Kenner Mayor Mike Yenni’s administration is finalizing a new sewerage contract, one it says will offer the city a one-time savings of $260,000 and another $244,000 per year over the 41/2 -year term of the contract.
The contract, which will remain with Veolia Water North America, will be introduced at the City Council meeting Thursday and be up for formal adoption June 18.
Yenni was not available for comment Friday, but the administration provided the highlights of the contract.
Kenner’s $5.7 million-a-year contract, which expires June 30, has been in place for two decades and has been viewed by the city as favorable toward the company.
Yenni floated the idea last year of bringing sewer services in-house, and the council passed an ordinance in December that created the framework for a sewer department.
Ultimately, however, the administration and Veolia were able to come to an agreement that will keep sewer services private.
According to the administration, the new $5.45 million contract will include a fixed $545,000 annual fee that will go toward management of the contract. About half of that fee covers Veolia’s administrative costs, with the remainder essentially being profit for the company.
The rest of the contract — about 90 percent of it — covers services that Veolia will document and invoice. The city then will reimburse it for those services.
The administration noted that 39 percent of the existing contract is made up of expenses that are documented and invoiced.
Under the new contract, Veolia will commit to staffing Kenner’s sewer operations with a fixed number of people — 35.5 positions — and will need approval from the city to adjust that number up or down, with the city paying for what it gets in terms of manpower.
Under the current contract, Veolia has whittled down its staff from 78 employees 20 years ago to about 38 now, with all the attendant savings benefiting the company, not the city.
The administration said Veolia has agreed to waive $260,000 in interest the city owes it for extra, unbudgeted work Veolia had to do because of the city’s failing sewer infrastructure.
Kenner is in the final years of an $80 million overhaul of its sewer system, which was cited by the state three times in the last decade for being out of compliance with environmental regulations.
The new contract also gives the company incentives to use energy more efficiently by splitting the savings and leaves the door open for Veolia and the city to collect and process waste from portable toilets and share in the revenue.
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