TOWN OF FRIDAY HARBOR

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Council to rehash July 18 decision

posted 07/31/02
Town Councilmember Wally Gillette is willing to risk "egg on his face" if the council agrees to his gamble to rebid the wastewater treatment plant and it results in higher costs. Two weeks ago, the four other councilmembers declined to take the risk fearing a potential moratorium, civil and criminal fines, and/or higher costs. Thursday, August 1, 2002 at their noon meeting the council may reopen the debate.

At their July 18, 2002 meeting the council voted 4-1 to award the $6.8 million construction project to Stellar J Corporation. The bid was opened June 28, 2002. The council discussed the bid at the July 11 and 18 meeting. After listening to Gillette's rationale to rebid the project next year, the council approved Resolution 1287 directing Mayor Gary Boothman to sign the contract.

After failing to convince the council to rebid, Gillette asked for a week's delay in signing the contract while he contacted a friend who knew about sewer plant construction. His motion to do so was not seconded. Councilmembers said they had confidence in the work done by the engineering firm of Caldwell and Brown. The council has paid more than $600,000 for the engineering and design work.

After the 4-1 vote, Town Administrator King Fitch asked if the council wanted to give Gillette the week to do research. The council again said no.

In the time since the vote, Mayor Gary Boothman has not signed the contract. Last week he told Gillette he would put the contract on the agenda for the August 1 meeting if Gillette could convince two councilmembers to agree to reopen the debate. Gillette contacted councilmembers and found one willing to make a motion to consider reopening the debate. He found another councilmember willing to second the motion. The contract was placed back on the agenda.

In a written report to the council, Gillette restated his previous arguments. He believes the bidding climate will be better early next year. The risk of fines "is minor" if the plant fails and sewage is dumped in the bay before the new plant is built. By changing the bidding documents and making the sludge dryer optional, he believes significant savings can be gained. He also cited figures from Southard Brumfield in Virginia. The friend of a friend said the sewer plant should cost $10 per gallon of plant capacity.

Project Engineer Jon Beers rebutted the cost savings Gillette cited based on Brumfield's information. Beers called and asked if sewer plant construction in Virginia is subject to seismic regulations. The answer was no. Concrete costs in Friday Harbor are 50 percent higher than in Virginia. The Virginian's estimate for electrical costs did not include instrumentation and controls.

Beers asked if the cost per gallon of plant capacity was based on maximum capacity. Brumfield did not know. In his note to the council, Beers stated that based on total plant capacity the cost is less than $10 per gallon of plant capacity for the Friday Harbor plant.

If the council reopens the debate, they will need to decide once again if they want to proceed with the project as bid. The boost to the local economy this fall and winter through subcontracted work and the spending by workers on lodging and food will be one factor under consideration. The risk of losing the locked in prices for key components is another point to be debated. The chance of having fewer bidders was another concern. The project received three bids. Two were within $10,000 of each other. The third was $1.4 million higher.

The deadline to accept the bid is August 11, 2002. The only scheduled council meeting before then is August 1.

Contract awarded for $6.8 million sewer plant

posted 07/19/02
Friday Harbor Town Councilmembers stepped to the brink, blinked several times but in the end made the leap. The contract for the largest public works project in town history was awarded to Stellar J Corporation. Their $6.8 million bid was the lowest for the construction of the wastewater treatment plant.

The council voted 4-1 at their July 18, 2002 meeting, to authorize Mayor Gary Boothman to sign the contract. "Now is the time we have to do something," said Councilmember Bill LaPorte. "Five years down the road it won't be any better."

Councilmember Wally Gillette cast the sole opposing vote. He tried several times at length to convince councilmembers to rebid the project. Rosenfeld asked what the penalties would be if the plant failed and raw sewage was dumped into the bay.

Town Administrator King Fitch said, "A $7,000 per day fine and your plant operator is in jail."

