United Water’s SOLUTION goes to business school

United Water’s SOLUTION goes to business school

We know that American cities and towns need to invest hundreds of billions of dollars – between $400 billion and $1 trillion to be exact – in their public water and sewer systems. And we know that investors are keen on investing in efficiently operated systems that will provide a steady return. That fact is what brought us to University of Pennsylvania’s Wharton Business School, one of the most prestigious business schools in the country, to discuss how we can collectively make more public-private partnerships work for water. Panelists at the Wharton Initiative for Global Environmental Leadership conference suggested that it is a moral imperative upon which the sustainability of cities hinges, to find ways for the public and private sector to work together in planning and financing to begin tackling the ever-widening investment and thereby sustainability gap. With water projects, as with any public initiative, public support is a key ingredient for success. Financial capital, in many cases, is more readily available than political capital. Implied in the name, the success of “public-private partnerships” depends on striking an appropriate balance between the interests of uncommon allies by providing for a return on investments while safeguarding the public interest. And the many municipal leaders who are considering a public-private partnership should expect to engage the public and various interest groups in the plan at many levels. A new model – recently used in Bayonne, NJ by United Water – emerged as a viable option for meeting the needs of both public and private partners. The architects of the SOLUTION model simply built it upon the financial and political lessons of...
United Water Marks Drinking Water Week, Touts Infrastructure Solutions

United Water Marks Drinking Water Week, Touts Infrastructure Solutions

May 4 -10 is Drinking Water Week; a week to raise awareness about the vital role water plays in our daily lives. And public awareness is greatly needed around this topic. Reports continually show that we, as Americans, take safe tap water for granted. No one expects to be without water – not even for a few hours or to face the inconvenience that a ruptured main or repair work can cause. Yet, few are eager to pay for upgrades to water infrastructure; in tax dollars or on a utility bill. For decades, governments at all levels have passed the buck on water infrastructure upgrades. Because of these deferred investment the American Society of Civil Engineers (ASCE) currently grades the nation’s water infrastructure a “D+”, meaning there is a “strong risk of failure.” The ASCE puts a $1 trillion price tag on bringing water mains up to standard over the next 25 years. Yet the story of our nation’s infrastructure is not all doom and gloom. United Water is embarking on an ambitious program to invest nearly $1 billion in our own infrastructure over the next 5 years. And we have recently launched a program for cities, SOLUTION, which will make similarly high levels of investment available to cities who chose to partner with United Water and leverage private capital to meet their needs. After all, the cost to communities of neglected water infrastructure is not just a financial one. Poorly maintained systems will turn back the clock on decades of progress in public health standards – and raise health...

Nation’s Water System Infrastructure Requires $384 Billion Investment by 2030

Last week, the U.S. Environmental Protection Agency (EPA) released the results of its fifth Drinking Water Infrastructure Needs Survey and Assessment. The survey identifies and assesses the nation’s water infrastructure needs over the next 20 years, which include thousands of miles of new pipes and treatment plants, storage tanks and water distribution systems. The survey findings show that our nation’s water systems need an estimated $384 billion in improvements by 2030 for them to continue to produce and deliver safe drinking water to 297 million Americans, which is critical not only for public health but also for our economy. No business can be started or maintained without a safe and reliable water supply. Water Industry experts agree that in order to maintain sustainable water and wastewater systems for the future, not only do we need operational efficiency, expertise and technological innovation, but also capital investment. According to Brent Fewell, Senior Vice President, Environment Health and Safety at United Water, “the recipe for failure is when the perceived risks of failure exceed the perceived benefits of success. The recipe for success is changing recipes.” United Water’s SOLUTION℠ business model addresses the water infrastructure challenge and is an example of the type of innovative, effective and scalable “recipe” that can ensure sustainable water systems. SOLUTION℠ was first implemented late last year by the Bayonne Municipal Utilities Authority and a joint venture created by United Water and financial partner Kohlberg, Kravis, Roberts (KKR). Since our partnership with Bayonne, we have eliminated nearly $125M of municipal debt and continue to implement full management, innovation and operational best practices and make capital investments – approx. $110M...
United Water Honored With ‘Distinguished Engineering Award’

United Water Honored With ‘Distinguished Engineering Award’

We are pleased to share with you that United Water received the New Jersey Alliance for Action’s Distinguished Engineering Award, which honors innovative and outstanding engineering accomplishments. New Jersey Alliance for Action honored our SOLUTION℠ business model with this award for its uniqueness and positive impact on New Jersey’s economy and environment. Our award-winning SOLUTION℠ model provides a way for local authorities to clear millions of dollars of accumulated debt, promote job creation, create a cleaner environment and ensure that ownership and stewardship of the water system never leaves public hands. SOLUTION℠ was first implemented late last year by the Bayonne Municipal Utilities Authority and a joint venture created by United Water and financial partner Kohlberg, Kravis, Roberts (KKR). Three months after the project began, Moody’s Investor’s Service upgraded the City of Bayonne’s bond rating from Baa1 with a negative outlook to Baa1 with a positive outlook. In addition to receiving the New Jersey Alliance for Action’s Distinguished Engineering Award, United Water’s SOLUTION℠ business model is part of a Commitment to Action made by our company at the Clinton Global Initiative (CGI) Annual Meeting in New York last year. SOLUTION℠ also received the Partnership Performance of the Year Award at the 2012 American Water Summit. We are thrilled and honored to be recognized by New Jersey Alliance for Action, the state’s most respected and influential association focusing on capital construction and economic growth opportunities within the region. As our CEO, Bertrand Camus, said: “United Water is deeply grateful for this award and for the acknowledgement of the private sector’s important role in public health. Maintaining clean, sustainable water supplies is the single most important contributor to public health and it is essential...

Moody’s Revises Bayonne, NJ Credit Outlook to Stable for the First Time in Five Years

Moody’s Investor Services recently upgraded City of Bayonne’s bond rating from Baa1 with negative outlook to Baa1 with stable outlook. In its report on City of Bayonne, Moody’s attributed the upgrade in rating to the city’s recent progress in reducing its debt burden through the lease-sale of the MUA operations, significant reduction of deferred charges, declining reliance on TAN borrowing and the expectation that fund balance reserves will remain adequate. The rating agency also noted that the Bayonne Municipal Utilities Authority’s (MUA) joint venture with United Water and Kohlberg Kravis Roberts (KKR) is one of the factors that contributed to the rating upgrade. The joint venture eliminated $120 million from Bayonne’s local debt burden by paying off all the MUA’s debt and a portion of the debt of the Bayonne Local Redevelopment Agency. We first announced the initiation of our joint venture with KKR and Bayonne MUA in December 2012, using our award winning SOLUTION℠ model. United Water’s SOLUTION℠ allows cities to attract new long-term capital from private equity partners to fund infrastructure upgrades and improve operating efficiencies, helping cities meet the growing demand for improved water quality and environmental standards. As Mayor Mark A. Smith put it: “This upgrade is very good news.  It shows that Bayonne has made significant financial progress during my Administration.  Moody’s has raised Bayonne’s rating for the first time in more than five  years. Our hard work and fiscal discipline are paying off. We have turned a corner and are moving in the right...