Chelsea may soon operate its own Water and Sewer Department as part of the Department of Public Works, rather than continuing to outsource the service.
The city currently contracts with R.H. White Construction Company to handle water, sewer, and drainage services under a 10-year agreement expiring July 21, 2022.
City Manager Thomas Ambrosino has proposed that the City Council approve an early termination of this contract to establish an in-house Water and Sewer Division under the DPW. Although start-up and personnel expenses will be incurred initially, Ambrosino indicated the city stands to realize approximately $350,000 in annual savings.
To make the Water and Sewer division operational by July 2020, Ambrosino is requesting authorization to pay an early termination fee to R.H. White.
“The DPW leadership and I recommend that we
meet in subcommittee to go over (an informational spreadsheet) and work plan in
detail,” Ambrosino wrote in correspondence to the City Council. “This will allow the
Council to understand fully why we believe we can perform these services not
only cheaper, but at a higher quality, and with more resources, than we
currently achieve with the RH White annual contract.”
Getting the water and sewer operation ready by July 2020 will require upfront expenditures for vehicle and equipment purchases, along with hiring seven new staff members to ensure the department can assume full responsibility for the water and sewer system.
According to Ambrosino, the total additional costs for Fiscal Year 2020 exceed $1.5 million.
“The capital costs are obvious one-time
expenditures,” Ambrosino explained. “But the added personnel costs in FY20 are also
one-time expenses. All of these personnel costs will be covered by the $1.784
million saved on the annual RH White contract starting in FY21 when the
contract is terminated.”
Ambrosino recommended funding all one-time expenses through retained earnings in the Water and Sewer Enterprise System, which functions similarly to free cash in the general budget.
•During Monday evening’s City Council session, Ambrosino also raised the topic of municipal electric aggregation for the Council’s consideration.
“Because municipal electric aggregation has
the potential of providing more stable and lower prices and utilizing more
renewable energy sources, over 140 municipalities in Massachusetts have taken
advantage of this program,” Ambrosino noted.
•The City Manager informed councillors that beginning in Fiscal Year 2020, which starts July 1, the city will solicit competitive bids for towing services in Chelsea.
While towing services are not subject to state bidding requirements, Ambrosino stated the city will nonetheless seek bids following a recent directive from District 6 Councillor Giovanni Recupero.
“There is some work required to prepare a
(request for proposals) and evaluate responses,” Ambrosino stated. “For this
reason, the Purchasing Agent believes he will have a new contract for towing
services in place no later than September 1, 2019.”