Water plant bids rejected | PostIndependent.com

Water plant bids rejected

Rather than wait up to another year and risk even higher costs, Rifle City Council unanimously rejected two bids on a new $25 million water treatment plant and decided to proceed under a “sole source” approach.

At a special June 25 meeting, the council 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 funds available to build the plant. Alder Construction, located in Salt Lake City, Utah, submitted a base bid of $33.1 million and PCL Construction, located in Phoenix, Ariz., 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 had 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.”

The project was originally designed to include improvements to the city’s raw water pump station, a new 24-inch raw water pipeline to the new 40,000-square-foot plant, a radio tower at the existing Graham Mesa water plant for remote data transmission of information about the city’s water system to the pump station and then by cable to the new plant, and connections to water transmission and main lines.

City officials have said the Graham Mesa plant is aging, undersized to serve projected population growth and unable to meet possible tougher federal water quality standards in the future. Construction work was expected to last up to two years.

Three choices

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 using a “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 the city that asked the city to downsize the plant.

“Why do we need a showplace and not just a good water treatment plant?” Nichols-Alvis read.

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 costs, but it will still be designed to treat up to eight million gallons a day.

“If we go to a six 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 two 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.

Plant details outlined

Microfiltration membranes are planned as part of the filtration system on the water plant, Miller wrote in a memo to the council, which are not to be confused with reverse osmosis membranes.

Miller noted a renegotiation with membrane suppliers had been discussed in several recent closed-door executive sessions with council members. Renegotiation was prompted by changes “involuntarily forced upon us” by General Electric, Miller wrote, which would have raised capital and engineering costs at a time when the city sought to reduce costs. As a result, the city terminated its contract with GE and entered into simultaneous negotiations with GE and Pall Corp. of New York, the two previous bidders in 2010.

General Electric’s renegotiated price for equipment and services was $2.25 million and Pall’s was $1.98 million, Miller wrote.

“Besides being lowest on capital cost, membrane purchase and replacement costs are also lower for Pall,” he wrote. “On a life cycle cost evaluation, capital and membrane replacement costs for Pall are more attractive than GE’s.”

Miller also noted Pall’s payment terms and conditions were more favorable than GE’s.

Council approved $99,000 for the engineer drawings to eventually purchase the membrane filters from Pall.

At an earlier meeting in June, council was informed Sturgeon had approved a $75,000 contract with Kumar & Associates of Denver to do some geotechnical testing of soils at a 65-acre site, adjacent to the original proposed site. Both are east of Rifle on U.S. Highway 6 and on city-owned land.

Miller noted in his memo that those tests were to determine groundwater level, bedrock elevations, along with soil, waste and groundwater characteristics for clay-lined drying beds. Those were planned to save the city money compared to an earlier plan (now abandoned) involving concrete lined drying beds, he noted.

Council approved another $47,900 to complete the drying bed design and water impoundment closure plan.

Miller noted approximately $10,000 of added work by Kumar & Associates will likely be needed as well.

Council also approved an application for a $2 million grant from the Colorado Department of Local Affairs’ Energy and Mineral Impact Assistance Fund to purchase process equipment and the Pall membrane system. The city would commit a local match of $500,000 from the city’s water fund as well.

In interviews after the meeting, Sturgeon said the overall budget for the new plant is $27.9 million.

Miller said the intent is to find enough savings to allow the project to proceed and have the same life expectancy at 8 million gallons a day treatment capacity.

“Things like finishes and processes that aren’t [state or federal water quality] compliance-related,” Miller added. “The process will allow us to make decisions on things like the types of pipes to use, the configuration of the plant will be denser, too.”

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