chosen to negotiate

Sunday, October 31, 1999

OMI Selected to Negotiate
Bergen County Utilities Authority

Bergen County's sewage authority has rejected a bid by United Water Resources and instead is negotiating with OMI, a Colorado company, to run parts or all of the authority's waste-water operation.

The Bergen County Utilities Authority has picked Operations Management International, a Denver-based company, as the prospective manager. OMI was among three companies seeking to run parts or all of the BCUA operation, which pipes sewage from 46 Bergen municipalities and disposes of the sludge. The other bidders were United Water Resources of Harrington Park and Professional Services Group of Rhode Island (PSG division of Vivendi).

The decision on whether to privatize will depend on which operating cost is lower, BCUA or OMI, officials said.

The BCUA's choice of OMI comes nearly five years after County Executive William "Pat" Schuber convened a panel -- at a cost of about $125,000 -- to determine whether the BCUA could save money by privatizing some or all of its waste-water operation. For years, mainly in the early 1990s, the authority was criticized for poor management, patronage, and inefficiency. The main target was the agency's solid-waste operation, but in 1995 Schuber's panel concluded the BCUA could save $10 million to $16 million a year by privatizing the operation (emphasis added).

Frank DeMicco, president of United Water New Jersey, spent 40 minutes before more than 150 people at New Milford High School, trying to explain why many of them had been flooded out of their homes nearly six weeks earlier during Tropical Storm Floyd.

Many of those storm victims believed the utility's actions and inactions -- particularly in relation to the dam at Oradell Reservoir upstream on the Hackensack River -- contributed mightily to their plights.

"This is a storm no one had experienced before," DeMicco said, apologizing for the delay in reaching out to residents. "This is the largest on record in New Jersey. We believe it was a 300-year event."

DeMicco's explanation was not well-received by the homeowners, most of whom had lost hundreds of thousands of dollars in property and suffered enormous disruptions to their lives. The meeting produced little more than shouting matches between residents, United Water employees, and borough officials, who had invited everyone to the high school to defuse a situation that had only gotten more distressing since the floodwaters drove them from their homes.

"It took them five weeks," said Councilman Michael Gadaleta. "They finally fabricated their Disneyland approach: Blame everyone but them. They mishandled the river, and we took the brunt."