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Annual Service Contract - page 38 / 43





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In the First Review, an emphasis was placed on the process of transition; from municipal to private and Transition Period to Commencement Period. OMI Thames Water Stockton has had the opportunity to right their behaviors and prove that the missteps in the first year were not patterns of behavior, but rather a “getting to know one another” period.

The City and OMI present a picture of the private operation as a good thing. An endeavor that has no contract failures. For if there were areas in the Service Contract where OMI failed to meet their contractual obligations, with nearly $1.6 million each month being paid to OMI, surely the City would take action.

It is our observation, that consistently, OMI fails to meet their contractual responsibilities and City representatives have failed in their fiduciary responsibility in managing the performance of OMI, considering the uninterrupted payment of taxpayer and utility users fees paid.

The outsourcing of the municipal operations was a one-sided event. The idea that municipal service could be more efficient and that reduced costs could provide lower stable rates, never had a chance for public discussion. Nor did it produce its desired effect. For the residents of Stockton their user specific utility rates have risen by 8.5% in the first two years of the Service Contact.

This Review is not a complete analysis of the Project, it was not intended to cover every facet. This Review, unfortunately, is a hindsight evaluation. Changes occur in the contact without public notification, including the City Council. For example, modifications of the Service Contract occur with the signatures of Mr. Lewis, City Manager, Mr. Madison, Director of the Municipal Utilities Department and Mr. Gary Nuss, General Manager for OMI. These changes in the Service Contract are not brought before the City Council, nor do they need the Council’s approval.

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