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Town may OK deal Tuesday for sewage plant work

By Alex Bridges

Strasburg leaders may move forward Tuesday on a plan to upgrade the town's sewage plant.

Details of the latest plan remain undisclosed until Town Council takes action and awards a contract to the private firm seeking to design and build the project. Town Manager Judson Rex said Monday he couldn't disclose the price of the project.

A resolution set to come before council Tuesday identifies English Construction Company Inc. as the design-build team the town would hire to construct the upgrades to the wastewater treatment plant and to relocate the Public Works Department.

"Our cost is definitely coming in lower than what we expected on the project," Rex said.

The proposal calls for Lynchburg-based English Construction to build the upgrades designed by its partner, Wendell Engineering, Rex said.

More than a year ago Town Council and officials received bids from firms interested in building upgrades to the plant to treat 2 million gallons per day. The lowest bid came in at approximately $31 million -- an amount that exceeded an engineer's estimated cost of $20 million. Town Council and staff responded to the sticker-shock by looking at ways to reduce the cost. In the midst of that effort, the town received an unsolicited proposal through the Virginia Public-Private Education Facilities and Infrastructure Act from a firm seeking to design and build an upgraded sewage treatment plant. The town then solicited proposals from any other design-build teams and council began negotiating with the interested groups. Now, after months of negotiations, council may pick a team.

Last week council met again to negotiate with the design-build team, identified then as English Construction. If approved, the contract would also call for the design-build team to construct a new facility for the Public Works Department.

"We're very happy with where the price is coming in," Rex said. "Something that has guided the council in these negotiations has been that $20 million figure in their head as far as the wastewater treatment plant upgrade goes and so we've used that sort of as a target for the project."

The cost of the project will be made public once council awards the contract. As Rex explained, the contract does not obligate the town to borrow or spend money for the project.

The town expects to pay for the project through a combination of grants and loans. The town has raised the sewer rate incrementally over the past few years in anticipation of the upgrade project, Rex said. Council plans to continue its discussion at a Dec. 16 work session and to revisit how the town would use the sewer fund to cover the cost of the upgrades.

"With us now having an understanding of how much exactly it's going to cost, we're very confident that we've planned well," Rex said.

The public will have an opportunity to comment on the project when council pursues financing options, Rex said. The town will hold public hearings on these options in the next few months. The town received a financing package that includes a zero percent interest rate through the Department of Environment Quality, Rex said.

"We will have to borrow money for the project and the public will have the opportunity to weigh in on that issue when we come to that point," Rex said.

The town secured $3.2 million from the Water Quality Improvement Fund for the project but may receive more with the new design, Rex said.

Council will be presented with some possibilities on how to set sewer rates for future years. The town has one more year of a slight increase in the sewer rate, Rex said. The next budget year calls for another 3 percent increase in the rate. Council asked staff to present proposals that would either keep the increase in place, not raise the levy or reduce the rate, Rex said.

As Rex explained, increases in the sewer rate needed to cover the cost of the project already have taken place.

The town's budget projections called for Strasburg to make debt payments of $810,000 each year on the project. The town had set up the payment schedule to begin in the current fiscal year. Rate increases needed to allow the town to start making payments have already taken place, Rex said.

But staff thinks the latest project cost would reduce those payments, Rex said.

Staff evaluated seven proposals for the project the town received May 3 using criteria outlined in Strasburg's Public-Private Education Facilities and Infrastructure Act guidelines. Staff picked two proposals for detailed review on June 19 then selected English on Aug. 13 to move forward on the negotiation of a comprehensive agreement.

The resolution states that Strasburg has completed these negotiations with English Construction Company Inc. for the design and construction of the project. The resolution also directs the town manager to execute an agreement with the firm.

The town intends to pay for the project using loans and grants from the Virginia Department of Environmental Quality's Clean Water Revolving Loan Fund, the Water Quality Improvement Fund and tax-exempt bonds through the Virginia Resource Authority.

As Rex explained, the town needs to upgrade its plant for two reasons: The current facility is at capacity and has been for several years. Additionally, the town needs to upgrade the plant to comply with stricter requirements for removing nutrients from the wastewater before it's released to the Shenandoah River.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com

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