OF TAUNTON, MA
DESCRIPTION OF PARTNERSHIP ARRANGEMENT
Since 1980, the city has contracted out the operations and maintenance of its 8.4 MGD wastewater treatment plant, first to EOS and then to OMI. Capital investment has remained the responsibility of the City. The facility is at the end of its design life, and has been placed under Administrative Order by the U.S. Environmental Protection Agency and Massachusetts Department of Environmental Protection to design and construct major upgrades. As an alternative to the conventional public works design/bid/construction process, the City issued an RFP and is now evaluating seven proposals from private companies including American Anglian (AAET), OMI/CH2M Hill, Earth Tech, Ogden Yorkshire, Professional Services Group (PSG), US Water, and US Filter/EOS. The scope includes design of an upgrade of major systems, regulatory approval, construction and operations of the facility, as well as full asset management (maintenance and capital replacement) for 20 years.
ESTIMATED/ACTUAL COST SAVINGS -- IMPACT ON RATES
The City's goal is to finance and construct the mandated upgrades and operate the facility at the lowest combined cost over the next 20 years. The City's engineering consultant has estimated capital needs between $20 million to $24 million under the conventional approach. Based on experience elsewhere, the City hopes this will be reduced by at least 50 percent through competition and private sector participation with full operating risk transferred to the private company. Given there is little existing debt on the facility, the savings in capital costs will result in smaller cost increases to the City and ratepayers. No up-front payments other than transactions costs are being sought by the City. "Off balance sheet" capital financing is being evaluated as part of the process to retain debt capacity for other needed municipal projects.
Although employees and wage levels were protected when the City originated contract operations with EOS in 1980, employee wage levels could not be protected during transition to a second contractor when the City rebid and awarded a new contract to OMI in 1992. Wage reductions created understandable problems. Under the City's special legislation passed for this procurement, the total compensation package for operators (Laborers' International #1144) must be comparable to current compensation. Also, construction will be subject to a Project Labor Agreement with area trades (i.e. similar in form to Boston Harbor). This new legislation was supported by both the laborers' and construction trades unions.
The United States Conference of Mayors
J. Thomas Cochran, Executive Director
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