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Arizona Water Resource March -April 2005 am
<br />Prescott Valley Reaps Benefits From Public- Private Partnership
<br />This Guest View was a collective pr iect involving Mark Ki'eren, Prescott
<br />Valley utilities contract coordinator; Neil Wadsworth, Prescott Valley utilities
<br />division manager; John Bowman, Operations Management International, Inc.
<br />Pr iect manager; and Larry Tarkowski, Prescott Valley town manager.
<br />Municipal privatization has long enjoyed its status as a well-
<br />known buzzword in governmental circles. After all, outsourcing
<br />saves millions in the long haul, all the while capitalizing on a simple
<br />division of labor approach that makes sense in today's world.
<br />Leaders within the Town of Prescott Valley have long em-
<br />braced the concept of outsourcing and have consistently nodded
<br />their collective consent in this direction. One matter that further
<br />reinforces this concept is the appreciation on the value of the part-
<br />nership approach in providing service delivery for the community.
<br />"The council has been sensitive to not growing a large municipal
<br />bureaucracy — an ideal it has embraced for the last 15 years," said
<br />Larry Tarkowski, town manager.
<br />Because the council intentionally chose to remain on the cut-
<br />ting edge of outsourcing, rather than building a municipal water or
<br />recharge department, town divisions such as public works and engi-
<br />neering benefit from seeing 90 percent of its workload outsourced.
<br />In the public works department, for example, if these divi-
<br />sions were staffed using the traditional model, there would be
<br />close to 200 personnel. Currently, the divisions utilize a staff of 30
<br />— many of whom are involved with contract administration as op-
<br />posed to direct service. By outsourcing, the town is able to leverage
<br />the experiential base wider than what we have currently available. A
<br />huge benefit to having that expertise on -site is that a private sector
<br />company is usually more agile and innovative because it is driven
<br />by profit to stay very competitive, which is an element that typically
<br />does not exist with municipally run operations. Outside resources
<br />typically embrace new technologies as they emerge in their efforts
<br />to produce a high end result.
<br />As part of the privatization process, the town has maintained
<br />a contract with Operations Management International, Inc. since
<br />1993 for wastewater services. This contract eventually encompassed
<br />the treatment and collection system, followed by the inclusion of
<br />the town's first municipal water system. "Therefore, it's been a natu-
<br />ral move to keep OMI on board for those services," said Neil Wad-
<br />sworth, utilities division manager for Prescott Valley.
<br />The town later purchased a private water company and con-
<br />tracted services out for the operating and maintenance for that
<br />water system as well. For the upcoming new fiscal year 2005/06,
<br />OMI also will be taking over the operation and maintenance of the
<br />recharge system, Wadsworth said.
<br />The view from the contract operations side also cites the benefits
<br />of working within a partnership. "We have about 150 municipal and
<br />industrial clients out there across the United States, and part of our
<br />service commitment involves keeping an eye on state and federal
<br />regulations," said John Bowman, OMI project manager. OMI staff
<br />work to track the ebb and flow of the industry and ensure a steady
<br />hold on compliance levels, he said.
<br />Since 1993, OMI presents an annual report presentation to the
<br />town's council that includes effluent treatment costs, on a per unit
<br />basis. Even with growth and inflation, costs have gone up but unit
<br />costs have actually decreased. Staffing levels also are lower than typ-
<br />ically observed for municipal operations. In a survey of comparable
<br />municipalities, OMI cites an average staffing level of 1.3 persons
<br />performing water services per 1,000 population. OMI's staffing
<br />levels, for contract operations, are closer to an average of 0.90 per-
<br />sons per thousand. In Prescott Valley they currently are at 0.49, but
<br />expect that number to increase to about 0.58 persons per thousand,
<br />starting in July, to meet needs based on growth and the provision
<br />of additional
<br />services.
<br />In turn,
<br />the town
<br />provides
<br />support to
<br />OMI when-
<br />ever possi-
<br />ble, working
<br />to ensure the
<br />highest qual-
<br />ity standards.
<br />If the cus-
<br />tomers don't
<br />PRESCOTT VALLEY
<br />receive the high quality standards they've come to expect, staff
<br />hears about it. Then, OMI hears about it ... and the town must
<br />make those adjustments.
<br />It's important to note that this cooperation gives the town a "big-
<br />ger bang for the buck," regarding the resources they (OMI) bring
<br />to the table. If the town provided all of these water and wastewater
<br />services in- house, current resources could be stretched to the limit
<br />in terms of manpower and cost. Approaching service delivery
<br />within the public- private partnership fashion works and from the
<br />operations side, it's a major benefit.
<br />Within the public works industry, survey statistics reveal that 97
<br />percent of government contracts up for renewal in 2004 benefitted
<br />from renewal.' High renewal rates for government contracts are
<br />well above average. Bowman agreed that many governmental agen-
<br />cies are now taking advantage of outside sources. "In the regulatory
<br />market it's becoming more difficult for municipalities to provide
<br />services in- house. In summary, Bowman added that partnerships
<br />also build a sense of place. "We're vested in the community in
<br />which we work. My family lives in Prescott Valley. We're part and
<br />parcel of Prescott Valley," Bowman said.A
<br />' Source: Public Works Finance newsletter March 2005
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