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Council approves Water Utility request to fund remaining WTP4 contracts

Friday, November 19, 2010 by Michael Kanin

Unsurprisingly, the Austin City Council voted 4-3 Thursday to grant the Austin Water Utility independent authority to execute all of the contracts remaining on Water Treatment Plant 4. With that action, city staff will no longer have to return for formal approval of future contracts for the facility’s construction.


The move prompted a wide-ranging outcry from plant opponents, who complained that the new process will be less transparent than the piecemeal authorizations used to approve contracts thus far. Council Members Bill Spelman, Laura Morrison, and Chris Riley each continued their trend of voting against plant-related items.


Still, after a host of Austin business organizations showed their support for the facility, the measure passed with the votes of the rest of the body. In her remarks from the dais, Council Member Randi Shade insisted that this was not the end of the dialogue about the plant.


“Don’t think for a minute that this discussion is over,” she said. “I believe that we’ll be continuing to look at this…and I do believe that the project gets better with (citizen) input.”


City staff argued that the move would enhance their ability to negotiate those deals. “(This) allows us to have a much more flexible approach to negotiating the contract, to…working with the bidders,” said Assistant City Manager Rudy Garza.


Garza added that, with the new arrangements, staff wouldn’t have to go through city boards and the council before they sign a deal. This, he argued, would save time. “The current process…adds about a minimum of two months to our time period—so the first tangible will be (our) negotiating the contract sooner, and consequently (getting) to the point of moving ahead sooner,” he said.


Water Utility director Greg Meszaros later added that the flexibility could also save money. “As an example…we get a request from a bidder that says, ‘hey I’m bidding on another large package and if you want my best bid, could you delay the bid two more weeks…?’” he said. “Often we’re in a position where we have to respond no or not fully take advantage of those opportunities because…if we miss a commission deadline, then we can often delay six weeks or longer.”


Meszaros told the Council that their action would allow the utility to bid out six packages of construction projects. All told, the building costs associated with the plant are not expected to exceed $359 million. He added that even if they granted the Water Utility the right to execute the remainder of the contracts, it could still act to cancel the plant somewhere down the road. “That language does not change,” he said. “Our contract has termination language (that says) at convenience.”


According to legal staff, the term at convenience gives Council the right to cancel the agreement that governs the construction of the plant for any reason after giving its lead contractor seven days notice. Costs in that event—in addition to other contractual fees that kick in with that sort of termination—could be as much as $6-7 million dollars.


In response to a question from Spelman, Meszaros also noted that the Council could switch back to the piecemeal approach at its pleasure.


All told, 10 officials associated with Austin business testified in favor of the plant. Their ranks included four representatives from the minority and women-owned business community. By their measure, the plant was a much-needed economic boon.


“It’s projects like Water Treatment Plant 4 that were able to allow us to stay in business,” said Teo Gomez owner of treatment plant sub-contractor Origin General.


Opponents of the facility, most as familiar as the 4-3 vote to authorize the new contractual process, argued that the Water Utility hadn’t earned the right to the autonomy they were about to be given. “Past actions of the utility show, at this point, that they’re not worthy of confidence,” said longtime activist Paul Robbins.


“The utility is in the process of adapting a culture of secrecy,” he later continued. “I know that, in my own information requests on the state of the utility’s water conservation efforts, I’ve waited as long as two months and then been told they have no information responsive to the request.”


After the hearing Morrison told In Fact Daily that, despite the sweeping authorization, the discussion had indeed not ended. “I know that a lot of people have a lot to say,” she said. “But the question here today was, ‘Are we going to completely defer to staff in all of the contracting for $300 million, or are we going to continue citizen and council oversight?’ I think fiscal responsibility says that we should be involved and the public should be involved and the (Water and Wastewater) commission should be involved.”


Council Member Sheryl Cole suggested—and her colleagues agreed—that staff should bring quarterly reports on minority and women business participation to the Council’s committee on small, minority, and women business. She also asked for quarterly reports that the utility will prepare for the Water and Wastewater Commission to come before the Council’s Audit and Finance Committee.

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