Water/wastewater contract in Sugar Land, Texas, stabilizes service rates

A public-private partnership with the city of Sugar Land, Texas, has allowed the community to stabilize its service rates for several years running.

Feb. 27, 2003 -- A public-private partnership with the city of Sugar Land, Texas, has allowed the community to stabilize its service rates for several years running.

Since 1980 the contractor has successfully provided the following O&M services: groundwater production, water distribution, activated sludge treatment, wastewater collection, and meter reading without rate increases.

The contract between Sugar Land, Texas, and ECO Resources involved the operation of a 7.5 MGD water treatment facility, a 7.5 MGD wastewater facility, plus maintenance of 131 miles of water distribution pipeline and 128 miles of sewer collection line. The system serves between 35,000 and 37,000 customers.

The partnership was initiated in 1980; it was renewed in 2000 for five years.

Highlights
During the contract, ECO Resources developed and supplied the city with customized software that allows the city's public works department to access ECO-Net, ECO's proprietary management information system, and view service records of any of 12,225 addresses on the First Colony system on a real-time basis, enhancing responses to customer service inquiries.

Staff members now read meters with non-invasive wireless units without disturbing residents; ECO data is simply downloaded to city computers for quick and accurate computation of monthly water bills.

The city's overall water utility operating expenses have been essentially unchanged for at least five years; potentially volatile costs such as salaries and wages, benefits, insurance, fuel and new regulatory requirements have been borne by ECO Resources.

The system in 1997 received an EPA Region 6 Award for wastewater treatment.

"ECO Resources has provided outstanding utility operations services for our residents for 19 years," commented Allen Bogard, City Manager. "In the city of Sugar Land, the expectations of our citizens are extremely high and ECO has worked closely with city staff to meet these expectations. The net effect is efficient, seamless utility services for our customers. The strategic use of the private sector allows city management to create an environment of efficiency in city operations through managed competition."

Background
Since 1980, ECO Resources, Inc., has provided water production and distribution, sewage collection and treatment, and related customer services to a portion of the master-planned development First Colony in Sugar Land, a dynamic, fast-growing city in Fort Bend County.

Through its annexation of First Colony, the city more than doubled in population from 30,000 to 68,000 between 1997 and 2000. The First Colony annexation added 12,225 active water connections.

Wanting to keep its existing water utility operation, city officials were concerned about how to control cost and quality while quickly doubling the city's staff to handle the added connections.

They were also unsure of their ability to operate First Colony's 7.5 MGD wastewater treatment plant. The city found a unique solution. In May 2000 the city renewed and expanded ECO's role to include the entire First Colony system (now called the South Zone) while maintaining its own water utility department to serve the older portion of the city, the North Zone. Under three new five-year renewable water services contracts, the company began providing water production, treatment and distribution, and wastewater collection for a population of 36,624 people via 12,225 customer connections (up from 7,500).

Today, in what may be the truest form of public-private partnership, city staff and ECO Resources employees work side-by-side to provide high quality water and wastewater services to all the residents of Sugar Land. ECO performs every utility function in the South Zone except utility billing, while the city performs all tasks for the North Zone.

The city owns the water production and treatment facilities, the regional wastewater treatment plant, and the regional water distribution lines, wastewater collection lines and lift stations, which are used to provide water and wastewater services to First Colony. ECO Resources is responsible for daily operation, maintenance and management of the systems, and also administers all quality assurance and regulatory compliance programs, ensuring that the systems operate in accordance with all federal, state and local health and safety standards.

In using the public-private partnership model instead of operating the South Zone water system itself, Sugar Land continues to support its dramatic population growth without the expense of having to redefine and greatly expand the city's utility staff.

Further, the pairing imparts a guaranteed performance and allows the city access to ECO's innovative industry experts with no impact on its payroll. The city is sheltered from regulatory issues at the South Zone wastewater treatment plant, due to ECO's compliance guarantee.

The overall water utility operating expenses will remain essentially unchanged for at least five years. Potentially volatile costs such as salaries and wages, benefits, insurance, fuel and new regulatory requirements are borne by ECO Resources. Through innovative management initiatives like the ECO partnership, the citizens of Sugar Land benefit from well-planned growth while enjoying one of the state's lowest property tax rates.

On the other side of the equation, ECO Resources has built new efficiencies into its operations and fostered a "do-it-yourself" approach to challenges. Deadlines and budgets are firm based upon detailed contracts and considerable accountability and reporting. ECO's sizable "deductible" for repairs encourages the company to find more versatile equipment and tools with longer life cycles and warranties and to scrupulously observe their maintenance schedules.

With its strong position in the greater Houston area, ECO can draw on the expertise and resources of other company contract sites in the county and state, thereby running the entire First Colony operation with only 13 full-time employees dedicated to the contract.

Results

COST SAVINGS - The contract needed no capital investment by the city and no expansion of city staff. The city's overall water utility operating expenses remain essentially unchanged for at least five years; potentially volatile costs such as salaries and wages, benefits, insurance, fuel and new regulatory requirements are the responsibility of ECO Resources.

OPERATIONAL EFFECTIVENESS - ECO developed and supplied the city with customized software that allows the city's public works department to access ECO-Net, ECO's proprietary management information system. The service records of any of the 12,225 addresses on the First Colony system can be viewed on a real-time basis, which greatly enhances responses to customer service inquiries. ECO also reads meters without disturbing residents using its non-invasive wireless units. ECO data is simply downloaded to city computers for quick and accurate computation of monthly water bills.

ENVIRONMENTAL COMPLIANCE - ECO won the 1997 EPA Region 6 Award for wastewater treatment.

COMMUNITY RELATIONS - ECO Resources participates actively in the life of the city, sponsoring Little League and school athletic teams, mentoring students, hosting the annual Water EXPO fair, donating materials and services to schools, and acting as the city's flood control agency.

This case study was provided by the Water Partnership Council. To learn more, visit : http://www.waterpartnership.org/.

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