New law puts a halt to Glenwood wastewater project
Glenwood Springs correspondent
Aspen, CO Colorado
GLENWOOD SPRINGS – The 2010 Interior and Environment Appropriations Bill that was signed into law on Oct. 30 by President Barack Obama has reached the Western Slope, and has brought the Glenwood Springs wastewater treatment facility project, and many more around the state, to a screeching halt.
The only step remaining for the Glenwood project – the City Council had planned to award the construction bid for the estimated $27 million project on Thursday – would have been to secure financing through the Colorado Water Resources and Power Development Authority.
The authority was scheduled to start selling municipal bonds on Nov. 17 to fund the project, and the loan was scheduled to close the first week of December.
However, the passing of the bill could mean that the city may have to re-bid the project.
According to city officials, the word came last week that the project would have to be put on hold, indefinitely, awaiting further clarification from the Environmental Protection Agency.
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City Manager Jeff Hecksel, who was out of the office last week, returned Monday to be blindsided by the development.
“We are not sure if this applies to us or not,” Hecksel said. “If it does we are not sure what we are going to do about it.”
Hecksel said that he was unsure as to why the Glenwood project would be included because the project was not seeking federal funding. However, according to Colorado Water Resources and Power Development Authority Finance Director Mike Brod, the new law imposes certain requirements on state funds as well as federal funds. The funds, which are used to buy down the interest rate on the loan, come through the Clean Water and Drinking Water State Revolving Funds program.
The intent of the bill, in the context of the Clean Drinking Water and Wastewater programs, was to appropriate $3.9 billion to help more than 1,500 communities improve their drinking water and wastewater systems, according to a document from the Committee on Appropriations.
But the bill includes language requiring projects using funds through the Clean Water and Drinking Water State Revolving Funds to include the Davis-Bacon prevailing wage requirement. That is where the problem arises for Glenwood.
The city did not include the Davis-Bacon requirement in the wastewater contract because it was not required when the contract went out to bid on Oct. 23.
“As a result of that we were told last week that we had to comply with Davis-Bacon [Act],” Hecksel said. “The original bid documents did not require that because that was not in place when we bid out the project.”
City administrators were giddy to move forward with awarding the contract with bids coming in significantly lower than anticipated. The low bid from Arizona-based Archer-Wester Construction came in at just under $23.5 million, or about $4.5 million less than initial estimates.
The change in requirements, which took effect Oct. 30, require any project not already secured in funding to include the prevailing wage rate, which could affect the cost of the project by between 5 and 20 percent, Brod estimated, depending on location and wages.
Additional administration and reporting requirements could also impact the cost of the project as well, Brod said.
“It throws a lot of uncertainty on how we are supposed to proceed with these projects,” he said.
Brod added that he is currently waiting on clarification from the EPA on how to proceed with projects like the Glenwood facility, but has not received any direction as of Tuesday.
“If the answer from Washington is that we have to do this immediately, that is going to affect the contract [Glenwood] put out to bid,” Brod said. “We want to make sure that we have a definitive answer on how to proceed so we know what we need to do.”
However, Hecksel and Brod were unsure how the decision would affect the nearly $6 million in contracts already awarded for work on the plant’s access road and force main – of which the work is nearly complete.
“We’ve awarded those contracts, work has been done, and we can’t go back and change that now,” Hecksel said.
Glenwood is not the only Colorado municipality being affected by the new law, either. According to Brod, 23 projects statewide have been halted since implementation of the new law, including one in the nearby town of Fruita in Mesa County. Fruita began construction of its $33 million wastewater plant on Nov. 12, but according to Brod, is still in the process of securing the financing.
“There are a number of projects around the state that may or may not proceed depending on the interpretation of this language,” Brod said.
And ripples are making their way around the nation as well.
“Colorado is not alone,” he said. “A lot of states are in the same position.”
Calls to 3rd Congressional District Rep. John Salazar’s office, seeking comment, were not immediately returned Tuesday.
Congressman Salazar is a member of the U.S. House Appropriations Committee, which oversaw the formation of the bill.