CON'I'R.

ACT FOR PUBLIC/PRIVATE PARTNERSHIP AND

OPERATION, MAIN'I'ENANCE AND MANAGEMENT SERVICES FOR
THE CITY OP HOBOKEN'S MONICIPAL WATER SYSTEM
 CONTRACT FOR PUBLIC/PRIVATE PARTNERSHIP AND
OPERATION, MAINTENANCE AND MANAGEMENT SERVICES FOR
THE CITY OF HOBOKEN'S MTJNICIPAL WATER SYSTEM
 TABLE OF CONTENTS

SECTION 1. P.AR.TNERSHIP 2
SECTION 2. TERI-! 2
SECTION 3. REPRESENTATION AND WARRANTIES 3
SECTION 4. PAYMENT TO THE CITY . . 6
SECTION 5. TERMINATION 7
SECTION 6. AUTOMATIC METER READING INSTALLATION 18
SECTION 7. SYSTEM CAPITAL IMPROVEMENTS AND/OR REPAIRS 19
SECTION 8 .. WHOLESALE WATER SUPPLY 23
SECTION 9. OPERATION, MAINTENANCE AND MANAGEMENT
OF THE SYSTEM 25
SECTION 10 . STAFFING .. . . . 27
SECTION 11... LICENSES . . 28
SECTION 12. WATER QUALITY STANDARDS 28
SECTION 13 . REPORTING REQUIREMENTS 30
SECTION 14 . OPERATIONAL COMMITTEE 3 O!
SECTION 15 . EXPENSES . 31
SECTION 16. INSURANCE .31
SECTION 17 . RATES, FEES AND CHARGES 32
SECTION 18. BILLING AND COLLECTIONS 33
SECTION 19 . APPLICATION OF RENTS, RATES, FEES
AND OTHER CHARGES 34
SECTION 20 . INDEMNIFICATION 36
SECTION 21 .. MEDIATION . . 38
SECTION 22 . WRONGFUL ACTS OR OMISSIONS 38
SECTION 23 . UNFORESEEN COSTS 38
SECTION 24 . LABOR STOPPAGE 39
SECTION 25. MISCELLANEOUS 39

EXHIBIT A GEOGRAPHICAL BOUNDARIES OF THE SYSTEM

EXHIBIT B AGREEMENT BETWEEN HACKENSACK WATER COMPANY
AND MID-ATLANTIC UTILITIES CORPORATION
EXHIBIT C WATER SUPPLY CONTRACT
EXHIBIT D SCHEDULE OF RATES
 CONTRACT FOR PUBLIC/PRIVATE PARTNERSHIP AND
OPERATION, MAINTENANCE AND MANAGEMENT SERVICES FOR
THE CITY OF HOBOKEN'S MDNICIPAL WATER SYSTEM

THIS AGREEMENT (herein called the "Agreement") i.s made and

entered into as of this 18th day of May, 1994, by and between the

CITY OF HOBOKEN, a municipal corporation of the State of New Jersey

(herein called the "City"), HACKENSACK WATER COMP.II.NY, a New Jersey

corporation doing business at 200 Old Hook Road, in the Borough of

Harrington Park, County of Bergen, State of New Jersey (herein

called the "Contract Partner"), and MID-ATLANTIC UTILITIES

CORPORATION,. a Ne)'/ Jersey corporation doing business at 200 Old

Hook Road, in the Borough of Harrington Park, County of Bergen,

State of New Jersey (herein called "Mid-Atlantic") .

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W I T N E S S E T H:

WHEREAS, the City currently owns _and operates a water

transmission and distribution system within the City limits of the

City (the "System");

WHE:R.EAS, the geographical boundaries of the System are shown

on Exhibit "A" attached hereto; and

WHEREAS, the Contract Partner is engaged in the business of

operating, maintaining and managing water utilities; and

WRE:R.EAS, it is the mutual desire of t.he parties to enter into

this Agreement providing for the operation, maintenance and

management of the System pursuant to and in accordance wi.th the

provisions of N.J.S.A. 40A:31-l et seq .. ; and

 WHERE.AS, the City Council of the City has determined that the

public health, safety, and welfare of the residents of the City can

best be protected by entering into this Agreement to provide for

the operation, maintenance, and management of the System .

NOW, TREREFORE, in consideration of the mutual covenants,

conditions, and terms herein contained, the City, the Contract

Partner and Mi.d-Atlantic, intending to be legally bound, agree as

follows:

SECTION 1.. PARTNERSHIP

A.. The City, the Coritract Partner and Mid- Atlantic, in

combination with each other in the manner herein described, agree

to operate, maintain, and manage the System on the terms and

,
conditions hereinafter set forth in this Agreement .

B.. The City acknowledges that any or all of the rights,

duties and obligations of the Contract Partner under the terms and

provisions of this Agreement shall be exercised, performed or

carried out by Mid-Atlantic on behalf of the Contract Partner ..

SECTlON 2 . TEP.M

A. The term of this Agreement shall commence on July 1, 1994

{the "Commencement Date" J, and, unle:;is earlier terminated i.n

accordance ':'ith Section 5 hereof, shall expire on July 1, 2004,

subject to such annual or other earlier renewal as may be required

by law and to such renewal as is contemplated in subsection B of

this Section 2 ..

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 B. As of the date of execution of this Agreement, the

parties hereto intend to extend the term of this Agreement for

three (3) consecutive ten (10) year intervals commencing on each of

July 1, 2004, July l, 2014 and July 1, 2024r respectively, and

expiring on each of July 1, 2014, July 1., 2024 and July l, 2034,

respectively. On or prior to the September 1 preceding each of

July 1, 2004, July 1, 2014 and July 1, 2024, the parties hereto

shall commence discussions to renegotiate the provisions of

Sections 5, 7, 8, 16, 17 and 19 hereof which shall become effective

on the following July 1.. If, on or prior to the April 1 preceding

each of July 1., 2004, July 1, 2014 and July 1, 2024, respectively,

the parties shall fail to agree upon all of the terms and

conditions of this Agreement which shall become effective on the-"

fol lowing July l, then, unless the parties shall otherwise agree to

extend the term of this Agreement, this Agreement shall

automatically terminate on the following July 1 .

SECTION 3 . REPRESENTATION" AND WAfiltANTIES

A.. The City hereby represents and warrants to the Contract

Partner as follows:

J... The City is a municipal corporation duly created and

existing pursuant to the laws of the State of New Jersey.. The

City has the requisite power and authority to enter into this
Agreement.

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 2.. The City has the legal. capacity and authority to

assess the rates for the supply of water service to customers

of the System which are required to be established by the City

pursuant to Section 17 hereof . Other than the existing bond

indebtedness previously disclosed to the Contract Partner in

the principal amount of $374,000 . 00, there are no liens,

notes, bonds, mortgages, encumbrances, or other entitlement to

the revenues of the system which have priority over the

Contract Partner's entitlement: t:o the revenues of the System

pursuant to this Agreement:, and no such liens, notes, bonds,

mort:gag!=S, or encumbrances will be issued or imposed by the

Ci.ty during the term of t:hi.s Agreement which effect the

priority of the Contract Partner's rights t:o the revenues

provided for in this Agreement.

3.. The City is not aware of any cl.aims, suits, act: ions,

or judgments which, if successful, would create an encumbrance

upon the revenues of the System which would have a priority

over the Contract Partner's entitlement t:o the revenues of the

System pursuant t:o this Agreement or which otherwise would

have a material adverse effect on the ability of either the

Contract Partner or the City to perfo= i.t:s obligations

hereunder .

B. The Contract Partner renresent:s and warrants t:o the City

as follows:

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 1. The Contract Partner is a corporation duly organized

and validly existing in good standing in the State of New

Jersey and is qualified and authorized to do business in the

State of New Jersey.

2. The Contract Partner has full power and authority to

enter into this Agreement and to perform its duties and

obligations hereunder . This Agreement has been duly

authorized, executed, and delivered by the Contract Partner

and the authorization, execution, delivery, and performance of

this Agreement by the Contract Partner will not violate any

law, jml.gment, order, ruling, or regulation applicable to the

Contract Partner and does not constitute a breach of or

default under any agreement or instrument by which the

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Contract Partner is bound .

3, The Contract Partner is a private water company

subject to regulation by the Board of Regulatory Commissioners

of the State of New Jersey as a public utility ..

4.. The Contract Partner has or holds, and will continue

to have or hold throughout the term of this Agreement, all

approvals, licenses, per:mits, and certifications necessary to

operate, maintain, and manage the System in accordance with

the tenns and provisions of this Agree.'l!ent . The Contract

Partner has, and will continue to have throughout the ter:m of

this Agreement, competent and experienced personnel on its

staff who have direct experience in operating, maintaining,

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 and managing water systems similar in nature and character to

the System ..

5.. No litigation is pending or threatened against the

Contract Partner which would impair its ab~lity to perform its

duties and obligations under this Agreement .

6. At a.11 ti.mes during the term of this Agreement, the

Contract Partner shall keep the System and all components

thereof free from any and all liens and encumbrances arising

out of or in connection with its operation, maintenance, and

. '
management of the System or any acts, omissions, or debts of

the Contract Partner, its parent, any of its subsidiaries, or

any of its subcontractors .

SECTION 4 . PAYMENT TO THE CITY

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A.. On or prior to the Commence.rnent Date, Mi.d-Atlantic will

pay to the City FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS

($5,500,000 . 00), or such lesser amount as shal.l be requested by the

City in a written notice to the Contract Partner delivered prior to

the Commencement Dat.e.. Said payment to the City sha.11 constitute

partial consideration for Mid-Atlantic's and the Contract Partner's

investment and undertaking as the City's partner in the

public/private partnership venture created hereby and does not

convey to Mid-Atlantic or the Contract Partner any ownership

interest or leasehold interest in the physical assets of t:he

System .

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 B.. If the City is paid less than $5,500,000 .00 in accordance

with the provisions of subsection A of this Section 4, the parties

hereto agree to amend the rates shown on Exhibit D hereto to

reflect that such lower amount was paid to the City.

SECTION 5 . TERMINATI.ON

A.. General Provisi ans - This Agreement may be terminated

prior to its stated expiration date by the City or the Contract

Partner on the terms and conditions set forth in this Section 5 .

The rights of the City and the Contract Partner to terminate this

Agreement shall be strictly consti:ued in accordance with the

provisions of this Section 5 .

