Wednesday, April 16, 2014

GDPUD: Water plant delayed again

From page A1 | March 22, 2013 | 1 Comment

Despite holding a special meeting on Tuesday to take up agenda items not addressed at last week’s meeting, the Board of Directors of the Georgetown Divide Public Utility District punted once again when it came to a decision about the retrofit of the Auburn Lake Trails (ALT) Water Treatment Plant.

At the prior meeting, the board decided to put off certain agenda items until General Manager Hank White could attend since he was out on a family emergency. The board decided to take up most of those items despite the fact that White had still not returned.

In his absence, Director Maria Capraun prepared a draft budget for the ALT plant based on figures she said came from White and correspondence with the State Department of Public Health. She estimated the total cost of the project at $11.1 million. Total funds available are $8.7 million, leaving a shortfall of approximately $2.4 million.

Kelly Shively, assistant operations manager, was asked his opinion about whether there was any way to reduce the funding shortfall at ALT. He said it was difficult to anticipate what the total cost would be, including cost overruns, given that the existing plant has to be kept operational at the same time the new facilities are being built. “It depends on what conditions we run into,” he said, adding the construction was likely to be “messy.”

Director Norm Krizl asked about interest rates on the proposed loan from the USDA, saying that with a lower interest rate, the district could borrow additional funds and still stay within the $7 surcharge. “A lot of time and effort has been invested in this,” he said, “and we know we have to make this infrastructure investment.”

Interim counsel John Knowlton volunteered that he had discussed the matter with Psomas, the engineering firm that designed the plans for the plant. Psomas suggested making a presentation to the board on “value engineering” as a way to cut costs including phasing in different parts of the project or using less expensive materials.

Shively disagreed, saying Psomas was the firm that designed the plans for the plant and if there were cost savings, they would already be incorporated into the project. “The only way to save $2.4 million is to lop off parts of the project,” he said, noting that he didn’t think Psomas had any magic ideas for saving that amount of money.

Board President Bonnie McLane asked Shively to contact Psomas about a presentation. She also suggested building the project incrementally as the district has the money. “We don’t want to deplete the Stumpy Meadows emergency fund,” she said.

Director Ray Griffiths objected, saying, “We are talking things to death.” He noted that based on current water rates in the district, including the $7 surcharge for the ALT plant, the district was still headed for higher water rates because the existing plant was going to die. “If we don’t build this thing, we’re going to regret it,” he warned. “The longer this drags on, the more it will cost. We can’t continue doing what we’re doing … getting Psomas back in here won’t solve the problem.”

Krizl went on to add that “Psomas can’t change the costs because they aren’t the contractor. All they can do is black out things from the project. The costs have already been reduced. So why would they all of a sudden have ideas for saving money?”

Krizl cautioned the board that the district could lose the grant and loan money if they try to do the retrofit in phases. He suggested putting the project out to bid and finding out what the contractors thought it would cost to build.

In the end the decision was made by McLane, Kathy Otermat, and Capraun to delay any action and instead have Psomas make a presentation to the board on how to cut the cost of the project. The board also voted to move ahead and accept a grant from the state for the project and to contact the USDA regarding interest rates on a loan from the agency.

In a separate decision, the board voted to substitute two evening meetings for their regular morning meetings in April, May and June. The meetings will be held the second and fourth Tuesday of those three months from 5 to 9 p.m. at the district headquarters.

Contact Dawn Hodson at 530-344-5071 or Follow @DHodsonMtDemo on Twitter.


Discussion | 1 comment

  • Ben ThereMarch 22, 2013 - 7:16 am

    "Value Engineering" is just another term for it's going to cost you a whole lot more down the road. I have sen this many times in the municipality world and so much time, money, and effort is wasted on retrofits and re-engineering and dealing with equipment just barely meets requirements that it is not unusual to see twice the original cost if not more. It is always best and most cost effective to do it right the first time.

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