It appears we may be heading toward a decision on water – at least from the standpoint of the Water Advisory Committee (WAC). The committee voted to eliminate the three most expensive options.
That leaves us with two Woodland options and one West Sacramento option. Committee member Alf Brandt indicated at the meeting that he would be ready to make a motion at the August 9 meeting.
According to alternate Matt Williams, it appears from all indications Alf Brandt will make a motion for one of the Woodland projects and Matt Williams in his article engaged the implications if it were to pass. Given the relatively small difference in cost – if you call $23 million small – that could further shrink, and with the relative complexities of the West Sacramento option, along with serious drawbacks such as lack of ownership and joint governance, uncertain purchase agreements and the serious harm to the relationship with Woodland, there is a lot of sense to such a vote.
However, supporting a Woodland option will set up a very interesting scenario, because while it is true that the work of the WAC, the reduction of the scope of the project and the lowering of the costs have brought more people in line with supporting a final project, there are several other key unresolved points.
The first is that the JPA has been a lightning rod for the dissenters. Most of the critics of the project appear to favor a West Sacramento option which could be delayed more and would not lock Davis into a project with Woodland, which seems to have a very different mindset and core values.
Second, there have been two critical discussions that were shelved as we sorted out which project was optimal and how much it would cost.
We last reported in January that former employees of United Water, one of the bidders for the DBO (Design-Build-Operate) were facing federal charges for tampering with E. coli bacteria monitoring results. The indictment alleges that United Water conspired to ” ‘tamper’ with the required E. coli monitoring method by changing the levels of chlorine administered at the plant before and after taking samples for E. coli.”
We are unable to find a true update on where that stands. However, as of May this year, the trial was still scheduled for next week.
In an article with Newsday, “The firm says it has learned from its mistakes and has implemented a robust environmental compliance program.”
“No other company has a higher commitment to meeting environmental requirements,” said Brent Fewell, United’s vice president of environmental compliance.
The related question is whether the DBO, with a private operator, is the best way to go. United Water would need to make a profit on the investment, while a public “O” might not.
The issue of the proper process, DBO or a more traditional Design-Build model, has largely been shelved. One of the critical questions is whether the JPA should have an outside private company run the water project or whether to have a public entity.
The DBO bidding process not only includes United Water but also Veolia. The Vanguard‘s research last year showed a startling record of failure involving both companies.
Newsday notes, “While United says 95 percent of clients renew their contracts, the company has faced allegations that it has maintained plants poorly and bears responsibility for a variety of water quality violations.”
The WAC has naturally focused on critical questions such as costs and project, but now it needs to focus clearly on the ability of these private companies to provide quality service in a competitive bid environment.
There are actually two clear examples that illustrate the pitfalls here. One was just down the road at the Fairfield-Suisun Sewer District. They signed a contract with United Water to operate their sewage system in 2004, and in January of 2008, the District would unanimously vote to bring its system in-house and cancel its contract with United Water.
Audits done by independent auditors found that they could reduce their operational costs by as much as 10 to 15 percent and at the same time offer their employees better benefits.
Their audit report found: “The district would achieve these savings by removing overhead costs associated with the company’s profits, which were expected to be as much as 20 percent of the value of the contract.”
Likewise, the report from Indianapolis involving Veolia illustrates a similar problem.
In 2002, Veolia would sign a massive 20-year, $1.1 billion contract to provide water service to more than one million people.
However, three years later, a federal grand jury would subpoena four Veolia employees as part of an investigation into allegations that the utility falsified water quality reports.
What the investigation would find is that the company had cut back on staffing, water testing, treatment chemicals and maintenance.
“We did lose money, more than we anticipated,” then-Veolia President Tim Hewitt told the Indianapolis Star in 2005. In reference to the ardent public opposition to the deal, he added, “We’ll get through this but have a black eye.”
Except they did not get through it, and the city had to ultimately pay the company additional money while reducing the company’s responsibilities. Amazingly, “Indianapolis then sought to raise rates by 35 percent to pay for these additional expenses along with costlier capital improvement projects.”
The city would eventually turn to a nonprofit Citizens Energy Group to run the operation of their water service.