Termination for Cause bv the Citv 1 . Upon the
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happeni.ng of any of the foll.owing events of defaul.t by the Contract

Partner or Mid-Atlantic, the Ci.ty shall have the right to terminate
this Agreement oi: to pursue a cause of action for actual aarnages,

all. as more full.y described in this subsection B of Section 5:

(a) the persistent and repeated failure by the Contract

Partner to operate, maintain, and/or manage the System i.n

accordance with the terms and provisions of this Agreement,

its obligations and duties created hereunder, and/or

applicable law;

(b) the failure of the Contract Partner to perform or

observe any of its covenants, agreements, obligations, and/or

duties created by this Agreement;

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 (c) if any representation and/or warranty made by the

Contract Partner in subsection B of Section 3 hereof sha11

prove to be false and/or misleading in any material respect

and the legality of th~s Agreement or, the ability of the

Contract Partner to carry out its duties and obligations under

this Agreement is thereby adversely affected;

( d) the commencement of any bankruptcy, insolvency,

liquidation and/or simil.ar proceeding against the Contract

Partner, its parent corporci.tion and/ or any of its subsidiaries

and/or related companies which adversely affects the Contract

Partner's abi.li ty to perform its duties or obligations under

this Agreement; the consent by the Contract Partner, its

parent corporation and/or any of its subsidiaries and/or!'

related companies, to the appointment of and/or taking

possession by a receiver, liquidator, assignee, trustee and/or

custodian of the Contract Partner, 3..i:s parent corporation

and/or any of its subsidiaries and/or related companies,

and/or any substantial part of their respective assets which

adversely affects the Contract Partner's ability to perform

its duties or ob1igatians under this Agreement; the making by

the Contract Partner, its parent corporation and/or any of its

subsidiari.es and/or related companies, of any assignment for

the benefit of creditors which adversely affects the Contract

Partner's ability ta perform its duties or obligations under

this Agree..rnent; and/ or the failure by the Contract Partne:z:,

its parent corporation and/or any of its subsidiaries and/or

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 related companies, to generally pay its debts as they come

due; or

(el the failure by the Contract Partner or Mid-Atlantic

to make any payment required to be m<j.de by the Contract

Pa!:"tner or Mid-Atlantic pursuant to the tenns of this

Agreement ..

2. Upon the happening of any event described in c1ause (a) or

(b) of paragraph 1. of this subsection B of Section 5, the City

sha11 provide written notice to the Contract Partner setting fort.h

in detail the alleged failure and/or deficiency of the Contract

Partner.. The Contract Partner sha.11 have thirty ( 3 O) days after

receipt of such written notice from the City to cure and/or correct

such failure and/or deficiency or to deliver to the City a written

notice alleging that no such event described i.n clause (a) or (b)

of subsection l of this Paragraph B has occurred and setting forth

in detail its reasoning as to why no such event has occurred. In

the event that the Contract Partner does not cure and/or correct

such failure and/or deficiency within said thirty (30) day period

or deliver to the City the written notice described in the

preceding sentence within said thirty ( 3 O) day period, the City

shall provide the Contract Partner with a second written notice

affording the Contract Partner an additional thirty (30) days to

cure and/ or correct such failure w"ld/ or deficiency . If the Contract

Partner fails to cure and/or correct the failure and/or deficiency

wi.thin such second thirty (30) day period, the City and the

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Contract Partner shall thereafter each select one (1) independent

third party to serve as an arbitrator of the underlying dispute and

shall together select one (1) additional mutually acceptable

independent third party to serve as an arbitrator so that a panel

of three (3) independent third-party arbitrators will be formed .

The panel so fanned shall. detennine: (a) i.f the alleged failure

a.nd/or deficiency actually exists, and (b) if the failure and/or

deficiency is detennined to in fact exist, whether such failure

and/or defici.ency has been cured and/or corrected by the Contra.ct

Partner or whether the Contract Partner has made substantial

progress in curing and/or correcting the failure and/or deficiency.

If the arbitration panel detennines that the Contract Partner has

made substantial progress towards curing and/or correcting the

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failure and/or deficiency, the City shall have no right to

t:enninate this Agreement; provided, however, that if such failure

and/or deficiency has not been finally cured and/or corrected by

the Contract Partner within thirty (30) days after the final

determination is rendered by the arbitration panel or within such

longer period of time as shall be determined by the arbitration

panel, the City shall have the right to immediately to t:e:r:minate

this Agreement: upon written notice to the Contract Partner.. If the

arbitration panel determines that the Contract Partner has not made

substantial progress towards curing and/or correcting the failure

and/or deficiency, the City shall have the right to immediately

terminate this Agreement upon written notice to the Contract

Partner .. The arbitration panel shall render its final

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determination within one hundred twenty (120) days of the City's

first notice of deficiency unless extended by mutual agreement of

the parties.

3. Upon the happening of any event desci:ibed i.n clause ( c) ,

(d) or (e) of paragraph l of this subsection B of Section 5, the

City shall have the right to immediately terminate this Agreement

upon written notice to the Contract: Partner .

4.. If the City terminates this Agreement in accordance with

the provisions of this subsection B of Section 5, the City shall be

obligated to pay to the Contract Partner, on the terms and

conditions hereinafter set forth in this paragraph 4, the sum
determined in accordance with the following formula:

____
D_
(A + B + C) x 3,653

Where: A = The amount: paid to the City in accordance with

Section 4 hereof .
Where: B = The unamortized portion, if any, as of the
date of termination of this Agreement, of any
advances previously made by the Contract
Partner for System capital improvements and/or
repairs in accordance with Section 7 hereof .
Where: C = The actual cost to the Contract Partner of the
installation of the Automatic Meter Reading
eauioment as certified to the City in
accordance with the provisions Of subsection B
of Section 6 hereof, or if such cost has not:
yet: been so certified, then C shall equal
$1., 000' 000"
Where: D = The number of days in the period beginning
with the da.t:e of termination of this Agreement:
and ending with June 30, 2004 .

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The sum to be paid by the City to the Contract Partner in

accordance with the preceding sentence shall be paid in five (5)

eaual annual installments, the first installment of which shall be

due one year after the date <;if the negotiated settlement between

the City and the Contract Partner or Mid-Atlantic, or a final

determination by a court of competent jurisdiction, as the case may

be, of the actual damages (including all attorneys' fees and other

expenses of litigat.ion or settlement) suffered by the City as a

result of the default by the Contract: Partner or Mid-Atlantic which

'
permitted the City to t:erminat:.e this Agreement pursuant t:.o this

subsection B of Section 5 . The Contract: Partner shall not be

ent:it:led to receive any interest on the sum which is to be paid by

the City in accordance with t.his pa.ragraph 4 of subsection B of

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Sect:ion 5 .
5. The City shall have the right to prepay the sum due and

owing to the Contract: Partner in accordance with paragraph 4 of

t:hi.s subsection B of Sect:ion 5 in whole or in part at any ti.me ..

6.. Notwithstanding anythi.ng in this Agreement: to the

contrary, the City shall be entitled to pursue a cause of action

against: the Contract: Partner or Mid-Atlantic, or both, as the case

may be, for any and all actual damages suffered by the City as a

result of any default by the Contract Partner or Mid-Atlantic under

paragraph 1. of this subsection B of Section 5, plus any and all

attorneys fees, litigation costs, collection costs or other

expenses incurred by the City .

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 C.. Termination for Cause bv the Contract Partner - 1. Upon

the happening of any of the following events of defaul.t: by the

City, the Contract: Partner shall have the right to terminate this

Agreement, upon sixty (60) days' prior written notice to the City:

(a) If a court of competent: jurisdiction determines that:

applicable I.aw (N.J.S.A . 40A:ll-15) requires the City to renew

this Agreement annually on any July 1 on or afte:?: July 1, 1995

and the City fails to renew this Agreement on any such July 1.;

or

(b) If the City Council of the City fails to enact an

ordinance establishing the rates for the supply of water

service to customers of the System which are required to be

established by the City in accordance with Section 1. 7 hereof_.,.

2. If the Contract Partner terminates this Agreement: in

accordance with the provisions of paragraph 1 of this subsection C

of Section 5, the City shall be obligated to pay to the Contract

Partner on the date which is one year after the date of termination

of this Agreement, the su..rn determined in accordance with the next

sentence, together with interest thereon at a rate of interest

equal to (i) the interest rate being paid by the City on any bonds,

notes or other evidences of indebtedness issued by the City in

order to fund such payment to the Contract Partner, or (ii.) if the

City does not issue any such bonds, notes or other evidences of

indebtedness, the monthly index for twentv (20) year taxexernpt

bond yields for the calendar month immediately preceding the date

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of termination of this Agreement as compiled by The Bond Buver or

any other similar tax-exempt interest index agreed to by the City

and the Contract Partner. The sum to be paid by the City to the
Contract Partne::::- in accordance with this paragraph 2 of subsection

C of Section 5 sha.ll be determined in accordance with the following

f m::nula:

D
(A + B + C) x
3' 653

Where: A = The amount paid to the City in accordance with

Section 4 hereof
Where: B = The unamortized portion, if any, as of the
date of termination of this Agreement, of any
advances previously made by the Contract
Partner for System capital improvements and/or
repairs in accordance with Section 7 hereof . _..
Where: C The actual cost to the Contract Partner of the
installation of the Automatic Meter Reading
ecruioment as certified to the City in
accordance with the provisions of subsection B
of Section 6 hereof, 6i if such cost has not
yet been so certified, then C shall equal
$1,000,000.

Where: D = The number of days in the period beginning

with the date of te:?:Itlination of this Agreement
and ending with June 30, 2004 .

3.. The City shall have the right to prepay the sum due and
owing to the Contract Partner in accordance with paragraph 2 of

this subsection C of Section 5 in whole or in part at any time,

together with accrued interest thereon to the date of such

prepayment .

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 4. The payments to be received by the Contract Partner from

the City in accordance with this subsection C of Section 5 sha11

constitute total satisfaction of any right, claim, cause of action

and/or entitlement which the Contract Partner has or may have

aqainst the City as a result of any default or breach by the City

under the terms and provisions of this Agreement.

D. .Termination for Unenforceabilitv of Aareement - 1 . If any

court, agency and/or other entity with competent jurisdiction shall

finally determine that this Agreement is unenforceable and/or

prohibited by law, or, if for any reason the City Council is

legally prohibited from enacting any ordinance establishing the

rates for the supply of water service to the customers of the

System which are required to be established by the City in

accordance with Section 17 hereof or any such ordinance so enacted

shall fail to become legally effective or shall no longer be

leqally effective, t.hen the City and the Contract Partner shall

each have the right to terminate this Agreement, upon sixty (60)

days' prior written notice to the other party .

