North Miami Beach water utility assessed as inefficient, may be privatized
A recent evaluation and assessment of North Miami Beach Water Utility shows the service needs to improve in areas of cost effectiveness, risk reduction, systems and facilities upgrades, staff training and management skills.
“We’re disappointed but in a way were happy we are proactive,” said North Miami Beach City Manager Ana Garcia, who has been assessing efficiencies throughout city departments since arriving on the job two-and-a-half years ago. “This is fixable. We have an opportunity to move forward and do something better. The silver lining here is: Imagine, if we wouldn’t have done this.”
The North Miami Beach utility provides water to neighboring cities such as Sunny Isles Beach, Aventura and Miami Gardens.
In January 2015, Garcia hired professional engineer Jeff Thompson to be director of the city’s public utilities. He later told her the water department needs a thorough assessment.
Garcia then asked the city council to hire a third-party independent consulting agency, Eisenhardt Group, LLC, to perform an operational assessment of the water utility. The study cost $194,000.
The Eisenhardt Group, based out of Port Townsend, Washington, has done over a billion dollars worth of utility assessments and has provided recommendations to many cities throughout the United States, including more than 25 in Florida. The team brought to North Miami Beach — including founder Paul Eisenhardt — has over 150 years of combined experience in the field, the company said.
The city tasked Eisenhardt to evaluate the efficiency and effectiveness of the utility. Eisenhardt performed four different assessments, including on-site visits, workshops, employee interviews and analyzing records. The assessments were a checklist survey, a checklist of attributes of effectively managed water utilities, benchmark metrics (comparing performance to 100 other water utilities) and an action item list.
Eisenhardt presented its findings at a special Public Utilities Commission meeting on April 8 and a city council workshop on April 12.
The 2016 water fund budget is $32.8 million; the wastewater fund is $6.8 million. Eisenhardt told North Miami Beach that if run efficiently, the utility could save more than $2 million a year and that with proper maintenance, utility infrastructure could last about 10 percent to 15 percent longer.
After hearing the results of the assessment, Mayor George Vallejo said: “We owe it to the citizen owners and paying customers of this utility to operate it as safely, efficiently and cost-effectively as possible.”
Eisenhardt told the council it had two early solutions to fixing the problems: hire consultants for about two years to better train utility workers, at a cost of about $3 million a year; or to privatize the utility.
Vice Mayor Beth Spiegel questioned whether city employees would lose their jobs if the utility is privatized.
Thompson told the Miami Herald that existing utility workers would “be transitioned” to the private company, but that some managers’ jobs could change depending upon their skills and abilities.
Garcia plans to ask council members at their next meeting on April 19 to authorize staff to go ahead and seek privatization bidders and to retain Eisenhardt to assist him in drafting the request for qualifications.
“My office will be working on preparing the RFQ to ensure we get the most qualified company,” City Attorney Jose Smith said.
Public Utilities Commission Chairman Charles Asarnow said he has “lost sleep” since learning of the utility inefficiencies.
“The mayor and other people in this city understand the urgency of this situation,” Asarnow said. “We can’t just let this thing drag out for months at a time and not get started on one basis or another because we have a threat. This represents the heart and the lifeblood of this city.”
This story was originally published April 14, 2016 at 4:47 PM with the headline "North Miami Beach water utility assessed as inefficient, may be privatized."