COOS BAY — The management and operation of the city’s sewer and wastewater collection system could soon leave the hands of the city’s contractor, as negotiations with the company grow challenging.
On Tuesday, the city council will consider moving forward to develop a transition plan to take over the collection system. Currently, the city contracts with an outside company, Jacobs, to do the work, but city officials say contract standards aren’t being met.
Concerns about the contractor’s performance came to the forefront when the city began the annual process of renegotiating its agreement with the contractor, according to City Manager Roger Craddock.
The city’s main concerns included the maintenance of the wastewater system’s infrastructure, repeated exceedances of environmental quality permits and staff turnover.
Those permit exceedances are the city’s responsibility, even if they’re caused by the city’s contractor. An audit found that many of the exceedances were preventable, Craddock said.
In a council work session Nov. 24, Efrain Rodriguez, a representative of the company, told city councilors about improvements it’s made since the city began raising its concerns.
“We started working on enhancements and additions to the contract that made that a little bit more cumbersome, and it dragged us into this situation of us having to perform, in certain cases, doing scope that is in addition to what the contract contemplates,” Rodriguez said. “In some cases, addressing new expectations — that we are happy to do, but are additional to the original contract, which all results into the situation we’re in after the fact.”
Those system improvements have come at a cost: In the proposed amendment to the agreement for service, Jacobs is asking for a major fee increase, over 30%, including a retroactive increase for several months. That’d cost the city around $500,000, bringing the total contract up to around $2.4 million.
Many on the city council expressed their displeasure with an increased fee for what they see as the same contract requirements.
“This 30% retroactive, with all due respect, we have not had very good service up to this point, and this increase is supposed to make service better,” Mayor Joe Benetti told Rodriguez during the work session. “So it’s hard for me to say we should give 30% for something that we haven’t had, I guess.”
The main disagreement between the city and the contractor comes down to what should be expected of the company under the current contract in terms of performance, maintenance and staffing.
“While I’m sensitive to the fact that they’ve got overruns and expenditures, when that happens in my business, I have to eat it because I agreed to a price,” said councilor Phil Marler.
Rodriguez, the contractor’s representative, responded by saying that the company’s costs had increased with the operation of the city’s new wastewater plant and additional permits and chemicals in use, and those new costs hadn’t been accounted for previously.
“It made for a much more complicated scenario than a year-on-year revision,” Rodriguez said, referring to the contract amendment process which takes place annually. “Typically this would have been a much more simpler process, but a number of topics happened at the same time that we had to address.”
Councilors and city staff, however, argued those changes weren’t new and were instead part of the city’s original contract.
“But you haven’t been able to uphold your end of the contract by keeping us out of permit violations,” councilor Carmen Matthews told Rodriguez.
Regardless, Rodriguez responded that the company wants to continue its service of the city’s system.
“In the time that I have worked with the city, I have learned that you care about your systems, and you want to do what’s right. You want to be cost effective, but you do not want your assets to be neglected,” Rodriguez told the council. “And what we have developed is something that would allow us to do that moving forward.”
But the city has begun considering other options. Since January, the city has been working with a consultant to evaluate the possibility of hiring its own wastewater staff and taking over the service of the wastewater system itself.
That’s what the council will consider Tuesday: an approximately $100,000 contract with that consultant to finalize and implement a transition plan to take over the city’s collection system.
That plan would leave the treatment portion of the wastewater system to Jacobs, though Craddock noted that the city could decide to take that over too if it can’t reach an agreement with the company.
Hope isn’t quite lost for Jacobs to keep the contract, though. In its work session, the city council directed city staff to continue pursuing a less expensive contract amendment with Jacobs that would maintain the desired level of service.
But time is running out, Craddock says. If the city council eventually decides to take over the wastewater system, that takeover would come at the beginning of the new fiscal year in July.
So, for the time being, the city is pursuing both options — negotiating a better contract with Jacobs, but preparing for the possibility that city staff will take over the operations.
Craddock is confident that the city could find the staff necessary to do so, even on the short timeline.
“We’ve been fairly well assured that we’ll be able to attract the talent that we need to do that,” Craddock said Wednesday.
The city of Sweet Home, northeast of Eugene, voted to take over its wastewater treatment plant from Jacobs earlier this year for similar reasons, the New Era newspaper reported. Coos Bay would take over operations at the same time as that city if it decides to do so this year.