2.. If this Agreement is terminated pursuant to paragraph 1 of

this subsection D of Section 5, the City shall be obligated to pay

to the Contract Partner in five (5) equal. annual installments, the

first installment of which shal.l be due one year after the date of

termination of this Agreement, the sum determined in accordance

with the next sentence, together with interest thereon at a rate of

interest equal to (i) the interest rate being paid by the City on

any bonds, notes or other evidences of indebtedness issued by t.he

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City in order to fund such payment to the Contract Partner, or (ii.)

if t.he City does not issue any such bonds, notes or other evidences
of indebtedness, the monthly index for twenty (20) year tax-exempt

bond yields for the calendar month imrnedi.ately preceding the date

of temination of this Agreement as compiled by The Bond Buyer or

any other similar tax-exempt interest index agreed to by the City

and the Contract Partner . The sum to be paid by the City to the

Contract Partner in accordance with this paragraph 2 of subsection

D of Section 5 shall be determined in accordance with the following

formula:

D
(A + B + C) x 3,653

Where: A = The amount paid to the City i.n accordance with'

Section 4 hereof.

Where: B The unamortized portion, i.f any, as of the

date of termination of this Agreement, of any
advances previously made by the Contract
Partner for System capital improvements and/or
repairs in accordance with Section 7 hereof .

Where: C The actual cost to the Contract: Partner of the

installation of the Automatic Meter Reading
equipment as certified to the City i.n
accordance with the provisions of subsection B
of Section 6 hereof, or if such cost has not
yet been so certified, then C shall equal
$1., 000, 000 ..

Where: D The number of days in the period beginning

with the date of termination of this Agreement
and ending with June 3 0, 2 0 04 .

3. The City shall have the right to prepay the sum due and

owing to the Contract Partner in accordance with paragraph 2 of

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this subsection D of Section 5 in whole or in part at any ti.me,

together with accrued interest thereon to the date of such

prepayment .

4. Upon termination of thi.s Agreement in, accordance with this

subsection D of Section 5, the payments to be received by the

Contract Partner from the City in accordance with this subsection

D of Section 5 shall constitute total satisfaction of any right,

1 .
c_a1.m, cause of action and/or entitlement which the Contract

Partner has or may have against the City pursuant to the terms and

provisions of this Agreement .

E.. Ootional Termination Ev the City - l.. The City may, at

its sole option and discretion, at any time during the term of this

Agreement, tenninate this Agreement for any reason whatsoever, upon

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ninety (90) days' prior written notice to the Contra.ct Partner .

2. If this Agreement i.s terminated by the City pursuant to

paragraph l of this subsection E of Section 5, the City shall be

obligated to pay to the Contract Partner, on or prior to the date

of termination of this Agreement, the sum determined in accordance

with the following formula:

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 _JL_
(A + B + C) x 3,653

Where: A = The arnount paid to the City in accordance with

Section 4 hereof .

Where: B = The unamortized portion, if any, as of the

date of termination of thi.s Agreement, of any
advances previously made by the Contract
Partner for System capi.t.al improvements and/or
repairs in accordance with Section 7 hereof .

Where: C The actual cost to the Contract Partner of the

installation of the Automatic Meter Reading
equipment as certified to the City in
accordance.with the provisions of subsection B
of Secti.on 6 hereof, or if such cost has not
yet been so certified, then C shall equal
$1,000,000.

Where: D = The number of days in the period beginning

with the date of termination of this Agreement
and ending with June 30, 2004 .

SECTION 6 .. AUTOMATIC METER READING INSTALLATION

A.. The Contract Partner agrees to install, at its sole cost

and expense, Automatic Meter Reading (herein called ".1'MR") devices

for each customer of the System as soon as practicable after the

Commencement Date, but in no event later than eighteen months after

the Commencement Date.. Notwithstanding anything in this Agreement

to the contrary, failure to install AMR devices due to

circumstances beyond the control of the Contract Partner, including

denial of access for purposes of installa.tion, shall not constitute

a default by the Contract Partner under this Agreement. Title to

the installed AMR equipment shall be conveyed by the Contract

Partner to the City. at no cost to the City, on July 1, 2004,

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unless this Agreement is earlier terminated in accordance with the

provisions of Section 5, in which case title to the installed AMR

equipment shall be conveyed by the Contract Part:ne:: to the City, at

no cost to the City, on the date of terminatiqn of this Agreement .

The City shall provide all reasonable and necessa::y assistance to

the Contract: Partner i.n order to expedite the installation process .

The Contract Partner shall obtain the City's prior approval for the

t:ype of met:e:: installed, and shall assign al.l manufacturing

warranci.es and representations to the City upon conveyance of the

title to the AMR equipment to the City .

E . As soon as practicable after completion of the

installation of the AMR equipment in accordance with subsection A

of this Section 6, the Contract Partner sha.11 del.i.ver to the Cit:y

a certificate, signed by an aut:hori.zed officer of the Contract

Partner, certifying to the City the actual. cost and expense of

installing the AMR equipment .

SECTION 7 . SYSTEM CAPITAL IMJ?ROVEMEN'l'S AND/OR REPAIRS

A.. For t:he one year period commencing on July l., l..9.94 and

ending on June 30, l..9.95 and for each one year period !:hereafter

commencing on July l. of each year and ending on J'une 30 of t:he

following year, the Contract Partner, aft:er consulting with the

City and/or its consult:ants, shall prepare a budget for such period

which sets forth i.n det:ail the capit:al improvements and/or repairs

t:o be made t:o t:he System during such period.. The Cont:ract Partner

shall be obligated to make and pay for at it:s sole cost and expense

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 the first $300,000 . 00 of the capital improvements and/or repairs to

be made to the System during each such period as set forth in such

budget. All charges made against the Contract Partner's obligation

to pay for the first $300, 000 .,oo of the capital improvements and/or

repairs to be made to the System during each such period shall be

made at the Contract Partner's direct cost of labor, material and

overhea.d, based upon the formula provided in the Agreement, dated

a.s of May __ , 1994, between the Contract Partner and Mid-Atlantic,

a copy of which is attached hereto as Exhibit "B" . The overhead

cost charged by MidAtlantic to the Contract Partner shall be

reasonable and shall not exceed the costs charged by Mid-Atlantic

to other water utilities for similar services .

B .. If for any reason, the Contract Partner does not incur

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expenditures for System capital improvements and/or repairs in any

one year pe:?:iod which are eqU.al to $300,000 . 00, then the Contract

obligation to contribute td the System capital

improvements and/or repairs during the next one year period shall

be increased to the sum of $300,000 . 00 plus the difference between

$300,000 .. 00 and the amount actually incurred by the Contract

Partner in the preceding one year period. It is the intent of the

parties hereto that the Contract Partner shall have contributed a

total of $3, 000, ooo. oo for System capital improvements and/or

,f ---------------
repairs by no later than June 30, 2004 .. If for any reason the

,lj'.p/ Contract Partner's total com:ribution for system capital

( improvements and/or repairs by June 30, 2004 is less than

"\ $3, 000, 000 . 00, then the Contract Partne.r shall pay to the City the
~~4 .
~-! -20-
difference between $3,000,000.00 and the amount actually

contributed by the Contract Partner over the ten year period .

C. Except as otherwise provided i.n subsection D of this

Section 7, if cost of the System capital .i,mprovements and/or

repairs in any one year period shall exceed the amount which the

Contract Partner is obligated to pay for System capital

improvements and/or repairs in such year pursuant to subsection B

of this Section 7, the City shall have the option to ( i.) finance

the costs of the System capi.tal improvements and/or repa.irs

exceeding the Contract Partner's 'obligations on its own terms and

conditions, \ii) elect to have the Contract Partner finance such

costs on behalf of the Ci.ty, or (iii) instruct the Contract:_ Partner

not to proceed with such capital improvement' and/or repair.. I;f the-'

City elects to finance such costs on its own terms and conditions,

the Contract Partner shall have no obligation to proceed with such

capital improvement and/or repair until the City shall have paid

over to the Contract Partner the estimated amount necessary to

provide for such costs . If the City elects to have the Contract

Partner finance such costs on its behalf, the Contract Partner

shall have no obligation to proceed with such capital improvement

and/or repair until (i) if necessary, the City shall have enacted

an ordinance increasing the rates for the supply of water service

to customers of the System to a level which both the City and the

Contract Partner agree will adequa.tely compensate the Contract

Partner for such costs (taking into consideration the labor,

material and overhead costs), and such increased rates shall have

-21.-
become effective, or (ii) t:he Cit:y and t:he Contract: Partner sha.l..l

have otherwise mut:ua.lly agreed t:a an arrangement: which adequately

compensates t:he Contract: Partner for such costs.

D.. Nat:wit:hst:anding any provision in t:his Agreement: t:a t:he

contrary, in t:he event: of a water main break or other emergency

sit:uat:ion relating t:o t:he System which t:hreat:ens the public health,

safety and welfare of the residents of the City, t:he Contract:

Partner shall be obligated ta repair and remedy the situation as

soon as practicable and, if t:he casts repairing and remedying such

sit:uat:ion shall cause t:he Cant:~act Partner to exceed its obligation

to pay for System capital improvements and/or repa.irs as set fart:h

in subsection B of t:his Sect: ion 7, then the City shall be obligated

to (i) reimburse the Contract: Partner far the excess amount as soon

as practicable thereafter, but in no event: later than one ( 1.) year

after the date of incurrence of such costs by the Contract Partner,

together wit:h interest: thereon to the date of repayment: at: a rate

of interest equal to (a) the interest: rat:e being paid by t:he City

on any bonds, notes or ot:he:r: evidences of indebtedness issued by .

the Cit:y in order to fund such repayment: to t:he Contract: Partner,

or (bl if the Cit:y does not issue any such bonds, notes or other

.evidences of indebtedness, the monthly index for t:went:y (20) year

t:ax-exempt bond yields for t:he calendar month immediately preceding

the dat:e of incurrence of such costs by t:he Contract: Partner as

compiled by The Bond Buver or any ot:her similar tax-exempt i.nt:erest:

index agreed to by the Cit:y and t:he Contract: Partner, or (ii) enact:

an ordinance increasing the rates for t:he supply of water service

22-
t:o customers of t:he System to a level which the City and the

Contract: Partner mutually agree will adequately compensate the

Contract Partner for such costs (taking into consideration the

labor, material and overhead costs).. It is contemplated t:hat such

'

an emergency could require t:he Contract: Partner to advance the

ent:ire $3,000,000 . 00 budget in a one year period .

