The City of Rialto and Rialto Water Services (RWS) have awarded Veolia Water North America a contract to manage the city’s water and wastewater systems. The 30-year contract is valued at approximately $300 million in revenues for Veolia Water.
The City of Rialto and (RWS) are utilizing a public-private concession model to strengthen the city’s financial position and improve infrastructure services. Rialto has received $35 million in an upfront cash payment and secured an additional $41 million in funding for future water and wastewater system improvements through a concession contract signed with RWS, a special purpose company established by Table Rock Capital and a Ullico affiliate.
RWS is responsible for managing the 30-year contract with Veolia. As part of the concession, RWS will oversee the infrastructure upgrade program that aims to improve the efficiency, level of compliance, water quality and reliability of Rialto’s water and wastewater systems. The program will create an estimated 445 jobs related to the project. In addition, all affected municipal employees have accepted positions offered by Veolia Water.
“The RWS partnership ensures that the city’s water and wastewater infrastructure is upgraded and run in the most cost-efficient manner, while also laying the groundwork for new economic development. We’ve worked with Veolia for years in the community and this arrangement allows for both continuity and improvement in the water resource and wastewater service, and it assures us that the total commitment to the residents of the city of Rialto is met” said Rialto City Administrator Mike Story.
The RWS concession will enable the aging facilities to be refinanced without being privatized. Public ownership, control and rate setting is maintained by the city. The concession provides the capital needed to rehabilitate and replace the water mains and sewers, design new infrastructure and carry out seismic retrofits. The planned program will strengthen the city’s finances with annual lease payments that can support economic development and local jobs.
“These public-private partnerships bring together different organizations, each of them specialized in their own field, whether as public-sector managers, financiers or operators. It’s a way forward for the future to ensure we have ever-more efficient, sustainable and accessible services” said Jean-Michel Herrewyn, CEO of Veolia Water.
The public-private partnership offers a potential example for other California cities. The partnership’s strategy of sustainable water management and support for economic development can be emulated in cities faced with the problems of aging infrastructure and reduced revenues.