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Government, Politics & Issues

Veolia Backs Out Of Controversial Contract With City Of St. Louis

(Rachel Lippmann/St. Louis Public Radio)
Protestors against Veolia gather in front of Mayor Francis Slay's office on January 16, 2013. The company announced today it will not sign a contract with the city.

Updated with additional quotes.

The French utility company Veolia has decided not to go forward with a $250,000 contract that would have reviewed the operations of the city of St. Louis water department.

Opponents of the company had raised questions about Veolia's corporate behavior and environmental record.

Mary Ellen Ponder, the deputy chief of staff to Mayor Francis Slay, announced the company's decision today at a committee hearing on a bill that would have stripped the funding for the contract from the budget for this year.

"Unfortunately, the passing of a year has had a greater impact than just lost time," she said. "Veolia, the firm that was legitimately selected per ordinance to help improve the water division's level of efficiency, has decided our business isn't worth it. It's not worth the damage to their business. Veolia will not go forward with the contract they were legitimately awarded. Frankly, they can't be blamed."

Ponder says the city has reached a verbal agreement with the Metropolitan St. Louis Sewer District to perform some of the work Veolia was contracted to do. MSD spokesman Lance LeComb says the agency is reviewing what work it can do with its own staff and what tasks may require outside contractors, though he believes most can be done in-house.

Opponents of Veolia celebrated the company's decision to back out of the city contract. But Kathleen Logan Smith, the policy director of the Missouri Coalition for the Environment, says the coalition will be watching closely to make sure the company is not a part of any contract with MSD.

"“We have to insist on competitive bidding, we have to assist on accountability, we have to insist on a public process," she said. "When our tax dollars are at play no matter where they are, and our public utility dollars are at play, we have to watch those monies."

Veolia's decision, however, has not put to rest questions about the way the city approves contracts. In a legal opinion released earlier this month,  the Slay administration that argued the because the money for Veolia had been approved in the regular budget process, it did not need separate approval by the Board of Estimate and Apportionment, where the contract has sat since March.

To get those questions answered, aldermen voted to strip the $250,000 that would have funded the Veolia contract. Ald. Terry Kennedy, who sponsored the measure, said he wants to make sure that the process is as transparent and collective as possible.

"It is the function of the legislative body to be checks and balances for the executive branch," he said. "What was pretty much outlined by the city counselor in her letter, in my interpretation, was a kind of carte blanche for the executive branch to be able to enter into contracts. That is not my understanding of how democracy works."

Follow Rachel Lippmann on Twitter: @rlippmann

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