SECTION 8 . WHOLESALE WATER SUPPLY

A.. On and after the Cormne;i;i.cement Date, the Contract Partner

shall ( i) perform all of the obligations of the City under the

Agree..rnent, da:ted December 3, 1992, between the City and its current:

supplier of wholesale wat:er, a copy of which is attached hereto as

Exhibit: ti ell I or any successor wholesale 'wate:r: supply contract

.. ~;:

(collectively, the "Water Supply Contract"), including, without

limita.t:ion, the obligation to pay all bills rendered to the City by

the supplier pursuant to such Water Supply Contract, and (ii) have

the right to exercise a.11 of the rights of the City under the Wa.ter

Supply Contract, except for the right to terminate the Water Supply

Contract which right remains exclusively with the City.. Any bills

or invoices received by the City pursuant to the Water Supply

Contract shall be promptly forwarded to the Contract: Partner. Any

bills so forwarded to the Contract Partner sha.11 be reviewed by the

Contract Partner, verified for accuracy and thereafter paid by the

Contract Partner.. Tf the City elects to terminate the Water Supply

Contract prior to its stated expiration date, then, upon request of

the City, the Cont.race Partner shall be obligated to provide the

.. 23 -
City wi.t.h a water supply on a wholesale basis, at. a price not. to

exceed t.he price t.he City would have been charged for wholesale

water supply pursuant t.o t.he Water Supply Contract... If the Water

Supply Contract terminat.es at i.ts stat.ed expiration dat.e prior t.o

the t.ermination of t.his 11..greement, t.hen, upon request of the City,

the Contract Pa.rtner shall be obligated t.o provide the City with a

water supply on a wholesale basis for the remaining term of this

Agreement at. a price not to exceed the highest price charged to t.he

City under the Water Supply Cont.ract, unless otherwise agreed to by

the City and the Contract Partner ..

B.. If. the City determines to terminate the Water Supply

Contract prior to its stat.ed date of expiration, the City sha.11

advise the Cont.ract. Partner of its intent to terminate the Water

Supply Contract prior to giving the required termination not.ice to "

the supplier under the Wate::- Supply Contract . If it is mutual.ly

agreed t.hat the Contract Partner shall rep;Lace the supplier under

the Water Supply Contract. as the City's wholesale water supplier,

then the City and the Contra.ct Partner shall coordinate the timing

of the termination of the Water Supply Contract with the

availability of a wholesale water supply from the Cont.ract. Partner ..

If necessary, the Contract. Partner sha.1.1 also be obligated to

upgrade the System, at its sole cost and expense, in order to

properly transport the new water supply into the System .

-24-
SECTION 9 .. OPERA.TI ON, MAINTENANCE ANIJ MANAGEMENT OF THE SYSTEM

A.. The Contract Partner agrees to operate and maintain the

System at all times on behalf of the City in compl.iance with all

State, Federal a.nd local laws and regulations. and accordance with

the terms a.nd provisions of this Agreement.. The Contract Partner

further agrees that the System shall at all times be kept in good

repair and working order and at all times shall be managed,

operated and maintained by the Contract Partner in an efficient and

economical manner, in accordance with the terms and provisions of

this Agreement and othe:r:wise in accordance with pi:udent indust:r:y

and utility pl:actice.. The Contract Partner shall perfonn periodic

testing of the System, including, without limitation, testing of

'
the AMR equipment installed in the System in accordance with_,,..

Section 6 he:r:eof, all. as shall be required in accordance with

pi:udent industry and utility practice .

B. The City shall have the right from time to time or at any

time to inspect the System and/or the operation thereof by the

Contract Partner .

C. The City shall have the right to continuously monitor and

review the perfo:r:mance of the System and the operation, maintenance

and management thereof by the Contract Partner and, if the City so

chooses, the City shall be entitled to hire a consulting engineer

and/or other consultant at its cost for purposes of conducting such

monitoring and review activities.. The Contract Partner shall keep

such records of all pertinent. onerating data and information

relating to the System, including accounting and financial records,

- 25 ..
as prudent industry and utility practice shall require. The City

shall. have continuous and unrestricted access to all components of

the System, . 1 d.ing,

i.nc_u all operating,
without limitation,

monitoring and financial data and inforrnat,ion relating to the

operati.on of the System required to be kept by the Contract Partner

in accordance with this Section and Sect.ion 13 hereof. The

Contract Partner shall be obligated to provide the City, upon

reasonab1e request., with copies of all operating data, accounting,

financial and other information kept by the Contract Partner in

accordance with this Sect.ion and Section 1.3 hereof.. If requested

by the City, the Contract. Partner shall provide monthly or

quarterly status reports to the City which set forth ba.sic

operating and financial infor:ma.tion relating to the System for the,,

previous month or qua.rt.er, as the case may be .

D.. The Contract Partner shall provide, at its cost and

expense, all labor, materials, machinery and equipment necessary

for the operation, maintenance and management of the System by the

Contract Partner in accordance with the terms and provisions of

this Agreement .

E.. The Contract Partner shall promptly respond to all

customer problems and emergencies relating to the System and shall

maintain at al..l times during the term of this Agreement a toll free

24 hour telephone number where customers of the System can report

any emergencies.. I.n addition thereto, the Contract Partner shall

provide, within the geographical limits of the City, a collection

. 2 6-
office (such as a bank) where customers of the System may pay their

bills during normal business hours Monday through Friday .

F. The Contract Partner shall provide, during the term of

this Agreement, free water service to the City Hall and all other

City offices existing as of the date of this Agreement, including

free water service to the City fire department, as well as provide

free water service for all fire departme;t related activities.. The

City shall not be required ta pay any hydrant fee during the term

of this Agreement.. The Contract Partner shall also comply with the

provisions of N.J-.S .A .. 40A: .31-10 .

G. All repairs and/or improvements to the System shaJ.l be

made by the Contract Partner in accordance with existing City

ordinances. If, during the course of excavation work necessary to

make repairs and/ or improvements to the System, hazardous waste

materials are uncovered by the Contract Partner, it shall not be

the obligation of the Contract Partne:?:: to. remove and dispose of

such hazardous substances . The Contract Pa.rtner shall, however,

take all of t:he necessary steps to notify the appropriate agencies

and determine the necessary seeps t:o properly dispose of such

hazardous waste . The parties legally responsible shall pay all

costs for ?UCh removal .

SECTION 10 .. STAFFING

The Contract: Partner shall provide a st:aff of qualified and

experienced employees who have direct experience in operating,

maintaining, and managing wat:er syst:e..'!1.S similar in nature and

-27-
character to the System, for operations, maintenance and management

procedu:r:es and shall provide such additional third party support as

may be needed to perform its dut.ies and obligations hereunder .

Said third parties shall be equally qualified. for the particular

. .

services to be performed and shall not have any direct cl.aim

against the City whatsoever .. The Contract Partner at all ti.mes

shall maintain the necessary number of employees, st.aff, and third-

party contractors to operate, maintain and manage the System in

accordance with the terms and provisions of this Agreement, to

.
adequately maintain the System i.n good repair and to adequately

operate the System to provide good service to the customers, and

protect. the health, welfare, and safety of the citizens of the

City .

SECTION 11. . LICENSES

The Contract Partner shall acquire and hold a.11. required

State, Federal, and local approvals, licenses, permits, and

certifications necessa.ry to operate, maintain, and manage the

System in accordance with the terms and provisions of this

Agreement.

SECTION 1.2 .. WATER QUALITY STANDARDS

A.. The Contra.ct Partner shall comply with all Federal, State,

and local regulations concerning safe drinking water standards

during the term of this Agreement.. The Contract Partner agrees to

indemnify and hold the Ci.ty harmless from any fines or penal.ti.es

-28-
assessed by the appropriate regulatory agencies during the term of

this Agree..~ent for any and all violations co!lllllitted by the Contract

Parcner, its agents, servants, or employees .

B.. The Contracc Parcner shall. have no obligation to indemnify

the City far any fines or penal.ti.es assessed for conditions which

pre- exi.sc the Commencement Date and which canscit:ut:e violations of

any current Federal, State, or local water quality laws o:r:

regulations. The City sha.l.l disclose to the Contract Partner any

and all such conditions known to the City as soon as practicable .

The Ci. t:y represents to the Contract: Partner that:, as of the date of

execution of this Agreement:, it: is not: aware of any such

violations.

C .. The Contract Partner shall comply with all applicable

State, Federal, and local laws, regulations, and ordinances,

including, without limitation, all environmental laws and

regulations as they apply to the Syst:e.~ and will maintain existing

regulatory licenses and/or pe=it:s (currently hel.d by the City)

necessary for the operation and maintenance of the Syste.~ in

accordance with the terms and provisions of this Agree.~ent:. This

provision shall not: be construed ca require the Contract: Partner to

make System capital improvements and/or repairs beyond those

required by the t:e=s and provisions of t.his Agreement: .

D. Ta the extent permitted by law, the City agrees to

indemnify and hold the Contract Partner ha.r!!'.less frcm a..--1y and a.ll

fines or penalties assessed by the appropri.a.t:e regulatory agencies

during the te= of this Agree.~ent: far any and al.l viola.ti.ans

-29-
committed by the City and for all. conditions which existed prior to

the Cormnencement Date and which constitute violations of any

current Federal, State, or local water quality laws or regulations .

Nevertheless, the City and the Contract Partner acknowledge that,

on and after the Cornmence..'ltent Date, the Contract Partner shall

operate the Syste..'lt in comnli.ance with all laws as required by the

te=s and provi.sions of this Agree..'ltent .

S:C:CTION 13 .. REPORTING REQUIREMENTS

The Contract Partner shall comply with all reporting

require..'!lents related to its operations and the operation,

maintenance, and management of the System, as mandated by Federal,

State, and local laws and :cegulat:ions ..

S:C:CTION 1.4. OPERATIONAL COMMITTEE

The City and the Cont::act Partner agree to establish a formal

committee which sha.11 meet every three (3) months to discuss issues

relaced to the operation, maintenance, and management of the

Syste..'TI; to receive and review renorts; and co confer generally as

a means of enhancing cormmmication between Che City and the

Concract Partner. In addi ti.on to such quarterly meecings,

representatives of the Concract Partner shall be available to meet

with the Mayor and me..'ltbers of the Ci.Cy Council of the City or their

authorized representatives as reasonably requested by the Ci.Cy

-30-
SECTION 15 .. EXl?ENSES

The Cont:ract: Part:ner shall pay a.11 expenses required for t:he

no:r:mal operat:ion, rnaint:enance, and management: of t:he Syst:em,

subject: t:o t:he 1imi.t:at:ions set: fort:h in Sect:ion 7 hereof rel.at:ing

t:o Syst:ern capit:al improvement:s and/or repairs .

SECTION 16.. INSURANCE

A.. The Cont:ract Part:ner shall. ma.int:ain, during t:he t:erm of

t:he Agreement, t:he following insurance.:

i.) Gener-al Liabili.ty Ins=ance and :Property

Damage: covering t:he Contract: Partner and the City in an

amount not less t.han $1., 000, 000 . 00 t:o any one (l) person and

$1.,000,000 . 00 for any one (l) occurrence for bodily injury,

and $1,000,000 .. 00 broad form coverage for propez:t:y damage.

