Friday, April 12, 2019

City of Hoboken announces new Suez agreement

Official release:

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April 12, 2019,

City of Hoboken, NJ

Community: Mayor Bhalla announces new contract with SUEZ for water main operations

Mayor Ravi S. Bhalla today announced that the City of Hoboken and SUEZ have agreed to a new water service contract that would invest at least $33 million in water infrastructure upgrades through 2034. The new contract, which is subject to City Council approval, establishes a new public water utility and includes an average of $2.2 million in water investments per year, over six times the amount of the current contract.

“This contract with SUEZ provides for unprecedented investments in Hoboken’s water system,” said Mayor Ravi S. Bhalla. “Hoboken has been suffering for years with increasing water main breaks due to a previous, woefully inadequate contract that provides for no proactive water main upgrades. The renegotiated agreement will finally allow Hoboken to make the critical upgrades to our water infrastructure that have been badly needed for years. I am hopeful the Council will agree and vote in support at Wednesday’s Council meeting.”

The new agreement was based upon the framework of the initial SUEZ negotiations led by former Mayor Dawn Zimmer and her administration in 2017.

“I am pleased that Mayor Bhalla's administration and SUEZ have agreed to a revised contract that provides critical funding for annual water main investments,” said Mayor Zimmer. “This achievement is the culmination of negotiations begun by my Administration and completed by Mayor Bhalla.  Thank you to the many public servants from both of our Administrations who worked so hard to make this happen.”

The agreement with the City and SUEZ calls for the establishment of a new water utility.  The revenue from the bulk water consumption would then be placed in the new water utility, and the City would then reinvest the majority of the revenue into water main upgrades. The water system would no longer be operated as a private water concession, but instead as a new public water utility. SUEZ would continue to maintain and operate the water system, however all revenues generated from water bills would be invested by the City as opposed to SUEZ.

An average of $2.2 million, over six times the amount required in the current contract, would be invested by the City each year for water main upgrades according to the contract, which includes $1.5 million in proactive upgrades and $700,000 for maintenance and repairs.  Additionally, the contract also includes $2 million in smart leak detection technology, which will record water consumption data in real-time to detect leaks.

Under a contract and several extensions negotiated by a prior administration beginning in 1994, several multi-million upfront payments to the City were used to fill budget deficits and were not invested into infrastructure upgrades. The previous agreement required only $350,000 per year for capital repairs and upgrades, which has been substantially insufficient for even emergency repairs.

Under the terms of the new contract, at least 18% of the City’s water mains will be upgraded by 2034, while the old contract upgraded only 5% of the system from 1994-2017.

In addition to the renegotiated contract with SUEZ, the Bhalla administration and the former Zimmer administration have independently invested over $17 million in water main infrastructure upgrades through the City budgeting process.  This includes $7 million for the complete replacement of century-old water mains along Washington Street and a combined $10 million in water main replacements in identified priority areas. $5.2 million of these replacements will begin construction this summer.

“SUEZ is proud to continue its partnership with the City of Hoboken and to be part of the critical transformation of its water system,” said Chris Riat from SUEZ Water. “Our priority, as well as the City’s, has always been ensuring the safety and reliability of the residents’ drinking water. We look forward to working with the City to modernize Hoboken’s infrastructure for years to come.”

“Our new contract and improved partnership with SUEZ allows Hoboken to reclaim most of our water revenues and self-fund all necessary improvements to our aging water system,” said Councilwoman Tiffanie Fisher. “This is a great outcome for Hoboken and I will encourage my City Council colleagues to approve this new contract.”

Councilman Mike DeFusco: Suez agreement is "great first step" for Hoboken

Official release:

Statement from Councilman DeFusco on Hoboken’s Agreement with SUEZ
On Friday morning, Hoboken announced the City has reached an agreement with SUEZ to continue operating the city's water system. The deal will include much-needed investments in the city’s aging water infrastructure, and it stems from the kind of open, direct negotiation that Councilman Mike DeFusco called for between the city and the private water operator last year. At the time, Mayor Ravi Bhalla had threatened a lawsuit against the company, an action that could have destroyed any chance of progress if not for the intervention of the City Council.
Councilman Mike DeFusco issued the following statement:
“Last year our city was on the verge of making a historic mistake in once again jumping into a protracted lawsuit that would only benefit lawyers instead of the residents of Hoboken, by entering into a lawsuit with SUEZ. 
Last summer, I demanded that the Mayor start a dialogue with the company and work towards an agreement that would make the investments in our water infrastructure that are so badly needed. The leadership shown by the City Council, particularly Ruben Ramos and Tiffanie Fisher, rescued our city from a legal battle that would have served no one and allowed us to reach a responsible agreement with SUEZ. This is a great first step to making much-needed investments in our water system, but this is not a silver bullet, it will not entirely fix the century-old problem. We can and need to do more and I look forward to improving infrastructure across Hoboken.