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Saturday, June 16th, 2007

Price for fixing water 67% more than anticipated

By Timothy Cox
Celina's planned addition to the city's water treatment system will cost water customers about $7.5 million based on current construction and equipment bids - about 67 percent more than originally projected.
That cost far exceeds the original $4.5 million estimate for project, which is being done to bring the city's water into compliance with EPA regulations.
City officials admit the latest batch of bids - covering the facility to house the new treatment equipment - might have to be rejected and new bids sought. Any further delay would jeopardize the city's chances of completing the work by the EPA's Dec. 31 deadline.
Bids for the facility to house the granular activated carbon (GAC) treatment system were opened Friday and ranged far higher than engineering estimates. The only bid for all of the work at the site came in at $5.5 million, about 32 percent higher than city engineering estimates.
The cost of the equipment also far exceeded expectations. Those bids were opened a couple of weeks ago. The cost of the eight massive tanks that will funnel the city water through carbon material to filter out organic material is more than $2 million. Estimates had previously pegged the cost at about $1.4 million.
Friday's bid opening showed that only one company, Peterson Construction, Wapakoneta, submitted a $5.5 million bid for the entire project, which includes general construction, electrical, plumbing and mechanical. Kirk Brothers, Alveda, bid $4.5 million for the general construction but submitted no bids for the rest of the work.
Two companies bid on only the electrical work and no bids were received for the mechanical and plumbing individual contracts.
Cheryl Green, of Floyd Browne Group, the city's Columbus engineering firm, said only a handful of general contractors expressed an interest in the project in the weeks leading up to Friday's bid opening.
Kent Bryan, the city's development consultant, said both sets of bids must be extensively reviewed and evaluated before any decisions are made. He acknowledged though, that it appears city officials will have little choice but to reject the construction bids and seek new price quotes.
"With those numbers, it looks like we'll end up rebidding," Bryan said.  
Ohio law prohibits public bodies from awarding contracts to companies when the bids exceed engineering estimates by more than 10 percent.
Before flatly rejecting the bids, though, city officials will seek to determine why the estimates and actual price quotes were so far apart, he said. This will involve discussions with contractors and the city's engineers to determine what happened.
The city might end up revising its own estimates and even reducing the scope of the project, Bryan said.
Part of the price problem might simply be bad timing, Bryan said. Many contractors have full work schedules and could not accept such a large project at this time of year, he said. Several local companies with the manpower, equipment and experience to do the work did not submit bids, he said. Others might have shied away from going through the process when they saw their own figures compared to the city's estimates, he suggested.
Contractors also have a unique situation to deal with at the construction site. The proposed facility is to be built on the old concrete foundation of the Blue Goose, the city's former failed power plant. All contractors were required to attend a pre-bid meeting a couple of weeks ago to go over issues such as the existing foundation.
The apparent higher costs for the project will result in higher water rates for Celina Utilities customers down the road. City officials plan to retire the debt on the project through an anticipated increase in water rates.
The city also has a $750,000 line item from Congress to defray costs and will finance the debt with a low-interest EPA loan.
The project is aimed at gaining compliance with EPA findings and orders handed down several years ago that require the city to lower the level of trihalomethanes (THM) in the water. THMs form when organic material in the water drawn from Grand Lake reacts with chlorine over time. The city's THM levels have exceeded EPA limits for many years.
The GAC will use carbon material to draw organic material out of the water before it leaves the plant. Extensive pilot testing done at the water plant has shown favorable results that have been backed up by testing at two outside laboratories.
EPA findings and orders handed down several years ago originally gave the city until Nov. 7 of this year to gain compliance. More recent discussions and correspondence with EPA officials shows the agency is now using Dec. 31 as a target date, Safety-Service Director Jeff Hazel has said.
Missing the original deadline called for daily fines of up to $25,000.
The city's water will be piped from the existing water plant to the new GAC facility where it will be run through the carbon-filled tanks. The water will then be piped back to the main plant, where it will be chlorinated and sent out for distribution.
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