Yellow Springs water plant cost goes up
- Published: March 3, 2016
The estimated cost of the new Village water plant increased during recent negotiations with the construction firm Council is hiring to build the plant, Manager Patti Bates reported at Council’s Feb. 16 -meeting.
Village staff and Shook Construction/Jones and Henry agreed to a price of $7.2 million during recent talks, Bates told Council. Previously HNTB, the criteria engineer firm the Village hired to begin the design/build process, had estimated the cost at $5.2 million. And the initial estimate Council received several years ago at the start of its discussion on constructing a new plant was about $3.2 million, according to News reports.
It’s possible that the estimated cost could go down after construction, Bates said in an email this week, because the design/build process chosen by Council requires that the construction firm estimate the cost of the building with only 30 percent of the building design completed.
However, according to Assistant Manager Melissa Vanzant at the meeting, it’s also possible that the final cost will go up.
While negotiations with Shook began at just under $10 million, “We have now achieved as much in cost savings as we feel possible without moving forward with a full design,” Bates stated in an update to Council.
Council will vote on the contract with Shook at its March 7 meeting. Construction is slated to begin this summer and to be completed about a year later.
The difference in cost estimates over the multiyear discussion regarding constructing a new water plant can be linked to several previous estimates that were unrealistically low, according to Council President Karen Wintrow and Manager Bates at the Feb. 16 meeting.
For instance, Council’s first estimate, at $3.2 million, came from the firm Artesian of Pioneer, which builds very basic plants that don’t include extras, such as the pellet softening that the Village wants in its plant, Bates said. And the more recent estimate of $5.2 million by HNTB was too low because an HNTB employee gave inaccurate numbers for the purchase of equipment, Bates wrote in an email this week.
“We’ve had way too low of estimates to get what we wanted,” Wintrow said at the Council meeting.
A variety of funding mechanisms will fund the new plant, according to Bates and Assistant Manager Melissa Vanzant at the meeting. The Village currently has in place a $1.3 million no interest 30-year loan from the Ohio Public Works Commission, or OPWC, and $162,800 in an OPWC grant to pay part of the interest on a loan from the Ohio Water Development Authority, or OWDA, for the remainder of the project. Bates recommended that the Village secure an additional $6.2 million loan from the OWDA for the project.
According to a report from Vanzant, the plant will cost in total $7.5 million, with an annual total debt service payment of $350,173 for 30 years. The first payment is not due until the second half of 2018.
The payments will also include debt service on two other upcoming water capital projects, which are rehabbing the Village water towers and replacing water meters with remote read meters. Also, it includes the payment for the recently completed loop completion and bottleneck elimination projects and an annual transfer from the water fund of $50,000 for water capital improvements.
Even with all these factors considered, water fund balances are expected to remain in the black, Vanzant said. The main factor in the fund stability is the increase in Village water rates that Council approved last fall. At the time, Council stated that the increases were necessary due to previous increases having been too low, along with the upcoming water plant funding.
Starting this year, villagers will see a 30 percent rise in their water rates for the next three years, with a total rise of almost 100 percent. Council also raised sewer fund rates at 15 percent for the next four years, for a total rise of almost 60 percent.
According to Vanzant, a typical household using about 7,000 gallons of water monthly, which is about two to three people, will pay about $1,405 yearly in 2016; $1,677 in 2017; $2,017 in 2018; and $2,151 in 2019.
The construction of the new water plant is the culmination of a Council discussion that began in 2011 regarding how best to source local water, in light of the fragility of the current 50-year-old plant. The late contract engineer John Eastman was charged with estimating the cost of four options, which included purchasing water from Springfield; rehabbing the current plant; constructing a new plant without softening (Village water is currently not softened, and extremely hard); and constructing a new plant with softening.
At around the same time, Council received its first estimate of a new plant, which was $3.2 million to $3.8 million from Artesian of Pioneer.
In February 2014 Eastman reported to Council that renovating the plant would cost $1.3 million, constructing a new plant $3.2 million (more for softening) and purchasing from Springfield would cost $5 million, according to News reports.
After many villagers weighed in on the importance of maintaining a local water source, in April 2014 Council agreed that sourcing water from another city was off the table. In June of that year, then water plant supervisor Joe Bates and Interim Village Manager Kent Bristol recommended building a new plant rather than rehabbing the current plant. And soon after Bates came on the job in July 2014, she was charged with moving forward with the plant, using a design/build process, which is considered faster than a traditional process.
Later that year, Council chose the firm HNTB, at a cost of $448,537, as criteria engineer for the new plant, meaning that the firm agreed to create a 30 percent design of the new plant, according to state design/build regulations; to assist the Village in choosing options and holding public meetings; and to oversee the entire process.
Late in 2015 Council chose Shook Construction/Jones and Henry Design from two finalists for constructing the plant.
Assisting Bates has been a water plant committee consisting of Council members Karen Wintrow and Gerry Simms, Water Distribution Supervisor Johnnie Burns, Water Supervisor Brad Ault and plant operators Richard Stockton and John Christenson.