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1 /^ PUBLIC WORKS <br /> MEMORANDUM <br /> TO: Tom Thetford <br /> FROM: Mark Sadler <br /> DATE: May 2, 2005 <br /> SUBJECT: Assumption of Utilities—Naval Station Everett <br /> Benefits of the Utility Department's Assumption of the water and wastewater utilities at <br /> Naval Station Everett <br /> From the Naval Side <br /> During negotiations with the Navy regarding the Utilities Department, Navy personnel did <br /> discuss the benefits that the Navy receives when their utilities are privatized or assumed <br /> operations by a municipality. These include: <br /> • Lowers the operating costs for NSE and makes the base more efficient. This may not <br /> have been considered for this round of base closures, but will be considered under <br /> future consideration for the DOD base realignment and closure evaluations. <br /> • The Navy is part of the nationwide program to privatize base programs and utilities <br /> where possible. The Navy is in the utility business only because they own navy bases. <br /> The Navy does not operate utilities in a competitive cost effective manner and cannot <br /> operate the NSE utilities at the same efficiencies as the local commodity provider. <br /> • Emphasizes the importance of NSE to the City. <br /> • Removes the burden of operating and purchasing under Federal guidelines. <br /> • Allows their systems to be operated and maintained at higher standards and reliability. <br /> City Benefits <br /> Based on the proposal effort and due diligence performed city staff is fairly well acquainted <br /> with the base and its water and wastewater utilities. We did not bid on the project when the <br /> Navy requested bids - therefore we were able to negotiate our proposal and conditions. <br /> Negotiations were more open than under the competitive process, especially regarding base <br /> access and resolution of operating issues. We inspected all key components of the water and <br /> wastewater systems. However, the Navy was not allowed to share cost information. <br /> Benefits to the City and our ratepayers include: <br /> • Makes the base more efficient and therefore viable in the long term. <br /> 58 <br /> S:\MSadier\WORD\Navyfinal docs\ avy memo 050205.doc 1 5/2/2005 <br />