Angleton,TX tries to terminate USFilter contract

by Michael Wright
The Facts

Published January 03, 2004

ANGLETON — City Council will meet in emergency session tonight to consider USFilter’s response to the city’s plans to take over wastewater services Monday.

USFilter took over the operations eight years ago, when the company was known as PSG. The city renewed the contract in 2001, but last year notified the company it was terminating the contract because it was unhappy with the company’s performance.

The city is scheduled to take over operations Monday morning. On Friday afternoon, the company’s attorney delivered a letter asking the city to extend the deadline, while at the same time denying any material breach of contract.

City Administrator Michael Stoldt said council needs to read USFilter’s response before Monday’s deadline.

“There is nothing that is earth-shaking,” Stoldt said. “It asks us to postpone to negotiate. They’re not giving me something new.”

State law allows an emergency meeting to be called with as little as two hours notice as long there is an “imminent threat to public health and safety; or a reasonably unforeseeable situation.”

Stoldt said the meeting was called “to ensure continuity of wastewater services to the citizens of Angleton.”

A USFilter spokeswoman declined to say if there was room for the company to give in negotiations.

“I really am not in a position to go into that,” Christie Kaluza said.

Kaluza said the company is willing to work out its problems with the city.

“We’ve had an excellent record and have an exceptional relationship with the city,” Kaluza said. “We’re committed to staying.”

Angleton Mayor Matt Sebesta said he’s not sure if council will take any action tonight.

“There’s always a chance,” he said. “We are meeting.”

Sebesta said he has not seen the letter from Ernest Blansfield Jr., USFilter’s attorney.

Blansfield warns the city it could face legal action if it continues down the path away from privatization of the city’s wastewater treatment.

“The city’s current conduct appears disingenuous based on its allegations that USFOS has defaulted on its contractual obligations dating back to 1996,” Blansfield writes.

If the city does terminate the contract, Blansfield continues, it must pay the company a $29,000 termination fee and $76,000 to cover the cost of upgrades.

“Additionally, the city should be aware that USFOS intends to pursue other legal and equitable causes of action against the city for a variety of business torts committed against USFOS by the City, which have caused, and will continue to cause, irreparable damage to USFOS’ business reputation,” Blansfield writes.

City officials contend USFilters hasn’t hired 19 employees as required by the contract.

Kaluza said employee staffing levels are sufficient.

“There is no stipulation in the contract that says what the minimum number of employees should be,” she said. “From our standpoint we have the staffing.”

The meeting will start at 6:30 p.m. in City Hall council chambers, 121 S. Velasco St. Council will meet in closed executive session. Any action must be taken in open session.

Contact Michael Wright at (979) 237-0151.