WASTEWATER TREATMENT PLANT
A workshop was held to discuss a proposed contract with Severn Trent Environmental Services, Inc. for operation of the Wastewater Treatment Plant.
André Wimer, City Manager, stated that the City is in the fourth year of the current contract that expires at the end of March. There have been no problems with the plant operations and during the first few years there were definitely significant savings monetarily. The contract has automatic renewals with a 60-day cancellation clause. Severn Trent would like to sign a longterm contract. Mr. Wimer added that his concern now is cost and can the City now operate the plant for less than the proposed contract amount. He stated that Severn Trent does have the expertise in plant operations but for an additional $25,000/year he does not feel this can be justified to the citizens.
Severn Trent would like a five-year contract for the stability of their employees and to be able to fund heavy equipment over a five-year period rather than just one year. They are a global company and can provide expertise and support for all aspects of plant operations, as well as being able to provide a larger buying capacity for supplies, etc. They would be contractually obligated to the proposed contract amount for five years, except CPI and power overages. They stated they would be willing to hold the current contract price until September 30, 2007, if a new contract could be signed then. They will agree to no CPI in the 4th year; no mark up on power overages; total flexibility in handling of maintenance expense to reduce costs; offered to reduce cost by $8,400 and give lawn maintenance back to City; shared our OH&P with them; shared actual cost history/projections; offered to reduce price to finalize relationship; offered to reduce price by $20,000 but give back dump truck; offered to meet halfway with $10,000 but want CPI back; settled for $13,000 reduction but still want CPI in fourth year; and no increase from March 2006 to October 2007; offered to include language giving ownership of vehicles; no retroactive billing to October; and compromised on liability and indemnification language.
A lengthy discussion was held on the pros and cons regarding the privatization of the Wastewater Treatment Plant, as well as the inability to assign a value to the intangibles such as licenses, employees, State permits; any fines, etc.
Severn Trent agreed to maintain the current monthly fee through September 30, 2007 and that no CPI adjustment would be made in the fourth year of the contract. Consideration of the proposed contract will be included on the agenda for the January 22, 2007 City Council meeting.