Updated $12.6 million price tag for new facility outside of city’s reach
A decision made by alderman Monday during the Elkhorn City Council meeting will push the Northeast Water Treatment Plant project back at least another year.
To-date, the city has committed approximately $1.6 million for the construction of the two wells and engineering for the site, according to a letter from Doug Snyder of Baxter & Woodman, Inc., Consulting Engineers.
According to Snyder, the firm received bids at 10 a.m. on May 1 and recommends the city accept alternate bids for a slower speed well pump, 1,750 rotations per minute (rpm) as opposed to 3,600 rpm, and exposed insulation inside the treatment facility, an associated low bid amount of $10,013,166.
In his letter to Mayor Brian Olson, Snyder said the original budget for the entire project, including well construction, was $10.22 million, while the revised budget, pending approval from the Public Service Commission, would come out to around $12.6 million.
Snyder said the increase is mainly due to a Wisconsin Department of Natural Resources to add a second exterior reservoir, as well as an increase in the cost of the treatment equipment. Snyder said the firm doesn’t believe rebidding would improve prices.
In a letter to City Administrator Sam Tapson, Snyder said the firm suggested potentially separating the project into three phases over three years. While the city wouldn’t save any money on the project, Snyder said this might ease the impact on the city’s water rate.
Alderman James D’Alessandro made a motion to not proceed with the project due to the cost following a presentation from Snyder Monday night, however, his motion was not seconded.
Tapson, who said he has been and remains to be a believer in the project, said with a price tag of $10.2 million, he believes the project exceeds the city’s ability to proceed at this point in time.
With the a likely 30 percent increase to water rates with the previous price tag, Tapson said rates would likely increase by at least another 10-12 percent with the new price on the project, as it is 30 percent over budget.
“From my perspective, this may have out struck the ability at the moment to move forward,” he said.
As for splitting the project into “bite-size pieces,” Tapson said it would simply cause consecutive rate hikes over a period of years.
“Which is generally speaking, very distasteful,” he said. “When you’re ready to do the project, it needs to be all in, not broken into pieces, because it’s not going to do anything for the rate structure.”
Olson said two months ago, the city was told the final portion of the project would approximately cost around $8 million and he questioned why the city is now looking at $10.2 million to finish the project.
“I was told we were going to be drinking red water and running to the rivers,” he said. “How did we go from two months ago it being an $8 million project to $10.2 million, and if it’s the DNR in February, we missed something.
“You’re talking a 30 percent increase at $8 million, but you go to this, you’re talking a 50 percent rate increase.”
According to Snyder, currently, the city could lose half of the outdated Centralia water treatment facility and still be okay. However, he said the facility is not a reliable treatment plant.
Alderman Hoss Rehberg made a motion to not proceed with the Northeast Water Treatment Facility project in 2014, seconded by D’Alessandro. The vote passed 4-1, with Alderman Gary Payson, Sr., casting the only negative vote. Alderman Scott McClory was not able to attend Monday’s meeting.
