City Council rejects Rifle water plant bids
July 11, 2014
Rather than wait up to another year and risk even higher costs, the Rifle City Council has unanimously rejected two bids on a new $25 million water treatment plant and decided to proceed under a "sole source" approach to hold down costs.
The council in late June also approved nearly $150,000 in project expenses, an application for a $2 million state grant to help purchase filters and equipment for the plant and the return of a $600,000 grant that was to help build a new main waterline connection to South Rifle.
The action came after two bids for the project came in $8 million to $11 million higher than the city engineer's estimate and the money available to build the plant. Alder Construction, located in Salt Lake City, submitted a base bid of $33.1 million; and PCL Construction, based in Phoenix with an office in Glenwood Springs, submitted a base bid of approximately $36.5 million.
The city received a $25 million low-interest loan from the Colorado Water Resources and Power Development Authority to help pay for the plant. Two years ago, Rifle voters approved a 3/4-cent sales tax increase to help repay the loan.
Mayor Randy Winkler said the city underestimated the cost of the new plant.
"All building costs seem to have gone up greatly just in the last year," he said. "So we were forced to really take a hard look at this project."
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City officials have said the current Graham Mesa plant is aging, undersized to serve projected population growth and unable to meet possible tougher federal water quality standards in the future.
City Manager Matt Sturgeon explained three options for the project to the council: not building the plant and likely having to pay much higher costs if the Graham Mesa plant fails; undergoing a full redesign of the project and waiting another seven months to seek new bids that would likely be much higher; or taking the sole source approach.
Sturgeon said that involved hiring a general contractor to "value-engineer the project so we would guarantee it would be built under the budget we have."
The approach will also ensure the city will not lose the $25 million loan, Sturgeon added.
"We're already two years later than our original plan to start spending the money," he said.
Resident Engineer Jim Miller said the sole source approach allows the general contractor to act as the construction manager as well.
"We will get pricing all the way through the redesign and bring it in line with budgets," he said. "Then we can start building the project."
Miller said instead of waiting seven to 12 months to break ground, this approach should see work start in three or four months.
"We don't really have an option to not build a new plant," he added.
Two residents commented to the council about the project. Susan Nichols-Alvis read a short statement she said was from another resident who was out of town, asking the city to downsize the plant.
"Why do we need a showplace and not just a good water treatment plant?" Nichols-Alvis asked.
Ava Bowles asked if it was possible to build a smaller plant and expand it later, when population demanded the move.
Sturgeon said the footprint of the building will be smaller to save money, but it will still be designed to treat up to 8 million gallons a day.
"If we go to a 6-million-gallon plant, there are smaller concrete structures and other parts that would be more costly to add or expand if we wanted to go up by 2 million gallons," he said.
Miller added that the city would also risk not producing enough revenue from water use fees with a smaller plant and potentially not being able to repay the loan before it would need to expand.