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SETTLEMENT OF HACKENSACK WATER COMPANY LAND TRANSFERS GETS FINAL STATE OK; PRESERVES 650 ACRES AND ENDS LAWSUITS WITH ENVIRONMENTAL GROUPS

    NEWARK, N.J., Aug. 5 /PRNewswire/ -- New Jersey's Board of Regulatory Commissioners (BRC) today gave its final approval to an agreement that will settle several lawsuits between Hackensack Water Company and two environmental groups and preserve more than 650 acres of watershed buffer land and open space.  The complex settlement will end four lawsuits challenging various aspects of past land transfers and a 1988 law.  Hackensack Water is a subsidiary of United Water Resources (NYSE: UWR).
    In June, after more than a year of negotiations, the agreement was signed by Hackensack Water, the Environmental Defense Fund, Save the Watershed Action Network, the state Department of the Public Advocate (Division of Rate Counsel) and the staff of the BRC.  On July 6, New Jersey's Watershed Property Review board approved the pact's environmental aspects.
    Donald L. Correll, president and chief executive officer of United Water Resources and Hackensack Water Company, described the settlement as "a fair accord that balances customers' right to excellent water quality at a fair price, the value of shareholders' investment in company assets, and communities' interest in open space.
    "Hackensack Water will implement the settlement as soon as we receive receive the written order of today's BRC decision," stated Correll.  "With these issues resolved, United Water and all its subsidiaries can focus full attention on opportunities to enhance shareholder value."  The compromise was made possible by the efforts of many people in constructive, persistent and creative negotiations that spanned more than a year, he added.
    The settlement calls for the water company to transfer 290 acres of golf course property to Rivervale Realty, an affiliated company. Permanent deed restrictions will guarantee the land's continued use as golf courses, and will require future owners to follow best management practices.  The land, near Oradell Reservoir, has been leased to golf clubs for decades.  The golf course acreage includes Emerson Golf Club in Oradell and Emerson, Pascack Golf and Country Club in River Vale and Harrington Park, and part of Haworth Golf and Country Club in Haworth.
    Hackensack Water will also reacquire 355 acres it transferred to Rivervale Realty nine years ago.  The 16 parcels will be permanently retained as part of the utility's reservoir buffer zones.  The utility rate base will rise by $22 million, reflecting the negotiated transfer price for the land.  (The utility rate base is the company's total investment in property and facilities used to provide service.  In the rate setting process, a utility is given the opportunity to earn a percentage return, established by the BRC, on the rate base.)
    Although the reincorporation of the acreage into the water utility's holdings will immediately raise revenues by about 3.1 percent, or $3.463 million per year, customers won't see its effect in their bills for about two years.  This is because of a formula that cushions the rate impact with $11 million in proceeds from the golf course transfer, earmarked for customers' benefit.  After two years, the average customer's quarterly bill will rise by about $2.43.
    If Rivervale Realty realizes additional net gains by selling the golf courses in the future, water customers may receive further financial benefits.  The realty company has agreed to provide the borough of Haworth with a 2-year option to purchase a 15-acre tract that is not part of the settlement.  Hackensack Water Company serves about 750,000 people in Bergen and Hudson Counties in New Jersey.  Both Hackensack Water and Rivervale Realty Company are subsidiaries of United Water Resources, a holding company engaged in water-related businesses and real estate.
    -0-             08/05/93
    CONTACT:  Martha Green of Hackensack Water Company, 201-767-2841 or 201-487-0011 (evenings and weekends) CO:  HACKENSACK WATER COMPANY ST:  NJ


-- NY083 -- X330 08/05/93
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Publication:PR Newswire
Date:Aug 5, 1993
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