The challenge
Innovative concession contract demonstrates an approach for other cities to strengthen their financial condition while improving infrastructure services and creating jobs.
Seeking superior service and lower costs, the City of Rialto contracted with Veolia in 2003 to provide O&M services to the City’s wastewater treatment plant and collection system.
The project challenges are:
- In 2013, Veolia partnered with Ullico and Table Rock Capital (TRC) to help the City address financial challenges through a 30-year concession agreement.
- Financing involved a $35 million up-front payment and $41 million in needed capital improvements to the water and wastewater treatment systems.
The solution
The city of Rialto and Rialto Water Services (RWS) use a public-private concession model— one rarely seen in the United States—to strengthen the city's financial position and improve infrastructure services. As part of this concession, RWS hired Veolia to manage the city's water and wastewater systems.
The financing mode is highly original, as the city of Rialto received funding for future water and wastewater system improvements through the concession contract signed with RWS, a special purpose company established by Table Rock Capital and a Ullico affiliate.
Facilities:
- 11.7 MGD wastewater treatment facility
- Collection system (263 miles)
- 6 lift stations
- 11 MGD water treatment system
- 5 wells
- Distribution system (187 miles)
- 11 booster stations
- 6 finished-water storage reservoirs
Benefits for our clients
Results:
- Initial $7 million capital improvements program and operational savings that saved $2.5 million over the first five years of the contract term.
- Massive $300 million contract expansion that provided a multimillion dollar concession payment and is funding more than $40 million capital repairs.
- Allows cash-strapped city to obtain funding for critical system improvements while retaining ownership of its assets.
- Economic development, including airport redevelopment, funded through the concession payment.
- Capital projects that are expected to generate hundreds of construction jobs.
- City retains full ownership and control of the water supply and water rights and transparent public authority over all rate setting.
- Delivery of industry-leading safety and compliance best practices.