Cost of water plant work jumps to $17 million

Inflation, supply chain delays blamed for increase in cost of project that will likely trigger significant rate hike
Ozaukee Press staff

The price tag to refurbish Port Washington’s aging water plant has gone up from an estimated $15.3 million when the project was first announced last year to $17 million, but the impact on water users isn’t yet known, Public Works Director Rob Vanden Noven said.

The new cost estimate by consultants City Water and Short Elliott Hendrickson Inc. reflects increases due to inflation and supply chain issues, Vanden Noven said, and is based on the increases they are seeing in other water projects.

The estimate includes not only $14.7 million in construction costs but design, engineering, administration and other fees.

Although the city hasn’t decided how it will finance the improvements, the impact on water users will likely be significant.

When the project was announced last year, officials said rates could increase by as much as 45%.

City officials are meeting Friday with the city’s financial consultant to discuss the matter, Vanden Noven said.

The city will have to borrow funds for the project, and it is looking at several options, including the Safe Drinking Water Loan Fund, he said, noting it has better interest rates than can be found on the open market.

The city is also looking at borrowing through the Water Infrastructure Finance and Innovation Act program, but this is typically used for larger projects, Vanden Noven said.

The city has taken out a short-term note to pay for the $914,000 in design work for the project, and it has increased rates by the allowable 3% to help mitigate future increases.

Vanden Noven said the city won’t likely determine how it will pay for the project and the potential impact on water rates until fall, when it prepares to bid the work.

Right now, he said, the design is about 30% completed.

The project, which is complex in part because the water plant needs to remain running while construction is underway, is expected to take two years to complete.

“There’s a fairly robust construction component,” Tom Nennig of City Water, told the Board of Public Works last month.

To help mitigate costs, Nennig said, they may look at pre-purchasing some of the equipment needed to help deal with supply chain issues and price increases.

The project is needed to meet state codes and address deficiencies, primarily regarding backup power and changes to the clearwell, identified by the Department of Natural Resources.

The DNR had grandfathered the water plant on these issues in the past but recently decided to end this practice and require plants like Port’s to update their facilities.

The work is expected to extend the life of the plant by 25 to 30 years.

The work includes constructing a new basin and equipment wing at the south end of the plant, adding an ultraviolet disinfection system and improving the overall electrical system, as well as adding a backup generator.

Much of the plant still has its original equipment, officials noted, adding that at times it is difficult to replace parts.


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