Water. "Since United Water has been providing service to the Hudson County area for more than a century, we already have the systems in place to serve our neighbors in Jersey City."

Under the terms of the five-year agreement, Jersey City retains ownership of the city's water system and will also control water rates. There is no rate increase under the terms of the contract. United Water will pay Jersey City a $2.5 million concession fee to operate the water system and has committed to an economic benefit package worth $38.5 million over the next five years. There's also additional potential revenue for the city, as well as United Water, through improved collections and operating efficiencies.

"The agreement provides major economic benefits to Jersey City over a five-year period," said Correll. "We'll bring operating efficiencies and improved billing and collections services."
According to Correll, the city council also approved an amendment of an existing agreement between the city and United Water for United Water's purchase of surplus water.

The contract for the operation of the Jersey City water system falls under the New Jersey Water Supply Public-Private Contracting Act, which was signed into law by Governor Whitman in May 1995. Upon approval of the New Jersey Board of Public Utilities, the Local Finance Board within the Division of Local Government Services in the Department of Community Affairs, and review by the New Jersey Department of Environmental Protection, partnership operations could start in the spring.

"More and more communities across the nation are seeking partners in the private sector as they strive to operate more efficiently and United Water is prepared to take advantage of these opportunities," said Correll. "Jersey City's decision to form a public-private partnership contract for water services with United Water is a step toward a trend that we'll see in many communities throughout the nation."

United Water Resources (UWR: NYSE) is a holding company whose subsidiaries are engaged in water-related businesses, real estate and environmental testing. As the nation's second largest investor-owned water services company, United Water provides water and wastewater services to about two million people in 13 states.