Mayor questions utility department over contract confusion

The Columbia City Council received the wrong list of jobs a consultant would do for Columbia Water & Light when it voted to spend $450,000 to do it.

Mayor Brian Treece pointed out the discrepancy between the scope of services the council saw at its Jan. 4, 2016 meeting and what the final contract with Black & Veatch provided. The city’s utility department asked for a comprehensive review of its water system, including how it collects, treats and distributes it. The scope of services attached to the agenda also asked to “evaluate rate structures,” and to figure out how to properly charge different customers.

Black & Veatch’s work is central to the Integrated Water Resource Planning group. The commission is considering how much to ask voters approve in bonds to, among other things, expand the city’s water treatment plant. Many options cost around $16 million.

However, the contract the city council approved money for didn’t require the rate structure work. Treece, who was not on the council at the time, said it’s important for a third party to review how much Water & Light is charging, and to ensure businesses and homes pay their fair share.

“Utility bills are just like taxes,” Treece told ABC 17 News. “We all have to pay them. And utility rate increases are like tax increases. A government monopoly utility, like the Water & Light department, should not be determining their own rates. That’s why they bring those rates to council.”

City spokesman Steve Sapp said staff attached an earlier version of the scope of services to the council’s agenda. New safeguards are in place to make sure the correct information gets put on agendas, Sapp said, including more people reviewing what is sent.

“Anytime that we send erroneous information out, it’s not good,” Sapp said. “And we know that. It would be really bad if we did it, you know, intentionally. But we didn’t.”

Governmental agencies create a scope of services to attract companies, like consulting firms or construction, to do various jobs. Once companies send proposals on the work it can do, staff negotiates with them on what the final contract will entail. Sapp said in this case, utility staff felt they needed to figure out which project they were pursuing.

“Then, do that rate study afterwards to see how those options would affect the end users’ rates, whether it’s a commercial account or residential account,” Sapp said.

Treece said he’s heard a few different accounts of why the wrong scope of services were attached to the agenda. The signed contract shows Black & Veatch had signed on in November, two months before the council took a vote. Another explanation was that contract negotiations to lower the price meant sacrificing the rate structure.

“Today, I’m hearing it’s a clerical error,” Treece said. “All of which compounds my frustration that this was misrepresented to city council, and ultimately that undermines not just the city council’s confidence, but the public’s confidence to make sure we’re making the best decisions with the most information available.”

Treece said the issue is important beyond transparency, but also in regards to rate setting. Private utility companies have to have rate adjustments approved by the state Public Service Commission, a process that can take several months. For Water & Light, it only takes a vote of the city council to adjust the rates. Treece said a review would give them a better idea of who’s paying what, and ensure it’s fairness.

“Before I’m comfortable moving forward on any water bond issue in the future, I need to have that independent rate review, so we know who’s going to be paying higher rates, and whether they’re disproportionately burdened with a utility tax increase,” Treece said.

Water & Light leaders have said a bond issue could be on a ballot in 2018.