Going to a public or a non-profit represents one alternative.
What both of these examples illustrate is the pitfalls of a competitive bid process that forces companies to try to be able to underbid their competition. When push comes to shove and they have to cut costs, they do not cut costs at the expense of their profit margin but rather at the expense of their employees, which impacts the level of service.
One report argued that, overall, “Private operation of municipal water and sewer systems often forces consumers to pay more for worse service.”
It adds, “Across the United States – from Fairfield, California, to Houston, Texas, to Gary, Indiana – cities have found that public operation is a better deal for residents. They have reclaimed their water systems, canceling contracts with United Water, to reduce costs and improve services.”
Newsday reports: “In Camden, N.J., United lost 45 percent of its water due to leaks, overflows and meter inaccuracies between 2004-08, according to an audit by the state comptroller. United, which inherited the Camden contract when it purchased another firm, US Water, in 2002, disagreed with the findings of the audit.”
United Water sued the city of Camden when they stopped making payments. This action forced the city to reach a $4 million settlement last year.
“We have tried to resolve our differences and have reached a settlement that keeps the city working with United Water until 2014,” said Patrick Keating, Camden’s director of public works.
As we have noted, “The most serious allegations against United stem from its work in Gary, Ind., where the company and two employees, a project manager and plant superintendent, were charged by the U.S. Justice Department in 2010 with 26 counts of violating the Clean Water Act for allegedly tampering with daily wastewater sampling methods. Their trial begins in August.”
Newsday reports that United Water spokesman Rich Henning said the firm is “fighting the charges” and will “prove ourselves innocent in court.”
Newsday reports, “United disclosed the charges in its bid proposal documents to Nassau. But Mangano spokesman Brian Nevin contends the county executive was not aware.”
“The issue in Indiana came to the county executive’s attention after the selection,” and Mangano has asked the committee that reviewed proposals “to further review the issue,” he said.
Mary Grant, a researcher with Food and Water Watch, a Washington, D.C., group that opposes sewer privatization, has studied United contracts and argues the firm has a poor track record.
“They reduce staff and maintenance, cut corners and increase rates,” she said.
The problem that we face is that we could have written much the same about Veolia. Plus Veolia has another drawback – the Palestinian issue. That issue may play a role with only a small portion of the population – but it is an issue with some resonance. If a coalition starts to form against the water project, and student groups sympathetic to the Palestinian issue are activated, that can change some of the dynamics.
A move back to the Woodland JPA may complicate this process.
A further issue will be whether the WAC can reach a unanimous verdict. If the verdict is unanimous or near unanimous, the project has a better chance of succeeding. But if there are three or four dissenters, it could fan a heated battle into the spring.
Finally, when the discussion about United Water and the DBO process emerged in the JPA last year, the Woodland councilmembers were almost completely uninterested. This may seem like a small thing, but it reflects a fundamental difference in the values between the two cities, highlighted by the entirely Republican Woodland City Council against the largely liberal Davis City Council.
—David M. Greenwald reporting
[i]”According to alternate Matt Williams – it appears from all indications he will make a motion for one of the Woodland projects [b]and Matt Williams believes that it will pass[/b]. Given the relatively small difference in cost – if you call $23 million small – that could further shrink, and the relative complexities of West Sacramento along with serious drawbacks such as lack of ownership and joint governance, uncertain purchase agreements, and the serious harm to the relationship with Woodland, there is a good of sense to this vote.”[/i]
Whoa there David. The scenario I wrote about was hypothetical. I “put it on the table” in my article yesterday for discussion purposes, not as a prediction. I have no specific knowledge about whether it will pass or not . . . especially without knowing what form it will take.
Bottom-line, you have jumped the gun, and I would suggest you reword your article.
Done
Matt and David
If WAC goes for one of the JPA options then decides DB is preferable to DBO or wants other bidders courted, would that be possible or has that train left the station?
[i]the entirely Republican Woodland City Council[/i]
Are you sure all the members of the Woodland City Council are Republicans?
BTW, wasn’t there a third firm bidding?
