Tippecanoe Chapman Sewer Bids $9.5 Million Over Estimate
By Deb Patterson
InkFreeNews
NORTH WEBSTER — Bids for the Tippecanoe and Chapman sewer project came in over the preliminary engineering report estimate costs and above the funding allocated by the State Revolving Fund and USDA Rural Development.
The low bids on all three contracts totaled $41,527,581.27, well above the estimated cost of $33.5 million – a $9.6 million gap between funding amounts and construction costs.
Potential solutions were discussed during the Tippecanoe & Chapman Lakes Regional Sewer District regular meeting Monday night, Aug. 8.
“We’re very optimistic we can close the gap,” said Ken Jones, president and CEO of Jones Petrie Rafinski. Conversations have been underway with officials from SRF and USDA Rural Development on additional funding. Jones stated SRF officials have indicated funding is possible through a 35-year debt service loan. “We don’t know the terms,” Jones stated.
An answer is expected by Thursday from state officials. Once information is received, financial advisors with Baker Tilly can begin work on the proposed rates.
It was also noted USDA could offer a loan for a longer term, but the “hoops” required to obtain that loan are unknown.
Selge Construction Company, Niles, Mich., was the low bidder for contract A — Chapman Lake and contract C — east Tippecanoe Lake. Their bid for contract A was $15,448,283.22. The bid for contract C was $11,253,814.09.
Niblock Excavating Inc., Bristol, was the low bid for contract B — the west Tippecanoe Lake Project. Their low bid was $14,825,483.96.
Bids ranged from $15.4 million to $20.9 million for contract A; $14.8 million to $22.5 million for contract B; and $11.2 million to $12.9 million for contract C.
Jones stated while the bids were over the PER budget, people “need to understand the board took positive steps to offset individual costs to the homeowners.” These steps were allowing property owners, prior to bidding, to relocate the service on their property. While this increased the construction costs by $4.5 to $5 million, the changes would have been charged to the individual customer.
Jones noted the majority of the high bids were due to inflationary costs, fuel and wages.
“Conversation informally (with both agencies) have assured us it is OK and are excited to get started.” Additionally it was noted the project needs to move forward at a rocket pace as there is no time to move back. Costs on pre-selected equipment are good until mid-November.
A timetable for awarding construction contracts, rate hearings and rate adoption were discussed.
The rate study and introduction of the rate ordinance is slated to take place at 5:30 p.m. Monday, Aug. 15, in a special meeting. However, the meeting is dependent upon how soon funding agencies provide information on the additional loan and how quickly Baker Tilly can provide rate figures.
A rate hearing is slated to take place on Monday, Sept. 12. The board will hold its regular meeting at 5:30 p.m. followed by the rate hearing at 6:30 p.m. A special meeting will then be held at 5:30 p.m. Monday, Sept. 19, to take action on the rate ordinance.
During other business the board approved the inclusion of property owned by Norma Monk, 14 EMS C31 Lake, into the district, pending funding agent approval. Steve Henschen, JPR engineer, reported the main line will be going directly in front of this property.
The board also approved a bond anticipation notice extension to the end of the year. The current BAN expires on Oct. 1. Officials with the bank that holds the BAN have agreed to extend the BAN to the end of the year at the same interest rate currently offered.