City ends USFilter contract

by Michael Wright
The Facts

Published January 14, 2004

ANGLETON — City officials terminated the contract with USFilter at 7:30 Tuesday morning, taking over the city’s wastewater treatment and street maintenance for the first time since 1996.

The city contends USFilter breached its contract by not hiring enough employees to run the plants and maintain streets, not submitting annual capital project reports and improperly charging expenses to the maintenance and repair budget.

USFilter officials said politics, not performance, is driving the city’s action. The company denies any breach of contract, and promises to go to court.

The two sides met Friday after the city extended its Jan. 5 deadline at USFilter’s request.

“We met for, I’d say, about 14 minutes and they offered us nothing,” Angleton Mayor Matt Sebesta said. “The negotiations were fruitless and we updated council on that (Monday) night.”

Council already had given Sebesta authority to terminate the contract at a Jan. 3 emergency meeting. Council took no action at Monday’s meeting.

City Administrator Michael Stoldt said USFilter officials gave the city three options at Friday’s meeting: To allow the current contract to run its course, to have the city take over street repairs without the company paying the $400,000 the city claims it would be owed, or to go to court.

“It seemed like negotiations were fruitless,” Stoldt said. “We are prepared to defend our actions.”

Stoldt said the city audited the company’s invoices in 2001 and found the improper expenses, including improper billing for electric costs.

“After the city began reconciling the USFilter maintenance and repair bill, their expenses decreased by an average of more than $75,000 annually,” the city’s news release states.

USFilter spokeswoman Christie Kaluza said the charges to the maintenance budget were nominal and the issue was resolved with previous City Administrator Ruth Hertel.

“It was a ($25) gift card to an employee who received no lost time for safety,” Kaluza said. “The candy is actually laughable. It was a bag of peppermints that would be placed in a candy bowl in the reception area.”

Kaluza said the city was happy enough with the company’s work to renew the original contract in 2001 after resolving the electricity charges.

“When the city first notified the company in November 2003 of its allegations of breach of contract, we immediately addressed these unfounded allegations with the city, knowing that each claim against USFilter was false,” Kaluza said. “The company values its relationship with the city and hoped to work through this issue — an issue obviously driven by city politics and not USFilter performance.”

The company had 16 people working in Angleton. The city contends the contract calls for 19.

Stoldt said just three of the employees on duty Tuesday morning declined the city’s offer to keep them on the payroll.

Stoldt said the city’s offer remains open until the positions are filled.

“Just because you walk out today doesn’t mean you can’t come back tomorrow,” Stoldt said he told the employees.

Stoldt said the transfer hasn’t affected operations.

Angleton isn’t the only city having problems with USFilter.

Mike Velsely, who works for the New Orleans Sewage and Water Board, said the company also has failed to properly staff its treatment plants there and has made improper charges to the board’s maintenance and repair budget.

“They’re going to try to sweet talk you and then they’re going to try to threaten you,” he said.

Kaluza said USFilter is proud of its record in New Orleans.

Michael Wright covers the city of Angleton for The Facts. Contact him at (979) 237-0151.