A private consultant will receive $1.7 million from the city of Wichita to evaluate the city’s water and sewer infrastructure.
CH2M Hill was selected by the Wichita City Council on Tuesday in the first phase of what the city is calling a private-public partnership to address Wichita’s estimated $1.6 billion water infrastructure needs.
But several residents voiced concerns over hiring the consultant. They said that this is the first step to privatization, that the company will only try to increase its profits and that the firm is not local, although it does have a local office with six employees.
“We should look at local expertise and businesses. Keep the money in Wichita … They promise pie in the sky, but when reality sets in, they can only be expected to maximize their profits,” said Russ Pataky, who addressed the council.
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Alan King, director of public works, said the agreement does not privatize city assets.
The city would retain ownership of plants, pumps and pipes as well as the ability to set rates and make policy decisions, King said.
CH2M Hill would bring in experts as consultants to work with the city’s field staff, assess the current conditions of the infrastructure, evaluate the risks, determine the remaining life of each asset and make recommendations on what to repair or replace first, he said.
“We’re not pursuing this because we’re desperate. We’re pursuing this because we don’t want to become desperate,” King told the council.
The study and work by CH2 Hill in this first phase will not affect ratepayers, King said.
A second phase, if approved by the council in 2017, would likely include a 10-year agreement to put the plan into place.
According to the contract with the city, CH2M Hill would have exclusive negotiations for the second phase.
Doug Ballard, another resident, said that is a big problem.
The city should not enter into no-bid situations for any work, Ballard said, and because the company has exclusive negotiations, it may try to expand the scope of work to increase its profits.
King said the scope of any work will be scrutinized by city staff and outside experts, including some from Wichita State University.
King told the council that CH2M Hill had many good references for previous work in other cities.
“You look for references. We look for lawsuits. And there’s a long list,” Ballard told the council.
CH2M Hill was one of several companies after Hurricane Katrina that courts ordered to pay millions to survivors who lived in toxic FEMA shelters.
“We’re a large company. We work on roughly 10,000 projects per year. And from time to time, you have issues, isolated issues. But in every circumstance, we take full responsibility and dealt with those issues,” John Corsi, vice president of CH2M Hill, told the council.
Council member Janet Miller said she understood the reticence of some people to use an outside consultant. She said that in her first month on the council seven years ago, she voted to outsource mowing at the city’s parks. She now wishes she could take that back.
“Since that time I’ve paid very close attention to other privatizing efforts going on, and I can promise you that if this was that, I’d run from it like my hair was on fire,” she said.
“I will be supporting this today, and I know it’s scary, but we have 16 months to learn from it and make a really informed decision (before considering the second phase).”
The city now pays for infrastructure repairs and improvements with cash or revenue bonds. The money ultimately comes from ratepayers.
The new arrangement means that CH2M Hill, if the city agrees to a second phase, will loan money to the city for infrastructure repairs.
“We would enter into a financial arrangement where we would commit to pay back that private capital over time and it would give us some flexibility we don’t currently have when we issue revenue bonds as a utility,” King told The Eagle in a previous interview.