Poll: Should St. Louis Sign The Water Consulting Contract With Veoila?
Next year St. Louis will turn 250 years old. In those early years St. Louis didn’t have a municipal water system, but for the last 178 years we have.
1764: The City of St. Louis is founded.
1831: The City of St. Louis contracts with Abraham Fox and John Wilson to build a waterworks.
1835: The City of St. Louis buys out the bankrupt Fox and Wilson, becoming sole owner of the St. Louis Waterworks. (St. Louis Water history)
With that long history comes old infrastructure. To get advice St. Louis issued a request for proposals to provide a “Operational Efficiency and Value Creation Analysis”:
PROJECT OBJECTIVE:
The objective of the St. Louis Water Division is to retain a Consultant or Consultants with expertise in water system operations that can provide insight and new ideas, programs and approaches on ways to increase the Water Division’s efficiency and/or revenues in order to postpone or lessen future water rate increases and to improve customer satisfaction. The Cityand the Water Division for the most part would like to identify the ideas, have them bedeveloped into projects or programs and be implemented through Performance Contracting such that the City has no additional initial outlay of funds for capital projects or procurement of equipment or services. There will be some Non-Performance Contracting efforts that will result in delivery of a report with recommendations and a detailed implementation plan that can be executed by the SLWD or others
Sounds like a proactive step, but the winner of the bidding process, French firm Veolia, is viewed by some as a company that specializes in the privatization of public water systems. So the fear is a short-term consulting contract is the gateway to handing over a valuable city asset.
Mayor Slay is saying Comptroller Green has a duty to sign the $250,000 contract since it went through the bidding process. Meanwhile, Lewis Reed, President of the Board of Aldermen, is calling for hearings over the handling of the contract.
For months a grass-roots organization Dump Veolia has fought the contract at every step:
We are a group of concerned residents who want St. Louis to reject a proposed water consultancy contract with the French multinational corporation Veolia, the largest water privatization company in the world.? Learn what the campaign is about, who is mobilizing against Veolia, and why.???
The poll question this week is “Should St. Louis Sign The Water Consulting Contract With Veoila?” The poll is in the right sidebar, results to be posted on Wednesday October 20th.
— Steve Patterson
StLouis is full of great companies and good employees that can handle the work. From all I’ve read and heard about “Veolia” and their prior mistakes. Lets not gamble on their outcome. A French company won’t have any “Skin In The Game”.
I don’t know if privatization would be a good idea, or not, but we won’t know if we don’t investigate our options. $250,000 seems like a fair number for a comprehensive analysis, and Veolia likely has the expertise to do a professional analysis, but so do “American” companies like Jacobs and CH2M Hill. My only two concerns, at this point, are whether or not this is essentially a sole-source contract (should there be/have been an open solicitation?) and why the opposition seems to be heavily weighted with political agendas that have very little to do with water treatment and delivery?*
The water system ain’t sexy – we expect it to work when we turn on the tap, and we, rightfully so, don’t think much about it until something fails. We do have aging infrastructure and we should have a plan in place for systematic upgrades, not just waiting for things to break. The one advantage I can see from privatization would be decoupling water rates from local political agendas – paying for trash collection on our water bill still rubs me the wrong way. On the flip side, I can very easily see any consultant recommending that we move away from flat rate billing and installing water meters for every account, which would give some people some rude surprises about how much water they actually use/waste (one benefit of having a system sized to serve a much larger population). My gut feeling is this is mostly like many other things in St. Louis – we’ve always done things this way, so why should/would we want to even look at changing?!
*Organizational Endorsers (from the opponent’s website):
Missouri Coalition for the Environment
St. Louis Palestine Solidarity Committee
Sierra Club, Eastern Missouri Group
Women’s Voices Raised for Social Justice
Corporate Accountability International
15th Ward Democrats
Organization for Black Struggle
Missouri Muslims for Civic Engagement
St. Louis Jewish Voice for Peace
St. Louis University Justice for Palestine
Council for American Islamic Relations
St. LouisInstead of War Coalition
Missourians Organizing for Reform and Empowerment
I agree it makes sense to look at options, but the concern with Veolia isn’t unique to St. Louis. Hiring a firm that specializes in privatization isn’t a good way to get an unbiased analysis.
