Dispute resurfaces over proposed Veolia contract
This article first appeared in the St. Louis Beacon, Oct. 20, 2013: After months of quiet, St. Louis may be on the brink of signing a contract to make Veolia Water North America a consultant to the city’s Water Department.
That's because the city counselor contends that the contract with the French-based company may not need approval from the Board of Estimate and Apportionment, the three-person body that has stood in the way of the measure's approval for months.
Earlier this year, St. Louis Mayor Francis Slay postponed a vote on the city’s Board of Estimate and Apportionment to contract with Veolia — at a cost of $250,000 — to look at the department’s operations and recommend efficiencies.
That board -- made up of the mayor, comptroller and Board of Aldermen president -- approves major financial decisions for the city. Slay's delay reflected, in part, the fact that he lacked the votes.
The contract had attracted opposition from an organization called the “St. Louis Dump Veolia Coalition,” which criticized Veolia's record toward the environment, organized labor and its role in the Israel-Palestinian conflict.
The two other members of the Board of Estimate and Apportionment – Board of Aldermen President Lewis Reed and Comptroller Darlene Green – also had misgivings about the proposal. Without Green's or Reed's support, Slay lacked the two votes needed on the three-person board to approve the contract.
But in a recent letter to Green, city counselor Patricia Hageman wrote that the Estimate Board's action may no longer be necessary. “It is my opinion that all the requisite approvals already have been obtained and that you, as comptroller, have a ministerial duty to sign” the contract, the counselor said.
Hageman explained that the Board of Aldermen approved the Estimate Board's recommendation for “professional services” in the new city budget – and the Veolia contract was included.
Because of the aldermanic approval, Hageman wrote, the board doesn’t have to take a separate vote to approve the contract.
Hageman wrote that Public Utilities director Curt Skouby testified before the Board of Aldermen’s Ways and Means Committee that the “budget and appropriations ordinance (recommended by E&A) included a $250,000 appropriation for the Veolia contract.”
She added that “the Veolia payments are to be made from the line item 'professional services' under a slate of budgetary line items known as 'contractual and other services.' ”
The lawyer went on to write that “it is my opinion that the Board of Aldermen’s approval of E & A’s recommended appropriation ... constitutes sufficient approval of the Veolia contract expenditure.”
Hageman’s letter was discussed at length during this week’s Estimate and Apportionment meeting. Elaine Harris-Spearman – the comptroller's chief of staff – said Friday that Green has yet to sign the contract.
Both Green and Slay voted at that meeting to remove clauses in the contract that Harris-Spearman said would make it easier for Veolia to implement the recommendations of the consulting agreement. That type of work -- known as "phase two" -- is worth potentially millions of dollars.
Harris-Spearman said Green may eventually have to sign the contract -- as long as it doesn't include "phase two" in it.
“We believe whether the law department is right or wrong about the appropriation, whether they’re right or wrong about discretionary versus ministerial, the fact of the matter is that $250,000 was for phase one,” said Harris-Spearman, which is referring to the consulting agreement. “There was no appropriation for a phase two. And why would she sign that not knowing what phase two would cost and why should it not be put out for competitive bid?”
Hageman's letter didn't set well with Reed. He has called for the Board of Alderman's Ways and Means Committee “to hold hearings on the validity” of the Veolia contract.
President of the Board of Aldermen Lewis Reed talks to reporters about the Veolia contract dispute.
“I’m absolutely concerned with what happened and how it happened,” Reed said. “We have a process that’s written into law that we’re supposed to follow in processing contracts in the city and ultimately signing the contracts that come before us. And it appears in this case that one of the steps may have been skipped.”
Reed added, "Water and the cost of water and the quality of our water in the city of St. Louis impacts absolutely everyone.”
“The people of St. Louis have been very vocal about this issue," Reed said. "They’ve said they have some major problems with this specific vendor. Veolia Water has problems all across the United States and internationally.”
Before Friday’s Board of Aldermen meeting, members of the “St. Louis Dump Veolia Coalition” gathered on the second floor of City Hall to decry the Veolia contract.
Kathleen Logan Smith, the executive director for the Missouri Coalition for the Environment, said Veolia has “a questionable record about compliance and business ethics.”
“The more you look into their record… they have problems. And they are not a company that we should trust with our drinking water,” Smith said.
Critics of Veolia – such as Smith – contend that the consulting contract is the first step toward the privatization of the city’s water department. Both Reed and Smith said St. Louis has plenty of engineering firms that could look at efficiencies within the water department.
Slay has emphasized that the city’s Charter bars privatizing the Water Department. He added that a selection committee chose Veolia, not his administrative staff.
A press release sent out earlier this year from Slay’s office stated the company’s consulting advice would address “how the city can operate its Water Division more efficiently and in a more sustainable way, while preserving existing jobs and the high quality of the city’s water.”