Tuesday, November 25, 2014
YOLO COUNTY NEWS
99 CENTS

Surface water project bid comes in under maximum price tag

By
From page A1 | October 04, 2013 |

Water agency and city officials can breathe a sigh of relief, as the one bidder left competing for the contract to build the surface water project treatment facility submitted a bid last month that is $10 million under the price cap the agency placed on the project’s overall costs.

Had the price tag come in higher than the maximum guarantee, capped at $151.5 million, the bidding process could have reverted back to square one and potentially put the water project on ice, resulting in costly delays in the project schedule.

The final cost of construction of the surface water plant, proposed by Colorado-based CH2M Hill, is $141.2 million, $10.3 million less than the cap and 25 percent lower than the original construction engineering estimates, according to water agency officials.

The cost breaks down to $66.4 million for Davis and $74.8 million for Woodland.

The overall cost of the project to Davis, however, including pipelines and administrative costs, will be about $106 million, down from $110.9 million. The estimated $9 million in annual operating costs will be split with Woodland.

“This kind of confirmed what we hoped, which was the bidding environment was very favorable for a project like this,” Mayor Joe Krovoza said Wednesday. “Saving more than $10 million off our already 19 percent below engineering cost estimates is spectacular, and welcomed, and does mean a lower cost to the ratepayers of Woodland and Davis for years to come.”

The Woodland-Davis Clean Water Agency surface water project, which was approved by Davis voters in March by a 54.1 to 45.9 percent margin, will pump water from the Sacramento River, treat it and pipe it to Davis and Woodland, largely replacing each city’s ground water supply.

To generate enough revenue to pay for the project, the City Council raised rates citywide in March that are expected to triple the average water bill over the next five years.

The water agency board is expected to award the contract to CH2M Hill at its meeting Thursday at 3 p.m. in the Community Chambers at City Hall in Davis, 23 Russell Blvd. If the contract is approved next week, construction of the facility would begin in March 2014.

“During the past three years, we systematically reduced the project cost estimate and set a maximum project cost for the regional facilities to be constructed by the design-build-operate team at $151.5 million,” Dennis Diemer, general manager of the water agency, said in a statement.

“We are very pleased that CH2M Hill was able to provide a proposal significantly below our maximum cost limit and in compliance with all of the agency’s requirements.”

For a time earlier the year, the bidding process seemed to break down, as both of the other two teams the agency had picked to compete for the project had withdrawn because of their respective inability to put forth a competitive proposal.

Concerns surfaced in the community that the agency would not be able to reel in the most competitive price from the only remaining bidder, CH2M Hill, as it could no longer pit teams against one another and drive down costs.

But Diemer maintained that because the agency set a maximum price guarantee and cemented in aggressive requirements for the technical aspects of the project, as long as CH2M Hill met those requirements, the competitive process would have worked and the cities still would be getting a great deal.

Meanwhile, even with the successful bid in hand, Davis city leaders still have to contend with the lawsuit lodged against the water rates, not to mention an initiative campaign to put those rates to a vote.

Both developments could significantly and negatively impact the financing the city must secure to begin paying off Davis’ share of the project. City Manager Steve Pinkerton and City Attorney Harriet Steiner both have said that ultimately would cost ratepayers in Davis more money.

Pinkerton and Steiner worry if the city approaches lenders with an unresolved lawsuit tied to the water rates, the interest the city receives on the bonds could rise dramatically. A ruling in the case is expected in December.

Krovoza says, however, the process to secure state revolving fund loans, which traditionally carry extremely low interest rates and shorter payback periods, is going well. Finance staff told the City Council earlier this year that if the city were to pay for a significant portion of the project with that type of financing, the overall cost of the project could be reduced by up to $60 million.

Ratepayers likely wouldn’t see the savings achieved by the state revolving fund financing until the project was paid off 20 years down the road.

— Reach Tom Sakash at tsakash@davisenterprise.net or 530-747-8057. Follow him on Twitter at @TomSakash

Comments

comments

Tom Sakash

Tom Sakash covers the city beat for The Davis Enterprise. Reach him at tsakash@davisenterprise.net, (530) 747-8057 or @TomSakash.
  • Recent Posts

  • Enter your email address to subscribe to this newspaper and receive notifications of new articles by email.

  • .

    News

    Adopt a family for the holidays

    By Special to The Enterprise | From Page: A1

     
    ‘The Nutcracker’ magic returns to Vets’ Theater

    By Special to The Enterprise | From Page: A1 | Gallery

    UC students leave campuses in protest

    By Wire and staff reports | From Page: A1 | Gallery

     
    As snow fades, California ski resorts are left high and very dry

    By New York Times News Service | From Page: A1 | Gallery

    Downtown lights up at annual holiday open house

    By Enterprise staff | From Page: A1 | Gallery

     
    Ferguson businesses torched in overnight protests

    By The Associated Press | From Page: A2 | Gallery

     
    Candlelight vigil set tonight

    By Enterprise staff | From Page: A2

    Arraignment date set for ex-Woodland firefighter

    By Lauren Keene | From Page: A2

     
    Pets of the week

    By Enterprise staff | From Page: A2 | Gallery

    Pre-holiday market opens at noon

    By Enterprise staff | From Page: A2

     
    No hazardous waste collection after Thanksgiving

    By Special to The Enterprise | From Page: A3

    Enterprise observes holiday hours

    By Enterprise staff | From Page: A4

     
    Give blood and get a free movie ticket

    By Enterprise staff | From Page: A4

    Learn how to accommodate low-vision readers

    By Enterprise staff | From Page: A4

     
    Lower American River expert speaks to local fly-fishers

    By Special to The Enterprise | From Page: A4 | Gallery

    Are eggs safer from backyard chickens?

    By Trina Wood | From Page: A5 | Gallery

     
    Wolks share their unique perspective on Davis

    By Enterprise staff | From Page: A5

     
    Lohse’s ballet students present ‘The Nutcracker’

    By Enterprise staff | From Page: A6

    .

    Forum

    Wait, which one is Tom?

    By Creators Syndicate | From Page: B5

     
    This is getting expensive

    By Creators Syndicate | From Page: B5

    Sit back, watch the spectacle

    By Letters to the Editor | From Page: A8

     
    Behavior reflects on coaches, parents

    By Letters to the Editor | From Page: A8

    Tom Meyer cartoon

    By Debbie Davis | From Page: A8

     
    Tom Elias: Who needs a political party?

    By Tom Elias | From Page: A8

    Green beans aren’t the only ‘green’ this Thanksgiving

    By Special to The Enterprise | From Page: A8

     
    Protect our migratory corridors

    By Letters to the Editor | From Page: A8

    .

    Sports

    Season’s over, but UCD is still making news on the pitch

    By Enterprise staff | From Page: B1 | Gallery

     
    Wildhorse women’s group more than just golf

    By Bruce Gallaudet | From Page: B1

    Just like that, Classic turns Causeway Catastrophe

    By Bruce Gallaudet | From Page: B1 | Gallery

     
    Lots of Aggie basketball at The Pavilion this week

    By Bruce Gallaudet | From Page: B1 | Gallery

     
    .

    Features

    .

    Arts

     
    B Street Theatre presents ‘Spinning Into Light’

    By Enterprise staff | From Page: A9 | Gallery

     
    DHS Madrigals plan traditional English winter celebration

    By Enterprise staff | From Page: A9

     
    .

    Business

    .

    Obituaries

    .

    Comics

    Comics: Tuesday, November 25, 2014 (set 1)

    By Creator | From Page: B5

     
    Comics: Tuesday, November 25, 2014 (set 2)

    By Creator | From Page: B7