A screen shot from Monday's meeting.
DERBY — The committee investigating whether it makes financial sense to privatize the city’s wastewater system recommended the city hire a firm to conduct an appraisal.
At a meeting Sept. 26, the members of the Derby WPCA Privatization Committee voted to recommend hiring Raftelis, a nationwide company with staff who specialize in valuing water and waste systems. The cost for the appraisal is about $40,000, according to Jack Walsh, the chairman of the committee.
The recommendation from the committee is with Derby Mayor Rich Dziekan’s office. City staff is looking at how to fund the appraisal, such as whether it can be paid for with money from the American Rescue Plan Act. The city’s law firm has to review a contract as well.
The ultimate decision on whether to hire Raftelis to conduct the appraisal rests with the Derby Board of Aldermen & Alderwomen. They approve contracts.
Walt Mayhew, the mayor’s chief of staff, said the matter will be on the agenda for the next meeting of the Aldermen/Alderwomen.
Wash stressed a decision has not been reached on whether to privatize the Derby WPCA.
The committee’s goal is to provide as much information as possible and to make a recommendation. The appraisal is part of that fact-finding mission.
Right now the committee has an offer on the table from Aquarion to purchase and operate the system. The utility described its offer as a $50 million investment, which includes $18 million in cash to Derby, plus a $32 million capital investment. Click this link to read a PDF presentation from Aquarion.
Raftelis, assuming the company is hired, will give Derby an appraisal that the city can judge against Aquarion’s offer.
At the Sept. 26 meeting, John Mastracchio, an executive vice president with Raftelis, said he has 27 years experience in the field, and specializes in valuing water and waste systems for municipalities and utility companies. Mastracchio said he has conducted more than 60 similar appraisals. It usually takes about six weeks to complete, assuming all information is readily available. The appraisal process includes a complete review of finances, budgets, the customer base, along with on-site inspections of the WPCA facilities.
Derby’s water and waste collection system is a complicated, expensive issue.
Derby voters approved $31.2 million in repairs to the sewer system in November 2014. That included replacing several pump stations, including one on Roosevelt Drive that had polluted the Housatonic River during heavy rain.
Derby single-family homeowners are paying $256 a year — on top of their regular WCPA bill — to pay for that referendum.
However, more expensive repairs and upgrades are looming, particularly at the Derby WPCA’s treatment facility under Route 8 next to the Housatonic River.
A regionalization study said Derby will need to spend $70 million in capital costs and operating expenses over the next 20 years if it continues to operate as is.
The study was to determine whether it made financial sense to combine WPCAs in Ansonia, Seymour and Derby.
However, that regionalization study seems to have died on the vine, lacking formal endorsements from the local governments in Derby or Seymour. Ansonia’s mayor said it wasn’t a good deal for his city.
“We have to figure out what makes sense,” Walsh said. “The bottom line is that we’re doing due diligence to see what makes sense — what’s the best possible deal for the citizens of Derby? Ultimately the citizens of Derby are going to bare this cost, one way of the other; whether it remains as a WPCA with us or whether it becomes a utility like water and electricity, where rates would be determined not by the WPCA, but by a water company regulated by the DPUC (Department of Public Utility Control).”
