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Council hears RFP-driven 'worst-case' budget if Biloxi privatizes water and sewer operations
Summary
Staff told the council the city issued an RFP to consider contracting out water and sewer operations; the planning budget assumes contracting out, shows a $707,583 increase and would reduce staff to one in-house position to oversee the contract.
City staff told councilors they issued a request for proposals to consider privatizing operations and maintenance of the city's water and sewer system, and presented a planning-level budget that assumes contracting out as a 'worst-case' scenario.
"We put out an RFP for, privatization of the operations and maintenance of water and sewer," said Christie Lobata, who presented the water and sewer section and explained that the example budget assumes contracting out O&M. "This will be the most expensive budget that we have...overall, we have, an increase of 707,583. Our employees will go from 31 to 1." Lobata said the model keeps the city purchasing materials while a contractor supplies labor and equipment.
Lobata said the city will perform a state-required water rate study and warned residents that rates are likely to rise if the contract proceeds: "So our rates are gonna more than likely go up...due to existing budget deficits...and increased costs to contract out the O and M." Councilors asked whether contractors would buy city equipment (staff said the contract can include purchases and some vehicles could be surplused) and whether a private contractor could reliably hire staff; Lobata said the RFP includes penalties if positions go unfilled.
Staff emphasized the decision is not final; the contract terms and legal review would return to the council before any change in operations.
