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Posted December 11, 2013 | Leave a comment
Town sewage plant cost comes in low
By Alex Bridges
Strasburg went back to the drawing board on its sewage treatment plant upgrade and it helped.
Town Council approved a resolution Tuesday to award a contract to English Construction Company and Wendel Engineering to build necessary upgrades to Strasburg's wastewater treatment plant. The contract also includes the construction of a new facility for the town's Public Works Department.
The total contract price of $24.58 million includes $20.62 million for the plant upgrades and $3.96 million for the Public Works Department facility, plus other costs and contingencies for the entire project.
Town Manager Judson Rex said Wednesday council members voiced support for the resolution and made positive remarks about the negotiation process and moving forward. Rex credited the process for helping to bring down the cost of the project.
"It's just been so much better than what we went through before," Rex said. "I think what it does it really forces the builder and the designer to work their creative juices to design a solution that will work within the cost parameters the town has. We had a budget we had in mind and they were kind of aware of that and yet they still knew what our needs were and so it just brings everybody together and it becomes an effective negotiation for the town."
A 30-day, public-comment period has begun with the approval of a resolution, Rex said. The town can execute the contract at the end of the comment period.
The town's out-of-pocket expense comes to $22.29 million. The project cost comes in well below the $31.7 million price given to the town more than a year ago, when Strasburg accepted bids for the project. Up to that point, town officials had been told the project would cost approximately $20 million. The price did not include a new Public Works Department facility.
Rex pointed out that the new cost is close to the $20 million benchmark the town has used but also includes more.
The town needed to upgrade its current plant to increase capacity from 975,000 gallons per day to 2 million gallons per day.
The town plans to cover the cost of the upgrades with a $4.5 million grant through the state's Water Quality Improvement Fund and $17.29 million from the Virginia Clean Water Revolving Loan Fund at zero percent interest for 25 years. The town expects to receive a loan of $3.5 million from the Virginia Resource Authority to cover part of the cost of the Public Works Department facility. Strasburg will spend $1.5 million in local money to cover the remaining costs.
The new loan amount of $17.29 million lets the town reduce its annual payments from $810,000 to $700,000. As a result, town staff and council plan to revisit the sewer rates they set assuming higher loan payments.
English and Wendell, a design-build team, submitted its proposal to the town through the Virginia Public-Private Education Facilities and Infrastructure Act this spring. Town staff and council negotiated with the team on the Strasburg PPEA Project that includes the two initiatives.
In response to a question from council, Rex said he explained at the meeting that the project now includes the Public Works Department facility because upgrades to the wastewater treatment plant would force the agency out of its current space.
"Part of the benefit of a PPEA process is that we can tackle a complex problem in a very cost-effective way," Rex said.
After town officials worked for months to reduce the $31.7 million price for the upgrade project, Strasburg received an unsolicited proposal through the PPEA. That prompted the town to solicit additional proposals. English submitted its proposal during the solicitation process in the spring of this year. Then, realizing the Public Works Department's relation to the upgrades, the town asked submitters to include a new facility for the agency.
The town will need to acquire approximately five acres for the Public Works Department facility, Rex said. The total cost of the project includes the price for land. The building has not yet been designed. Rex said the facility would include offices and space for storage and equipment. Some council members expressed concern that the town doesn't have a facility designed or property secured. Rex said the contract includes extra time for the town to secure the land.
Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or firstname.lastname@example.org
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