By Patrick Anderson
The city is demanding $1.3 million from United Water, its former drinking water contractor, for that company's role in and handling of last summer's drinking water crisis.
In an insurance claim filed last month, the city accuses United Water of "breach of contract" during the water crisis and subsequent 20-day-boil order, City Solicitor Suzanne Egan said yesterday.
The amount of the claim includes not only direct costs but an estimate of lost water bill collections from the crisis. Egan said that, if new costs are discovered to have resulted from the emergency, they can be added to the claim.
The city has estimated that the boil order cost $814,000 in direct losses, including employee overtime and state fines that don't include the hits to local businesses and the city's reputation.
Neither Egan nor Mayor Carolyn Kirk would elaborate any further on the grounds for the claim or release a copy of it.
United Water ran the city's drinking water treatment and sewage plants for five years until last November, when it was replaced by French infrastructure giant Veolia Water. Veolia beat out United Water and two other companies with a $15 million bid for the five-year contract.
The city has covered the $814,000 cost of the emergency using part of the roughly $2 million balance in Gloucester's drinking water enterprise account, Chief Financial Officer Jeffrey Towne said last week. If the claim is awarded to the city, Towne said the money would go right back to the water account.
A claim against United Water was not unexpected.
Although the city and United Water presented a unified front during the crisis itself, there were signs even early on that a battle over the costs of the emergency was likely.
Mayor Carolyn Kirk openly lobbied for United Water to send additional workers to Gloucester to help resolve the bacteria problem as the boil order dragged on for three weeks with few signs of early day-to-day improvement.
After the state Department of Environmental Protection in August cited United Water for naming a worker chief water operator without the proper credentials, Mayor Carolyn Kirk said the company had "represented to the city that it was in compliance" in a written statement.
By December, when the state fined the city $15,000 for the incident (with another $67,000 suspended), Kirk said findings by regulators that the municipal system was slow to react to rising bacteria counts were "in a lot of cases referring to United Water."
Of course years of neglect of the city's drinking water infrastructure was an overriding cause of the water quality emergency cited by the state on top of any operator failures.
United Water, which is owned by the French conglomerate Suez, approached the city in 2008 about purchasing the municipal water system, but was denied by Kirk.
While United Water's chances of securing a new five-year contract to operate the water system may have been scuttled by the boil order anyway, the committee appointed to review bids ranked the company's proposal last on technical merit and the second most expensive at $17.4 million.
The new contractor, Veolia Water, is the largest water company in the world.
Patrick Anderson can be reached at 978-283-700, x3455, or via e-mail at panderson@gloucestertimes.com
