Response to sewer FAQs

November 02, 2007 12:00 am

Below is an abbreviated response to the letter to the editor by Lois Munson ("Certain questions demand answers from the city") in the Oct. 27 edition of The Daily Triplicate. The full response is available at Crescent City Hall:

Q. How were invitations to bid on the project advertised?

A. The project was advertised via newspaper, in 13 builder/plan exchanges, and direct mailers to roughly 24 "treatment plant" contractors.

Q. In which newspapers were bid invitations published?

A. The Daily Triplicate was the only newspaper. All other publications were plan exchanges.

Q. How many responses were received?

A. Wahlund Construction et al, a Joint Venture from Humboldt County was the only bidder. We asked others why they did not bid. In general, they had too much work and Crescent City is too far away.

Q. When was the winning bid accepted?

A. The Bid was conditionally awarded by the City Council on March 19, 2007. The bidder had to hold his price for 90 days from the bid date until the city received its "Approval to Award" from the State Revolving Loan Fund (SRF). The notice of award was issued on May 22, 2007.

Q. When was the contract signed?

A. The contract was physically signed by the mayor on June 7, 2007, but is dated March 19, 2007, which is the date the project was awarded by the City Council.

Q. What alternatives for meeting Water Board requirements have been explored? By whom and with what result?

A. Numerous alternatives have been explored beginning with the Community Wastewater Conveyance and Treatment Feasibility Study adopted by the City Council in October 2000. The Feasibility Study and EIR were prepared by a team comprised of Montgomery Watson and SHN Consulting Engineers. Refined alternatives were explored in the facilities plan by Brown and Caldwell. It was approved by the City Council on October 6, 2003. The Regional Water Quality Control Board stated "The facilities plan is very comprehensive and well done." A Value Engineering study prepared by CDM slightly modified and confirmed that the proposed project was the least expensive alternative for the city. Results of the study were heard by the City Council and finalized on May 21, 2004. Details are at City Hall.

Q. What alternatives for funding have been explored? By whom and with what result?

A. The city retained a very successful Washington lobbyist to create legislation for grants. At this point, roughly $375,000 has been obtained. The city has slightly less than $1 million under State Proposition 50. The city also has a CDBG grant for approximately $1.2 million. Grant funds are hard to get these days for public utilities. The city delayed the project in order to find grants but with little success. In fact, in the four years the city had looked for grant funding, the project costs had escalated over $5 million by inflation. This time delay offset the value of any grants that had been obtained.

The City pursued a low interest loan from the State Revolving Loan Fund (SRF) at 2.5 percent interest. That is the major funding for the project. If the city had to get a similar loan at market rate they would have to spend an additional $10.5 million in interest.

Q. Will cost of new hook-ups also triple? If not, why not?

A. Residential sewer rates will roughly double in three years. A sewer connection charge increase is not proposed. The work being done today is needed whether or not any new connections are made.

Q. What has the total cost of the "studies" been that produced the shelf of notebooks displayed in the power point production?

A. The Feasibility Study prepared by MWH/SHN cost approximately $350,000 in 2000. The conceptual studies and facilities plan was roughly $1.5 million. The value engineering was roughly $70,000. The final design was roughly $3.5 million.

Q. In the event this proposal passes, what checks and balances will be put in place to manage the costs and cost overruns? How will you make sure the public is informed?

A. Checks and balances are already in place. The contractor is being inspected and any change he proposes is evaluated for "reasonableness". The contractor has also made a pledge to the City Council to keep the final project at or below the original contract price. Much of the underground work is completed and we believe the contractor is striving towards that pledge. The City Council will have to approve any change over that amount at a public meeting.

Q. Will the increase in rates be rolled back after three years? It would seem if this is a 20-year loan, the increased charges will need to remain in effect for the duration of the loan. If not, how will the payments be met?

A. The rates will not be rolled back since they are needed to pay for the loan over the next 20 years.

Ward Stover is the project manager for the wastewater treatment plant and works at Stover Engineering of Crescent City.