HOBOKEN — The city will invest $33 million into its antiquated water system over the next 15 years under a newly remodeled contract with Suez, a deal city officials hope will help modernize its water infrastructure.

The renegotiated contract, which was Friday and must be approved by the city council, will convert the city’s concession model with Suez into a public water utility, sending water revenues into city coffers while paying Suez an annual fee of $1.99 million to operate the system. The city will then invest $1.5 million a year in proactive water main upgrades, coupled with $700,000 annually for repairs or upgrades through the contract’s lifespan.

"This contract with Suez provides for unprecedented investments in Hoboken’s water system," Mayor Ravi Bhalla said in a statement. "Hoboken has been suffering for years with increasing water main breaks due to a previous, woefully inadequate contract that provides for no proactive water main upgrades. The renegotiated agreement will finally allow Hoboken to make the critical upgrades to our water infrastructure that have been badly needed for years."

The Mile Square City has been plagued with frequent water main breaks for years due to the city's century-old infrastructure. Flooded streets and boil-water advisories have seemed to become a monthly occurrence.

After a rash of breaks in August, the city took aim at Suez — declaring a city-wide emergency and filing a lawsuit in court claiming the company mismanaged the water system.

That lawsuit has since been dropped.

The city council in September passed a resolution to solicit bids for new system operators, and had prepared a request for proposal, but ultimately did not procure any new bids, officials said.

"We were exploring all of our options at that time," said Jennifer Gonzalez, the city's environmental services director. "We continued to renegotiate with Suez while we were exploring options to procure a different operator."

Officials noted that the company had a “historic knowledge” of the system that “I don’t think we wanted to lose,” Gonzalez said — adding that there was an opportunity for billing disruption if ties with Suez had been severed.

Suez was only required to invest $350,000 for repairs each year in the current contract and "had absolutely no vision for proactive water main upgrades," Gonzalez said.

"The original contract didn't envision an acceleration or an increasing of funds to go back in the system," said city Business Administrator Stephen Marks. "$350,000 was just not enough to maintain the system of our size."

Hoboken city council members also cheered the new deal.

“For three years I have advocated for Hoboken to keep its water revenues, instead of Suez, so we can invest in our aging system and this contract finally gets it done,” said Second Ward Councilwoman Tiffanie Fisher, who also heads the council’s finance and infrastructure subcommittee.

“Last year our city was on the verge of making a historic mistake in once again jumping into a protracted lawsuit that would only benefit lawyers instead of the residents of Hoboken, by entering into a lawsuit with SUEZ," First Ward Councilman Michael DeFusco said in a statement. “This is a great first step to making much needed investments in our water system, but this is not a silver bullet, it will not entirely fix the century-old problem. We can and need to do more and I look forward to improving infrastructure across Hoboken.”

The renewed contract also includes $2 million in smart leak detection technology, which will record water consumption data in real-time to detect leaks and will allow operators to jump on potential main breaks.

“Suez will be managing the system for us, but we’re in the driver’s seat,” Marks said. “We’re recapturing profits to reinvest into the system, where today those profits are going to Paris.”

The new deal, if approved by the council, would give the city more leeway in capital investments toward its water system renewal plan, officials say. Under the plan, the city anticipates replacing just over 7 miles of water mains in an eight-year span — work that will be conducted in three phases.

“Our priority, as well as the City’s, has always been ensuring the safety and reliability of the residents’ drinking water," said Chris Riat from SUEZ Water. "We look forward to working with the City to modernize Hoboken’s infrastructure for years to come.”

But the city still faces a massive undertaking in replacing its water system. The plan would only replace 18 percent, which “are the most fracture critical parts of the system,” Marks said.

Much of the system is still very old, and it will likely take some time before the city can reach an industry standard where 50 percent of its water system is younger than 50 years old.

But “under this new contract we reevaluate our plan every year... that’s going to allow us to have a much better handle on how old the pipes are, and their vulnerability...” Gonzalez said.

Corey W. McDonald may be reached at cmcdonald@jjournal.com. Follow him on Twitter @cwmcdonald_. Find The Jersey Journal on Facebook.