Freeport council approves five‑year Veolia water contract with penalties, monthly reporting and SCADA requirement

The Freeport City Council voted 4–1 to approve a five‑year agreement with Veolia Water North America Central, LLC to operate the city’s water and wastewater systems, adopting new reporting and accountability measures designed to give the city more oversight of contractor performance.

City staff presented the contract during the council’s regular meeting, saying the proposed agreement establishes a five‑year term, enhanced performance expectations, monthly operating reports for council review, and a tiered penalty structure that escalates for repeat violations. “The proposed agreement establishes a 5 year term and includes enhanced performance expectations, reporting requirements, and accountability measures,” Doctor Kelly said during the presentation. The annual fee in the contract is $2,915,538.36, to be paid in monthly installments.

The contract requires installation of a non‑proprietary real‑time SCADA system within two years; when the system is installed it will become city property. Staff also confirmed Section 14 of the agreement outlines moderate, medium and severe penalties, including monetary penalties and the city’s ability to cancel the contract for ongoing nonperformance. Staff said Veolia must attend the council’s second meeting each month to present the monthly operating report and that mutual monthly site inspections are required so both parties can verify work.

Council discussion focused on whether the agreement contains sufficient “teeth” to hold the contractor to performance standards and whether the city’s own oversight had improved. One council member said, “I want to make sure that this contract has teeth to hold Veolia accountable,” and asked staff to confirm that the city could enforce the penalty schedule. Kelly pointed the council to the contract sections that provide escalating penalties, cancellation authority and mutual inspection provisions.

Field staff and a Veolia representative also addressed the council. Nick Meeks, who was introduced by staff as the city’s on‑site point of contact, told the council that recent changes in leadership and operations have improved response times and information flow in the field: “The things I’ve seen him do right now, I support 100,” Meeks said, referring to Veolia’s on‑site leadership and new monitoring tools.

A public commenter urged caution in renewing the contract, citing prior allegations of overbilling under a previous operator and arguing for careful oversight. Staff and several council members said the new contract language and enhanced reporting were put in place specifically to address those past concerns.

Staff also highlighted several operational follow‑ups required under the agreement: nonoperational fire hydrants listed in Appendix H must be repaired, replaced, or restored within 90 calendar days of the contract’s effective date, and the contract includes provisions intended to improve meter data transmission (staff said about 56 meters still require manual reading and roughly 30–35 meters are awaiting replacement due to inventory shortages).

After discussion, Councilman Pina moved to approve the contract and Councilman Davis seconded; the presiding official called the vote and the motion carried 4–1. Following the vote the council recessed into executive session under Texas Government Code section 551.071 for attorney consultation on several legal and negotiation matters.

Next steps identified by staff include tracking the two‑year SCADA installation deadline, enforcing the monthly reporting and inspections required in the agreement, and monitoring repairs to hydrants and completion of outstanding meter replacements. The budget impact for the utility will be the fixed annual fee noted in the contract and costs are to be incorporated into the city’s utility operations budget.