Elsberry city council doesn’t renew contract with Alliance, to seek bids

With the hot topic of the night being water, Alderman Bob Kindred apparently felt it would be a good time to voice further concern about Alliance Water Management’s contract at the recent Elsberry City Council meeting.

“The time to act is now” Kindred began. “This council should only be interested in the common welfare of its citizens.”

According to Kindred, the contract with Alliance is a luxury the city can ill afford.

“My concern is solely based on finance and not personality,” Kindred said. “I feel that we could save approximately $100,000 by taking over city services ourselves. According to the contract we have with Alliance, we have to give them 90 days notice if we intend to do that.”

This past February the infrastructure committee was given a list of contractors to be contacted in reference to preforming the city services. However, according to Kindred the city has yet to receive any bids, which limits the time they have left to make a decision on whether or not to renew the Alliance contract.

“If we don’t give them the 90 days notice the contract is automatically renewed for five-years,” said Kindred.

The numbers Kindred based his city savings off of was the 2011 Alliance Budget, which was $592,689. However, for the sake of argument Kindred decided to use the figures based off of a $600,000 budget.

“Under the current contract Alliance receives a two to six percent increase each year,” he said. “For the last several years they’ve gotten the minimum. Except one year they got 10 percent,” Kindred said. “Using the lowest figure of two percent per year over the next five years it will cost [the city] approximately $662,448.”

Kindred went on to say that assuming the city saves $100,000 the first year by taking over city services, each year thereafter they would be able to reduce the savings by five percent for inflation or cost of living. According to him the city would save $100,000 in 2013, $95,000 in 2014, $90,250 in 2015, so on and so on.

“I’m not saying this is 100 percent correct, I’m just saying this is the theory,” Kindred said.

However, his claims would not go without question as Alderman Tony Steele, after glancing over the paperwork Kindred provided, stated that he was not half wrong but rather $44,000 wrong. Since the city took over electric in 2011, the current contract with Alliance is only $556,469.

“These aren’t figures I made up, the figures I used were supplied by Alliance,” Kindred said.

Alliance Water Resource Division Manager Dan Gummersheimer said the numbers being used were not accurate because they were based off of the 2011 contract and they did not take into account the loss of Alliance responsibility for electric, the non-contractual work they do or the savings for bulk materials and various equipment items.

“Starting off your numbers already $46,000 off is not accurate. Since the actual 2012 contract is set at $556,803 and not the $592,689, the future total, after adding the two percent minimum, is $614,750 by 2017,” Gummersheimer said.

However, before he could go any further Kindred repeated that the numbers he was using were numbers supplied by Alliance, not including the 10 percent they charged for non-contractual work done. From that moment the debate of contractual and noncontractual duties preformed began.

After several more minutes of back and forth the board of aldermen decided to vote on whether or not to renew the Alliance contract or force them to bid just like any other company. With a 6-0 vote, the Alliance Contract will not be renewed automatically.

 

Story courtesy of The Elsberry Democrat.

Posted on Monday, October 1, 2012 at 9:21 am