And I wouldn’t expect an unbiased analysis, but I would expect the city water department’s staff to present their arguments for staying a city operation and I would expect the mayor and BoA to weigh both arguments before making a decision.
My experience with privatization, much like my experience with design-build in the public sector, is that it all boils down to management and paying attention to the details. You don’t just tell a private company to go do something, you need to spell out specific, quantifiable performance objectives and standards.
So you expect employees trying to do their day to day jobs to put together a proposal to counter a huge multinational corporation that’s getting paid a quarter million dollars? That’s as fair and balanced as Fox News.
Isn’t this the same argument that could be used TO bring in any company? that the day to day employees don’t have the additional resources to counter or develop their own cost cutting means?
There are employees in the department that need to justify their department’s existence in the larger city budget, every year! They know how the money is spent, where the needs are and. likely, where any inefficiencies may lie. See pages 3-7 of the following: http://stlouis-mo.gov/government/departments/budget/documents/loader.cfm?csModule=security/getfile&pageID=341526 . . If Veolia (or another consultant) can identify inefficiencies, then they SHOULD be addressed. That does NOT mean that the department should or must be privatized, it just means moving it into the 21st Century, if that’s truly the reality. The mayor and our aldermen have a duty to run the city efficiently. If any department (or any of our fellow citizens) are afraid of this level of scrutiny, we have way larger problems to tackle!
No doubt JZ, however, with any group of long-term employees, they sometimes get blinded/ immune/ to ‘opportunities’ that lie in either staying currently abreast of developments or trimming the fat or changing operational systems. I could point out many times that I’ve gone in as a replacement manger to only shake my head at how stagnant they had become or…or…I’ll just point to AB and how their arrogance cut their feet off. They had an inside plan to contain costs. It just took too long nor cut deep enough. And not to defend Veolia (because I think this is an extremely bad deal) but let’s face it….a division like water that had been part of the City since the beginning how can there not be an attitude of ‘where else are they going to get water from’.
I used to be in the privatize-as-much-as-possible camp, but I’ve seen, first hand, that the private sector is not always the best answer for delivering services to the public. Cheapest is not always the best, especially in the long run. At this point, I support getting a second opinion, then let’s discuss our options. Saying that nothing needs to be changed is just as naive and idealistic as saying that privatizing will be the perfect solution. If anything, I’m now in the If it ain’t broke, don’t fix it camp, but if it is broke, then we SHOULD fix it!
Water is a basic necessity for life, we don’t need a corporate board located anywhere being more important than our access to water.
And that would include the Board of Aldermen?!
You seem to be in the opposed-to-looking-at-anything camp. Or, are you just opposed to Veolia looking?
I agree, water is a basic necessity for life. However, water is effectively delivered to its end users around the country by a variety of corporate structures – a department in city government (St. Louis), an independent agency owned solely by the government (Denver, Louisville, Los Angeles), a private company (St. Louis County) or by independent, privately-owned wells (Tom in Wildwood). Good management, just like bad management, is not exclusive to any specific corporate structure.
I’m confused by your statement, that “we don’t need a corporate board located anywhere being more important than our access to water.” Define “important”. Are you afraid that any look at operating more efficiently will somehow limit access to city water? For all of us or just for certain residents? I see saying that the status quo is perfectly fine poses a greater threat to universal access, especially if our aging infrastructure remains untouched and continues to randomly fail.
Corporate boards work to maximize profits for shareholders. Government owned water departments are supposed to act in the best interest of the public served, not stockholders.
