Officials Say Union County Utilities Deal Will Save $100 Million For County And Local Municipalities

RAHWAY – Union County and participating municipalities are about to see millions of dollars in savings and direct budget relief under the terms of a deal between the Union County Utilities Authority and Covanta Energy, officials announced Monday.

An extended lease approved by the Union County Utilities Authority will reduce its waste disposal costs and will pass on those savings to the county government and the 14 municipalities that use the authority for their communities’ waste disposal, officials said. Under the deal Covanta Energy will continue to manage its energy-generating solid waste incinerator facility here until 2031.

Because the lease deal is in effect retroactively as of Jan. 1, 2011, municipalities will receive rebate checks for their waste disposal costs during 2011.

“We are thrilled to have been able to strike a deal that puts money immediately back into the budgets of municipalities during tough economic tough times and ensuring those continued savings into the future,” said Daniel Sullivan, acting executive director of the Union County Utilities Authority.

According to the authority, the following municipalities will immediately be receiving direct reimbursements, Elizabeth, $658,000; Garwood, $16,000; Hillside, $101,000; Kenilworth, $30,000; Linden, $148,000; New Providence, $41,000; Plainfield, $235,000; Rahway, $158,000; Roselle, $95,000; Roselle Park, $54,000; Springfield, $67,000; Summit, $90,000; Union, 69,000; Winfield, $9,800.

“Union County has taken an innovative approach by maximizing an asset to deliver taxpayer savings,” Freeholder Chairman Deborah P. Scanlon said. “This is a win-win situation. At the same time, we are guaranteeing that our municipalities maintain low disposal rates at the Resource Recovery Facility.”

The extended lease will reduce the towns’ costs by $12 per ton of waste, which will amount to a combined $100 million over the length of the lease, or $4 million per year. The authority will also provide $500,000 in solid waste grants to waste generators in the seven non-contract municipalities equating to an additional savings of $3 per ton.

That savings will go towards the municipalities’ continuing services such as fire and police departments. It will help the cash-strapped towns avoid potential layoffs and other cost-saving measures recently instituted.

Union County itself will see a savings of $1.5 million per year from the authority that will be used to provide tax relief to citizens.

“I would like to thank the leadership of the Union County Utilities Authority and Covanta for recognizing the potential benefits this opportunity presented and then working together to bring real and significant financial relief to the people of Union County” said John Kulish, chairman of the Union County Utilities Authority. “This is a great example of how governments and their private partners can provide results rather than rhetoric.”

“Covanta is proud to be part of a successful collaboration with 14 Union County municipalities and the Union County Utilities Authority resulting in an agreement that directly benefits their residents. The lease extension not only secures long term sustainable solid waste disposal for the County, but will also save taxpayers millions of dollars,” said Seth Myones, president, Covanta Americas.

“In addition to the financial benefits this transaction brings to municipalities, the deal ensures that the Union County Energy-from-Waste Facility will continue to supply reliable, renewable electricity to thousands of County homes while reducing greenhouse gases which contribute to climate change,” added Paul Stauder, senior vice president of business management, Covanta Americas.

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