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South Zone Water Utility System

2002 NCPPP Project Award Winner
Project Location: Sugar Land, TX
Public Sector Partner: City of Sugar Land, TX
Contact Name: Allen Bogard, City Manager, 281.275.2700
Private Sector Partner: ECO Resources, Inc. (Southwest Water Company Services Group)
Contact Name: Mike Thelen, Area Field Manager, 281.275.1774

Project Summary
Sugar Land is a dynamic high-growth city in Fort Bend County, Texas. It more than doubled in population from 30,000 to 68,000 from 1997 to 2000 through the annexation of the First Colony development and its 12,225 active water connections. The city wanted to keep its existing water utility operation, but was concerned about how to avoid the high and somewhat unpredictable cost of adding staff and equipment in such a short time to handle the added connections. It would also have to create a wastewater treatment staff to operate First Colony’s 7.5 MGD (million gallons per day) plant, since its existing treatment plant was owned and operated by a state river authority.

Originality/Innovative Concept
The city found a creative solution: it would maintain its own water utility department to serve the older portion of the city, now called the North Zone, and contract the utility functions of First Colony (South Zone) to ECO Resources, Inc. It knew ECO’s work through the company’s operation of municipal utility districts in First Colony before the annexation. Each zone serves about 34,000 people; the city does the billing for both.

Thus, in what is probably the truest form of public-private partnership, Sugar Land public works and ECO Resources employees work side by side to serve the whole city. By not taking on the South Zone water system itself, Sugar Land is able to support its dramatic and greatly expanding its own utility staff. In addition, ECO has brought to the partnership well-qualified professionals who were very familiar with the area and its utility systems. Through creative management initiatives like Sugar Land – ECO partnership, citizens of the city benefit from well-planned growth while enjoying one of the state’s lowest property tax rates.

Designing for Success
To speed communication and tracking, ECO developed and supplied the city with customized software that allows the city’s public works department to access ECO-Net, ECO’s proprietary management information system, and view the service records of any of the 12,225 addresses on the First Colony system on a real-time basis, greatly enhancing responses to customer service inquiries.

Also, ECO introduced noninvasive wireless units to read meters without disturbing residents. Data collection by ECO is simply downloaded from the devices to city computers for quick and accurate computation of monthly water bills.

Efficient, Effective, ECO
Under its performance-based contracts with the city for water distribution, wastewater collection, lift stations, water plants and the regional sewage treatment plant, ECO is required to meet the same performance criteria as contained in Sugar Land’s own operating standards. This ensures that services provided to residents by ether city or ECO personnel are of the same high quality. Further, the partnership shelters Sugar Land from regulatory issues in the South Zone, thanks to the contract’s compliance guarantee.

ECO’s participation in numerous trade and professional associations, e.g., American Water Works Association, keeps employees up to date on advancing technologies, new patented processes that are more cost-effective, and more versatile equipment and tolls with longer life cycles and warranties. Sugar Land can also avail itself of ECO’s long experience and capabilities in environmental affairs, laboratory analysis, purchasing, 24-hour dispatch, flood control and community relations

Comprehensive preventive maintenance programs keep repair and maintenance costs in check. Internal and external training programs provide Texas Commission on Environmental Quality (formerly Texas Natural Resource Conservation Commission or TNRCC) licensing for operators and training in various safety and environmental regulations affecting the business.

Finally, by using ECO’s own in-house technicians, who are specially trained to work on chlorine and electrical systems, pumps and motors, and video for checking sanitary sewer lines, Sugar Land saves the cost of outside consultants.

The city and ECO meet monthly to discuss all word completed during the month as well as any work to be scheduled for the following month. Before each meeting, as part of the accountability process, ECO prepares and distributes a bound report containing task frequency, water production graphs, operations, and repair and maintenance reports. These meetings give Sugar Land and ECO the opportunity to address any operational concerns.

Through e-mail, ECO staffers keep city personnel informed of what repair work is scheduled, where the crews will be working, who is performing the work, an estimate of how long it will take and how much it is estimated to cost. In addition, discussions are underway to add the city’s public works department to the ECO Nextel system, to enable direct communication with ECO management.

Costs Contained, Curtailed
According to Sugar Land city manager Allan Bogard, no precise calculation of cost savings can be computed as the service area was added to the city through annexation. He reports however that the city is fully satisfied with its public-private partnership strategy because it has made costs predictable. The flat-rate, five-year contract has no escalation clause, so the city’s overall water utility operating expenses will remain essentially unchanged for the length of the contract. Changes in potentially volatile costs such as wages, benefits, insurance, fuel, new regulatory requirements, training and technology are borne by ECO Resources.

Likewise, ECO is responsible for any maintenance or repair costs for the water or wastewater system up to $2,000 per occurrence. The city bears the expense of any repairs over $2,000 each. This checks-and-balances system gives both partners strong incentive to work together on minimizing such occurrences to save money. If both operate their zone systems efficiently and perform the necessary preventive maintenance and repair schedule and budget that includes established limits for valves, manholes, video checking and cleaning of sanitary lines and replacement of water meters.

Additional savings are realized by scheduling maintenance work during non-peak periods and volume purchasing.

Because of its familiarity with the South Zone’s utility operations from having operated segments of its municipal utility districts, ECO was able to “hit the ground running,” offering first-rate delivery of services from the start and achieving maximum operating efficiencies.

In addition to its contractual duties, ECO Resources participates actively in the life of the city, sponsoring Little League and school athletic teams, mentoring students, hosting the annual Water EXPO fair, donating materials and services to schools, and acting as the city’s flood control agency.

In the words of the city manager Allen Bogard, “In the city of Sugar Land, the expectations of our citizens are extremely high and ECO has worked closely with city staff to meet these expectations. The net effect is efficient, seamless utility services for our customers.”