Archive for Thursday, February 14, 2002

Alliance to present proposal to manage water utility

Iowa city satisfied with private operation of city departments

February 14, 2002

Maquoketa, Iowa, City Manager Brian Wagner said he was surprised last summer when his city council chose to contract Alliance Water Resources to operate the city's sewer and water departments.

It wasn't that Wagner was surprised that the city council would seek a contract provider. Another contract provider operated the water and sewer departments in the eastern Iowa city of 6,100 since the early 1990s.

"When it came time to renew that contract, the city council decided to open it up for proposals," Wagner said. "I was surprised. I thought we would go with our old provider, but Alliance did an excellent job."

Alliance, which approached the De Soto City Council last month about operating the city's water department, is contracted to run the Maquoketa sewer and water departments for $285,000 annually. Wagner said that was $30,000 less than the previous contractor. But he said that was not the only reason the city council chose Alliance.

"When we called around, the references Alliance got were higher than other contract providers," he said.

The Maquoketa City Council confirmed its satisfaction with Alliance during recent discussions concerning next year's budget. The company said it would have to increase its annual contract rate by 10 percent, Wagner said. When it approved Alliance's initial contract last summer, the Maquoteka City Council warned the company not to attempt to make up for a low initial bid by inflating the contract price in subsequent years.

"I really thought the council would see it as low-balling," Wagner said. "But once they came in and explained their reasons, the council was satisfied."

Company spokesmen explained they weren't able to get an accurate read on the local labor market when they made their first bid because employees with the previous contractor were reluctant to talk, Wagner said. The company was also operating the water department a truck short, he said.

With the adjustments, Alliance has assured the Maquoketa City Council future annual increase would be near 3 percent, absent an extraordinary event, Wagner said.

Last Thursday, Alliance representative Donald Pesek and Craig Edlund agreed to write a contract proposal to run De Soto's water department.

The decision came after all De Soto City Council members expressed an interest in Alliance's services. The most enthusiastic council members were Brad Seaman, Emil Urbanek and Linda Zindler.

"I do have a sincere interest," Seaman said. "We could gain from the expertise they have. I would be interested in seeing if they could operate in the same budget or less than we are."

During a presentation to the council last month, Edlund said it would take about three weeks to write the proposal. During that time, company representatives will tour water department facilities and review paperwork.

Councilman John Taylor said Alliance would have to show it can run the water department cheaper to earn his vote. The water department's 2002 budget is $750,000.

"If we don't save any money, I don't see any reason to go with them," he said.

Councilman Tim Maniez said the council needed to do more research.

"Before I'm ready to say we're going to pursue this, I'd like to hear from other cities (Alliance serves), and from water department employees," he said.

In response to Maniez's concerns, Interim City Administrator Rich Caplan agreed to call other cities Alliance serves. Edlund said he would meet with the department's employees and with council representatives.

Pesek repeated assurances given the council during the January presentation that Alliance's wages, benefits and opportunities generally exceed what those cities offer. "We don't make our profit by cutting heads," he said.

That may not be the case in De Soto, Mayor Dave Anderson said. Changes are coming to the water department with the completion of two water lines connecting the city to the water treatment facility, he said. The lines should allow the city to streamline the department's operation by reducing the dependence on the downtown plant, he said.

The city needs added expertise if it becomes the wholesale water supplier with the proposed improvements at the Sunflower water plant, Anderson said.

"If we get into the water business, we're going to have to present ourselves as professional," he said. "We would have a corporation, expertise and training to fall back on."

Maquoketa has found that to be Alliance's strength, Wagner said.

"The advantage they offer municipalities is the network of expertise they can call on," he said. "When the city council first went with a contract provider, they wanted better-trained people to address problems."

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