City to contract with OMI for water sewer management

Sean C. Morgan

Of The New Era

By one vote, the Sweet Home City Council agreed to contract with Operations Management International, Inc., for operation and maintenance of the city’s water and wastewater treatment plants.

Voting against contracting with OMI were councilmen Bob McIntire, Jim Gourley and Dick Hill. Voting in favor of contracting with OMI were Mayor Craig Fentiman and councilmen Tim McQueary, Rich Rowley and Jim Bean.

The city will begin negotiating a contract with OMI for approval later by the City Council.

The council held a public meeting on July 25 to receive public input about the idea. Eleven persons provided comments to the council. Of those, three supported the idea. One was OMI Regional Business Manager Gary Young.

Two Sweet Home residents spoke in favor of the OMI contract.

One perosn did not comment one way or the other but did ask that public employees not be insulted. One other added neutral comments, suggesting the council examine further questions about projected budget numbers and proposed savings.

Six commented against contracting with OMI. Most were employees or family of employees potentially affected by the decision.

“When you find a company that’s in Fortune magazine’s 100 best companies to work for, that’s an advantage,” Lawrence said. It’s a win-win if it will save residents money on water and sewer bills. While jobs may be on the line, “I’m sorry, but the city needs to think about the citizens first. I hope the city’s looking at it from the citizens’ point (of view), not just the employees.”

Young disputed information presented in an advertisement purchased by opponents two weeks ago in The New Era.

Opponents had claimed that contracting with OMI would cost the city an estimated $94,000 or more, he said, but OMI estimates a savings of about $100,000 per year. That figure was adjusted later based on costs the city would still accrue to $55,000 the first year.

OMI also will not cut the workforce at the plants in half, he said. OMI will staff the plants with five operators. The plants currently have six with a position open.

OMI is not driven by Wall Street and is privately owned, he said. Employees can purchase stock.

OMI would be accountable, like city staff, but in this case through a contract, he said. “We’re willing to guarantee that in a contract, cost-wise and service-wise.”

Opponents said city employees have more than 50 years experience, but OMI brings that much and probably more, he said.

State law only requires one operator be certified, he said, but like the city, OMI “definitely supports that.”

Fentiman stressed that this decision will not result in reductions to rates, but the city hopes it will minimize increases.

“This is not going to be the cure-all and lower water bills,” Fentiman said. “You can’t take $5 million in loans for a water plant and not see an increase.”

Elmer Roshone outlined differences between the city and OMI’s projected costs and actual costs, saying that estimates understate the costs the city will continue to incur even with OMI operating the plants.

Those include tests, memberships, uniforms, mailings and a wide variety of other related costs.

Public Works Director Adams said those costs were calculated into the estimates, but he was not prepared to argue about them line by line. The previous level of anticipated savings was reduced as a result from about $100,000 the first year to $55,000.

Resident Jeanie West suggested the council establish a committee to examine those differences line by line and report back to council. She did not advocate a position on contracting with OMI.

“I don’t doubt any of the information we’ve received,” Bean said. “It is a bit confusing and conflicting in my mind.”

He agreed with West’s suggestion to form a committee and review the numbers presented by Roshone and the OMI-staff estimates.

He was not comfortable making a decision because the council was getting two different sets of numbers. The question about numbers was the only thing keeping him from making a decision.

Fentiman said he believes Adams’ numbers were correct.

“If something’s working right now, why change it?” Hill asked. He proposed waiting and seeing what ideas city employees could come up with to save money.

“OMI is a reputable organization,” Rowley said. “They are willing to service things professionally, and they do desire to employ the existing staff.”

Among benefits, the city will receive OMI’s expertise as it builds a new water treatment plant, a synergistic benefit combining expertise of OMI and the city, Rowley said. OMI will help stabilize operations and costs.

“I don’t see how you can talk about those benefits without knowing the cost,” Bean said.

“I don’t see any savings,” Gourley said. “I think the people down there (the plants) could come up with solutions to save (money).”

The city has no need to change when it’s about two years from building a new plant, he said. Changes can be made without contracting out for operation and maintenance.

“We need to go out and get real numbers and come up with solutions,” he said.

He knows OMI is more than qualified, McIntire said, and the city could use OMI’s expertise while designing the new plant, but operations and maintenance should remain with city employees.

“I think we need to explore more options within our own operations, and I think it needs to stay with city management,” Gourley said. “I believe the money savings may not be quite as much as represented.”

He moved to deny OMI’s proposal, with a second by McIntire. The council turned the motion down 4-3, with Fentiman, McQueary, Rowley and Bean voting no. Gourley, Hill and McIntire voted yes.

Rowley countered with a motion to begin negotiating a contract with OMI. McQueary provided the second.

“We’re making some decisions that are probably not real prudent at this time,” Gourley said, and then councilmen aligned themselves during discussion with the final vote.

Bean retained reservations over numbers, and then supported the motion following an argument from Rowley.

There is conjecture about the numbers and proposed savings, Rowley said, but the main goal is not saving money but rather to stabilize the rates and costs.

“The level of the savings we’ll get, I don’t know,” Rowley said. “I think there’s going to be something positive. How substantial it is, I think that’s an object of conjecture.”

OMI is “a professional organization that works toward the benefit of the plants that they operate as well as the communities where they operate,” Rowley said. It brings a “brain trust” with it that can provide good input into operating those facilities.

OMI has proposed a five-year and a 10-year contract, he said, but it is not insisting on a 10-year contract. With a 10-year contract, OMI is willing to provide capital investments into the city’s plants.

Contrary to claims in the advertisement, Woodburn has never rejected OMI, and he has been with OMI since 1988. Woodburn may have considered it, but many communities consider it.