Public hearing on new water deal Thursday

A new services agreement for the Rahway Water Treatment Plant will be the subject of a public hearing during a special meeting of City Council on Thursday at 6:30 p.m. in the library.

The draft agreement for the operation, management, maintenance and repair of the Westfield Avenue facility by Suez Water Environmental Services no longer includes a $14-million concession fee, which was part of an earlier version of the long-term.

Rahway Water Treatment PlanCity Administrator Cherron Rountree confirmed the new draft agreement does not include a concession fee but it’s unclear what other changes, if any, there are to the agreement that will be the subject of Thursday’s public hearing. An Open Public Records Act (OPRA) request for a copy of the latest draft agreement was made to the City Clerk’s Office on Friday. UPDATED, Jan. 24: The latest draft agreement, dated Jan. 6, was received yesterday, Jan. 23, and can be accessed here.

The last time we heard about the water deal, City Council tabled three ordinances in October related to a new 20-year lease agreement. The deal was to have taken effect this month, replacing the last three years of the current agreement, which expires Sept. 29, 2019. The revised agreement will become effective May 1, 2017. The ordinances also would have authorized borrowing $14 million against the original concession fee via the Union County Improvement Authority (UCIA).

The city issued a Request For Proposals in May 2015, receiving one from Suez and another from Middlesex Water Company. Negotiations with Suez began in October 2015 and were completed in May 2016. An earlier version of the draft services agreement can be found here.

A presentation to City Council during a special meeting in June detailed the annual water rates and expenditures over the proposed 20-year agreement. City projections assumed about $48 million in “water capital expenditures” over the life of the new 20-year contract, according to the presentation. The same presentation projected a surplus of $19 million over 20 years and approximately $30.8 million “projected taxpayer savings,” based on projected revenues and water rates.

Paramus-based Suez operates 20 water and five wastewater facilities in the state, with 84 contracts nationwide.