The St. Louis Water Division has inked a new, five-year consulting contract with a private utility service company called Veolia, and some department employees are less than thrilled with the news.
The city has made no formal announcement and the contract is still in "negotiation" according to a city spokesperson, but according to internal memos, Veolia won in a competitive bidding process that began late this summer.
A worker who spoke to Daily RFT under condition of anonymity says the Veolia contract has renewed fears inside the department of layoffs and a private takeover of the utility.
"This Veolia company is just bad news if you look at their track record," said the employee.
Veolia is based in France and the world's largest private water services company. Two years ago, Veolia made headlines in St. Louis just for touring the facility. The timing of the visit, soon after the release of a report by the Show-Me Institute recommending that the city's public water utility be privatized to save money, raised eyebrows and anxiety levels within the water district. At the time Mayor Francis Slay's office brushed off privatization rumors, though Chief of Staff Jeff Rainford did say that an outside entity might be brought in at some point to "help us with both sides of the ledger."
It appears that time has come.
The city issued an RFP (request for proposals) on July 27 for the consulting work. The listing in the City Journal read, "The St. Louis Water Division is seeking a Consultant with expertise in water system operations to provide insight and new ideas, programs and approaches on ways to increase the Water Division's efficiency and revenues and/possibly postpone or lessen future water rate increases while maintaining or improving customer satisfaction." The company Black & Veatch was tapped to handle the RFP. Though the Kansas City-based firm is also a private water engineering company, the city gave them a $245,100 contract just to help lead the search.
This past March water division employees received a memo from Water Commissioner Curtis Skouby entitled "Outside assistance." The memo acknowledged the search for a consulting company, characterized it as a cost-saving measure, and made the following four bulleted promises:
- To continue to own and operate the utility
- That there will be no layoffs
- All union representation of employees will remain
- To keep you informed as the work proceeds
"My commitment to you is that you will known information as it is available and that you will be part of the process," the memo concludes.
On October 29 another "Outside assistance" memo named four companies being interviewed for the contract: Veolia Water, Siemens, Missouri American Water, and Johnson Controls. The memo reiterates the promise of no layoffs and public ownership of the utility.
Finally, a memo sent to staff on November 30 acknowledged Veolia Water as the winning bid (emphasis ours):
There were four keys to their selection:
1. A plan to accomplish our goals and complete without layoffs. They have significant staff capacity within the St. Louis area and will bring additional expertise to work locally to complete the evaluation in the first four months of the contract.
2. An integrated communications strategy for both the public and SLWD employees to share results that improve service, keep rates low and maintain water quality.
3. A strong, local MBE/WBE commitment.
4. They presented a plan to identify a number of cost savings, efficiency improvement and revenue generating ideas they felt they can implement quickly, such that within five years their work is complete and are no longer engaged with the water system operations.
When we called the mayor's office to verify the content of the memos, Rainford confirmed only one detail through a spokesperson: "Absolutely no layoffs." A follow-up call from the city was promised, but has yet to take place (we'll update when it does).
Records show that the Missouri Secretary of State's Office granted a business license to Veolia Water Solutions & Technologies North America on November 16, right around the same time that a spokesperson for Missouri American Water tells Daily RFT that it was turned down for the contract with the city's water division.
Despite the emphatic assurances of "no layoffs," sources in the department say rumors are persistent and Veolia is being eyed suspiciously by workers.
But jobs are not the only concern being raised over Veolia. The worker who provided the memos to Daily RFT says he is doing so because he doesn't believe the public is being properly informed about what's happening with the city's water supply.
Later this week on Daily RFT: Why watchdog groups warned St. Louis about Veolia two years ago and why they say we should be keeping a close eye on them now.
Read the original RFP below.
Update: Click through to page three to read internal memos from Curtis Skouby to the water division employees explaining the RFP and Veolia's new role in the department.