Issues

• Costs

  • $82 Million is just the beginning

  • $60 Million bond + $77 Million debt service =$137 Million

  • Life of contract(20 years) = $176,000,000 out of our pockets and our community to American Water in New Jersey

  • This averages to $8.8 Million per YEAR!

  • Bid has doubled in 1 year. Blamed on materials cost

    • Materials cost index is 25%

    • Materials cost is ? % of contract?

   

• American Water

  • Multinational Corporation will make a huge profit over the 20 year contract

  • Privatization - municipal enterprise sewer funds are only allowed to charge as much as it takes to maintain and operate the plant. They are not allowed to make a profit. When American Water or another contractor takes over, the plant is actually being run FOR PROFIT to the operator.

  • Involved in many lawsuits across country

  • Being sold by parent company RWE as an IPO in March

  • Have been lobbying to get laws in favor of privatization

  • Cities with American Water issues

    • Stockton, CA

    • Felton, CA

    • Larkfield, CA

     

• DBO Contract

  • Bidding method supposed to save money – savings have not been documented

  • California Legislative Analysts’ Office does not recommend for these projects.

  • Reported to stifle competition according to Massachusetts Attorney General Report

  • State does not allow except under special provisions

  • Delafield Hawkins and Wood: Special counsel to write contract for City

  • Charging 100's of thousands to write a contract

  • Sued by state of Connecticut for $70 million as part of an Enron energy bond scheme that costs the state $200 million

  Competition is stifled with DBO(from California Legislative Analysts Office)

  • Good Access for Small Contractors. By awarding contractors based on price, the design-bid-build process provides the best opportunity for qualified small and new contractors to obtain government contracts. Small and newly established contractors may be able to perform work at a lower cost than large competitors because of lower overhead and more efficient operations

    How to Ensure Access for Small and Newly Established Contractors. Using criteria such as experience and qualifications to award contracts reduces the likelihood that contracts are awarded to small and newly organized contractors. Over time, this may limit competition for public agency construction contracts

    Buildings Only. At this time, we recommend that the Legislature grant design-build authority only to buildings and directly related infrastructure. There are more complex issues associated with other public works projects such as transportation, public transit, and water resources facilities. Evaluation of design-build as a construction delivery option for these other infrastructure facilities is beyond the scope of this report.

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• Energy Use

  • MBR uses 3,200 kWh/af = $340,00/yr

  • Camrosa Plant = $120,000/yr

   

• Compliance

  • After spending $82 million we will still not be in compliance with chlorides and boron OR have water softening

  • We will have to spend millions more to solve the chloride problems

  • Water softening is part of our Waste Discharge Requirement (WDR)

  • Water softening was approved by the public

  • Water bills will double

   

• Alternatives

  • Micromedia

  • Vertreat

  • PERC Water

  • Camrosa Plant: oxidation ditch and sand filter for tertiary Title 22 = $1.1 Million/yr O&M

  • Los Osos engineering study: 12 alternatives, cheaper to build and operate

   

• Recycling

  • $26 million to pump water back up to school grounds and parks. Wastes one limited resource( energy) to save another (water).

  • For $26,000,000 we could buy 120+ acres of agriculture for percolation and irrigation

  • School will have to pay potable rate for recycled water