InfrastructureLodi, CA considers privatizing $36 million water plant
The city of Lodi, California is in the midst of building a new $36 million water treatment plant, and is considering privatizing the facility; the new plant will open in 2012 and provide the city with one-third of its drinking water; Lodi is in a tight financial situation and is considering methods to reduce costs like privatizing the new treatment plant; the treatment facility is expected to cost $1.8 million to operate annually with an additional $1 million for payroll; Lodi residents have proposed that the city hire a private company to save money on payroll
The city of Lodi in California is in the midst of building a new $36 million water treatment plant, but at the behest of local citizens is exploring privatizing the facility.
The new water treatment plant will open in 2012 and take in roughly 600,000 acre-feet of water annually from the nearby Mokelumne River to provide the city with one-third of its drinking water.
The plant will be staffed by city employees and is expected to cost $1.8 million to operate annually with an additional $1 million for payroll.
Like many cities and states across the United States, Lodi is in a tight financial situation and is considering alternative methods to reduce costs like privatizing the new treatment plant.
The Lodi City Council has already approved a 2 percent increase in water rates to help pay for the facility, but Vice Mayor Joanne Mounce said they need to find more ways to save money.
She said, “As a council, I think we have to look at everything.”
Lodi resident Ed Miller suggested during a public comment session that the city hire a private company to save money on payroll. Unlike the city, private companies do not hire unions which could save money on benefits.
Mayor Bob Johnson says the proposal must be carefully weighed due to the recent failed attempts by the nearby city of Stockton to privatize its water facilities.
In 2003, the Stockton City Council signed a $600 million deal with water giant OMI/Thames for twenty years. The deal was designed to save approximately 50 percent on operation costs.
Stockton was dissatisfied with OMI/Thames’ poor maintenance of the facility and its minimal staffing, and relations began to sour. The city was eventually sued and forced to spend millions on a broken contract. Stockton took control of its water facilities once more in 2007.
Charlie Swimley, the deputy public works director of Lodi, believes that the new plant would run most efficiently if it were operated by the city.
According to Swimley once the plant became fully operational staffing could even be scaled back.
