Implementing Creative Cooperation — City of Camden, New Jersey and American Water Operations & Maintenance LLC Public Private Partnership

OVERVIEW The Public Private Partnership for the water and wastewater facilities in Camden, New Jersey really works! The cooperation between the city and its operations and maintenance contractor has driven many improvements and has provided significant added value savings and enhancements. This is most evident in a recently assigned capital improvement project that is helping the city save and avoid up to $25 million in costs. This is possible by Camden partnering with their OM&M contractor who has the advantage of national purchasing power and can attract high quality designers and constructors that develop best value solutions. More importantly, this approach will provide a higher water quality to the City's customers much faster than traditional methods! This partnership works because of the commitment to work together through challenges and to always seek to find solutions to make the community's water and wastewater systems better. BACKGROUND Camden, New Jersey, for over sixty years was a significant American industrial base and home to New York Ship Building Corporation, the largest shipyard in the world during World War II as well as Campbell Soup and RCA Victor. With a shift in American economic forces, Camden lost businesses, residents, faced increased crime, and limited revenue sources. In 1994, the City of Camden, New Jersey with NJDEP, commissioned a water management study resulting in the recommendation that the City consider privatizing its systems. In 1999, the City entered into a twenty year operations & management contract for its water utilities systems. The City was looking for economic benefits for a financially struggling community without selling their assets. In 2002, under the Municipal Rehabilitation and Economic Recovery Act the City came under State supervision. During this oversight period, the NJ Office of the State Comptroller (NJ OSC) implemented a performance audit of the contract. Because of the Audit, an amendment was negotiated for early termination with a new RFP projected. The City with the Camden County Municipal Utilities Authority developed a team to evaluate options for future water and sewer service, ultimately deciding to utilize lessons learned and continue a contract services approach. Working to ensure the City received multiple proposals while also, allowing proposers to offer options, there were three proposals received and a fourth alternative offered. To ensure a smooth transition, the RFP mandated the selected firm be required to provide on-site presence for 90 days prior to commencement to ensure understanding issues, personnel and system assets. A NEW PARTNERSHIP COMMENCES The City selected American Water Operations & Maintenance (AWO&M). By law, the award required Public Hearings, reviews and approvals by NJ State Agencies. This Contract commenced on 2/1/16 with a 10-year term and an option for an additional 5 years. Enhancing the synergy of the selection of AWO&M was the fact that the Corporate Offices of American Water was later announced as relocating to the City and New Jersey American Water has for many years served the East Camden and Cramer Hill sections of the City. The City is proud of the public private partnership with AWO&M for the Operation, Management, and Maintenance of the drinking water, sanitary, stormwater and combined sewer systems. The new partnership with AWO&M immediately reduced operating expenditures resulting in significant funds being available for critical maintenance and repair work for these aged systems. AWO&M's corporate buying power also decreased costs for material, supplies and equipment. Through this partnership, the City has improved utility operations. The partnership has achieved sustainable results that align with community priorities of mitigating combined sewer overflows, water loss, improving water quality and reducing overall operational costs. Jersey Water Works recognized AW and the City with an award for their partnership in December. 2019. Jersey Water Works strives to transform NJ's inadequate water infrastructure through sustainable cost effective solutions that provide communities with clean water and waterways. ADDED VALUES OBTAINED This partnership has provided in addition to enhanced operations with the cooperation of both parties improved knowledge and understanding of the over century old systems. CCTV inspection with the cleaning of the combined sewer system has identified that approximately 40% of the system piping examined, which are predominantly brick sewers, are rated on the NASSCO grading criteria as Category 1, Excellent Condition. This rating equates to substantial remaining life of the pipe, which will allow an economically feasible capital improvement program of lining or replacement for the City's 195 mile system. Additionally, the partners developed a quick response plan to failing pipe to avoid more costly collapses Another key benefit is the capability to implement cost effective solutions to delayed capital programs along with enhanced coordination with NJDEP. These capital improvement programs included projects long delayed for a variety of reasons now in progress with the cooperation of both partners. CSO regulator improvements were contracted with NJDEP approval on a sole source, unit cost basis with the original supplier of the regulator technology from the 1960s as a subcontractor to AWO&M. This project at just over $5 million in costs, includes the cleaning, relining of vaults, the repair and replacement of regulator technology and installation of enhanced safety and access measures at twenty eight locations along the Camden waterfronts. A second significant project but at smaller capital costs are water system interconnections. NJDEP had required interconnection upgrades for the City with four adjoining water systems, which had been stalled for over five years. Both of these projects are underway and are providing significant cost and time benefits with the utilization of the established service and equipment vendor relationships of AW Corporate. PFAS IMPROVEMENTS This approach has been implemented for PFAS Improvements. As a former industrial base, Camden was home to many technological developments. Unfortunately, these improvements for quality of life resulted in chemicals known now as 'forever chemicals' that contaminate nationwide our drinking water sources. New Jersey is leading the way on this national issue in implementing corrective actions. Camden, which showed the highest presence of these chemicals in New Jersey, needed to act quickly. The presence of these compounds resulted in the removal of multiple wells from service. However, the use of nearby wells shows a shifting of the presence of these chemicals in the aquifer continuing the threat to the City. The City/AW Partnership recognizing this problem developed a fast track, two-phase approach. Utilizing the buying power of AW, GAC skids were committed to the Parkside WTP (capacity - 3 MGD). A design/build team was selected by AWO&M. Also, to address the larger Morris Delair water treatment plant (capacity - 18 MGD), a program of parallel testing and pilot programs was included in the approach. The Parkside facility will be upgraded and online in December 2021, just fourteen months from the City's decision to proceed. The Morris-Delair WTP will follow this again on a fast track approach about two years later. These projects are very significant for the City with total Capital Improvements approaching $40 million and the purchase of additional water over this period totaling about $10,000,000. COSTS SAVED & AVOIDED A three-year timeline has been charted for design, construction, and operational completion of both projects. Taking a traditional capital project approach used in municipal settings, these PFAS related improvements could take an estimated 5-6 years or even longer instead of the projected 3 years. In additional to providing higher water quality faster, this fast-tracked approach is giving the city the ability to minimize the amount of supplemental water it would need to purchase to meet the supply demand while the improvements are made at both their treatment plants. This savings alone is in the $7-10 million range. Additionally, the purchasing power of AWO&M has brought favorable pricing of equipment and attracted high quality design-build teams who bring best value solutions, with projected savings over $10 million. Another area of savings that is harder to quantify is the avoided cost of escalation of materials and construction costs that the city would experience if the work took two or three years more. An estimate of cost escalation per year of 3-5% saves an additional $3-6 million. The approach will save Camden from 50% more cost requirements! Public Private Partnerships in water can and does work in Camden, NJ!