SODA, that is an issue that the WAC will be discussing after it completes its current efforts to come up with a project recommendation.
“Are you sure all the members of the Woodland City Council are Republicans?”
Pimentel told me. He and Martie Dotie were the Democrats and they are now off the council.
Understand Matt but what has to happen for it to occur if WAC and CC do suggest DB for JPA option?
[quote]If WAC goes for one of the JPA options then decides DB is preferable to DBO or wants other bidders courted, would that be possible or has that train left the station?[/quote]
In so far as I am aware, that train has [u][b]not[/b][/u] left the station!
So, to clarify,
[i]”when the discussion about United Water and the DBO process emerged in the JPA last year, the Woodland councilmembers were almost completely uninterested”[/i]
… the council contained two Democrats? Therefore
“[i] it reflects a fundamental difference in the values between the two cities, highlighted by the entirely Republican Woodland City Council against the largely liberal Davis City Council[/i]”
is an incorrect statement?
[quote]dmg: Most of the critics of the project appear to favor a West Sacramento option which could be delayed more and would not lock Davis into a project with Woodland, who seems to have a very different mindset and core values.[/quote]
[quote]dmg: Finally, when the discussion about United Water and the DBO process emerged in the JPA last year, the Woodland Councilmembers were almost completely uninterested. This may seem like a small thing, but it reflects a fundamental difference in the values between the two cities highlighted by the entirely Republican Woodland City Council against the largely liberal Davis City Council.[/quote]
Is Republican versus Democrat what you are referring to by conjuring up “differences” between the two cities in “core values”? The Vanguard is now going to try and frame the surface water issue as somehow a political one? The implication seems to be Davis should have nothing to do with Woodland because they are Republicans? Is that the Vanguard’s position?
I would posit the more sensible/realistic view that water issues have absolutely nothing to do with what particular political party one may be affiliated with; that it is very much a local issue that needs to be figured out on a pragmatic basis. In fact the Woodland WAC has discussed the very same issues that the Davis WAC has looked at – but the crux of the matter is one of cost. For Woodland, the West Sac option does not pencil out financially – it is the more expensive alternative for Woodland.
“Is Republican versus Democrat what you are referring to by conjuring up “differences” between the two cities in “core values”?”
I’m going to raise this point more specifically later this week, but there are some issues such as project and cost, that political / core value differences do not matter. There are other issues where it may. I’ll lay it out more later this week.
Elaine
There is a Woodland WAC?
What have their discussions and decisions yielded?
I was unaware they had a WAC.
[quote]dmg: The issue of the proper process – DBO or a more traditional Design-Build model has largely been shelved. One of the critical questions is whether the JPA should have an outside private company run the water project or whether to have a public entity.[/quote]
It seems wiser to resolve the issue of which alternative first and foremost. There should be ample time to look at other issues once the preferred alternative is chosen.
[quote]dmg: The WAC has naturally focused on critical questions such as costs and project, but now it needs to focus clearly on the ability of these private companies to provide quality service in a competitive bid environment.[/quote]
The WAC does not need to focus on the DBO issue yet. Rate structure is the next order of business. Secondly, I don’t believe it is part of the WAC’s mission to select which specific company should/should not be chosen for this project – that would be beyond the scope of what the WAC was tasked to do.
[quote]dmg: A move back to the Woodland JPA may complicate this process.
[/quote]
So is the real point of all this “discussion” of DBO and Republican versus Democrat really a call for the West Sac option?
[quote]dmg: A further issue will be whether the WAC can reach a unanimous verdict. If the verdict is unanimous or near unanimous, the project has a better chance of succeeding. But if there are three or four dissenters, it could fan a heated battle into the spring.[/quote]
In other words the WAC had better come up with a unanimous/near unanimous decision, or else? It sounds like a threat…
Elaine:
“It seems wiser to resolve the issue of which alternative first and foremost. There should be ample time to look at other issues once the preferred alternative is chosen. “
I’m not criticizing your prioritization of tasks – I agree with your reasoning here.
“The WAC does not need to focus on the DBO issue yet.”
I agree – but it the time is getting closer.
