Trustees Award Contract to Ridgway Valley for WWTP Renovation Project

At the September 18 Town of Lake City Board of Trustees meeting, trustees approved the award of a contract with Montrose-based Ridgway Valley Enterprises, Inc., to begin work on the impending wastewater treatment plant (WWTP) renovation project.
   The matter was discussed at length in the workshop portion of the meeting, with Town Engineer Joanne Fagan — who has been integral in the negotiations and planning of the project — in attendance.
   In her staff report, Fagan referenced a $375,000 supplemental grant award from the Department of Local Affairs (DOLA) that the town will receive for the renovation project, as well as a supplemental loan for $900,000 from the Colorado Water Resources and Power Authority (CWRPA), that has been completed and submitted and is now under review.
   Her report states, “that loan application is under review and is due to be presented to CWRPA on October 4. When we last talked with CWRPA staff, Lake City was the only loan applicant for their October meeting and they felt that funds were available. Staff is continuing to look for other resources that might help lower the loan amount. As we have recommended in the past, we suggest that the town secure the loan and then if the project costs less, the Town can repay the portion of the loan that is not needed and reduce the debt service. We did hear that the loan rate is expected to be 2 percent rather than the 3.25 percent initially indicated.” 
   In the meeting, Fagan stated, “Ridgway Valley would like to start [their work] the 29th (of September), but the loan doesn’t go to the Power Authority until the 4th of October. They would be giving us the loan on the condition that we raise our rates, and the loan is probably not going to close until the end of the year, so you probably have until you finish your [2025] budget to get your rates adjusted. If you want to [Ridgway Valley to] start the work – I need to know if you want to have heard that they’re recommending that the loan would be approved [first]?”
     Town Manager Lex Mulhall spoke up, saying, “I doubt that we’re going to be turned down. They’ve already given us so much, we’ve already tied up so much money that we’ve been sitting on, that we have to spend in the next couple years, that they’re not going to prevent us from getting started and finishing the project. They want us to spend that money, they want us to start paying them back. I don’t see them turning it down. While I’m not 100 percent sure, I’d say I’m 98 percent sure. There is always that slim 2 percent possibility.” 
   Mulhall went on to say, “They know we’re running out of time. There are a lot of people at the state level who understand the challenges we face, that are unique, so personally, I say, let them start building on the 29th, we’ll find out a week later. If we wind up having to find the money somewhere else, we’ll figure it out.”
   Mayor Dave Roberts agreed with this, stating the project had been “delayed and delayed and delayed,” and that it needed to get started.
   Mulhall agreed, saying that in speaking with representatives at Ridgway Valley Enterprises (RVE), “they’re eager to get started.” 
   The overall project has been reported as costing, according to Mulhall, approximately $5.6 million, and the contract with RVE would encompass $3 million of that scope.
   Fagan has worked diligently to find ways to cut the costs of the project, hoping to keep the burden from falling too heavily on water and sewer customers. In her staff report, she refences the fact that in her negotiations with RVE over the past few months, she was “trying to refine the project scope, trying to re-use more of the existing piping, making changes to the aeration system, and miscellaneous other changes.”
   The report went on to say, “RVE suggested that the Town furnish some of the equipment for the contractor. They charge a 20% surcharge on everything they furnih, so staff looked at what equipment the Town could furnish and decided to focus on the most expensive equipment – blowers, fixed film modules, insulated covers and the air diffusers. The total cost for those 4 items is almost $2 million.”
   Fagan asked to speak about one other topic, which was adding a $6,000 additional ‘builder’s risk’ insurance policy into the contract, and Town Attorney Dan Krob, who had Zoomed into the meeting, offered his opinion on this addition.
   “I think it’s duplicative,” Krob said. “We already have many different insurances in place in this contract. We have property, liability, vehicle, worker’s compensation. I think we can forego the ‘builder’s risk.” 
   Trustee Henry Woods said, “Six thousand dollars in the scope of this project is a drop in the bucket.”
   Fagan asked Krob if he had looked over the construction specifications of the project, to which he replied, “I don’t even pretend to know how to do your job, but I did review the contractual part and this is. I believe you’ve used this same contract for a while, it’s standard. It’s good.” 
   Mayor Roberts joked that he had intended to read the entirety of the 355-page contract but fell asleep, to which Trustee Diane Bruce quipped that it was “a little above her pay grade” to read the very complicated document, deciding instead to defer to Fagan’s expertise.
   When the time came to vote on the contract award approval, the motion was made by Trustee Henry Woods and seconded by Trustee Jesse Kendall and approved unanimously.