SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: December 10, 1998
MIDDLESEX WATER COMPANY
(Exact name of registrant as specified in its charter)
NEW JERSEY 0-422 22-1114430
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
1500 RONSON ROAD, P.O. BOX 1500, ISELIN, NEW JERSEY 08830
(Address of principal executive offices, including zip code)
(732) 634-1500
(Registrant's telephone number, including area code)
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MIDDLESEX WATER COMPANY
Item 5. Other Events
A. Middlesex Water Company has signed an agreement with the City of
South Amboy in which Middlesex would be granted a franchise to provide
water service and install water system facilities in the City of South
Amboy. The agreement is subject to formal City Council adoption of the
franchise ordinance and is further subject to approval by the New Jersey
Board of Public Utilities (BPU).
Middlesex Water has been providing water service to the City of
South Amboy since 1996. The Company has also operated and maintained
South Amboy's water system through its contract operations subsidiary,
Utility Service Affiliates, Inc. (USA), since 1995.
"We are pleased to be awarded this franchise which will enable us
to improve upon the advances made to the City's water system over the
past two years," said J. Richard Tompkins, President of Middlesex Water.
"Operating the City's water system as efficiently as possible has and
will continue to be our goal," said Tompkins.
In 1997, USA replaced all of the City's 2,600 meters with modern
remote reading units. The Company also inspected, painted and repaired
more than 200 of the City's fire hydrants. Upon BPU approval of the
franchise, Middlesex Water and USA will continue to operate and maintain
the City's water facilities.
B. Utility Service Affiliates (Perth Amboy), Inc. (USA(PA)), a
subsidiary of Middlesex Water Company, today was awarded a contract to
operate the City of Perth Amboy's water and sewer utilities for the next
20 years. Under this innovative agreement, USA(PA) will help the City
realize increased operating efficiencies, address rapidly mounting
infrastructure replacement costs and provide quality water service in an
increasingly challenging regulatory environment.
"The agreement with our neighbor, the City of Perth Amboy, provides
us with a new opportunity to serve this area," said J. Richard Tompkins,
President of Middlesex Water Company. "We already provide service to
Woodbridge, South Amboy, Sayreville and other communities in Middlesex
County so expansion into Perth Amboy makes practical sense. This
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partnership benefits all parties; Middlesex Water, the City of Perth
Amboy and most of all Perth Amboy customers. We look forward to working
with Mayor Vas and current City employees in what we expect will be a
smooth transition."
USA(PA) is set to begin operating the City's utilities effective
January 1, 1999. Many of the capital improvements planned for the Perth
Amboy system are scheduled to occur within the first five years of the
contract. Initial plans also call for the re-metering of all customers'
water meters.
Under the terms of this privatization agreement, Perth Amboy will
retain ownership of its source of water supply, the Runyon Watershed in
Old Bridge. USA(PA) will operate and manage its water and sewer
utilities and pay the City concession fees of $4.5 million annually for
the first five years of the contract and $1.1 million for the remaining
15 years. These monies will be dedicated to a tax stabilization
program. Middlesex Water would be paid $6.4 million in the first year
to $9.7 million in the final year of the contract. Perth Amboy and
Middlesex Water will generally share equally in new revenues generated.
Middlesex will make $18 million in capital improvements using funds
obtained from the Middlesex County Improvement Authority. Water and
sewer rates for Perth Amboy residents will remain the same for the first
five years and last three years of the agreement, and increase between
four and five percent annually for years six through seventeen. Current
Perth Amboy water and sewer department employees will remain city
workers but will be supervised by the Company.
The signed agreement is the culmination of months of negotiations
that began last year when the City first requested proposals.
Middlesex Water Company, organized in 1897, is an investor-owned
water utility and is engaged in the business of collecting, treating and
distributing water for domestic, commercial, industrial and fire
protection purposes. The Company is skilled in all facets of water
supply and distribution including water and wastewater treatment and the
development and management of watershed properties. Utility Service
Affiliates, Inc., another contract operations subsidiary created in
1995, currently operates the water system for the City of South Amboy,
New Jersey.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
MIDDLESEX WATER COMPANY
(Registrant)
Date: December 10, 1998 /s/Marion F. Reynolds/
Marion F. Reynolds
Vice President, Secretary and Treasurer