” Secondly, I don’t believe it is part of the WAC’s mission to select which specific company should/should not be chosen for this project – that would be beyond the scope of what the WAC was tasked to do. “
I’m not sure on this point. The intent of the article was to raise issues that are still unresolved, not necessarily task them to the WAC. That said, I think this is an issue that the WAC should take up.
“So is the real point of all this “discussion” of DBO and Republican versus Democrat really a call for the West Sac option? “
No. This article does not take a position on which way to go, it only seeks to highlight issues that will arise and have not been dealt with.
“In other words the WAC had better come up with a unanimous/near unanimous decision, or else? It sounds like a threat… “
Good lord Elaine, I sometimes wonder about you. Again, the point here is to highlight possible issues. I have not taken a position myself.
[quote]dmg: Finally, when the discussion about United Water and the DBO process emerged in the JPA last year, the Woodland Councilmembers were almost completely uninterested. This may seem like a small thing, but it reflects a fundamental difference in the values between the two cities highlighted by the entirely Republican Woodland City Council against the largely liberal Davis City Council.[/quote]
There is an implication here that the city of Davis is so much smarter than Woodland; that the values of Davis are so much superior. At least that is how the paragraph comes off to me (and I suspect is how Woodland and other cities might see it), which I find worrisome, vexing, perplexing, but expected.
Every community has its own ethos, concerns and viewpoint. No one community is superior to another. Davis has a not so great reputation for its “I’m better than every other city” attitude, which in my opinion is not one of Davis’s better qualities. Davis has actually become the butt of jokes in many quarters. This superior attitude often works to our city’s detriment. If you go to another city, and admit you are from Davis, it is not unusual for the other person to roll their eyes and raise the issue of how superior Davis thinks it is.
Secondly, one’s party affiliation should not somehow make him/her a lesser person. A particular party affiliation does not make a person dumber, more close-minded, less of a critical thinker. Neither do liberals nor conservatives have a lock on what is “right and relevant”.
E Roberts Musser said . . .
[i]”In other words the WAC had better come up with a unanimous/near unanimous decision, or else? It sounds like a threat…”[/i]
Elaine, I don’t see that as a threat at all. I see it as a recognition of the political reality that if we end up in a February period leading up to the march vote in which some WAC members are openly discussing their dissenting vote . . . then the election will be a much messier one. That seems to be common sense.
In writing this article David is making the same point I made yesterday when I described my Group 11. The difference is that he is pointing out specifics about the issues that are central to the people in that Group. My words yesterday were as follows, and I think that assessment is still on target.
[i][b]11. For those who have serious ethical concerns about the bidding DBO firms and/or the DBO model itself and/or the DBO bidding process,[/b]
The major engagement of the issues central to this interest group are yet to come; however, some of the people in this group can be expected to vote against a 12 mgd WDCWA project simply because the West Sacramento Bryte Bend surface water treatment facility will not be designed, built, or run by one of the DBO firms. So, the key question when assessing this group is without double counting a “no” vote that has been counted in any of the earlier groups, how many “no” votes will be cast by this group?[/i]
BTW, wasn’t there a third firm bidding?
With the lapse of time, and questions on “scope”, are the bids still “in play”?
[quote]There is a Woodland WAC?
What have their discussions and decisions yielded?
I was unaware they had a WAC.[/quote]
Yes, Woodland had had a WAC for quite some time, much, much longer than Davis. It consists of about 25 members, and if I’m not mistaken were not chosen by City Council members. I believe they were just interested and concerned citizens. I know that they discussed many of the same issues our WAC is wrestling with, but I couldn’t tell you what recommendations they made. I presume you could find out by contacting Woodland.
[quote]erm: “In other words the WAC had better come up with a unanimous/near unanimous decision, or else? It sounds like a threat… ”
dmg: Good lord Elaine, I sometimes wonder about you. Again, the point here is to highlight possible issues. I have not taken a position myself.[/quote]
Here are your words:
[quote]A further issue will be whether the WAC can reach a unanimous verdict. If the verdict is unanimous or near unanimous, the project has a better chance of succeeding. But if there are three or four dissenters, it could fan a heated battle into the spring.[/quote]
To me, it sounds as if the Vanguard is saying if the WAC does not come up with a unanimous verdict, then it can expect a heated battle as a result, and will have failed in its mission in regard to public outreach. Hence the WAC had much better come up with a unanimous verdict.
