When Earth Tech, Inc. first heard of the RFP to be issued by the Borough of Chester, we became excited and pleased that a municipality within New Jersey was seeking a long-term contract for operation and maintenance services. We knew that we could be very competitive in the contracting of the water and wastewater facilities for the Borough, and we knew that we would provide the client with reliable high quality wastewater services with guaranteed costs and performance. We were confident that the Borough would realize that contract operation, maintenance and management of their facilities would be not only cost effective in the short term, but beneficial to the people to whom they represent for a long period of time. We knew from our extensive experience in contract operations that we would realize significant cost savings. In addition to these savings the Borough would realize the benefits and commitment of a totally integrated company with thousands of professionals with many years of experience in all different disciplines within the water and wastewater fields, as well as other fields of expertise in the engineering arena.
In preparing our response to the RFP, it became apparent that we could not be competitive with regards to the operation and maintenance of the Borough water treatment and distribution system. The reasoning behind this conclusion was the user base of the Borough. The current user base of 164 customer was just not sufficient to carry the financial burden that would be placed upon it as a result of the necessary capital upgrades the system required. As a result of this it was our recommendation that the Borough entertain offers from private water companies to purchase the entire water franchise and system. This recommendation, we felt, was the most cost effective and beneficial means to solving their water treatment and supply difficulties for the residents of the Borough. Subsequently, the Borough negotiated with the New Jersey-American Water Company and sold the water system and franchise in its entirety. The wastewater system turned out to be a different story. The difference between the two systems was quite obvious in our analysis. First the water system was, as previously mentioned, in need of addition raw water supply. The aquifers in the area were contaminated and a source supply was a question. Secondly the surrounding areas of the Borough were serviced by the two private water utilities with distribution mains at the Borough's borders. The capitalization of the system could easily be spread over the entire user base and thus have minimal impact on the citizens.
The wastewater plant on the other hand had just gone through an upgrade and had additional capacity to handle the areas of concern that needed collection system expansion. It was our determination that the Borough would benefit most by the long-term contract operation of the wastewater treatment and collection system. The Borough was interested not only in the operation and maintenance of the existing system, but also in future expansions of the collection system to address various problems with potentially failing septic systems. These needs were each fully addressed in our proposal to the Borough, for long-term operations and maintenance and design/build services which was submitted for their consideration on April 30, 1997.
Shortly thereafter, the Borough advised Earth Tech that it was selected as the preferred proposer and was invited to negotiate a contract for the operation, maintenance and management of the wastewater treatment plant and collection system. The contract negotiations were to also cover the design/build expansion to the collection system intended to connect 30 single-family homes in the vicinity of the treatment plant whose septic systems were becoming problematic. The Borough was successful in achieving a significant reduction in the cost of providing sewer service to its existing sewer customers. This reduction is achievable through a long-term contract as compared to the previous short 3-year contract. Throughout the contract negotiations, the Borough, with the assistance of its procurement advisors, Alternative Resources, Inc., endeavored to create a comprehensive contract that provides oversight to adequately protect their interests and concerns. This is especially important in a long-term contract as the parties on both sides could change and a clear document that provides for equitable resolve will only help to maintain the partnership. An interesting provision of the contract has Earth Tech annually provide funds to allow the Borough to retain an independent professional engineer to evaluate our performance under the terms and conditions of the contract. We believe that such an annual "report card" will greatly benefit both the client and the contractor by maintaining a performance standard by which we will be judged on a routine basis. This report card also allows for any concerns to be addressed before they become a stumbling block in the partnership.
While the contract was being finalized, the Borough's existing contract with another firm was about to expire. The Borough had requested our assistance in providing operational services on an interim basis until such time as the contract was finalized and duly executed. Accordingly, Earth Tech entered into an interim agreement with the Borough and began operation and maintenance of the wastewater facilities on January 1st, 1998. We immediately set to work on improving the operation and appearance of the facility.
Earth Tech entered into a 20-year contract with the Borough on February 1, 1998. We have fully embraced the idea that we are not just a contractor doing business with the Borough, but rather a partner in all sewer matters that may arise at any time. During the first year of the contract, Earth Tech assisted the Borough with several policy matters including the application of sewer connection fees and sewer user fees. We have also assisted the Borough with sewer service applications and sewer lateral repairs. Also, the wastewater treatment plant is situated in the immediate vicinity of several rather upscale single family dwellings. Naturally, there was a real concern over the operation of the facility in such a manner as to prevent the release of those persistent and unpleasant sewer odors that can result from time to time.
Earth Tech has a great many resources in the design of infrastructure improvements, as well as treatment plant efficiency improvements, plant upgrades and other wastewater system improvements. We are one of the leading environmental firms in the Design/Build/Operation of water, wastewater and industrial waste treatment systems throughout the United States. Our proposal to the Borough included value added services, which are part of a long-term partnership, entered into by the parties. These include engineering services in the area of treatment systems, administrative support, regulatory reviews, stabilizing rates without compromising compliance. Assuming all responsibility for all regulatory compliance, executing programs that provide long term benefits and future cost savings.
In summary, Earth Tech is looking forward to working as the Borough's partner in all wastewater matters that may arise over the next twenty years. We are confident that our relationship will be one of success and happiness as we help the Borough grow to become one of the best municipalities in the state of New Jersey.