Request for Qualifications for Water Utility Management Sent Today.

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Dec. 31, 1998--Request For Qualification (RFQ) materials were mailed today to prospective private firms that may have interest in submitting competitive bids for the day-to-day management and operation of our local water utility.

The water system is currently owned and operated by the Tennessee-American Water Company (TAWC), which is the only privately-owned water system providing service within Hamilton County and the surrounding area. TAWC has enjoyed a 130-year monopoly on the City of Chattanooga's water resources. TAWC is owned corporately by American Water Works Company, Inc. (NYSE: AWK) of Vorhees, New Jersey.

The City of Chattanooga has announced its intention to acquire the assets of the TAWC system used to provide water service within the City of Chattanooga, either through a negotiated purchase or through exercise of the power of eminent domain. Chattanooga's nine-member City Council has unanimously approved the acquisition of the system assets and has appropriated adequate funds for consultants and legal fees associated with the acquisition. The City's plan calls for competitive selection of a private contractor to operate the system.

It is the intent of the City to establish a short list of qualified firms from among the firms that respond to this Request for Qualifications. Firms remaining on the short list after the evaluation of the Statements of Qualifications will be requested to respond to a Request for Proposals for the contract operation, maintenance, and management of the water system.

"It has been my contention from the outset that the 130-year monopoly that Tennessee-American enjoys in our city must be opened up to competitive bidding," said Mayor Jon Kinsey. "I feel it is crucial that the citizens of Chattanooga own the rights to their water resources, but I fully support a private company handling the operation, maintenance and management of the water system," the Mayor said.

In a continuing effort to give TAWC every opportunity to continue to manage Chattanooga's water resources, it is one of the firms receiving the RFQ materials postmarked today. This RFQ information will also be published through advertisements placed in local daily newspapers, as well as, the Wall Street Journal to assure that all interested companies will have an opportunity to submit qualifications.

As previously announced RFQ responses are due back by February 15, 1999. At that time Request for Proposal (RFP) materials will be sent out by March 15, 1999. RFP responses (with competitive prices) are due by May 1, 1999. One month later an operator will be selected.

For more information, please contact Ken Hays, Chief of Staff, Mayor's Office Chattanooga Tennessee, at 423/757-5152.