Construction bids for the replacement of the Centennial Water Treatment Plant came in at least $4.7 million higher than the last estimate, boosting the overall project costs to $21.4 million.
In a February 3 memo to the Town Council, Town Manager Paul Bockelman, Public Works Superintendent Guilford Mooring, and Finance Director Sean Mangano recommend to the Council that it rescind the previous borrowing authorization of $18 million and approve a new borrowing authorization of $21.5 million, which also covers engineering and design costs. According to the memo, the three bids ranged from $18.9 million to $20.8 million for construction costs, with R.H. White Construction Co. the lowest bidder.
Water supply infrastructure projects are paid with revenue from the Water Enterprise Fund, which is separate from the property-tax-funded Town budget. All consumers of town water, including the university and colleges, pay into the water fund based on how much water they use. A table included in the memo shows water rates projected to increase yearly from the current $4.75 per hundred cubic feet per year (HCF/yr) to $6.22 HCF/yr by 2028. At an average use of 92 HCF/yr, a typical water bill would increase from $437/yr to $572/yr by 2028. Sewer rates, currently at $5.20 HCF/yr, are also projected to increase yearly.
To offset some of the cost of the Centennial project, the Town applied to a State Revolving Fund loan program which is expected to provide a favorable loan interest rate of 1.5% and loan forgiveness of up to $4 million.
The Finance Committee is expected to review the higher borrowing authorization request on February 7.