The wastewater treatment plant on Brown Street will be operated by city employees beginning Oct. 4, when Lampasas’ contract with OMI Inc. for water distribution system and wastewater system maintenance terminates. PHOTO BY DAVID LOWE The Lampasas City Council voted 7-0 in a special session Tuesday to terminate the city’s contract with OMI Inc. — which manages the city’s water distribution system, and its wastewater collection and treatment systems — effective Oct. 4.

The termination comes in response to a citation the city received from the Texas Commission on Environmental Quality for not issuing a boil water notice when the level of chlorine residuals in the system dropped below TCEQ standards.

Lampasas officials received a letter June 14 informing them that the TCEQ executive director was pursuing enforcement action against the city for alleged violations of the Texas Health & Safety Code and commission rules. An inspection in March had revealed eight instances of noncompliance with TCEQ rules.

The most serious — a category 1 violation — was the failure to issue a boil water notice to city water and wastewater customers within 24 hours of chlorine residual tests OMI employees took Jan. 21, 2009 and March 18, 2009.

Although City Manager Michael Stoldt said bacterial contamination did not occur, he said OMI’s failure to notify city officials of the chlorine results and to call for a boil water notice convinced City Council members to terminate the contract.

“The boil water notice bothered me to no end,” Stoldt said, adding that the other violations were less serious infractions that, without a boil water violation, probably wouldn’t have resulted in TCEQ action. “I take pride that we provide good water, and I felt like this was a blow to the city’s credibility.”

Protection of public health, OMI Regional Director of Operations Kirby Chaney said, is the company’s highest priority. He added that OMI operational employees received training last week about meeting environmental requirements, and he said legal compliance staff are training this week.

“We did not take what would be the proper actions, and we have addressed that,” Chaney said.

Based on conversations with legal compliance specialists and TCEQ employees, however, Chaney said OMI officials did not believe TCEQ regulations required a boil water notice as a result of two low chlorine residual readings.

A public notice — which is not the same as a boil water notice, Chaney said — is required only if 5 percent of disinfectant residuals taken in two consecutive months fail to meet TCEQ standards, the OMI regional director said, citing Title 30 Texas Administrative Code Chapter 290.110.

Different rules — which OMI staff also do not believe apply in the cases of Lampasas’ two low chlorine readings — govern when boil water notices must be issued, Chaney said.

OMI employees take three chlorine residual measurements per day and collect samples for bacte- riological and disinfectant residual analysis once a month at 10 locations — one more than the number of sites required — Chaney said.

“In no case do we believe those two samples should prompt a requirement for a boil water notice,” he said, adding that OMI officials still are trying to discover why Lampasas received a TCEQ citation.

The environmental commission is assessing a fine of $1,709 because of the violations. Because the city has corrected the instances of non-compliance as directed, TCEQ reduced the fine from its original amount of $2,136.

Although city staff plan to seek compensation from OMI for the fine, Stoldt said the City Council voted to terminate the contract not because of the monetary penalty, but because OMI staff failed to report low chlorine readings.

After city officials met with representatives of TCEQ and OMI, officials from the Englewood, Colo.- based company offered a plan to train their employees more rigorously in following TCEQ requirements, Stoldt said. Even with additional precautions, however, city staff believed continuing to contract with OMI would create distractions for city employees.

“It leaves staff in the position that we would have to watch them constantly,” Stoldt said. “If I have to put that much time and effort into it [water and wastewater systems management], why not take it back over ourselves?”

Lampasas’ agreement with OMI — the city’s water and wastewater system operator for about the last 15 years — was set to expire in September 2011, Stoldt said. Even before learning of disciplinary action by TCEQ, City Council members had been considering not renewing the contract next year.

“Staff had been thinking that after 15 years of rate increases we could do this as inexpensively or less expensively with city staff,” Stoldt said. “We were already leaning toward doing this inhouse.”

By ending the OMI agreement Oct. 4, water and wastewater management by municipal staff will begin just a few days after the city’s new fiscal year commences. The operations changes will be easier to implement in 2010, Stoldt and Public Works Director Randy Clark said, than in 2011, when the city manager said public works staff will devote significant time to projects associated with the Texas Department of Transportation’s rebuilding of Key Avenue.

City staff will hire nine new employees to manage Lampasas’ water and wastewater systems, Stoldt said. OMI employees who currently work in Lampasas are welcome to seek city jobs if their employment with OMI ends, Clark said.

“They have done a yeoman’s job in this city,” Clark said of OMI workers, “and we’re just really proud of them. ...OMI’s termination does not prevent them from applying.”

OMI considers employee wellbeing a primary concern, Chaney said, adding that the company will offer job opportunities for workers in Lampasas once OMI’s contract with the city ends. Although he said he cannot promise workers OMI jobs in Lampasas, Chaney said employees will be notified of openings elsewhere within the company’s service area.

OMI has 10 ongoing water and wastewater contracts with Texas municipalities, Chaney said.

OMI workers who desire to work for the city of Lampasas likely will be well prepared for their new roles, Chaney added.

“Because of their knowledge of the local system, they will also be good candidates to apply for openings in the city,” the regional director said.

OMI had served Lampasas well for many years until the recent chlorine sample reporting problem, Clark and Stoldt said.

“Part of this is a disappointment with OMI and upper staff,” the city manager said, “because they had done a good job prior to that.”

Stoldt noted that the company provided technical support as city officials tried to resolve recent water discoloration problems that resulted from changes in Stillhouse Hollow Lake and from a Kempner Water Supply Corp. “burnout” cleaning process. Ending of the city’s OMI contract will not change any agreements between Lampasas and either KWSC or Central Texas Water Supply Corp., he said.

The city will continue to pay its regular monthly fee to OMI until the contract termination date and will not have to pay a penalty for ending the agreement, Stoldt said.

Until Oct. 4, the city manager plans to obtain reports about all chlorine residual samples within four hours of when the readings are taken. Staff will exercise extra caution, Stoldt said, to ensure any low disinfectant residuals are resolved promptly and properly.

“This is very serious,” he said. “This is not going to happen again.”

Laboratory chain of custody papers, Chaney said, show who takes samples, where readings are obtained and where samples are transported after the initial reading.

“We can always go back and get the detailed results for our samples in the laboratory chain of custody,” Chaney said. “As a contractor, we always keep those records available for city staff on request.”

As it prepares to begin water and wastewater management, the city will pay on an hourly basis as needed for technical support from outside companies. That assistance, Stoldt said, will help ensure a proper filing system for water and wastewater reports, and will aid the city in following TCEQ rules.

Technical support will be billed as “professional services” and will not have to be bid, Stoldt said.