Wastewater Treatment Plant Project Cost Exceeds Original Budget by Appx. $1.1 Million

During the Wednesday, August 7, Town of Lake City Board of Trustees meeting, trustees unanimously approved town staff to request an Energy/Mineral Impact Assistance Fund (EIAF) grant through the Department of Local Affairs (DOLA) in the amount of $375,000 for the impending Wastewater Treatment Plant (WWTP) Renovation Project.
In her bi-monthly report, Town Engineer Joanne Fagan provided details for the trustees as to how the project is progressing. She reported that Ridgway Valley Enterprises (RVE), a concrete contractor out of Montrose, provided a preliminary cost estimate in late July, and that town staff had been working to refine the project’s scope and budget. Fagan was able to identify both items that were missing from the scope, as well as items not needed, but reported that despite being able to trim it back some, the first estimate far exceeded the town’s preliminary budget.
RVE initially intended to charge overhead on both materials and equipment, so in order to economize, staff suggested Town of Lake City directly purchase more expensive items, including fixed film modules, blowers, aeration equipment and covers, and Fagan reports that RVE is supportive of the plan.
Fagan said, “The aeration system in RVE’s original quote was from the same company as the fixed film, Entex. Cost for that Entex equipment doubled between when I got quotes in December and the numbers given to RVE. We have not found an alternate supplier, but there are less expensive and more efficient ways to aerate so a much less expensive aeration system is being proposed.”
After several drafts back and forth and working out details with suppliers, Fagan reports that she and town staff have the cost estimate for construction of the WWTP Renovation Project, including project management/engineering down to $5.6 million from the initial $6.2 million, with 5 percent contingencies.
In order to arrive at that number, Fagan chose a less expensive aeration system, which in her report she called, “a better fit for the plant, although it does add another vendor into the mix.” She also chose less expensive piping materials and decided existing bypass lines could be reused rather than replaced. “RVE is also considering fabricating some of the structures in their shop, under our observation, to save money,” she said. Fagan is also considering the postponement of purchasing aspirators and generators for the plant but stated in her report that the $5.6 million cost estimate does include those purchases.
“Even with all the negotiations and changes,” said Fagan, “the project cost will exceed the projected project budget by $1.1 million. We had been talking about the project as around a $5 million project but had been waiting to look for additional funding until we had a better idea of the actual project cost. To fill the shortfall, staff has applied for supplemental Energy Impact funding and additional State Revolving Fund (SRF) loan funds. We plan to ask for loan funds to cover the full shortfall if the Energy Impact funds do not come through. SRF funds are in short supply, but we learned this morning that they believe they could meet our needs. We also plan to reapply for Federal Emergency Management Agency (FEMA) funds for the generator and are applying for several other potential grants.”
The bottom line is, as Fagan stated in the August 7 meeting, “the longer we keep not getting it done, the more the price goes up.”