Marysville will be getting a new water treatment plant at a bargain price.
Last week the city opened up bids for the new Raymond Road Water Treatment Plant.
The apparent low bidder was Peterson Construction Company from Wapakoneta. Their base bid came in at $40.57 million. City manager Terry Emery said the bid is “significantly under” the engineer’s estimate of $50 million. In February, Marysville City Council approved the borrowing of up to $50 million, based on that estimate. At the time, city officials said they believed the plant would cost between $46- and $48-million.
Friday, the city and its consultants will be conducting interviews with the highly-recommended contractor to ensure that both parties clearly understand the scope of services for this project. Additionally, city officials said they will use the meeting to “value engineer” the project, seeing if the company can recommend any efficiencies or areas where the project can be improved.
“This is the contractor we wanted,” City Engineer Jeremy Hoyt said.
Hoyt said Peterson’s priority is “getting started as soon as possible.” He said that while some prospective contractors said the project could take as many as 30 months, Peterson is pushing to get it completed on a 24-month schedule. City officials said they expect construction to begin in July. Officials said the plant will likely not be complete until August 2022.
The contractor estimated that the project saved $2-$5 million directly due to the “hungry contractors” associated with the economic impact of this pandemic.
“I think we benefitted from what we are dealing with,” Emery said. “A lot of communities are not in a position to move forward with a project of this magnitude right now.”
Hoyt said it is a simple matter of “supply and demand.”
He said with fewer commercial construction projects, contractors are more aggressive to get the municipal projects.
“Peterson really wanted it so they made sure they got it by putting their bid where they did,” Hoyt said.
Hoyt said he estimates that in addition to the $40 million for water plant construction, the actual plant will need an additional $3.5 million for things like inspections, consultants, change orders as well as programming the computers and other costs associated with starting the plant.
Finance Director Brad Lutz said the water plant, which will sit near the city’s upground reservoir on Raymond Road, is one part of a larger vision which also includes a $3.4 million project to run water lines along Raymond Road from West Fifth Street to the reservoir, a $1.1 million project to connect the waterline from the reservoir to Mill Valley, the drilling of a well near the miniatous and operation center and erecting a water tower in in southeast Jerome Township.
Hoyt said the projects will create a redundant loop so that if a line breaks, residents do not lose water service. Those projects are expected to be part of the 2021 budget. Lutz said that if the bids for the water plant had come in high, those projects could have been delayed.
Hoyt said with the plant and all the associated projects, officials are estimating the total cost to be in the $55 million range. Initially the plant and other water related items were projected to cost more than $70-million.
The city planned to pay for about $24 million of the project using money saved in a variety of water related funds and issue bonds for the rest.
Officials said they got a “AA” bond rating which, in conjunction with historically low interest rates, made this an ideal time to borrow money.
Lutz said it is “too early to know” whether the best decision will be to use the bond money first and reduce the amount paid by the city upfront or to use the city commitment first and repay any unused bond money.
“At this time, we haven’t finalized how that will all work out,” Lutz said, adding that he is working to create a financial breakdown “that will be in the best interest of the city now and long term.”
He said that having the cash to use a lower bid, “opens up a plethora of opportunities for us to work with and maximize the fees that we are receiving from our citizens.”
“It gives us the ability to take a step back and look,” Lutz said. “We have options and whatever the most advantageous of the final options are, we will go that route.”
Emery said that is the goal of the project from a service stand point as well.
“This is setting up the city for our ability to accommodate the growth the city and the entire region is going to see in the next 40 to 50 years,” Emery said. “We will be able to provide the redundancy the citizens need and we will be able to prepare for growth in the industrial area.”
City officials have repeatedly promised that despite the project costs, the city will not even consider raising water rates until at least 2025.
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