City pushes forward with privatization plan

Should city leaders opt to privatize Sunnyside's water and sewer services, a firm with strong ties to France has been singled out to take on that responsibility.

Last night, the Sunnyside City Council authorized City Manager Bob Stockwell to enter into negotiations with Veolia Water on an operation, maintenance and management services agreement. Stockwell explained the negotiations will include detailed price proposals from Veolia Water. He said once this step has been completed, probably by mid-January, city staff will report back to Council and make a recommendation on whether it makes sound economic and operation sense to contract out the city's water and service systems.

"We anticipate being ready to make a final recommendation to the City Council at the January 24, 2005 City Council meeting," Stockwell said in his executive summary last night.

Before the Council voted unanimously to authorize Stockwell to proceed with negotiations, local residents Martin Campbell and Ellen Bird asked city leaders to reconsider their actions.

Campbell told Council that contracting out the city's water and sewer services doesn't make sense to him.

"It seems counter-productive," Campbell said. He explained that the city provides many things for its citizens, but the most important service it provides is water and sewer. "Without it, we can't live in our homes. It's the city's core business," he said.

Campbell likened the privatization of the water and sewer services to the current system of hauling away the trash from local residents' homes. He said the garbage service is provided by a Yakima company that employs Yakima drivers, does the maintenance on their trucks in Yakima, "...and probably all of their gas is bought in Yakima.

"Every dime I spend on garbage collection goes to Yakima," Campbell said, inferring that Sunnyside shouldn't be sending its water and sewer money out of the community into someone else's hands.

Campbell also pointed out that the city employees who work in Sunnyside's public works department "...are our friends and neighbors." He said the Council can't expect loyalty from them if it continues to try to contract out their jobs.

"A lot of these (city employees) are highly trained people," he added.

Bird, a regular visitor to the Council meetings, agreed whole-heartedly with Campbell. "I echo Martin's sentiments and feelings," she said.

"Where does it stop? Pretty soon the whole town will be farmed out," Bird said.

Councilmen Bruce Ricks and Don Vlieger responded by offering their explanations on why the Council is proceeding with the plan to look into the option of privatizing the water and sewer services. Ricks said the Council doesn't yet know if contracting out those services will benefit Sunnyside, but for fiduciary reasons the Council is obligated to investigate the matter. Vlieger concurred, saying the Council is responsible for seeking out the best options for local rate payers and taxpayers.

This past fall, the city sought statements of qualifications and general price proposals from companies interested in operating and maintaining the city's water and wastewater systems. Three firms expressed an interest, including Veolia Water, which has its U.S. headquarters in Houston, Texas.

A team of city staff members-comprised of Stockwell, City Attorney Mark Kunkler, City Engineer Jim Bridges, Water Supervisor Steve Schut and Sewer Supervisor Joe Ortega-evaluated the proposals. Veolia Water was ranked as the best fit for Sunnyside from among the three companies.

Veolia Water was formerly known as Compagnie Generale de Eaux Australia. It merged with US Filter in 1999 to create Vivendi Water, a division of Vivendi Universal, which in 2001 was ranked by Fortune Global 500 as the 91st largest company in the world. Vivendi Universal, a broad based company according to its 2002 corporate profile, features two distinct divisions. One is Vivendi Environnement, which is involved in water, wastewater, energy and transportation services in at least 65 countries, with aims at privatizing public services. The other is its communications and entertainment division, which has had holdings over the years in such companies as Universal Studios, Universal Music and the USA network channels.

In 2002, Vivendi began experiencing major financial difficulties. Its CEO was fired and his replacement began selling off major chunks of the company's media and publishing holdings. In 2003, Vivendi Water adopted Veolia Water as the company's new identity.

The company's Pacific Northwest headquarters is in Vancouver, Wa. Company officials said Vancouver will be the primary site to provide a base of licensed and experienced professionals who will support both the routine and emergency needs of its Sunnyside team. Veolia Water operates the water and sewer systems in Vancouver, as well as in Cle Elum and Wilsonville, Ore. Company officials boast of more than 560 operators, technicians and support staff in the Pacific Northwest and the Western region at-large. Worldwide, officials at Veolia Water say they serve more than 110 million people, with annual revenues of more than $14.4 billion.

Company officials also estimate that over five years, its base bid will save the City of Sunnyside an estimated $1 million when compared to current operations.


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