Gillette argued the jail time wouldn't happen unless the state could prove lack of due diligence. He asked how long it would take to jerry-rig repairs if the old plant's infrastructure fails. He acknowledged raw sewage would gp into the bay while the stop gap measures were done, but the town shouldn't let the risk of a $7,000 fine cause them to approve a bid that came in too high he said.

The council discussed ways to cover the cost of the project. FItch and Treasurer Wendy Picinich had prepared a variety of rate plans which would cover the costs. Base rates of $72 for a single family residence were discussed. The rate is $58 currently.

County Assessor and town resident Paul Dossett encouraged the councilmembers to research a general obligation bond as a means to cover the cost. "I'm concerned about taxing the user in Friday Harbor to death. They already have the highest sewer rates in the state," he said. "I'm urging you to move toward a more equitable system. At least look at the cost."

The council directed staff to come up with more options for financing. They will discuss the rate increases at future meetings.

Gillette recommends rebidding sewer plant project

posted 07/17/02
Town Councilmember Wally Gillette believes the town should clean up the bid documents and rebid the new waste-water treatment plant project. He's leery of the town's plan to award the $6.8 million project to the lowest bidder and then negotiate deductive change orders. "I would think the second low bidder would have an awfully good case to sue," he said.

The two lowest bids were only $10,000 apart. Town Attorney Don Eaton said he doesn't think the second bidder would have a case.

Brad Musick of Brown and Caldwell said cuts of $350,000 had been identified. In his report he wrote: "the deductive change order would be negotiated after the award of the contract but before the Notice to Proceed is issued. In the worst case, if a change order cannot be negotiated to the satisfaction of the town, the contract could be terminated at will by the town. However, the contractor would be entitled to 5 percent of the contract amount, or about $340,000.

Gillette believes with the slowing economy, the bidding climate may improve. He would like the town to "go over the documents, cleaning them up a bit and making the $450,000 sludge dryer a separate item."

Musickand town staff explored the option of dropping the sludge dryer. The problem is hauling the sludge to a landfill Musick said. "In the long term the dryer saves money," he said. "You've got one staff member taking a whole day driving. The manpower would be better used in the facility and in the town." It costs the town $30,000 a year in disposal fees and staff time to haul the sludge to the mainland.

The estimated cost to prepare and rebid the revised documents is $60,000.

At the July 11, 2002 meeting, other councilmembers disagreed with Gillette's idea. "You are making a big bet things will be lower," Councilmember David Jones said. The Town Council will discuss the project again at their 5:30 p.m. July 18, 2002 meeting.

Why was the bid so high?

posted 07/17/02
The lowest bid for the Town of Friday Harbor's wastewater treatment plant was $1.3 million higher than estimated by the engineers. The electrical work was estimated to be $600,000, the bid price was $1.15 million.

The difference according to Brad Musick of Brown and Caldwell was due to the way the estimate was made. The $600,000 figure was derived from taking the project's mechanical costs and multiplying by 15 percent. Musick said the percentage used should have been higher. A too low mechanical cost estimate further compounded the discrepancy.

The $550,000 difference in the electrical bid accounts for almost half of the difference between estimate and bid. Indirect costs which include, mobilization, field office, waste disposal, employee housing, and ferry transportation accounted for another $200,000. According to Musick's report most of the increase is due to higher costs of transporting goods to and from the island. Labor rates and per diem came in $150,000 higher. Since the estimate was too low, sales tax needed to be $100,000 higher.

Musick told the council at their July 11 meeting, bids for this kind of project have been coming in high. He cited four other water/wastewater projects recently bid on which have come in substantially higher. It may be due to a less competitive bidding climate, fewer contractors bidding on projects,. Stanwood received only one bid on their project which was bid the same day as Friday Harbor's sewer plant.

Rate increase likely to pay for sewer plant

posted 07/12/02
Users of Friday Harbor's wastewater treatment plant may find out as early as next week how much rates will be increased to pay for the upgrade to the facility. "If it went on the straight number of accounts, it can go up to $90 per month (from its current $58)," said Town Administrator King Fitch. Town staff will present a list of possible rate structures at the July 18, 2002 council meeting.