Here is where I am coming from to better explain my reaction. As Chair of the WAC, it has been singularly frustrating when members of the public (not just the Vanguard) seem incapable of trusting the WAC to carry out its mission as an independent body. Pressure is constantly put on the WAC (often behind the scenes) to do things a certain way; to come up with certain decisions, etc., rather than allowing the WAC to carry out its mission as an independent body.
Additionally, I suspect that if the WAC unanimously decides on any surface water project alternative, there may be some citizens who will not be happy with such a decision because they want no project at all, and will “fan a heated battle into the spring” anyways, no matter what the WAC does or doesn’t do. The WAC still has to act as an independent body, listen to all the evidence, and come to the decision it thinks is best [i][b]based on that evidence[/b][/i]. It cannot base its decisions on what it thinks a few citizens might or might not do…
“There is an implication here that the city of Davis is so much smarter than Woodland; that the values of Davis are so much superior. At least that is how the paragraph comes off to me (and I suspect is how Woodland and other cities might see it), which I find worrisome, vexing, perplexing, but expected.”
I don’t know where you come up with the implication that Davis is superior or smarter, the comment was different, there was no value judgment attached to it.
ERM…. ‘chill’… the WAC (or anyone else) had better not believe that the WAC is in a position to MAKE any DECISION (unanimous, or otherwise). Y’all were appointed by the CC, not the rate-payers/customers/voters. I will be extremely angry if the ‘electeds’ rubber-stamp (or, reject, in a cavalier manner) the WAC [b]RECOMMENDATIONS[/b]. The decision is their (CC) responsibility, and they need to be accountable for it, and not hide behind the WAC.
I respect the commitment and work by the WAC.
I was told by a source close to the JPA that the DBO is pretty much a done deal. That issue will not be on the table. If that information is correct, it has some huge implications for going forward.
[quote]To me, it sounds as if the Vanguard is saying if the WAC does not come up with a unanimous verdict, then it can expect a heated battle as a result, and will have failed in its mission in regard to public outreach. Hence the WAC had much better come up with a unanimous verdict.[/quote]
Elaine: I don’t see how that explanation of the politics of the decision is tantamount to a threat. I see it as a reality. A split decision will foster existing cleavages in the community, a unanimous decision will smooth some of them.
“Additionally, I suspect that if the WAC unanimously decides on any surface water project alternative, there may be some citizens who will not be happy with such a decision because they want no project at all”
I don’t disagree.
Give us United Water or Veolia Water as targets, and we will easily knock down the Woodland choice. Also, the DBO option is Dead Before Arrival in Davis. We want Davis W-2 employee professional staff running our water system, fully accountable to the City Manager and CC and our ratepayers and voters
Michael Harrington said . . .
[i]”We want Davis W-2 employee professional staff running our water system, fully accountable to the City Manager and CC and our ratepayers and voters.”[/i]
In the immortal words of Tonto, “Uhh…who do you mean we, Kemo Sabe?”
City employees working at a new plant? Yeah…. so why is the City shedding so many of those workers?
Mike H.: please own up to the fact that you are opposed to ANY surface water answer that might occur in the next 50 years?
[quote]I don’t know where you come up with the implication that Davis is superior or smarter, the comment was different, there was no value judgment attached to it.[/quote]
Here are the Vanguard’s words:
[quote]dmg: Finally, when the discussion about United Water and the DBO process emerged in the JPA last year, [i][b]the Woodland Councilmembers were almost completely uninterested[/b][/i]. This may seem like a small thing, but it reflects a fundamental difference in the values between the two cities highlighted by the entirely Republican Woodland City Council against the largely liberal Davis City Council.[/quote]
The implication seemed to be 1) Woodland Councilmembers don’t pay attention to important details; 2) Woodland City Council members are “Republican” (oh horrors!) whereas Davis City Council members are “liberal” (politically correct). LOL