'
ii.) Comprehensive Automobile Liability Ins=ance:

not less than $1,000,000 .. 00 fo:r: each accident for propert:y

dama.ge.

iii) Worke:i:s' Compensati.on: in accordance wit:h

Stat:e and Federal stat:utory requir'e..'!tents and liability

insurance of not less t:han $1.00, 000. 00 ..

iv} UmbreJ.la Excess Liability Ins=ance and

Aut=obile Liability: covering t:he Cont:ract: Partner and t:he

Cit:y wit:h t:he mininrum limit of $5,000,000.00 .

B.. Any System capit:al improve..'I!ent:s and/or repairs which are

funded t:hrough t:he proceeds of insurance shall not: be counted in

-31. ..
determining whether the Contract Partner has met its obligation to

P ay for System cap1'.tal. -improv e men t s an d/ or repo.l.rs

- se t "
'-ort h 1n

Section 7 hereof.

SECTION 17. RATES, FEES AND CEARGES

A.. Effective as of July 1, 1995 and as of each July 1

thereafter to and including July 1, 2003, the City a.grees, to the

extent permitted by law, to increase its rates for the supply of

water service to customers of the System to at least the rates set

forth for each such July 1 on Exhibit JIDJI attached hereto. Nothing

herein shall be construed to restrict the City from establishing

rates for the supply of water service to customers of the System

which are in excess of the rates set forth on Exhibit "D" attached
"
hereto, as such Exhibit D may be amended from time to time in

accordance with the terms of this Agreement.

B. The City and the Contract Partner agree tha.t the rates set

forth on Ex.li.ibi t D which are to become effective on ,July 1, 2001,

July l, 2002 and July 1, 2003 are intended to increase the ra.tes in

effect: for the prior one year period by two (2%) percent more than

the rise or fall in the United States Consumer Price Index (the

JI CPI JI) during such prior one year period .. The City and the

Contract Partner agree that the rates set forth on Exhibit D which

are to become effective on July l, 2001, July 1., 2002 and July 1.,

2003 shall be adjusted higher or lower to the extent that the CPI

for the prior one year period varies from the assumed three (3%)

percent increase which was used to compute the rates for those

-32-
dates shown on Exhibit D hereto. It is the intention of the City

and the Contract Partner that any such adjusted rates which are to

become effecti.ve on July 1, 2001, July l, 2002 and July l, 2003,

respectiveJ_y, will be reasonable, shall result in a reasonable

industry based return for the Contract Partner and will not be

excessive,

C. The City and the Contract Partner acknowledge that the

rates shown on Exhibit D do not include any additional rate

increases which may be necessary or required in order to fund any

System capital improvements and/or repairs which are in excess Of

the Contract Partner's obligation to pay for System capital

improvements and/or repairs as set forth in Section 7 hereof,

D, The City and the Contract Partner shall cooperate with

~

each other in determi.ning and establishing the connection fees to

be charged to new customers of the System connecting with t.he

System on and after the Commencement Date. All such connection

fees shall be established in accordance with the provisions of

N.J.S.A. 40A:31-ll,

E. The Contract Partner shall have the right., at its own cost

and expense, to participate in any legal action challenging the

validity or enforceability of any rates or connection fees

established by the City in accordance with this Section 17,

SECTION 1.8. BILLING AND COLLECTIONS

A, On and after the Commencement Date, the Contract Partner

shall be responsible for the prepa.ration, maintenance, and

-3 3.
collect:ion of all bills and invoices to the users of t:he System and

all costs and expenses associated therewith . The City agrees to

cooperat:e with the Contract: Partner in collection rnat:ters and to

use statut:ory powers pertaining to any and all, remedies granted to

municipalities for purposes of collect:ion. The Contract Part:ner,

in addition to other monies paid to the City pursuant to the terms

hereof, shall reimburse the City for any and all costs and expenses

incurred by the City in connection with the use of its statutory

powers and remedies to enforce such collections ..

B. The Contract Partner shall promptly respond to all

customez: billing and collection questions, problems, a.nd inqui.:t:ies

and shall maintain a toll free telephone number for customers of

'
t:he System to handle such questions, problems, and i.nqui.ries . The

Contract Partner shall. provide the City, upon request., a copy of

the Conr.:act Partner's written policy in dealing with customer

service and compla.ints relating to billing and collection matters,,

SECTION 1.9 .. APPLICATION OF RENTS, RATES, FEES AND OTHER CHARGES

A. On and after the Commencement Date, a.11 rents, rates, fees

or other charges for direct or indirect connection with, or the use

of the services of, the System shall be paid to and collected by

the Contract Partner and, except as otherwise provided in this

Section 19, shall be retained by and become the property of the

Contract Partner.

B,, Notwithstanding anything in t:his .ri.greement to the

contrary, any rents, rates, fees or other charges for direct or

.. 34-
indirect . connection wi.th, or the use of the services of, the System

which are collected by the Contract Partner on or after the

Commencement Date and are in payment for connections made with, or

services rendered by, .

the System orior
- to the Commencement Date

shall be paid over to the City by the Contract Partner as soon as

practicable after receipt thereof by the; Contract Partner .

C. Notwithstanding anything i.n this Agreement to the

cont.racy, any rents, rates, fees or other charges for direct or

indirect connection with, or the use of t.he services of, the System

which are collected by the City on or afte:c: the te=ination date of

this Agreement and are in payment for connections made with, or

services rer:;.de::ed by, the System prior to such te=ination date

shall be pai.d over to the Contract Partne:: by the City as soon as,.

practicable after receipt thereof by the Ci.ty .

D.. If, prior to July 1., 2004, the City enters into an

agreement to obtain a source of wholesale water supply to the

System pursuant to which the Contracc Partner can purchase

wholesale wate:: for the needs of the System at a cost which is

lower than the cost of water under the Water Supply Contract, then

the Contract. Partner shall pay over to the City the savings

realized by the Contract Partner as a result of such lower cost of

water.

E.. If during any one year period commencing on each July 1.

and ending on the following June 30 the water usage of the System

shall exceed an annual average of s.5 mill.ion gallons of water per

day, then the Contract Partne:: shall pay over to the City, as soon

-35-
 as practicable after receipt thereof, 20% of the net revenue

received by the Contract Partner resulting from the usage of the

System exceeding 5.5 million gallons of water per day after

deduction of the cost to t:he Cont:ract: Part:n.!=r of purchasing t:he

'
wat.er: 2.n excess or- 5 . 5 m1.' __
1 1,1.on
' ga11
.. ans ..

F. If during any one year period commencing on each July l

and ending on t:he following June 30 t:he water usage of t:he Syst:em

shall exceed an annual average of 6 . 0 million gallons of water per

day, then t:he Contract Partner shall pay over to t:he City, as soon

as practicable aft.er receipt. thereof, 50% of the net. revenue

received by t:he Contract Partner result:ing from t:he usage of t:he

Syscem exceeding 6. O million gallons of water per day aft.er

deduct.ion of the cost. to t.he Cont:racc Partner of purchasing t:he,,.

water in excess of 6 . 0 mi.Ilion gallons .

i:JI . \.' G.. As soon as

p:r:act.ica bl e -
a::::te:r:: .
:r:eceipt t h er:eo f , the
1"0
c..cr..~ ' -t:,
. ,\'0";.,.VConcract. Partner shall pay over t:o the City any rents, rates, fees
~-("' i.l~

\...r"' or other charges received by the Contract: Partner f:r:om cust.omers of

the System which result. from the City establishing rates for the

supply of water service t.o customers of t:he System which a.re in

excess of the rates set. forth on Exhibit "D" attached hereto, as

such Exhibit. D may be amended from t:ime to time in accordance with

the terms of this Agreement. .

SECTION 20 . INDEMNIFICATION

A.. The Cont.ract Partner agrees to, and shall indemnify and

hold harmless t.he Cit:y, it.s elective and appointive officers, and

- 3 6 ..
its duly authorized agents, servants, and employees from any

liability, including liability to third parties, for personal

injury, including death, and/ or property da..rnage which a.re caused by

or arise from the negligence or willful misconduct of the Contract

Partner or any subcontractor selected by the Contract Partner .

B. The Contract Partner, its employees, subcontractors, and

agents, shall not be responsible for any liability far personal

injury, including death, and/ or claims for property damages arising

out of circumstances which are beyond the control of, or which were

not caused by, the negligence dr w.illful misconduct of the Contract

Partner, its employees, subcontractors, or agents.

C. In the event that the Contract Partner and/or its

subcontractors, together with the City or any third party, are

negligent, and the negligence of each is the proximate cause of "

such damage (s), then each party shall be responsible for the

portion of the liability or damages equal:ca that party's portion

of the liabili.ty or damages equal to that party's comparative share

of the total negligence.. The parties reserve their rights to

conduct their own defense and settle any claims made against: them

or for which they will be responsible.

D. The Contract Partner's indemnification shall include the

reimbursement to the City of all legal fees and expenses reasonably

incurred, unless it: is determined that: the City bears

responsibility for the cla.ims asserted .

.. 3 7 ..
SECTION 21 MEDIATION

In the event that the parties are unable to reach an agreement

regarding (i) any of the provisi.ons to be renegotiated at the ten

( lO) year intervals as set forth i.n subsec;tion B of Section 2

hereof, or (ii) the rate increases required to adequately

compensate the Contract Partner for expenditures for System capital

improvements and/or repairs whi.ch are in excess of the Contract

Part:ner's obligation to pay for System capital improvements and/or

repairs as set forth in Sec ti.on. 7 hereof, the City and the Contract

Part:ner may designate an agreed-upon media.tor to recommend a

resolution of the dispute. The recommendation at: such mediator

shall not be binding unless both the City and the Contract Partner

agree to accept such recommendation and incorporate the terms of"

the recommendation into this Agreement.

SECTION 22. WRONGFUL ACTS OR OMISSIONS'

Wrongful, willful, or negligent aces of t.he City, through its

offi.cers, agents, or employees, which cause damage to the System or

to other parties or properties shall not be the responsibility of

the Contract Partner .

SECTION 23 . UNFORESEEN COSTS

Unforeseen costs associated with wrongful acts or omissions

described in Section 22 hereof, including those which increase

maintenance expense, repair costs or other expenses beyond the

control of the Contract Partner are the responsibility of the City ..

- 3 8-
SECTION 24 . LABOR STOPPAGE

In the event a labor action, stoppage or dispute which

disrupts or prevents the Contract Partner.' s employees or its

subcontractor's employees from entering upon and working on any

part of the System, the Cit.y, with the Cont.ract Partner's

assistance, or the Contract Part.ner itself, shall seek appropriate

legal injunctions, remedies, or court orders . In any event, the

Contract Partner shall continue to operate the System through the

use of office personnel, management:, or other resources at its

disposal.. The Contract Partner shall always maintain operation of

the System t0 protect the health, welfare, and safety of the

customers of the System and the residents of the City .

