Council Urges $497,000 Audit of Waste Water System

City Council members recommended Monday that the city pay $497,000 to audit the city’s waste water system, long a source of complaints from San Fernando Valley residents of overcharging.

Joel Wachs and Cindy Miscikowski recommended that Black & Veatch, a management consulting firm, be selected from seven competing bidders to conduct the benchmark audit.

Four others submitted lower bids for the whole contract, but a panel of city analysts earlier recommended Black & Veatch because of the firm’s proposal, experience and lower hourly rate.

If the full council agrees, the company would compare expenses, operations and rates of Los Angeles’ waste water system with those of 25 other privately and publicly run sewage treatment systems throughout the country. Auditors have been asked to recommend ways to improve efficiency for the city system.

The six-month study would provide information that might help the city decide whether its waste water system should be turned over to a private contractor, Wachs said.

“The whole purpose of this is to take a real hard look, and where we can improve. We need to improve,” Wachs said.

Los Angeles operates the third largest waste water treatment system in the United States, serving more than 4 million people with an annual budget of $635 million. City officials are planning to spend more than $1 billion in the next few years to replace aging sewer pipes.

In recent years, the Sanitation Bureau has cut operating costs by 20%, exclusive of the agency’s massive construction budget.

Wachs said some city officials believe another 20% to 30% in savings can be realized by addressing complaints that construction projects are over-designed, redundant and plans are changed too many times. If the city can cut construction costs by another 10% , $130 million would be saved in the coming years, Wachs said.

Black & Veatch officials said that some cities have saved up to 40% by contracting out operation of sewage systems.

“It [the study] is intended to look at best practices in the industry and how the city of Los Angeles compares,” said Judy Wilson, general manager of the Sanitation Bureau.

North Hollywood resident Ivan Shinkle, who has sued the city alleging that sewer rates are excessive, said he is hopeful that the audit will result in lower service charges.

“I’m fairly confident they are overcharging,” he said. “Assuming there are inefficiencies, which there are, the regulations state any surplus has to be held over so the rate can be lowered the next year.”