City officials cut back plans for the wastewater-treatment plant after bids for the construction came in millions of dollars over the engineer’s estimate.
The estimate for the Santa Rita Water Reclamation Facility upgrade was about $54 million. The city received two bids on the project, one for about $62.8 million and one for about $70.7 million, Sean Bannon told the Durango City Council on Tuesday.
A tight timeline for the project, high labor and concrete costs all likely contributed to the high bids, Bannon said.
“There is a lot of competition for work out there, and we know that played a role in the bid we received,” he said.
The city negotiated with the low bidder, Archer Western, to bring the cost down to about $54 million, with about $5.18 million set aside as contingency.
The city received a $62.2 million loan and a $2 million grant from the state to fund the project.
To lower the cost, the city will not build the administration building or the vactor truck garage as part of this project, Bannon said. The city also will use asphalt in some areas instead of concrete, he said.
The existing administration building must be demolished to make way for aeration basins that are necessary for wastewater treatment, Bannon said.
The new administration building was expected to provide laboratory space and work space for employees and public restrooms.
In the interim, a lab and shower facilities will be provided in the former Durango Chamber of Commerce.
The administration building and garage will likely be built in the future, Utilities Director Steve Salka said.
High bids were likely driven by a tight labor market. The wastewater treatment plant is competing against at least 10 other projects in the larger region, Bannon said.
“They are demanding a higher wage to work remotely in addition to just the per diem costs,” Bannon said. Per diem payments cover the daily expenses of workers who travel from outside the area. Another factor is the March 1, 2018, deadline to meet the state’s new limits for releases of nutrients such as ammonia, nitrogen and phosphorous into the Animas River. That deadline impacts the aeration basins.
A contractor might have to pay penalties if the deadline wasn’t met, Bannon said. The city could also be prohibited from issuing water taps for new construction if it failed to meet the requirements of the state’s permit.
City Manager Ron LeBlanc said he planned to meet with officials from Colorado Department of Public Health and Environment soon to talk about receiving an extension on the deadline in case some unexpected issue arises, he said.
While making cuts to the project, city officials prioritized items they knew were important to the community, so they maintained funding for odor control, landscaping to ensure the building blends into its surroundings and the redevelopment of Santa Rita Park, Bannon said.
The project is expected to be completed in summer 2019.