Mayor Zimmer: Current Contract with United Water is 'Unfair to People of Hoboken'

The city is looking into ways to terminate its current agreement with United Water, a 30-year agreement that was put in place in the nineties and isn't set to expire until 2024.

Under the current agreement, United Water is obligated to invest $350,000 per year into Hoboken's water system for repairs and capital improvements.

But, said Mayor Dawn Zimmer on Wednesday afternoon during a press conference in City Hall, that no longer seems to be enough.

Of that amount, which is capped, 80 percent is spent on existing repairs, Zimmer said. That means that barely any money can be spent on improvements, the mayor continued.

"We're paying the price," Zimmer said, "for investments that should have been done long ago."

The agreement between the City of Hoboken and United Water was entered into in the early nineties, under Mayor Anthony Russo's administration, when the city sold the rights to the water system. 

Now, Zimmer announced, the city is looking into the option of a buy-out and entering into a new agreement with United Water.

"I don't think the agreement we have right now is a fair agreement for the City of Hoboken," Zimmer said. "We need to figure out a way to get out of this contract."

The city is currently looking into how much such a buy out would cost.

"Mayor Russo sold a 30 year revenue stream of $240 million and estimated $100 million in profit for $13.2 million in one-time payments," Zimmer said.

In July 1994 the city received $5.5 million; in June 1996, $3 million; in June 1997, $2 million and in June 2001 a final pay out of $2.7 million.

Together this is a total of $13.2 million.

The mayor's press conference comes on the heels of five separate water main breaks in a span of five days. It started with a main break on Thursday morning on Willow Avenue. Later that day, a 30-inch main was hit by a construction worker, because it wasn't marked properly, Zimmer announced on Wednesday.

Under the current agreement, it's not possible to plan for the future and improve the water system, Zimmer said.

"We really need to invest long term," the mayor continued.

Zimmer said she was aware of the contract — which she called "a legacy issue" — before Wednesday afternoon.

"I don't understand how they could have done what they did," she said.