10/17/2011 Email to Lodi City Council and Staff evaluating the various proposals being considered to provide staffing to Lodi's new surface water treatment plant and staff's posted recommendation.  This matter is to be consider in the 10/19/2011 City Council meeting:

(The first paragraph is correcting my mistake)

My apologies, I misunderstood, apparently the city staff is recommending staffing the new plant with city staff.  This is outrageous again because the staff's arguement is not substantive.  The complaint by staff and city council of union benefits growth, etc is no longer creditable with this recommendation.  This was a paperwork analysis and staff's impression.  Sorry, this process has been conducted very poorly.  There is an old adage, "He who buys an IBM computer, never gets fired."  Meaning, rather than take the risk of doing something new, just take the safe route.

On 10/17/2011 4:23 PM, Ed Miller wrote:

Lodi City Council Agenda Item:  Res. I-1 Adopt Resolution Authorizing Recruitments to Staff the City’s Water Treatment Plant and Appropriating Funds ($225,000) (PW)

I must say that I was shocked to read city staff’s recommendation to staff the water plant via a contract with Veolia.  Frankly, it appears that staff has done very little since the original shirtsleeve session and is making a recommendation based on bureaucratic rules, not substance.  Although I could not practically, as a private citizen, survey Veolia (no plants in the area), I could survey Southwest (Mountain House) and did.  Did city staff?  I saw no evidence of that being performed in the staff report.  That someone can outsource a service as important to the city as the water plant without physically validating competing suppliers is beyond my comprehension.

Here is my scorecard to date.  As a citizen, I believe the city should be looking for the best value; i.e., the best combination of cost, delivery and quality.  Here is how I rank each attribute:

Ranking: (1^st, 2^nd and 3^rd)

	Southwest	Veolia	City
Cost:	1	3	2
Delivery	2	1	3
Quality	1	1	3
Score	4	5	8

Lowest score should be the recommendation

Cost Analysis:

	Southwest	Veolia	City
Labor, years 1-3	$1,246,592	$2,136,964	$2,314,967
O/H & Profit, years 1-3	$1,047,774	$1,678,266	$1,389,108
Total:	$2,294,366	$3,815,230	$3,704,075
Delta:	---	$1,520,864	$1,409,709

- That the city is willing to leave $1.5M on the table is not defendable.

- Staff’s belief that it is not plausible to run the water plant with three (3) staff members flies in the face of the Mountain House facility operation.

- Southwest described proactive steps they would take for maximizing equipment warranties; the objective being to save start-up cost by avoiding the cost of inappropriate equipment infant mortalities that the manufacturers should bear.

Delivery Analysis:

	Southwest	Veolia	City
Time to “Normalization” in months	15	8	17

I have no expertise in this area and cannot evaluate beyond the estimates submitted.

Quality Analysis:

I ranked Southwest and Veolia equal based on a brief audit of Southwest’s system and Veolia telling me they are ISO certified.  However, Southwest does everything an ISO certified operation would be expected to do and I could not validate Veolia’s quality system beyond their word.

Quality observations during the Mountain House tour managed by Southwest:

-         10-year old plant very clean and tidy; paint and pipe marking in very good shape – Process Engineering rule-of-thumb:  Generally, a clean process performs well and is reliable; a dirty, unkempt one does not.  Demonstrates operator attitude and corresponding performance.

-         Operator attitude upbeat and enthusiastic, not over-worked or unappreciated by the company; high esprit de corps

-         Quality audits are performed by the state agencies, EPA, internally and by third party with reports to the city

-         Southwest expressed a strong wish to start interacting with the design engineering contractor to insure that “design for serviceability” attributes are incorporated into the design preferably before construction.  Design engineers are tasked with delivering functionality, not serviceability.  Progressive private sector companies use concurrent engineering techniques like this to save cycle time and cost by avoiding changes during plant start-up.

-         Southwest’s PM system is computerized.  This application schedules tasks and generates work orders.  PM metrics go to company and city for on-time performance monitoring.

-         Standard Operating Procedures (SOPs) binders present in plant office as is customary – would require a full quality audit to validate beyond this observation.

-         Mountain House have renewed their contract with Southwest after they started-up the plant and sustained operations for some 10-years.  This is a strong statement of quality performance by itself.