By Richard Van Winkle, News of Mill Creek.
The Mill Creek City Council recently approved a surface water system construction contract and learned that repair costs continue to increase. It is now estimated that repairing the city's large stormwater pipes will cost $1,300,000 this year, which is above the $939,000 budget.
At their May 14, 2019, meeting the Mill Creek City Council approved the first construction contract in their six-year program for replacing the city’s aging stormwater system.
As the lowest of two bidders, Road Construction Northwest was awarded a $750,000 contract to do the work.
However, Public Works and Community Development Director Gina Hortillosa informed the city council that the amount of this contract was substantially higher than what the engineer estimated it would be, which was $445,000.
When asked to explain the cost difference Hortillosa said the material costs Perteet Engineering used in their estimate proved to be old and too low, but didn’t know exactly why these costs have increased.
She went on to say that going out for bids so late in the year was also a contributing factor in the high construction cost.
Former City Manger Rebecca Polizzotto didn’t include any capital spending for surface water system repairs in her 2017-2018 budget. Her main budget focus during her tenure was to help the city council reduce spending.
The 2017 emergency Sweetwater Ranch sinkhole repair was not budgeted and cost a total of $900,000, which used up the city’s surface water reserve funds. This prompted the city council to take a hard look at the city’s aging surface water pipes last year.
In order to avoid costly future emergency repairs the city council approved an engineering study in February 2018 to look at Mill Creek’s aging surface water system.
As the result of this study, in November 2018 the city council approved a $4,700,000 Surface Water Reconstruction Program as part of the city’s 2019-2024 Capital Improvement Plan.
Without detailed engineering estimates, the program contained roughly $1,000,000 of surface water system work in 2019, with an additional $600,000 to $800,00 to be spent each subsequent year beginning in 2020. These numbers include detailed engineering design as well as construction cost estimates.
Since the city’s Surface Water Fund was insufficient to pay for the work, the city will borrow $2,800,000 this year to fund the program and property owners will repay the loan with increased surface water fees.
They plan to increase the fee again to $175 in 2020 and $200 in 2021, followed by annual fee increases of 3 percent through 2026.
At the May 14th meeting Mayor Pro-Tem Brian Holtzclaw asked how this year’s increased surface water construction costs would affect the overall program cost.
Finance Director Peggy Lauerman pointed out that the amounts budgeted each year are just estimates and only a portion of the city’s surface water pipes have been inspected so far. Additional repairs will certainly be required.
Hortillosa estimated that the city’s total expenditure for surface water system engineering and construction would be about $1,300,000 in 2019.
It was pointed out that since this amount is more than the $938,000 budgeted, the increased cost will require the city council to pass a budget amendment at the end of the year.