SECTION 25 . MISCELLANEOUS

A.. New Eauinment:.

Any new equipment installed in the System by the Cont.race

Partne:?: during the term of this Agreement shall become the property

of the City.. The Contract: Partner shall maintain books and records

regarding any such new equipment:. Prior to making any significant

change to the System or expenditures of its awn, the Contract

Partner will consult with the City .

B.. Enforcement ..

The failure an the part of any party t:.o enforce any provision

of this Agreement shall not be construed as a waiver of its right

to enforce such provision in the future .

- 3 9 ..
 C. Assicrrunent ..

This Agreement shall not be assigned by any party without the

prior written consent of the other parties, which consent shall not

be unreasonably withheld .

D. Eoual Oooortun i tv..

The Contract Partner is an equal opportunity employer ..

"
E.. Entire Acrreement,..

This Agreement contains the entire agreement between the

parties hereto relating to the operation, ma.intenance and

management of the System and supersedes all previous or

contemporaneous communications, representations, or agreements .

This Agreement: may be modified only by written amendment: signed by

the parties hereto.

f

F. Not; ces,..

All not.ices given pursuant to the terms of t.his Agreement

shall be in writing and delivered in person or transmitted by

certified mail, return receipt requested, postage pre-paid ..

Notices required to be given to the Contract Partner shall be

addressed as follows:

Allan D .. Shakley, Secretary

Hackensack Water Company
200 Old Hook Road
Ha.rrington Park, New Jersey 07640

Notices required to be given to the City shall be addressed as

follows:

City Clerk
Hoboken City Hall
Hoboken, New Jersey 07642

-40-
or to such other address (es) as may be specified by written notice.

G.. Public Notices .

The City shall issue a.11 public notices. associated with non-

compliance with regulatory requirements for drinking water

standards, and the Contract Partner shall provide all necessary

support which the Ci.Cy may reasonably require.

H.. Annlication of Law.

This Agreement shall be const:z:ued in accordance with, and is

subject to, all applicable laws, rules, and regulations of the

United States of America, the State of New Jersey, any a.ppropri.ate

poli ti.cal s1:Jlldivi.s ion ( s) , and any relevant regulato:z:y or

admi.nistra.tive agency .

41-
 j
IN WITNESS w"HEREOF, t.he patti.es have hereunto set their
hands and fixed their seals as of the date f i.rst above written.

ATTEST: CITY OF HOBOKEN

/
..

