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OMI wants out of West Haven and New Haven sewage plant

Andy Bromage , Register Staff

9/16/2004

Operations Management International, the private company running sewage treatment plants in New Haven and West Haven wants to end contracts in both cities because of alleged million-dollar losses, city officials said Wednesday.

OMI, is five years into a 15-year contract with West Haven and has asked city officials either to cut it loose or renegotiate its contract, Mayor H. Richard Borer Jr. said.

"They told me they’re losing $800,000 to $2 million a year," Borer said. "If their claim is true, the benefactor of them underbidding their contract are the users and the residents of our city."

New Haven Mayor John DeStefano Jr. said during a recent editorial board meeting with the New Haven Register that OMI wants to end its contract with the city’s Water Pollution Control Authority.

OMI manages New Haven’s treatment plant, which also processes sewage from East Haven, Hamden and Woodbridge. All four municipalities are negotiating terms to create a regional water pollution control authority.

"We’ve been very pleased with private management," DeStefano said. "It’s my understanding they are unhappy with the contract. ... OMI feels it’s losing money."

An OMI spokesman could not be reached for comment Wednesday.

OMI runs West Haven’s sewage treatment plant off First Avenue near Sandy Point, which accepts wastewater from West Haven and parts of Orange. The plant employs 21 workers on three shifts.

Borer characterized OMI’s losses Wednesday as "their problem" and said he doubts the city has authority to renegotiate the company’s contract.

"That wouldn’t be fair to other people who bid on the contract," Borer said. "Nor do we have the powers to renegotiate with them."

Borer said West Haven has three options: run the plant in-house, cut OMI loose and solicit bids from new firms, or hold OMI to its contract.

Director of Finance Richard Legg said he is favor of renegotiating OMI’s contract if possible.

"They have the experience, and there’s an experience factor you can’t ignore," he said. Running the sewer plant in-house, as the city did prior to hiring OMI, would cost millions and require a 4 to 6 mill increase in the tax rate, Legg said.

But before any decisions are made, Borer said he wants an independent audit verifying OMI’s alleged losses.

Borer said that Water Pollution Control Commission Administrator Bill Norton "had contested some of their numbers."

Norton declined comment on the matter Wednesday.

Another option for West Haven would be to sell its assets and join the effort to form a Greater New Haven Regional Water Pollution Control Authority. Borer said he opposes this option.

"We have our own facility, our own treatment plant, our own incinerator and a good collection system," Borer said. "I don’t see any need for us to join up." He said OMI does a great job running the plant and has helped the city meet state mandates.

Based in Englewood, Colo., OMI is a water and wastewater management company with over 170 facilities in the United States, Middle East and Asia.