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Annual Service Contract - page 3 / 43

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Introduction

(Information presented in this review has been gathered from various public documents.  Information comes from annotated City Council minutes, OMI-Thames Water Stockton monthly reports, and other information gathered via the Public Records Act. Where applicable documents can be viewed in the Appendix.)

This is the second Contract Compliance Review of the Service Contract between the City of Stockton (City) and OMI-Thames Water Stockton, Inc. (OMI). It is presented as a review of selected key performance objectives and as an observance of OMI-Thames Water behavioral attitudes. The first Review released in December 2004 covered the following topics:

Contract Administrative Memoranda #3 - an agreement between the City and OMI to waive Article IV Section 4.3(7) thereby allowing OMI-Thames Water to exit the Transition Period and begin the Commencement Period. Article IV Section 4.3(7) stated in the event of any legal proceedings that  would “challenge, or might challenge, directly or indirectly, the authorization, execution, delivery, validity or enforceability of this Service Contract” that OMI wold not be permitted to enter the Commencement Period of this Service Contract. Both parties knowing a legal proceeding was, and as of the date of this publication, is still proceeding, waived this requirement.

Water and Wastewater Rates - while not part of the Service Contract, customer rates were directly effected by the Service Contract.  Within the Service Contract there are provisions for automatic annual service fee adjustments. Customer rates and fess were restructured with automatic annual increases to produce the necessary revenue to cover these annual service fee adjustments.

Customer Service - the Service Contract made specific requirements regarding customer service that were to be completed during the Transition Period. Failure to meet the customer service requirements meant OMI would not begin the Commencement Period.

Staffing - spoke specifically to the inadequacy of OMI-Thames Water’s ability to maintain long tenured operations and maintenance staffs.

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