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NW Financial initially introduced the idea of privatizing the Municipal Utilities Authority (“MUA”) to the Town of West New York, NJ in order to lower the facility’s operating costs and keep its sewerage rates to a minimum. Initially, NW Financial was charged with the investigation and review of a number of proposals from private companies that wanted to either purchase or enter into a management contract of the facilities. However, using the staff’s technical skills, NWFG Financial determined that a regionalization initiative, rather than a sole privatization, would be more beneficial to the Town of West New York and would also benefit the service area participants of the Tri-City Sewerage Authority. Using a proprietary software product that instantaneously analyzed the competitive bids and rate analyses along with potential bond structures, NW Financial performed extensive rate analysis and review of complex tax and financial factors that resulted in the development of a finance plan which enabled a new, larger sewerage authority; the North Hudson Sewerage Authority, to successfully undertake a $104,000,000 sewerage facility acquisition.
The difficulties in this transaction centered around the coordination of different municipalities and one county, while attempting to keep the transaction on a strict timetable. The tasks performed for the completion of this project solidify NW Financials expertise as program financial advisors.
This particular transaction required NW Financials to use its broad market communications, i.e. rating agencies, bond insurers, institutional and retail bond funds, regional and national bond counsels, and tax counsels, to create a coordinated, planned strategy designed to encourage maximum participation by investors and achieve the most savings for the ratepayers.
As Financial Advisor, NW Financial created numerous spread sheet analyses describing the many alternatives and the varying effects each had on the transaction. NW Financials financial modeling expertise allowed the firm to show numerous rate scenarios to the new entity and allow the government officials to present the results of transaction to the ratepayers and other government officials.
As part of the firm’s duties, NW Financial reviewed the concerns of the MUA and analyzed their financial situation including all assets of the MUA. NW Financial developed a coordinated plan among many government officials and professionals and spearheaded the transaction through the process. Numerous times during the process, NW Financial was charged with raising issues of concern to the ratepayers, and those items that are of concern to the capital marketplace. The firm’s spreadsheet analyses allowed the MUA to properly value their assets and allow them to negotiate with potential bidders and eventually price the transaction in the marketplace.
Not only was a successful asset resolution program implemented, but NW Financial was also responsible for the research and assessment preceding the program development and management of the program once it was implemented. The acquisition merged the respective service areas of various municipalities, stabilized future rates and funded various capital improvements to the existing West New York MUA facility in order to meet various technical/environmental standards. The $104,000,000 regionalization issue won the praise of local and state officials for its concept, design and execution.
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