The oversight board for El Paso Water delegated more of its authority to its CEO John Balliew and other utility officials at Wednesday’s meeting.
The Public Service Board voted unanimously to allow El Paso Water to bid out projects up to $6 million without further approval from the board in this year’s capital improvement program — which usually involves major construction.
The adopted resolution said that Balliew or another designee would be able to evaluate, select and award construction contracts procured “using the competitive bidding method or the competitive sealed proposal method” without further oversight.
Utility officials, in their request to the PSB, said that skipping the process for these “routine, procedural and non-controversial” contracts would speed up the process between 30 and 45 days.
The utility is ramping up construction, estimating to start 90 projects in the next five years, compared to 21 last year. Of those, 72 projects — or 80% — would be below $6 million, Irazema Rojas, the utility’s interim chief technical officer, said.
“Big needs require big changes, and this is a big change we’re proposing,” Rojas said.
Rojas said the utility was following state law, which allows government bodies to delegate requests for bids and proposals, which only requires the governing body to name the delegates and enact limits on spending.
The board would still be consulted on bids where the lowest bidder was unresponsive, or staff picked a higher bidder, according to the resolution adopted by the PSB.
The newly delegated power would expire Feb. 28, 2023.
Capital projects are the utility’s highest expense, especially in this year’s budget at $724 million — triple last year’s budget of $242 million.
Construction costs across the world are sharply spiking due to supply shortages and price hikes in construction materials due to the pandemic, and the utility is no exception, Balliew said.
“Those suppliers are only guaranteeing those prices for a short period of time now, instead of holding prices for 60 days or 90s days. We might have 30 days,” Balliew said. “We either have to move much quicker or rebid the project to reflect the price increase.”
A look at the budget shows a majority of projects fall under $6 million.
The utility’s total budget for capital improvements for the water and wastewater systems is $538 million, with the vast majority of the projects falling underneath the $6 million limit. Out of 215 budgeted capital improvement projects, only 20 — about 9% — are above the threshold.
For stormwater, out of 36 capital improvement projects totaling $19 million, only one project requires spending more than $6 million.
At Wednesday’s meeting, board members had few questions for Rojas or Balliew.
Mayor Oscar Leeser asked staff to provide 30-day reports on the projects approved, which Rojas agreed to.
Board Member Ivonne Santiago asked how the utility plans to have enough staff to manage projects. Rojas replied that she was looking to fill “every single vacancy in our group,” but didn’t rule out hiring temporary staff or contracting out project management.
This isn’t the first time the PSB has handed the construction reins over to utility staff.
In July of 2021, after historic levels of monsoon rains caused flooding across the city, the PSB enacted emergency policy conditions to allow Balliew to enter into contracts without their oversight.
That measure waived state requirements for competitive bidding, to speed up emergency repairs on stormwater systems damaged in the flooding.
In November, the board extended that emergency provision indefinitely, allowing the utility to spend money set aside for capital improvements to finish emergency repairs. It also allows the CEO to “take any and all related actions” in securing contracts, such as negotiations, signing and termination of other contracts all without PSB’s approval.
