Tuesday, February 1, 2011

Council authorizes $2.5 million for turn-around of Division of Water

As reported in the Plain Dealer this morning, Council approved authorization for the Jackson Administration to enter into contract, for 2-years with a renewable 3rd-year option at $1.25/year, with a consultant/professional firm to “develop management strategies, and implement accepted recommendations” for the management of the Division of Water and the Public Utilities Department (oversees Water, Water Pollution Control and Cleveland Public Power).

See Ordinance No. 138-11 here.

See the Full Plain Dealer article here.

Cleveland hires outside consultants for $2.5 million to fix water department
By Mark Gillispie, The Plain Dealer, Tuesday, February 01, 2011
The following was posted as a comment to the article -- 

A few additional facts from yesterday's Finance Committee hearing -- The ordinance approving the consultancy (2-year plus one renewable year, with a not-to-exceed amount of $1.25 million per year, represents an acknowledgement that the Administration does not have, in-house, the management capacity sufficient to run the Division of Water’s operations.  The consultancy is expected to go further to address management issues that intersect the Division of Water Pollution Control as well as Cleveland Public Power. 

The  ordinance was brought to the Finance Committee and was passed as an emergency.  It did not go through the normal Committee process, i.e., read and discussed at a weekly scheduled Utilities Committee meeting.  The ordinance was introduced without any detailed scope of service or detailed narrative of what the consultancy would address and there was initially no funding amount specified.

There was a good amount of debate that included Councilwoman Brady commenting on the fact that in the private sector, the equivalent to the Director and Commissioner positions would be replaced with individuals that could get the job done.  Councilman Polensek and others expressed concerns about the lack of defined scope of service or process and the absence of a not-to-exceed amount in the contract.

There was some discussion that the Chief and Director will be developing a working group to manage and oversee the consultancy.  There is also currently an Acting Commissioner of the Division of Water and they reported that the permanent position will be filled within 90-days.

Council will need to be vigilant in overseeing the process.

To place the issue in some perspective, I mentioned the following issues prior to the vote in Chambers last night –

For over 150 years the City of Cleveland has supplied quality water service to the community.  The Division of Water supplies water to over 1.5 million people throughout 3 counties and 70 communities

The ordinance represents -- $1.25 million per year; 2 years w/ 1 yr renewable
Represents less than 1% of the annual combined budgets of the Dept and Divisions (Water, Water Pollution Control, CPP).

Half a billion dollars ($455) in operations w/ over 1,500 employees (Water, Water Pollution Control, CPP).
  • Department of Public Utilities, $2.5 million budget w/ some 25 employees
  • Division of Water, $260 million budget w/ over 1,000 employees
  • Division of Water Pollution Control, $23 million budget w/ over 150 employees
  • Cleveland Public Power. $170 million budget w/ over 350 employees
  • Division of Water has utilized the following funds for third-party consultancies, for studies, technical services and engineering and design:
    • Professional Services, averaged $5 million last three years.
    • Other Contractual Services, averaged $3 million
  • City of Cleveland should consider the development of a Water/Pollution Control Board to provide oversight to the Departments.  The Board could include participation from the private sector as well as regional/local governments outside of Cleveland.
    • Louisville Water Company (850,000); 7–member Board of Water Works, appointed by the Louisville Metro Mayor
    • The Water and Sewer Advisory Board (2.1 million), 9-member Water and Sewer Advisory Board.
    • Denver, 1.3 million customers; 5-member board
Although there has been substantial progress made, the Mayor's Administration has so far been unable to resolve chronic problems in the operations of the Division of Water. Those of us on City Council should be critical of ourselves as well for not demanding more, sooner.

Even in yesterday's actions, The Administration came to the table with too little information to ensure a successful process to engage a professional outside firm. There is a high degree of trust between the current Council and Mayor and when chronic problems such as this persist, Council needs to be stronger in our oversight role.

As to prove the point of needing to act more quickly the following was also reported this morning by the Plain Dealer -- 

13,000 Cleveland water customers didn't get their November bills
By Dave Davis, The Plain Dealer ,Tuesday, February 01, 2011

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