City eyes options as water plant cost tops $16m

The City Council went back to the drawing board to consider revamping the City’s 101-year-old water treatment plant after bids surpassed the $14.4 million the Council budgeted for a new plant.

At an hourlong meeting with engineers Corlett Probst & Boyd on Nov. 1, the Council discussed ways to shoehorn the lowest of four bids by Texas-based general contractors into the City’s budget using $13.5 million in revenue bonds, about $1 million in interest and $2 million in an unspent grant for a stalled water reuse line.

The lowest bid, by Horton Excavating of Pollock, Texas, was $14.59 million if the City opted to go with cheaper steel tank clearwells instead of more expensive but lower- maintenance concrete clearwells. The City would have to nix a planned upgrade of the raw water pump station, and changing the plastic liner at the Lake Kickapoo reservoir for a concrete liner to afford the Horton bid.

The bid does not include the $1.5 million that the City would owe Corlett Probst & Boyd for its services during the 2-½-year construction project.

“You’re still talking $16 million and you’re not getting everything you want,” Councilmember Harrison Wellman said. “We’d be having to borrow $4 million more and it kicks the can further down the road as far as infrastructure [improvements].”

“I’m one vote but I don’t think we have the money for that,” Mayor Pro Tem Tom Parker said.

“We definitely don’t,” Councilmember Tommy Kimbro said.

City Administrator Arpegea Pagsuberon noted that the Council has 30 days from the Oct. 24 bid date to vote on whether to proceed with the plan for a new water treatment plant.

Devin Smith, president of Corlett Probst & Boyd, said the firm “could go back and get a package plant [estimate] and other options” for the Council to consider. Package plants are pre-manufactured treatment facilities used to treat water and wastewater in small communities or on individual properties, according to the U.S. Environmental Protection Agency.

The City of Olney would need two package plants, which would cost about $5 million apiece but would last for only a decade or so, Mr. Smith said.

The Council also discussed updating a three-yearold proposal to update the old water treatment plant - an option that was previously discarded as nearly as expensive as building a new plant – before inflation and interest rates sent construction costs skyrocketing. But refurbishing the old plant would be challenging because the plant would have to operate at maximum capacity while being rebuilt, Public Works Director Michael Jacoba said.

The City also could consider going ahead with the new plant, betting that the interest on the $13.5 million in bonds will cover most of the unplanned costs, and using grant funds to cover the rest.

About four years ago, the City received a $2 million grant from the Texas Water Development Board to build a water reuse line to pump treated wastewater back into the water supply but is lacking an easement on one property to start the project, Mrs. Pagsuberon said.

The pricetag for that project has likely risen above the budgeted $2 million as the City fought with the property owner over the easement, she said.

“That $2 million on a water reuse line … will not cover it,” she said. “That’s money we could transfer to the water treatment plant.”

Mr. Parker noted that low-interest U.S. Department of Agriculture loans are available for cost overruns on public works projects.

Mayor Rue Rogers put together a working committee to lay out the long-term financial implications to the City for rebuilding the old plant, switching to package plants and funding the higher-cost new plant.

The committee, including Mr. Jacoba, Mr. Parker, Mr. Wellman, former Olney Mayor Phil Jeske and Olney Economic Development Corporation board member Franklin Fisher, met on Nov. 6.