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Despite bill hike, contract renewed

• Water agency continues work with consultant whose 11th hour adjustment cost an extra $100,000

Posted: May 31, 2008 1:44 a.m.
Updated: August 1, 2008 5:03 a.m.
 

Local water officials have renewed their contract with a San Francisco consulting firm despite an 11th hour increase of 67 percent in the company's last bill and concerns voiced by one board member about "routine work" continually being farmed out to experts.

Board members of the Castaic Lake Water Agency this week authorized General Manager Dan Masnada to renew the agency's two-year General Engineering Services Contract with Kennedy/Jenks Consultants.

The agency, which supplies water to Santa Clarita Valley residents through four local retailers, will pay the consulting firm $150,000 for two year's work implementing a handful of capital water projects already underway.

The company - considered by many in the water world to be best in the field of water supply management - was to be paid $250,000 instead of its initial contract price of $150,000 after the agency authorized a "budget adjustment" increase Wednesday night.

Despite concerns voiced last month by board member Dean D. Efstathiou about the agency outsourcing "routine work" and about the consultants' last minute notice about work warranting a bigger pay package, the board renewed its contract with Kennedy/Jenks.

Although it appears at first blush that half a dozen consulting firms line up regularly at the trough of money generated by the agency - $95 million in revenue reported for last year alone, up $20 million from the year before - the work and expertise they provide is recognized in far more economical terms with year-by-year contracts, according to Masnada.

"There was a lot of activity at the end of this fiscal year," he said, referring to FY 2007/08.

The current "revised" contract with Kennedy/Jenks ends June 30.

"For the next year, we should be back to historically what has been the case," he said, referring to the contracted payment of $150,000.

"We've been using (Kennedy/Jenks) to manage $40 to $50 million in capital projects," Masnada said. "For our staff to handle 40 to 50 million, this building isn't anywhere near large enough."

More than $44 million has been budgeted this fiscal year for eight key capital improvement projects, including a perchlorate treatment plant and a water recycling plant.

"If we were to hire all the staff that we need to manage these capital projects, we would be seeing our costs rise and a significant increase in our operating budget," Masnada explained.

Despite that, he said the agency is hiring a fulltime engineer in the next couple of weeks.

About staffing, he said: "You want to be as surgical as possible.

"When I walked in the door, the agency had one-and-a-half engineers," he said. "Now we have two senior engineers, an associate engineer and, as of next week, a third engineer."

Meanwhile, the cost of consulting firms is expected to remain the most expensive monthly expenditure for the agency after paying for water.

Consultants cost the agency more than $5.76 million in March, representing five of the agency's 14 largest disbursements of cash.

Kennedy/Jenks Consulting was founded in 1919 by Clyde C. Kennedy, one of the first Masters Degree graduates in the School of Public Health and Sanitary Engineering at the University of California, Berkeley. In the mid-1970s, his company formed a joint venture with the similar firm of Jenks & Harrison.

Today, the firm operates out of six offices in Western states with 14 additional offices in California, Nevada and Arizona.

On its Web site, Kennedy/Jenks identifies itself as: "One of the pioneering firms in water supply and municipal wastewater engineering services with extensive experience in water system master planning, water quality investigations, and design of systems for water storage, pumping, transmission, distribution, collection, and treatment plant design."

Masnada said it makes little sense to hire the staff needed to set up water treatment plants only to have those staffers sitting around the agency doing nothing once the capital project is finished.

"It's not like you build a water treatment plant every day," he said.

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