Archive for Thursday, December 8, 2005

Sewer bids exceed estimates

December 8, 2005

In what has become a familiar story, all bids the city of De Soto received for the construction of a new wastewater plant exceeded the amount the city has to build the plant.

"It's the De Soto 20-percent rule," said city engineer Mike Brungardt, referring to a number of bids opening for recent city projects -- including the new pool -- that exceeded engineer estimates by that percentage. "It's obvious the low bid is beyond our ability to fund with the bond issue.

"At this point, I don't know if we reject all bids and re-bid or look for another solution."

The low bid from Walters-Morgan Construction in Manhattan was for $6.1 million. Two other bids were slightly higher and a fourth bid was for more than $8 million. Shafer Kline Warren's engineer's estimate for the project, shared with bidders at a pre-bid conference was $5 million.

The city issued $9 million in bonds for the new wastewater plant in the West Bottoms near Sunflower Road. That money was also used to pay for engineering, bond attorney fees, land acquisition, $1.6 million in sewage processing equipment (by far the most expensive non-construction cost), state permits and sundry other costs.

In addition to those costs, the city needs to maintain a contingency fund for the project, Brungardt said.

Faced with the same situation when bids for the pool exceeded the engineer's estimate last spring, Brungardt worked with the low bidder to bring construction costs down. That will be more difficult to do with the new sewer plant.

"We already went through the value engineering process once with Shafer Kline Warren," Brungardt said. "There doesn't appear to be anything we could take out that would have to be added back in five years or so."

Late in the design phase, the Kansas Department of Health and Environment notified the city the plant would have to discharge into the Kansas River instead of the small tributary that flows at the base of the bluffs. That mandate added about $350,000 to the low bid.

He would ask KDHE to reconsider that decision, Brungardt said.

Mayor Dave Anderson pointed to another possible solution. The city used the $2.5 million in the fund established when the city sold its electrical utility to help pay for temporary financing before the $9 million bonds were issued. That money has since been paid back with interest.

Another temporary loan from the electrical utility fund could be used in combination with value engineering and an approach to KDOT to get the project started, Anderson said.

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