By: { , (. : c.
~~~~~"'-'~Ma~
~--;~ " ! (. (. ' !lA /l/.1.--i;

.)
I
ATTEST: HACKENSACK WATER COMP.ANY

Bv:
~
,j .i
'~
, . C,,
-Ii \t{_(/ / , ..C-.tt'l'f----....
Tl tle: (-1<.ES i bctv,
PAT~ICIA DAVIDSON
Assistant Secretary

ATTEST: MID-ATLA.J.'fTlC UTILITIES

CORPORATION

PAT~iCIA DAVIDSON
Assistant Secretary

-42-
 EXHIBIT A

GEOGRAPHICAL BOUND.ARIES
OF TE:E SYSTEM:
 EXEIEIT E

AGREEMENT
BETWEEN

E:ACKENSACK WATEl!. COMPANY

AND

MID-ATLANTIC UTILITIES CORPORATION

 THIS AGREEKWT dated as of the 2-3 day of 111,4 )/ ,
1994,

EETi'lEEN

RACKENSACX WATER COMPANY, a public utility corporation

duly organized and exiscing pursuant to the laws of the State of
New Jer3ey {hereinafter "Hacken3ackH)

MID-ATLANTIC UTILITIES CORPORATION, a corporation duly

organized and existing pursuant to the laws of the State of new
Jersey (hereinafter "Mid-Atlantic")

W I T N E S S E: T H:

WE::EREA.S, it has been determined by the management of Mid

Atlantic and Hackensack that the most effective and economical
mer.hod of providing and obtaining certain services and materials to
and for Mid-Atlantic is for Mid-Atlantic tci utilize the facilities,
services, materials and expercise of management, supervisory,
=lerical and technical personnel provided by Hackensack,

NOW, TBXREFORE, in consideration of the promises and the

mutual covenants and conditions contained herein, and other good
and valuable consideration, the parties agree a.9 follows:
 1. DORA.l'ION 0!' AGREEMENT

1. 1 The services to be rendered by Hackensack shall

corrunence on , 1994, and shall continue for an
initial period of one (l) year from said date. Thereafter, this
Agreement shall be automatically renewed, and the terms set forth
herein shall be binding upon the parties hereto, for up to three
(3) additional successive yearly periods, unless and until
terminated by either party, upon prior written notice to the other
during the thirty (30) day period preceding the final month of the
then current yearly segment. All terminations shall be effective
on the last day of the current yearly segment, Fees for such
services rendered shall be d~t~rmined as set forth in Sections 3.1
through 3.5 below.

1.2 Notwithstanding the provisions of Section 1.1,

either party may terminate this Agreement or any renewal thereof,
for any reason, upon thirty (30) days' written notice to the other
party.

1. 3 After this Agreement has been in effect for a perj.od

of four (4) years, renewals shall be by separate Agreement, duly
executed by the parties hereto.

2. SERVICES AND CC!o!PE:NSATION

Hackensack agrees to provide to Mid-Atlantic on certain .

facilities, services and expertise of personnel and certain other
services and materials as set forth hereinafter. Mid-Atlantic
agrees to utilize and pay for same.

3. BA.SIS O!' CRARG!i:S TO TRli: SUB.:racT CCMPANili:S

3.1 In addition to those services defined in Appendix A,

Hae kensack sha 11 pro"7 ide to Mid-Atla'ntic the se:::-v ices of certain
clerical and technical personnel. For .such services, Hackensack
will bill Mid-Atlantic for the ~clual time these individuals de~ote
to Mid-Atlantic, based upon periodic time sheets submitted by such
indi v idual.s .

 3.2
In addition to those services defined in Appendix A,
Hackensack will provide to Mid-Atlantic the services of management
and supervisory personnel, and certain technical personnel whose
services are not included in the aforesaid Appendix. For such
services, Hackensack will bill Mid-Atlantic for the actual time
such individuals devote to Mid-Atlantic, based upon periodic time
3heets submitted by such individuals.

3. 3 Hackensack shall provi.de certain facilitie.s and

materials to Mid-Atlantic, all as more fully described in Appendix
A annexed hereto and made a part hereof. Additionally, Hackensack
shall allocate a percentage of its General and Administrative costs
=o Mid-~t!anti.c for miscellaneous General and Administrative
expenses which will benefit Mid-Atlantic, all as more fully
described in Appendix A, subpart "M" annexed hereto and made a part
hereof.

3. 4
For budgetary purposes, Hackensack agrees to
allocate a percentage of its projected General. and Administrative.
costs to Mid-Atlantic, as referred to in Section 3.3 above, at the
start of each fiscal year pursuant to a formula based primarily gn
the number of customers serviced by Mid-Atlantic as well as the
!"listorical needs of Mid-Atlantic and the projected cost of the
services and materials to be supplied. Sixty (60) days after the
close of the fiscal year, Hackensack will provide an adjusted
statement which will accurately reflect, b~~ed upon actual costs as
well as allocated percentages, those costs Hackensack had incurred
on behalf of Mid-Atlantic for the previous fiscal year. The
statement and supporting dai:a will be in sufficient detail to
esi:ablish the reasonableness of the fees and costs t:o Mid-Atlantic
by Hackensack .

.3 . 5
Any additional services obtained or expenditures
made by Hackensack for and on behalf of Hid-Atlantic will be billed
by Hackensack to Mid-Atlantic.

3. 6 The itemization of personnel, services and

administrative costs contained in Appendix A shall not be construed
to prevent the utiliz,tion by Mid-Atlanti.c of services of a similar
nai:ure by Hid-Atlantic personnel or other parties, where
u.pp.::cpr-iate,,

3
 4. Mi:THOD OJ!' BI'LLING AND l?.A:XMENT

4.1 Hackensack shall bill Hid-Atlantic for the services

provided and expenditures incilrred for and on behalf of Mid-
Atlanti:, as defined in Section 3.1. and .3.2 at:.:.v2, on a monU,1.:,'
basis .

4. 2 ~~r ~he services discus3e~ in Sections 3.3 dnd 3.1

:ibov,:, Ha:kensa:k shall bill on a mqnthl.y basis . Each rncnth,
Hacken!ack 3ha~! bill Mid-Atlant:c one-twel:t~ ( l. /.: 2) 0 f t ~~ ~

----
----= --
--

- \.,. ~ ... - , ,
-.:.. .... - .!
i 30) of an invoice from Hackensa~k .

5. MISCE!.I..ANEOUS

5.1 A~lcovenants and agreements herein by or on bena~:

of Hackensack er Hid-Atlantic shall bind their respec:i~e
successors and as~igns, whether expressed or not .

 IN WITNESS ~l!', the parties hereto have caused this
Agreement to be duly executed on the date first above written.

WITNESS:

By:
Donald Correll - President

WITNESS:

5
 APPENDIX A

The following is a list of services that Hackensack will

provide to Mid-Atlantic Wat.er Company, Inc. (Hid-Atlantic), and for
which costs will be allocated to Mid-Atlantic Water Company, Inc . ,
at. year end

A Accounting: Hackensack shalf prepare and implement or

make available accounting methods and procedur:e.s that conform fully
to the requirements, rules and regulations of governmental
aut.horities having jurisdiction over Hid-At.lantic. Similarly, it.
shall provide preparation and .i;-eview of Mid-Atlantic's monthly
financial reports, annual reports and reports to any governmental
authorities, It .shall provide adv ice and assistance in the
establishment and maintenance of current record keeping techniques;,
review of account.ing procedures, methods and forms; and evaluation
of systems of internal cont.rol for receipt and disbursement of
funds, materials and supplies, and other assets.. Hackensack shall
further maint.ain accounting records.

Hackensack shall assist in the preparation of operating and

canst.ruction budgets and monitor the control over such budgets by
comparing expe.r ienced costs to the projections .

Hackensack shall prepare or assist in the preparation of

federal, state and local tax returns for Mid-Atlantic.

B.AQn1ni.stration: Hacken.sack shall make employees

available to perform or assist in the performance of Hid-Atlantic's
corporate activities. These employees shall keep themselves
informed of all aspects of operations and shall r:eoularly visit
Mid-Atlantic's facilities. Hackensack shall make recommendations
to Mid-Atlantic for operating expenditures and for additions to and
improvements of property, plant and equipment. Hackensack shall
keep abreast of economic, regulatory, governmental and operat.ional
developments and conditions that may affect Mid-Atlantic and advise
Mid-Atlantic of any such developments and conditions to the extent
that they may be important to Mid-Atlantic.. Hacken.sack shall
provide or make available an audi.t staff for periodic audits of
accounts, records, policies and procedures of Mid-Atlantic and
submit reports thereon .

c. Camnmication.s: Hacken.sack shall recommend procedures to

promote sati.sfactory relations with employees, customers,
corrunun~ties and the general public and assist in the preparation of

corrm1unicat.i.on materials such as press releases and brochures .

D. Co:rporate Secretarial: Hackensack shall ma in ta in, in

.such places and manner as may be required by applicable law,
documents of Mid-Atlantic such as minute books, charters, by-laws,
::on t.ract.s deeds and other corporate records, and shall administer,
an orderly program of records retention .
.r

Hackensack shall prepare or review documents and reports

required by Mid-Atlantic such as deeds, easements, contract.s,
charters, franchises, tru.st indentures and regulatory reports and
:i!..ings .

E. ~qineering: Hackensack shall make available engineering

services to assist Mid-Atlantic in planning for, operating,
maintaining and constructing its facilities .

It shall conduct system surveys and prepare or review maps,

charts, operating statistics, reports and other pertinent data.

It shall assist Mid-Atlantic in the proper maintenance and

protection of Mid-Atlantic's properties by periodic inspection of
its structures and equipment.

2
 The engineering services provided by Hackensack shall also
include the conduct of field investigations as necessary to obtain
engineering information and, when required, the preparation of
studies, reports, designs, drawings,
estimates, cost
specificacions, and contracts for the construction of additions to
or improvemencs of Mid-Atlani:ic's facilities.
Hackensack shall
arrange for the purpose of equipment, materials, and supplies and
assist in the evaluation of application procedures.

E'. E'in=cia.l: Hackensack shall assi.st in the development

and implementacion of financing programs for Mid-Atlantic.

Hackensack shall provide a~sistance to Mid-Atlantic in the

preparation of all financial reports.

G. H=n Resources: Hackensack shall provide qualified

;:ierscnnel. fer Mid-Atlantic and shall further carry out training
prog::ams for the development of personnel on behalf of Mid-
Atlancic. It shall also advise and assist in regard to group
employee insurance, pension and benefit ~lans and in the drafting
or revising of those plans when required. It will keep Mid-
Atlancic apprised of all employment laws and develop procedures and
controls to assure compliance.

H. In.fomtion Systems.: Hackensack shall make available to

Mid-Atlantic electronic data processing services. Those services
shall include customer billing and accounting, preparation of
financial ~taternents and other reports including those required by
Federal and State agencies.

3
 I. 0pera.tio11: Hackensack shall develop and assist in the
implementation of ope.rating procedures to promote the efficient and
economic ope.ration of Mid-Atlantic. Periodic ope.rational .reviews
will be performed by Hackensack personnel and any deviations from
adopted procedures will be reported to Mid-Atlantic.

J. Rata.s and Revenue: Hackensack shall make recommendations

for changes in .rates, .rules and regulations and shall assist Mid-
Aclantic in the conduct of proceedings before, and in its
compliance with, the .rulings of .regulatory bodies having
jurisdiction over its ope.ration. It shall keep abreast of economic
and .regulatory developments and conditl.ons that may affect Mid-
Atlantic; and advise Mid-Atlantic of any such developments and
conditions to the extent that. they may be important thereto.. Rates
and Pevenu-= personnel shal.l be provided for rate filings or
applications and for the preparation of supporting documents and
e.xhi.bits requested or required by Mid-Atlantic and its regulatory
commissions. Hackensack shall al.so make qualified personnel
available to testify on Mid-Atlantic's behalf as required du.ring
any regulatory proceedings.

K.. Risk Management: Hackensack shall make available a Risk

Management Program to .review the exposures to accidental loss 0
Mid-Atlantic, recommend efficient methods of protection either
th.rough the purchase of insurance, self-insu.rance or other .risk
management techniques, Hackensack shall fu.rthe.r a.r.range for the
purchase of insurance cove.rage. It shall also supervise
investigation procedures; .review claim.s, and negotiate and assist
in, and evaluate proposals for, .settlement on behalf of Mid-
Atlantic. It shall assist in the establishment of safety and
security programs to avoid or minimize .risk and loss.

 Water Qu.U.ity: Hackensack 9hall assist Mid-Atlantic in
standard.s of governmentaland inagencies
asi::ai:::l.ishing and attaining Mid-Atlantic's water qualify objectives.
!t sha!l assist in providing design criteria for processes,
::crd!~ai::!ng with public agencies, developing approaches and
EC.i.J:i::ins co water quality problems, and providing technical
5ssis<:6nce and general direction ta Mid-Atl.antic.

:-:a:k:ci5ack shall also provide laboratory services for analyses

__ =~~~iraj by relevant regulations.

'.!
Miscal.laneou:s &xt>en.se.s: 1:!ackensack shall, on behalf of
:'.:.:!-'.:~an:i:, provide for miscellaneous General. and Admi.ni.strative
.ouch as: tran.sportatian expenses; telephone charge
delivery service; stationery and supplies; postage; due9 1 ,

-"tc.5 ::i.p;:i.::;n and seminar expenses; automobile lease expen.se.s; rent

::::::.;; ::ravel and entertainment expenses. Mid-Atlantic shall he

5
 EXHIBIT C

WATER SUPPLY CONTRACT

 _, -

WHEREAS, the City of Hoboken is in need of a bulk water

supplier to supply water to its tansrnission .and distribution system
for both private and public use; and

WHEREAS, the City Council and.Administration Officials have

negotiated with to suppliers, to wit: Jersey City Water Department
and Hackensack Water Company and request.ed each to submit a sealed
proposal; and

WHEREAS, the Business Administrator Edwin Chi.us, Public Works

Director Roy Haack and Water Supervisor Frank Swart each recommends
that the proposal of Jersey City Water department be accepted; now,
therefore, be it -

RESOLVED, that a contract be prepared by the City Attorney for

