COUNTY PRESS RELEASE
Los Alamos Public Service Council members voted unanimously to approve Order 712 at last Wednesday’s council meeting and forward it to County Council for consideration. If Council approves the order at its November 9 meeting, it will authorize the utility manager to request that the Department of Public Utilities loan amount from the New Mexico Environment Department (NMED) be increased from $ 17 million to a maximum of $ 30 million for the construction of the Water Resources Recovery Facility (WRRF). This facility is proposed to replace the aging White Rock wastewater treatment plant.
Material and labor shortages, as well as supply chain delays related to the COVID-19 pandemic are causing significant cost overruns for all recent DPU projects and the water resource recovery facility project is no exception, according to DPU officials. Even after anticipating and preparing larger bids, the project bids received for the WRRF far exceeded the engineer’s estimate and ministry budget clearance.
While the results of the tender are still under review, the DPU project manager approached officials from the Office of Construction Programs at NMED, the State Department that administers the Revolving Fund loan. state for clean water, to assess options. Citing similar issues in other cities and counties across the state, NMED officials agreed to prepare a new ordinance to increase the loan amount to a maximum of $ 30 million while maintaining the original interest rate. at 2.38%.
“$ 30 million is the worst-case scenario for establishing adequate budget authority by ordinance and avoiding delays associated with the future review of the ordinance,” said Philo Shelton, head of utilities. “The final loan amount will be based on the actual final costs for design and construction. “
Shelton says he realizes this is a huge increase in costs, but without budget clearance the bid committee will have to cancel the bids. “Frankly, I don’t see the price going down if we have to relaunch. Building a new facility will only get more expensive over time as wage rates are expected to increase on January 1, 2022. ”The proposed scope of the WRRF has already been reduced with designs that enhance and incorporate many components of the existing wastewater treatment plant in the new facility to minimize costs. “We are proposing to build a Chevrolet, not a Cadillac,” he said.
In order to provide a sound financial platform to build White Rock’s new WRRF, aggressive tariffs were adopted by BPU and Council during fiscal years 2015 to 2019 to compensate for decades of low sewer tariffs. Three years ago, the DPU recommended and the BPU and Council adopted a further three-year round of tariff increases of 6, 3 and 2% respectively. The increases were designed to gradually decrease each year to eventually cover inflationary costs only. Future rate increases to fund WRRF are based on design and construction costs at 2% per annum over the next four years.
The BPU-approved order will be presented to the board on October 26 and reviewed at the virtual board meeting on November 9 at 6 p.m. via Zoom. If approved, DPU staff will work with NMED to modify and finalize loan documents. A closing date will be set 30 days later. Construction of the new facility could begin as early as January 2022 once the bidder has been selected and a contract awarded. The new White Rock WRRF would be operational in fall 2023.