WILILAMSON – At a regular meeting of the Williamson Utility Board held Thursday, Feb. 11 the board voted to enter into negotiations for a yearly review of the board’s contract with Veolia Water.
Both the Utility Board and the city of Williamson renewed contracts with Veolia in 2013. The cities’ contract concerns public works such as streets and trash collection. The Utility Board’s contract concerns water and sewer.
According to Williamson’s Mayor Robert Carlton, a yearly review of the Veolia contract is required. Failure to review the contract could result in a penalty. “It is required under the contract to review the contract every year at the end of Feb. Failure to do so could result in an automatic rate increase of three percent,” Carlton stated.
The city of Williamson is also required to review their contract with Veolia on a yearly basis. “It is the same for the city for garbage and streets. It has to be examined at this time of year as well. I will request that the council look into theirs as well,” Carlton explained.
Carlton explained that the Utility Board’s attorneys will review the contract and recommend what the best course of action would be. This includes examining the possibility of terminating the contract. “It will be based on the attorney’s advisement. They will determine the cost of terminating the contract and will make a recommendation. Regardless, we can’t continue to go into debt. It is a no win situation,” Carlton said.
Under the current contract, a termination schedule is included that list termination fees. The termination schedule states that, “The following termination payment shall be immediately paid to Veolia by the Board upon the termination of this agreement for any reason and such payment shall be a condition precedent to any termination of the agreement by the board under the terms of this agreement.”
According to the contract, The Utility Board agreed to enter into a contract with Veolia for two, five years terms. The first term began in 2008 and ended into 2013 when the contract was renewed. The Utility Board entered into the current contract in 2013, and would be required to pay a termination fee for year three of the agreement. The termination schedule states that termination within year three would cost $694,089. The agreement states, “In the event that this agreement is terminated at the end of the first five year term or terminates for any reason prior to the end of 10 years from the start date, board shall pay to Veolia a termination fee based on the remaining unamortized balance of the concession payment made by Veolia to board in accordance with the termination payment schedule set forth in this agreement.”
The next meeting of the Williamson Utility Board has been scheduled for Thursday, Feb. 25 at 3:30 p.m. in Council Chambers at Williamson City Hall.
(Courtney Pigman is a news reporter for the Williamson Daily News. She can be contacted at [email protected], or at 304-235-4242 ext. 2279.)