the purchase of water from the Jersey City Water Department which
shall include but ;iot limited to the followi;1g terms:

1.. A ten year contract with the option that the city of
Hoboken may terminati the contract at any time upon 90 days notice
to the Jersey City Water Department .

2" The water rates shall be as follows:

1st year $1, 000 . per pmg F

2nd year $1,050 . per p:og

Jrd year $1,125 . per pmg
4th year $1,250 . per pmg
5th year $1,400. per prng.
6th-1.0th year $1.,500 . per pmg .

3.. The rates enumerated in the contract will not be

increased for any reason during the ten year term of the contract;
whatsoever, including capital improvements; or costs escalation by.
virtue of any governmental requirement; or losses sustained by
Jersey City Water Department by natural or accidental disasters .

4 .. The water quality will at all times meet the standards

as required by any governmental agencies and the Jersey city Water
Departr:tent will guarantee this requirement will be sustained
throughout the contract .

5. All the terms of the proposal of {Jersey City Water

Department shall be included in the contract /together: with such
ter;:;is and agreements as approved by the City Attorney of Hoboken;
and be i t further -

RESOLVED, that' the Mayor is hereby authorized to execute said

contract and the City Clerk is hereby authorized to attest the same
and to affix thereon the seal of the City of Hoboken.

MEETING: December 2, 1992

 A G R E E ME N T

This is an Agreement made this Jrd day of December , 1992

between the City of Hoboken, a muAicipal corporation of the State
of New Je:::-sey, hereinafter referred to as "Hoboken" and the City
of Jersey City, a wunicipal co::-pora ti on of the State of New Jersey /
hereinafte:r: refer:::ed to as 11 Jersey City 11 ..

WITNESSETU:

WHEREAS, Jersey City owns and operates a water supply system;

and
WHERE.AS, Hoboken has requested that Jersey City provide it
with a supply cf water for private and public use; and

WHER;:As, Jersey City has agreed to supply Hoboken with water

for a period of ten_ (10) years upon the terms and conditions set
forth herein;

NOW, THERE~ORE, in consideration of the promi.ses and of the

mutual covenants herein contained, the parties agree that:

ARTICLE I

WATER SUPPLY.
A. Exclusive Suoolier: Hoboken agrees tilat Jersey City will
be the sole and' exclusive supplier of water to the city during the
term of the Agreement.

B. Water Suooly Obliaation: Jersey city agrees to supply

water to the Hoboken at a rate not to exceed 6,000,000 gallons~
day at normal operating pressure. In the event of a fire protection
emergency, or :future demand, where Hoboken requires more than
6, ooo, ooo gallons per day, Jersey city agrees to use its best
efforts to provide safe, adequate and proper service to meet
Hoboken's excess demand for water consistent with Jersey City's
other system r~quirements.
I
C. Hoboken shall not resell water purchased from Jersey City
for use or cons1:1rnption outside the municipal boundaries of Hoboken.

D. Adjustment of Maximum Purchases. Hoboken may serve upon

Jersey City a writ.ten notice signed by a proper offi.cer of Hoboken
requesting a new maximum. Jersey City shall indicate i.ts
acceptance of ~he new maxiii1i..l'm by ~crving upon Hoboken within JO
days of recei.pt of such notice a written acceptance signed by its
Business Administrator or other designated representative. The
new maximum shall remain i.n effect for the remainder of the tei:m
unless changed under this article.
 ARTICLE II
Points of Deliverv, Water Main cut, & Wet Tao Installatio~

Water to be supplied by Jersey city hereunder shall be

delivered to Hoboken at the existing point or points of
interconnect!.on bet,;een water mains of the t;.io parties and such
other points of delivery as may be agreed to from time to time.
All water delivered to Hoboken shall be continuously measured by
one or more rneters presentl.y located at existing meter stati.ons or
such further meter stations as may be agreed upon by the parties.
Both parties shall have the right through their duly accredited
representatives to have access to such meter or meters and to
inspect and test same. Water purchased by Hoboken shall be
delivered at the point of interconnection at the prevailing
unregulated pressure of the Jersey city system. Jersey City shall
inspect and, if necessary, recalibrate the water meters at the
above r..entioned meter s ta ti.ans every six ( 6) months.

Hoboken shall be permitted to attach a device, the

specifications of which meets the approval in writing of Jersey
City, which will facilitate the reading of the above mentioned
water meters by Hoboken and Jersey city at a designated remote
location. Jersey City also reserves the right to approve the
instal.lation of said device. >

At the recuest or Hoboken, Jersey City, at its sole

discretion, may install '"..iet taps" and "water main cuts" within
Hoboken's service area. All installations shall be done in
conformity with the terms, standards and procedures outlined in
Exhibi.t A. Jersey city shall bill Hoboken for said installations
at the rates provided in Exhibit B.

i\RTICLE III
Rate Schedule
'
Hoboken shall pay [or all water delivered pursuant hereto i.n
accordance with the rate schedule entitled "Service to Other
Systems Under Contract" of the Second Party's tariff for water
service, annexed hereto as Exhibit c, or as said rate schedule may
be changed from time to time. Hoboken shall pay to Jersey city all
sums due i.t urider this contract on or before the JOth day after the
bill is submitted.

i\RTICLE IV
Guaranteed Rate

The rates enumerated in the contract will not be increased fer

any reason ~~ring the ten year term of the contract; whatsoever
including capital improvements; or costs escalation by virtue c
any governmei;ital requirement; oi lesses sustained by Jersey cit:r
Hater Department by natural or accident.al disasters.
/ l\f<TICLE V

The term of: this Agreement s!"lall be for ten ( 10 J years

beginning January l, 1993. Hoboken may terminate this contract
upon ninety (90) days wri.tten notice ta Jersey City, The carties
hereto agr:-ee to negotiate a ner...: cant!:'act one year prior '"to the
termination of this Agreement .

ARTICLE VI

War, etc ..

Nei.ther party shall be considered in default of any of i.ts

obligations i.f performance is prevented or delayed by war,
resolution, hostilities, civil commotions, strike, epidemic,
accident, fire, wind, ctr-aught, flood, or explosion; by reason of
any law, o:-der, proclamation or regulation of the United States of
America or ether government authority; or by reason of any act of
God, whether the.samL or of a di.fferent nature.

If a water emergency is proclaimed by Jersey city, Hoboken

agrees ta issue a similar declaration withiri i.ts municipal limits
and promulgate such ca6s.ervatian measures as shall be necessary to
reduce water consumption ta the same degree as such conservation
measures are imposed within the municipal limits of Jersey city.

ARTICLE VII
Acoroval of Water Policv and suoolv council

This Agreement shall be filed with and subject ta approval by

the Water Policy and Supply Council of the Department of
Environmental Protection and Energy of the State of New Jersey as
required by law.

ARTICLE VIII
ADDITIONAL SERVICES.

Additional Services Within the city Water svstem: Jersey City

agrees ta provide, within the city Water System, at no cast to
Hoboken, upon reasonable request by Hoboken, electronic leak
surveys, water quality testing as required by law, and emergency
system assistance subject to the reasonable availability of Jersey
City personnel and ~qui.pment.

ARTICLE IX

Water Quality

The water ,quality will. at all times meet the standards as

required by any governmental agencies and the Jersey City Water

Depart::ient will guarantee this requirement will be sustained
throughout. the cantr~ct.
ARTICLE X

General

No Benefit: This Agreement is deemed to be for the benefit

of the parties hereto and not thi~d party shall acquire any rights
or clai~s by reason of this Agreernent .

Notices: All notices, requests, demands . and other

communications hereunder shall be in writing and shall be deemed
to have been duly given to Hoboken if delivered or mailed by
registered mail to the Business Administrator, City Hall, Hoboken,
New Jersey and to the Business Administrator, City Hall, Jersey
City, New Jersey. If mailed, the date of mailin~ shall be deemed
to be the date on which notice is given, and the postal receipt
shall be conclusive evidence between the parties as to the fact <J.nd
time of delivery.

Authoritv: It is represented that the persons signing this

1'.gree:::ent:. for the respective parties have the authority to do so
and certified copies of all statutes, resolutions, orders or other
docu~ents necessary to evidence such authority are annexed hereto.

CITY OF HOBOKEN

ATTEST:
-~ a4.r .
bv:
g_g_
PATRICK PASCULLI, Mayor

by:

ATTEST:

 __......,,. ..
~ii~:.
. ' .
' .
EXHIBIT l\.

All macerials shall be supplied by the Contractor and shall

confo;:m to the "Standards of the Jersey City Water Deparcment".
See Paragraph (C) below. The Contractor shall e:<cavate an area
around the water ;;ia1n as d irecced by a representative of the
Jersey Ci::y \.lacer Depart;;ient. Furthermore, the Contractor shall
install the tapping sleeve and the tapping gate valves in
accordance with the "Standa;:ds of the Jersey City \.later
Deoarcmenc" and the manufacturer's recommendations . If a
conflicc: a;:ises between said Standards and recommendations, the
Jersey City \.later Depa;:c::nent shall be contacted for a resolution
of same .

All oE the above-wencioned CJork shall be completed and

inspec:ed by Che Jersey Cicy \Jacer Department at lease 24 hours
prior co tCie dis;:iacching of a City cre"' co install said water
cue . Al.l. oermits and rnacerials shall be on-site at the time
scheduled E~r the City crew to begin work .

(C) All \let ~aps -cr \lacei:- Cuts shall only be installed on
Saturday GJDrning only.. The City of Hoboken shall confirm that
any and all. excavations and/or installations of capping sleeves
and tapping valves co01ply with the "Standards of the Jersey City
De.::ia= c~e.nt:
11
Wace.I: ..

A licensed plumber and official of Che Hoboken Water

Department shall. be on-sice 30 minutes pcior co the arrival of
the Jersey Cicy Water Deoactmenc's ins~allation crew.. The
excavacion shall be open an~ dry.

ihe Hoboken \.late:: Department shall confir":n work three (3)

days prior to the scheduled installation and verify again
eighteen (18) hou;:s prior to installation.

(D) "STANDARDS OF THE JE?,SEY Cl TY \.IAI'C:R DEPARH1ENT"

Ihe Standards referred to are contained in Paragraph C.

Copies of said standards shall be made available co the public by
the Hoboken Water Department. Any questions of said- Standards
muse be addressed to the:

JERSEY Cl TY \./ATER DEPARHlENT

DIVISION OF WATER ENGINEERING
60 COLLARD STREET
JERSEY CIIY, NEW JERSEY
(E) PAYMENl OF FEES

Ihe City of Hoboken shall be responsi~le fer the collection

of all fees enumerated in Sections A & B above. Said fees shall
be added to the City of Hoboken's monthly water bill, based upon
the work performed during said billing period .

 1 of 2

\.iST TAP & \.IAT:::R ~AlN CUT INSiA!..LAT'lONS

(A) ~r.: r TAPS -.- .....

... -- rEE
TAP SiZE SINGLE TAP MULTi?LE TAPS
3 / 4 inch s 150 ~ 125 each
1 inch 225 185 each
1.-1/4 inch*"llt 300 250 each
1- l / 2 inch :; 7 5 310 each
2 inch 450 37 5 each

*l-l/4 inch caps co be disconcinued afcer Che Cicy's supply is

exhaus:ed .

The above fees include al.1 labor and rnacerials necessary for
che inscallacion of said cap.. fhe mulciple c,ap fee \.lill apply
1.Jhe.n mote "chan one t:ao is inscalled on any single day.. Exiscing
service cap shall be ihuc and capped prior co che inscallaciori of
cbe ne\.I cap .

(B) WAII:R MAIN CU'i'S - (4" I~ROLJGH l:Z" INCHES)

wAi::::R MAIN \JAT:::R CUT r:::::s .r

\ lncnes) ~ ~ 2..e \inch)

6 4 only $750
B or 6 on1y 750
1 :z "
4 , 6 or B only. 750
16 4
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6, B o;: 12 on1.y Sl,000
20 4 ' 6, 8 o;: 12 only 1,000
24 4 , 6, 8 or 12 only l, 000
30 ! 4 , 6, 8 12 only
0;: ~l,500
36 or la~ge:: 4 , 6, 8 or 12 only 1,500
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 ~ EXHIBIT
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OF' WATER
3 2 of 2
JERSEY CITY DEPAR'J:':-"...::Nr
' .,, .... DIVISION OF WATER ENGINEERING
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WATER TAP FESS

TAP. MAIN. 1'!..".TER.IALS * LABOR & EQUIPMENT**. TOTAL COST

3/4 2 0 . 00 80 00 100.00
1 25 . 00 105 00 130 . 00
1-1/4 30 . 00 110.00 140 .oo
.. 1/1/2 3 5 . 00 11.5.00 15 0 . 0 0
2 55 . 00
.. 4 6 345.00
145.00
180.00
200.00
525 . 00
6 6 345 . 00 180.00 525.00
4 8 500 . 00 200.00 7 00. 00
6 8 500.00 200 . 00 700 . 00
8 8 500 . 00 200.00 700.00
4 10 6 '1 0 0 0 410.00 1050.00
6 10 640 . 00 4 10 00 1050.00
8 10 640 00 410.00 1050.00
I. 0 10. 640.00 410.00 1050.00
4 12 906.oo 500.00 1400.00
6 l. 2 900 . 00 500.00 1400 00
8 12 900.00 500.00 1.400.00
10 12 900 . 00 500 . 00 1400.00
12 12 900 .. 00 500.00 1400 .00 .r
4 16 1150 .. 00 600.00 1.750 . 00
6 16 600.00 1750.00
' 1150 . 00
8 16 1150 . 00 600.00 1750.00
10 16 1150 . 00 600.00 1.750 . 00
12 16 1150 . 00 600.00 1750.00
4 20 1387.50 800 :. 00 2187 . 50
6 20 1387 . 50 800 . 00 2187.50
8 20 1387 . 50 800.00 2187 . 50
10 20 1387 . 50 800.00 2187 . 50
12 20 13 8 7 .. 50 800 00 2187.50
4 24 1.625 . 00 1000.00 2625 . 00
6 24 1.625 . 00 1000.00 2625.00
8 24 1000.00 2625 . 00
' 1.625 . 00 2625 . 00
10 24 1.625 . 00 1000.00
12 24 1625 . 00 1000 . 00 2625.00

* J:"IGURES USED FOR M.1\.TERIALS INDICATE AVERAGE COST.

** LABOR & EQUIPMENT CHARGES INCLUDE ADMINISTRATIVE COSTS USING A
MULTIPLIER OF 1.5

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 EXHIBIT c
' ;!., .WATER RATE:

Year 1 $1,000. pmg
Year 2 $1,050 .. pmg
Year 3 $1,125. pmg
Year 4 $1,250 . pmg
Yea.r 5 $1.,400 . pmg
Year 6-10 $1,500. prng

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 EXE:IEIT D

SCHEDULE OF RATES

Rat.e/1000 c . f.
Julv l of wate:?: % Increase

1995 $18 . 96 2 . 5%'

1996 19 .. 91 5.0
1997 21 . 11 6 ,, 0
1998 23 . 22 1.0 . 0
1999 25 .. 54 1.0 . 0
2000 28 .. 09 1.0 .. 0
2001 29 . 50 5. 0 *
2002 30 . 97 5.0 *
2003 32 .. ,52 5" 0 *

Assumes CPI. = 3%

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