“Government owned water departments are supposed to act in the best interest of the public served, not stockholders.” Agree! But if their operation is not audited or scrutinized on a regular basis (perhaps decades), how do we know that they’re acting in our best interest? Looking at the limited information included in their budget request, even I can see some potential red flags for a department that specializes in pipes and pumps, billing and digging. Why do they need to have (as full-time employees) a Carpenter Foreman ($62K), a Lead Carpenter ($54K), three Carpenters ($50K each), and, of all things, a Blacksmith ($37K)? Sure, this is only $300,000 out of a $56 million budget (and 6 positions out of 306 currently filled), but it just doesn’t look right or very efficient. Is there truly enough work every day / week to keep 5 carpenters busy?!
I think many people are very afraid of finding out just how cheap our water is and the other half is very afraid it will be outsourced. I have absolutely no problem with consultation. My only concern (and I think that of many) is that this particular contract is appearing to be a back-door way into not only outsourcing, but clear cut selling of one of the City’s crown jewels.
I don’t think our BofA has the skills needed to either figure out which cost cutting methods will impact water quality much less find them. But I do think that with the addition of a few experts (maybe not for we may already have such expertise on the payroll and they just need to be freed up for some long range planning) our City Water could easily develop long range plans that could best that of any private company.
But the question I’m not hearing is what do we (users, alderman, water department) see our water being next year, 5 years, and 20 years down the road and how do we intend to get there. Nor am I hearing that being asked by the leaders. I am hearing; how can we cut costs. These are not the same question.
Agree!
I’m somewhat conflicted about this. On one hand, I’m sympathetic to people trying to make sure there’s accountability from the mayor and BOA because many times things will slip through without the public at large being aware. But it also seems like the water department needs some serious work. There’s been construction work (being done by the water division) on almost the entire stretch of 39th street for months. And current estimates leave it taking another month to finish. They’ve left the current state of the road in deplorable condition with large holes having no cones or signs. Their inability to efficiently do the work here and the work done on Grand and Chouteau this post summer makes me think something needs to change. Maybe decoupling flat rates would be a good thing. Help them raise money while also teaching people to conserve water usage.
First off, I’m not willing to judge the water company on a few instances of infrastructure repair taking a few weeks, not when all of our infra is inter-connected and must be juggled by various departments. We have a very large network of aging works that yes, sooner or later will need attention. The writing is on the wall. Probably within the next 20 years, all of the water system will need replacement….billions of dollars. It makes sense to figure out now rather than piece meal as we go which is what is happening.
We also have an aging department which translates to many long-term, cost-laden employees and retires. Sure we can be like a private company and cut and bring in younger i.e. cheaper employees. But is this morally the right thing to do, especially as a public entity? A very gray area which alone brings heavy arguments on both sides and no single answer.
Secondly, I think any company with a track record of Veola must be approached with caution. There is a difference between consulting with the goal of streamlining and/or development of infrastructure improvement tools and consulting with the goal of outsourcing. Its been made abundantly clear that the CITY residents do not want outsourcing. This must be respected. Add the history of environmental issues Veola has created/charged with is also of concern.
Third….metering. Sure, sounds good. Lived in towns where this was done. Can be very expensive and eye-opening. But metering isn’t going to solve the problem if most of the leaks are in the system and not in people’s homes. With a 150+ year old system, my money is the leaks are in the system not wasteful users.
Fourth…we missed a great opportunity to ride the bottle water craze in the 90’s and 00’s. As the documented best water system in the Country, we should have been bottling our water for all the Midwest. Missed $$$$ in my opinion.
Our domestic water for a family of five , 43 goats, five stable horses, and one miniature pony costs me approximately $9.00 a month, which is the cost of operating a well pump. And the water is great tasting and is void of “supplements”. Now I’m researching solar power devices so that I can soon eliminate the local electrical power company from the equation. No consultants.
I don’t see a reason that your typical city needs to own water utilities any more than it needs to own farmland or asphalt companies. I think they should be looking directly at privatization.
And it’s rank prejudice and xenophobia to act like it matters that Veolia is French. Localism is just a different expression of bigotry.
Missouri American Water is a subsidiary of American Water, headquartered in New Jersey. Do you think people in Missouri would be more or less accepting if they were paying their bills or selling their infrastructure to Water, Inc.?
http://www.amwater.com/About-Us/Corporate-Information/