Town councilmembers pondered other options during their July 11, 2002 evening meeting. A property tax increase which would "spread the pain" was favored by Councilmember Carrie Brooks. Other councilmembers questioned the fairness of the owners of undeveloped property being required to pay for a service they are not using. 41 percent of the land in town is undeveloped.

A property tax increase would require approval by voters and several councilmembers doubted that would happen.

The suggestion of a business and operations tax drew groans from Town Treasurer Wendy Picnich and Town Attorney Don Eaton. Several times In the past, documents have been drawn up, public hearings held, and then the idea turned down by the council. LaPorte said he was dead set against such a tax.

Councilmember David Jones asked the town staff for more guidance. "We need more fat on the bones before we make a policy decision," he said.

Fitch responded, "WIth all due respect, we haven't seen the strength of a council to make the decision." He cited a $16,000 study completed seven years ago that outlined the hefty increases necessary to set aside money to pay for the upgrade. The town councils in office during those years balked at imposing the large increases.

Mayor Gary Boothman defended the past actions. "The staff is not the ones that hear from the public."

"It's called leadership," said Town Attorney Don Eaton.

The council asked Fitch to prepare recommendations for rate increases and present them at the July 18, 2002 town council meeting.

NOTE: The Type of Waste Water accounts and the use by class and rates are available on the town's Web site.

Town to consider financing options Thursday

updated 07/09/02 -- posted 07/07/02
A $1.5 million revenue bond is one option under consideration for financing the upgrades to the Friday Harbor wastewater treatment plant. Repayment of such a bond is estimated to cost property owners $.36 per thousand of assessed value. The owner of a $200,000 house would pay $72 per year more in property taxes.

The bids for the project were opened June 28, 2002 and came in higher than anticipated. Friday Harbor Town Councilmembers will discuss the project and financing options at their July 12 meeting.

The information on the table below is part of the council's material for their discussion.

Bids higher than expected for new sewer plant

posted 06/29/02
Bids for the Town of Friday Harbor's largest ever public works project came in higher than engineers had estimated when the bids were opened Friday, June 28, 2002. The three bids for construction of the waste water treatment plant ranged from $6.8 to $8.1 million. The town had estimated the construction costs would be about $5.7 million.

The town has obtained a $3.5 million loan from the state Public Works Trust. Treasurer Wendy Picinich has applied for an additional $2 million loan from the trust. The town has $1,350,000 in local revenue for the project. If the second loan is approved that brings the total to $6.85 million.

The town's estimated budget for the project totaled $6.9 million. It included $5,082,000 for construction, $1,200,000 for engineering and $628,000 in a contingency fund. $110,719 was spent on preliminary design work. A $440,000 loan covered the cost of detailed design by Brown and Caldwell. Last week the Town Council approved a $675,514 contract with the firm for construction management services.

The total of $8.1 million (the bid of $6.85 million plus $1.2 million engineering costs) leaves the town $1.3 million short.

Town Administrator King Fitch said he had hoped for more bids. Eight companies asked for the bid specifications and six made site visits. The highest bid happened to be the first one opened. King, Town Clerk Kelle Wilson and Project Manager Jon Beers looked relieved when the second bid came in lower. "When we opened the second one, I thought at least it's going in the right direction," Fitch said. The difference between the two lowest bids was $10,000.

Beer will review the bids to make sure they meet the specifications. He will also look to see why they were higher than Brown and Caldwell estimated. Some modifications might be possible to reduce the cost he said.

Town Administrator King Fitch said one option would be to delay for a year. He did not know how this would affect the loan the town has obtained from the state. According to the information provided by the state:

The local government shall begin the activities identified in the scope of work no later than three months after the loan agreement execution and reach project completion no later than 48 months after the date of agreement execution.

Recommendations will be presented to the Town Council on July 11, 2002.

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