Best Practices '98 - Bridgeport, Connecticut (3/9/98)

Public-Private Partnership Provides Bridgeport Lower Rates, Improved Efficiency

Like many cities across the United States, Bridgeport, Conn., has felt the effects of continually rising costs on its efforts to supply quality wastewater treatment services to its residences. Eventually those higher costs have to be shared with ratepayers, which impacts all city residents.

A city study of wastewater treatment services in the early 1990s indicated that Bridgeport sewer rates would continue to climb. In an effort to stabilize sewer costs, Bridgeport Mayor Joseph P. Ganim began investigating the possibility of contracting the operation, maintenance and management (OM&M) of the city's wastewater treatment system to a private firm.

More than two years ago, city officials began analyzing the possibility of forming a partnership with a private firm. The local Water Pollution Control Authority (WPCA), a semi-independent city government affiliate that maintains its own budget separately from the city, had managed the wastewater treatment system for many years. Bridgeport's system includes 30 MGD and 10 MGD wastewater treatment plants, along with approximately 300 miles of combined sanitary sewer systems.

Contract Benefits
After extensive proposal reviews, Professional Services Group, Inc. (PSG) Houston, Texas, was selected to negotiate a contract for the OM&M of Bridgeport's wastewater treatment system. The city's decision was due in part to increased cost savings, improved training and advancement opportunities for wastewater system employees. The private firm's capital and technical resources, also weighed heavily in the city's decision. (The firm also provides OM&M services to three other municipalities in Connecticut, as well as 27 other facilities in other states within a 150-mile radius.)

In April 1997, the Water Pollution Control Authority approved the contract, valued at $43 million, which made PSG responsible for the OM&M of the city's wastewater treatment and collection system. As part of the agreement, the private firm committed $500,000 of its own capital to upgrade facility operations.

A financial analysis by the city has indicated the public private partnership will result in Bridgeport saving approximately $10 million over the contract term, or $2 million per year. "This represents a savings of 20 percent compared to our previous budget which is going back to our ratepayers," said Mayor Ganim. "The agreement was the culmination of a five-year effort to make city wastewater treatment services more cost-efficient."

The savings have resulted in a 2 - 5 percent drop in resident's quarterly sewer bills. Bridgeport's current sewage rate is $2.286 per cubic foot (pcf). Before the establishment of the partnership, the city sewer rate was $2.337 pcf. City officials predicted that rates would have increased to $2.486 pcf in the next fiscal year without the public-private partnership. "Not only has the partnership helped to stabilize sewer rates, it is an effective way to use private sector resources to provide municipal services," said Mayor Ganim. "The agreement has met Bridgeport's goal of cost-effectively improving city services."

Private OM&M Concerns
One of the key issues included in the OM&M agreement was employment for the existing municipal wastewater system employees. Naturally, the change from a publicly operated system to contract OM&M made some workers apprehensive. Many of the municipal employees were concerned that the private firm would eliminate their jobs or lower their salaries.

Under the Bridgeport agreement, all municipal wastewater system employees were offered employment with the private firm at comparable wages and benefits. The agreement also included a "no job loss" provision, in which workforce reductions would occur only through normal attrition. Furthermore, the agreement has resulted in the former city employees receiving increased training which, in turn, increases their knowledge and provides them with greater advancement opportunities.

Environmental Compliance
With environmental requirements becoming increasingly stringent, municipalities can be overwhelmed by the complexity of regulations. Many cities have to hire outside consultants and engineers to help meet environmental standards, a practice that can be very expensive. Under contract OM&M, the technical expertise needed to operate Bridgeport's treatment system is provided by the private firm.

Bridgeport's wastewater treatment system discharges into Long Island Sound. The private firm guarantees compliance with environmental requirements which will help ensure that the ecological balance in the Sound is undisturbed, said Mayor Ganim.

A Good Decision
In Bridgeport, city officials have historically explored many avenues to improve the delivery of public services, including comparing public and private sector costs for these services. The public-private partnership for the OM&M of Bridgeport's wastewater treatment system provided an opportunity for the city to strengthen its finances, ensure stable rates, and upgrade wastewater treatment services.

"I feel it is important for city administrators to take advantage of such opportunities when they present themselves. For Bridgeport, this agreement has accomplished our goal of enhanced wastewater services at a lower price," said Mayor Ganim.

For more information on Bridgeport's public/private partnership with PSG, contact Tom Foster or Joe Hopkins at (218)359-2044.