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The Crescent City Council on Monday gave final approval to allow Operations Management International to operate the wastewater treatment plant.

The City Council unanimously approved a professional services agreement with Operations Management International, also known as Jacobs Engineering. The agreement includes a transitional period from Sept. 9, 2019 through June 30, 2020, according to the city’s staff report. After that the agreement between the city and Jacobs Engineering will last for five years.

Under the contract, Jacobs Engineering will be responsible for staffing the plant. Two city employees serving as plant operators will be offered jobs through the new contractor, said City Manager Eric Wier.

Jacobs will also conduct an audit of the treatment plant, complete one-year and five-year capital improvement plans and install a computer maintenance management system, Wier said. The contractor will also submit monthly operational and maintenance reports to the city, Wier said, and be responsible for fines and penalties that are their fault.

“If things go outside of their control, beyond their parameters, then we have contract language that they will not be responsible for those types of events,” Wier said.

Though Jacobs Engineering will operate the sewer plant, it will still belong to the city, Wier said.

City staff will still handle billing, collection and customer service responsibilities and would cover the cost of unforeseen circumstances, Wier said. Staff will also continue to monitor the system that monitors the status of the different components of the sewer plant, he said.

According to City Finance Director Linda Leaver, Jacobs Engineering will receive approximately $1.2 million per year, according to the base annual contract. The contract also includes a repairs budget, which the city will allocate to Jacobs Engineering throughout the year, she said. However if they don’t spend the entire budget on repairs, that money reverts back to the city, Leaver said.

Jacobs Engineering wanted the city to invest $190,000 the first year to address a backlog of repairs, Leaver said. In subsequent years, the repair budget will be $160,000 annually, she said.

“They think they can spend the full $190,000 even though it’s not quite a full year for the first term,” Leaver said. “They’re going to bring in additional resources in the first six months to get everything up to speed.”

The base annual fee during the first nine months of the contract — through June 30, 2020 — will be about $1 million, according to Leaver’s report.

The contract also includes an escalation clause that is open to annual negotiations, Leaver said. If Jacobs Engineering experienced an unexpected cost during the year, it could ask the city for a higher escalation, she said. If there was a cost savings, the city could negotiate a lower escalation, according to Leaver.

The escalation clause would be a minimum of 1.5 percent and a maximum of 4 percent annually, she said.

According to Leaver, other city employees that had worked at the sewer plant will be reallocated to fill other needs. These could include maintenance at the Shoreline RV Park, on city streets or at its water system. About 2,000 employee hours have been reallocated from the sewer fund to the general fund, water fund and RV park fund, Leaver said.

Leaver noted that if the city were to adopt Jacobs Engineering’s operational model and find out what the cost would be, it would require at least $220,000 in additional investments at the sewer plant in the first year and an extra $50,000 annually in the future. Contracting with Jacobs Engineering will mean a net savings to the city of $83,356, she said.

Meanwhile, Public Works Director Jon Olson said in addition to a cost savings, engaging Jacobs Engineering provides an entire support team instead of just one or two sewer plant operators employed by the city.

“Generally we’re going to be able to pick up a phone and get a quick answer to something we need,” Olson said.

In other matters, the City Council also unanimously approved a letter of support for the Hurdygurdy Mountain Bike Trail. The proposed 10.7 mile network of new trails is spearheaded by the Del Norte Trail Alliance, which is seeking $250,000 in U.S. Forest Service dollars to complete environmental studies for the project.

The proposed trail system would convert an existing network of old roads and mining trails for mountain bikes, according to a letter from trail alliance president Joe Gillespie to Six Rivers National Forest Supervisor Ted McArthur.

 

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