Contract Operations Save Towns Money, Headaches

Major U.S. cities like Atlanta, Indianapolis and Seattle have recently discovered what their French and English counterparts have known for years: contract water and/or wastewater operations can result in savings. Atlanta expects to save about $22 million in operating costs for the first year alone of its water treatment plant deal.

In addition to cost savings, public-private partnerships can enhance operations, improve customer service and provide solutions to stringent regulatory compliance issues. Those benefits are just as tangible for smaller towns as they are for major cities.

ECO Resources, a subsidiary of Southwest Water, has provided contract water and wastewater operations for 25 years. The companys clients include cities and municipal utility districts with populations ranging from 5,000 to 50,000.

Dos Palos, Calif., for example, saves approximately $40,000 annually from its contract with ECO Resources. The partnership has lowered the citys utility operating costs by 10 to 15 percent.

In Discovery Bay, a California utility district, water and wastewater treatment plant operations were costing $1.2 million annually. Under an ECO Resources contract, the district is now paying $465,000.

Private companies specialize in utility operations - cities generally do not. That is one reason why private companies can lower operation costs. Their operations can cover multiple water and wastewater facilities throughout several geographic areas. This diversity provides facility managers with company resources and solutions that cover a myriad of issues, emergencies and circumstances gained through decades of experience with other facilities. Contract water and wastewater management also offers savings because public companies can usually operate with lower overhead costs and can take advantage of high-volume purchasing power and other economies of scale.

Private companies rely on the quality of their performance to stay in business. In order to save operating funds for cities (without raising usage rates for the citizens), these companies win and renew contracts by maximizing efficiencies while keeping a close eye on operational quality. The competitive nature of the contract bidding process helps ensure that cities are getting the best value for their contract dollars.

City officials can optimize contract benefits by choosing a company whose track record shows its management and operations savvy. City managers, who oversee multiple public works functions, can negotiate tailored contracts for water or wastewater management services that include street maintenance, storm drain service, customer billing and collection, and even fleet management.

Private companies, such as ECO Resources, enhance utility operations and solve regulatory compliance problems at fixed costs as standard contract provisions. They lift compliance and daily operating responsibilities from the shoulders of city officials, while those officials retain facility ownership and control through reporting procedures that are spelled out in customized water and wastewater contracts.

"Its critical that we keep in mind who were working for," says Steve Richardson, ECO Resources western regional vice president. "We have to keep abreast of new information to stay competitive and serve our client communities efficiently. If we want cities to renew our contracts, we have to provide the right mix of cost efficiency, accountability and technology."

The city of Rio Vista, Calif., contracts with ECO Resources for water and wastewater facility management. Recently, ECO Resources implemented new technology in the form of a polymer distribution system for the city. That implementation produced a 20 percent increase in sludge bed holding capacities. Additionally, the company installed a new filter press that removes pathogens and produces a 95- to 99-percent solid Class A sludge.

Public-private partnerships also can result in unexpected benefits. Last year, a tornado hit a Houston-area department store, leaving floodwater and debris in its path. A crew from ECO Resources responded, pumping out 2,600 gallons of water and helping in the cleanup efforts. Consequently, the store re-opened four days later, and the company considered its contribution as part of the contracted emergency services.

Hurricanes threatened fresh water supplies in Biloxi water pump stations. During torrential rains and 175 mile-per-hour winds, company employees maintained water pressure for four pump stations. The ECO Resources employees worked around the clock to keep the water system in operation.

"ECO Resources has performed utility contract operations for the City since 1989," said A.J. Holloway, Biloxi mayor. "In short, they take care of our facilities as if they owned them, a fact that keeps our water wells, booster pumps, sewer lift stations, collection lines and other equipment operating at peak performance."

Private companies like ECO Resources want to provide water and wastewater treatment. Local government wants to save operating dollars and make their operations more efficient. The "art" in leadership is bringing the two together for mutual benefit.