Sean C. Morgan
The Sweet Home City Council will meet in an upcoming work session to discuss options for operation of the city’s water and wastewater treatment plants.
The city turned over the operation of the plants to CH2M Hill in 2006. Jacobs Engineering Group purchased CH2M Hill in 2017 and now operates the plants.
In March, city staff conducted an audit of the Water Treatment Plant and identified multiple deficiencies, Public Works Director Greg Springman told the City Council during its regular meeting on Aug. 13. In June, Jacobs requested a 3-percent increase to its annual fee.
The city paid $1.06 million to Jacobs in fiscal year 2018-19, which ended on June 30.
The council rejected the request and asked city staff to look into different options for operating the plants, and city staff formally requested that Jacobs renegotiate the base fee.
Since then, city staff members have met with Jacobs to discuss the condition of the Water Treatment Plant, staffing and operations and maintenance, Springman said.
Staff members also met with representatives of Veolia Water, a Jacobs competitor. Veolia toured the facilities and submitted a letter of intent to negotiate a contract with the city to operate the plants.
As an alternative to long-term operations, Veolia also offered short-term, four to five years, service until the completion of the Wastewater Treatment Plant Improvement Project and then transfer the functions to city staff, Springman said. Veolia would assist in correcting outstanding deficiencies and with the startup of the new Wastewater Treatment Plant.
Murraysmith Engineering, which is designing the Wastewater Treatment Plant project, and serves as the city’s engineer, submitted a cost estimate for city operation of the facilities, Springman said.
Springman outlined the city’s options.
– It could renegotiate with Jacobs, which requested an annual base fee of $1.093 million in June, Springman said. Terminating the contract with Jacobs would cost 5 percent of the base fee, $53,000 and it would take six months to demobilize Jacobs.
Jacobs would perform repairs up to $30,000 at no cost to the city, Springman said.
– Veolia would require 30 days to submit a proposal, Springman said, but it would operate at about the same cost.
– According to the Murraysmith estimate, the city could operate the plants at the current level of service for $908,000, Springman said. The city needs to catch up on deferred maintenance and maintain the Wastewater Treatment Plant’s service during construction, so it would need to bump up staffing by about $84,000 and the materials and services budget by $94,000 for a total of $1.086 million, slightly less than the request by Jacobs.
Springman asked the council to look at and think about the information then return to take action.
Mayor Greg Mahler asked if Jacobs is working on the deficiencies.
“They have been working on them,” Springman said.
Jacobs has hired additional staffing, said city Utilities Manager Steve Haney. Jacobs is cleaning things up and playing catch-up.
“Quite honestly, they’re operating at a loss right now,” said Haney, who worked for Jacobs before joining the city staff. He said the spotlight is on the company right now.
“They’re eating a lot of the repair costs.”
Jacobs is fixing items from a six-page report on conditions of the Water Treatment Plant, Springman said, but city staff are not certain exactly which items have been addressed so far.
Councilor Dave Trask said he’s bothered that maintenance has been deferred. If Jacobs came to council with requests like replacing filters and making repairs, the council would probably have agreed.
The way the contract is designed causes issues, Haney said. Maintenance is part of the operational cost. If something fails, the city pays.
“It’s not spoken of, but that’s how it’s done,” Haney said.
The council will set a work session to further discuss its options.
Present at the meeting were Cortney Nash, Lisa Gourley, Mahler, Diane Gerson, James Goble and Dave Trask. Susan Coleman was absent.
In other business, the council:
– Approved a contract with the Chamber of Commerce to operate the Visitor Information Center for the next year. Under the agreement, the city pays the chamber $15,000 in revenues from the city’s transient occupancy tax.
– Approved a trip for an engineering technician and Haney to attend the WEFTEC annual conference in Chicago, Ill., with Murraysmith staff members to see a variety of equipment and compare them to the city’s needs in the final design of the Wastewater Treatment Plant project.