Middletown PA employed the novel WCP PPP concession solution to eliminate their substantial pension shortfall without having to resort to painful property tax increases or raising electric rates on Borough residents. Middletown received an upfront payment of $43 million which allowed them to emerge debt free and improve their balance sheet with:
Initial financing included:
- $10.8 million to wipe out City Pension Liability
- $25.6 million to eliminate water system and city debt
- $6.6 million to strengthen balance sheet and fund additional city initiatives
The joint venture has also committed to financing another $83 million for the system infrastructure improvements over the 50-year life of the contract.
As the result of the concession agreement, the Middletown Water Joint Venture was formed to operate and maintain Middletown’s six groundwater sources, 36 miles of water main, one wastewater treatment plant and 25 miles of sewer main, as well as manage and deliver capital upgrades. To date, the JV has:
- Refurbished 3 Water Tanks
- Flushed over 15,000 feet of water mains
- Cleaned over 8,000 feet of sewer mains
The concession agreement also contains objectives that place a strong focus on environmental, health and safety performance and an improvement to the services delivered to 9,400 people in Middletown.