After months of negotiation, the Coos Bay City Council finally moved to part ways with its wastewater contractor Tuesday, opting instead to operate the system itself.
The move means city staff will begin operating the whole system, from the collection pipes and pumps underneath the city to the operations and maintenance of the city’s two treatment plans.
“It’s time to say it was good while it lasted and it’s time to move on and take this on ourselves,” said Mayor Joe Benetti during a council meeting Tuesday. “Taking the whole thing on is just the right step for us to do.”
The city has had a two-decades long relationship with Jacobs, the wastewater treatment contractor, and its predecessor companies. Much of that time was productive and beneficial, Benetti said – but the agreement grew challenging in recent years.
Failures in the system caused environmental quality permit exceedances, which the city is ultimately responsible for whether they’re caused by the contractor, the city or something else.
City staff and councilors have had a laundry list of other issues with the contractor, saying there have been challenges with deferred maintenance, staff turnover and transparency.
New efforts by the company improved some of those issues – but city leaders agreed that the ship had already sailed.
“It’s too little too late for me,” said councilor Drew Farmer Tuesday. “From what has been presented to us, both by Jacobs’ performance and by staff reports, I don’t see there being an option to continue on with Jacobs.”
Through much of last year as the city renegotiated its contract with the company, representatives from Jacobs asked the city for significant increases in wastewater fees as costs rose to meet city performance expectations.
Those increases came to be too much for city leaders, who moved in the latest agreement with the company late last year to take over the collection portion of the system and provide the city the opportunity to opt-out of the contract all together.
The opt-out option is what city councilors exercised Tuesday in a 6-0 vote.
“Staff wants to ensure council, if they decide to self-perform the (operations and maintenance) of the entire asset, staff is up to the challenge, and feels strongly they have the right resources and support in house, and external consultants currently in place to make this transition successful,” Public Works Director Jim Hossley told the city council.
What’s not exactly clear about the move is how much it’ll cost the city, and whether or not it’ll be cheaper than keeping Jacobs would have been.
A cost analysis prepared by the city estimates that the raw cost of the city operating the whole system could be $80,000 to $300,000 more than keeping service with Jacobs.
But that might not paint the full picture.
“While initially it appears the operations and maintenance costs may be more if managed by the city, there are other costs that are difficult to calculate that may compensate for the increased self-performance costs,” Hossley told the council.
One of the costs that’s difficult to calculate is the value of city staff time spent working with Jacobs under the current contract due to permit exceedances and other performance issues.
Hossley said the figures also don’t take into account some of the values inherent to city staff takeover of the system, including the possibility for increased transparency, the vested interest of city staff in the maintenance of the system and the fact that more of the money spent will remain in the city.
In spite of the possible increased costs, city staff recommended councilors move to take over the system.
“I think it’s unfortunate that we’re at this point. And my problem is change is always kind of scary. Because the unknown is fearful,” said Councilor Phil Marler. “But I concur with Councilor (Robert) Miles and Councilor (Stephanie) Kilmer, we’re kind of at a point now where we got backed into a corner. And I place a lot of trust into what staff is telling me.”
For Miles and other councilors, the decision was a matter of trust in Jacobs.
“I feel like the writing’s on the wall. We can’t keep putting our trust in a company that’s not performing,” Miles said.
The move gives the company 180 days’ notice of the city’s intent to drop the contract. The city’s already hired a consultant to help take over the system and hire key city staff.
“This is probably one of the most difficult decisions, and hardest decisions, this council is going to have to make, and it hasn’t been an easy one,” Benetti said.