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Floyd County

October 13, 2012

New Albany will end sewer privatization

New hire made to oversee transition of utility to in-house operation next year

NEW ALBANY — Mayor Jeff Gahan confirmed the city will retain operational management of the New Albany sewer system beginning in January.

The city’s $1.77 million annual contract with Environmental Management Corp. — whose parent company is American Water Enterprises — will expire Dec. 31.

The New Albany Sewer Board has agreed to hire what the administration has labeled a Transition Director to “facilitate a smooth conversion between private and public management” according to a news release.

James D. Garrard was hired Thursday, and he has served in a similar position with the Evansville water and sewer utility system. He was also previously employed as Director of Economic Development for Indianapolis.

“By bringing this public utility back under public management, we will not only save taxpayer money, but we will also eliminate the outsourcing of these good-paying jobs to an outside company,” Gahan stated in the release.

He said in January part of the reason he placed himself on the sewer board was to help shift the city away from privatization of the utility. The New Albany City Council isn’t required to vote on the matter.

New Albany was paying about $3.3 million a year for wastewater treatment before EMC was hired in 2001, and the company’s contract with the city has been reviewed and debated since its inception. EMC was paid about $3.6 million a year until its contract was trimmed by Mayor Doug England as part of a plan to balance spending for the utility that included rate increases.

EMC also once managed the city’s stormwater operations, but New Albany paid $200,000 to end its contract with the company two years premature in 2008.

Sewer board member Ed Wilkinson said Friday he’s confident the city can do “as good or better” of a job operating the wastewater treatment plan and system as EMC without making several new hires.

“Overall staffing that we have in place right now as far as the number of bodies should remain approximately the same,” Wilkinson said. “It wouldn’t be something that would take more personnel just because we do it in house.”

Wilkinson said he pushed for the city to end privatization of utility billing, and also supports the decision to not renew the sewer contract with EMC. Not only is it financially feasible, but the city should be able to provide more maintenance focus on the sewer system than EMC, Wilkinson said of the move.

“It’s a $200 million complex that just doesn’t operate by itself,” he said.

When sewer funding issues started to become public in 2009, Wilkinson said the utility was behind on bond payments, monthly bills and the U.S. Environmental Protection Agency’s requirements to end Sanitary Sewer Overflows, or SSOs.

“Now all the capital projects have been completed that the EPA had on the list, on our five-year masterplan we’ve completed 90 percent of those projects, and we have SSOs down to almost zero,” Wilkinson said.

“We’re projecting a nice, clean operation for 2013 — all inside of our current rates — and we’re looking for a very successful first year of operating ourselves.”

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