Mike Furlong, left, and Shane Fry, who work in water operations at Wright-Patterson Air Force Base, walk near storage reservoirs at one of two water treatment plants at the base. In an effort to save money, Wright-Patterson has asked for bidders to take over management and operations of its two water treatment plants. CHRIS STEWART / STAFF
Photo: Chris Stewart
Photo: Chris Stewart

Wright-Patt looks to privatize utilities

As Defense budget continues to be cut, base taking bids to run water, natural gas and other operations.

In one of the upcoming decisions, Wright-Patterson has asked for bids to privately manage two water plants on base that pump more than three millions of gallons a day out of an underground aquifer, said Col. Cassie B. Barlow, commander of the 88th Air Base Wing.

“Right now, it’s all in house,” she said. “What the Department of Defense has decided to do is privatize all of our utilities so water is just one of them.”

The Defense Logistics Agency also has asked for bids to maintain the base infrastructure for waste water collection and natural gas distribution to the state’s largest single site employer, said base spokesman Daryl Mayer.

“There is an intensive drive by the Defense Department of find cost savings wherever possible and even small cost savings are being aggressively pursued,” said Michael Gessel, Dayton Development Coalition vice president of federal programs.

The Dayton City Commission gave the go-ahead to prepare a bid to take over the water treatment plants.

“We are and have been in the utility business for a very long time,” said Tammi Clements, city director of water services. “We believe we can bring value to the base.

“The more folks or customers you serve creates some economies of scale that can reduce costs across the board for everyone,” Clements said.

While defense officials contend the move would save money, they couldn’t say how much. David Perkins, the director of civil engineering at Wright-Patterson, would not release figures on the water plants’ operational costs citing the expectation of pending bids to take over operations. The city also has not determined how much it would cost to operate the water plants yet, Clements said. The Defense Logistics Agency did not have a cost estimate on savings because bids have not been awarded, according to Susan E. Lowe, a DLA Energy spokeswoman.

“The goal of this process is to leverage the expertise and capital of the commercial companies to own, operate, maintain, upgrade, and repair utility infrastructure to industry standards, because, in many cases, the government has insufficient funding to sustain, upgrade and modernize,” Lowe said in an email Monday. The switch in ownership would allow the military “to concentrate on its core mission,” Lowe added, instead of the maintenance and improvements to “a deteriorating system, which may threaten mission readiness.”

Gessel said the Defense Department has a track record of privatizing utility services. Dayton Power & Light, for example, took over maintaining and upgrading the electric power infrastructure on the base under a 50-year contract that started in 2011. The base pays about $350,000 a month under the deal, according to base figures. The utility has a separate contract to supply electricity.

The base has purchased waste water treatment services from the city of Dayton, and a much smaller amount from the city of Fairborn, for decades, officials said, but the contract to manage the infrastructure would be new.

“Based on what they’ve done, there does not seem to be a significant risk,” Gessel said. “But on the other hand having waste water infrastructure which is antiquated … that’s an even greater risk.”

Sequester forces cost cuts

The moves are one of several the base has undertaken to curb costs as the bite of sequestration, or automatic budget cuts, take hold.

A second round of sequestration cuts is expected to hit the base and the Defense Department in mid-January unless Congress reaches a deal to avert the reductions, but many observers don’t expect that outcome.

In a bid to find money in an era of declining budgets, Wright-Patterson wants to attract public-private partnerships on undeveloped land on the base through “enhanced-use leases.”

“The future for us is sort of rocky in terms of what the budget looks like,” Barlow said. “We don’t know exactly what it looks like. But we know in order to provide a quality workplace for our employees that we need to really think outside the box. And we’ve been trying to do that through partnering with the community, looking at opportunities for enhanced use leases.”

Wright-Patterson has about 480 acres of “developable” land close to the fence line, she said, that could be a shared use between the base and a company or public entity. Today, the base has an enhanced use lease with Kettering Health Network to operate a hyperbaric chamber at Wright-Patterson Medical Center under a five-year contract paying $120,000 a year.

“If there’s a function that we need that we know we’re not going to be able to get a military construction project for gosh knows how long, maybe there’s an opportunity for us to work with a local business developer to have them build it for a win-win relationship,” she said.

Turning off the light switch

Wright-Patterson has cut costs by taking a look at what’s needed and what the base population can live without, Barlow said.

For example, scientific tests have been pushed to hours when electric consumption is at its lowest to snare cheaper rates, she said.“They may be testing in the middle of the night instead of the day because it’s cheaper during that time,” she said.

In another move, base offices have dialed back the thermostat to 68 degrees in the winter and dialed up to 78 degrees in the summer.

“We’ve been pretty steadfast holding those temperatures just to make sure we’re getting the utility savings we need in order to make our budget,” Perkins said. “It’s very inconvenient for the base populace and we know that. We try to keep that communication flowing as best we can, but that is a sacrifice that everyone has helped us with.”

Among other actions in recent months: A before- and after-school program was consolidated to one building, saving $50,000; two swimming pools were closed and a third had hours reduced to three hours a day for five days a week, saving $56,000; cable television was eliminated at fitness centers, cutting $7,700 and reducing operating hours at the base’s community center, auto hobby repair shop and arts and crafts shop cut $66,000.

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