The Hard Labor Creek Reservoir Management Board and Walton County Water and Sewer Authority last week voted to revise the design capacity of their planned water treatment plant from 16 million gallons per day to 12 million gallons per day.
The two bodies took the action in a called joint meeting after learning that the projected cost of construction of the water treatment plant has increased by more than 62 percent--from $96 million to more than $155.8 million.
An attempt to reduce costs while maintaining the 16 million gallons per day capacity resulted in a cost estimate of $129.8 million.
By reducing the capacity to 12 million gallons per day, the engineers and construction managers brought the cost estimate to $104.8 million–still well in excess of the original $96 million estimate.
That cost could increase if the state does not approve the smaller settling basin that the designers are proposing and if labor and material costs increase.
The current cost estimate is based on completion of 30 percent of the design work for the plant, and the two governing bodies will see the cost estimates again at 60 percent and 90 percent completion of the treatment plant design before any decision is made to award a construction contract.
The decision to reduce the capacity of the treatment plant is contingent on the state, which has promised $42 million in federal pandemic relief funds for the treatment plant, not objecting to the reduction in treatment capacity.
Oconee County is budgeted at paying $20.8 million in costs of the construction of the water treatment plant, though it does not need the water and all of the treated water will go to Walton County once the plant is completed.
$12 Million Commitment
The Oconee County Board of Commissioners approved the sale of $12.5 million in bonds in early August to cover the county’s contribution to construction of the water treatment plant and the primary transmission main.
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| Parker 10/19/2023 |
Oconee County is the junior partner with Walton County in the reservoir project. The reservoir is in the southeastern corner of Walton County.
Oconee County Board of Commissioners Chair John Daniell told the Walton County Water and Sewer Authority, which has ultimate control over the project, that the county would contribute only $12 million at this point.
Walton County agreed to cover the additional expenses, with Oconee County making up the difference at some point in the future when it decides it needs water from the reservoir.
Walton County Needs
At the meeting last Thursday (Oct. 19), Morris Jordan, Director of the Walton County Water Department, said Walton County currently is using 7 million gallons per day of water at its summer peak.
At present, the Walton County Water Department is receiving its water from Newton County, as it does not have any independent source of water.
The city of Monroe does have its own reservoir and treatment capacity. It provided water to the Walton County Water Department in the past.
Jordan told the meeting last week that almost all of Walton County’s water customers are residential.
Jordan said he expected demand for water to increase in the future with residential growth in the south of the county.
Cost Estimates
Jimmy Parker, Reservoir Project Manager and Senior Vice President at Precision Planning Inc. in Monroe, said at the meeting on Thursday that “at 30 percent design we had both the engineer and the contractor provide an estimate of cost.”
“And the purpose of that, if you’re running above budget, we have an opportunity to value engineer things back within the budget,” he said.
Value engineering is a term for reviewing decisions during the design phase to reduce costs.
“When Archer Western looked at the 30 percent design for 16 mgd, given inflation, and everything else we’re seeing in the market, you can see the cost model total instead of $96 million is currently $155 million, almost $156 million,” Parker said, referring to documents he provided to the Board and the Authority.
Archer Western, with offices in Atlanta, has been selected as the construction manager at risk for the project. Jacobs Engineering, an international firm that also has offices in Atlanta, was hired to do the engineering of the plant.
“They did come up with a lot of cuts to reduce that total to $129 million,” Parker said. “Even going further, what we recommended to the executive committee to consider is reducing the capacity of the plan to 12 mgd to get it back closer to the original budget total. That is $104,795,581.”
“We are essentially building the 16 mgd plant, the shell of it, but we are only outfitting it, or putting in the pumps and equipment, to treat 12 mgd under this scenario,” Parker said.
The executive committee accepted that recommendation and forwarded it to the Board and Authority.
Contingencies
David Thompson, a member of the executive committee and Chair of the Walton County Board of Commissioners, said approval of the change was “subject to it not affecting the grant that the state has already approved.”
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| Mayfield (Speaking) And Horton |
“We need to read the grant, make sure we’re not doing anything to trigger something to cost us that $42 million,” he said. “I don’t think we are. We are still designing and building the 16 million, but we’re just putting equipment in to treat 12 at this time.”
Pavel Mayfield with Archer Western told the two governing bodies at the meeting last week that “We are reasonably confident that that number should not change,” referring to the cost estimate of $104.8 million.
“There is a chance to get to 96 ($96 million),” he said. “But I’d rather tell you the hard truth today rather than make promises.”
Jay Horton, representing Jacobs, said he was in negotiation with the state Environmental Protection Division about the size of the concrete settling basin for the treatment plant.
“It’s a risk,” he said. “That basin could get larger. And that would add to his costs.” The reference was to Mayfield’s estimates based on the plant design.
“More concrete, essentially, more forms, labor,” Horton said.
“You’re not approving construction,” Parker told the group. “You are going to see these costs again at 60 percent. What we are authorizing Jacobs to do is change their design approach to a 16 mgd, build out at 12. That is a different approach for design. That is what we are asking the boards to consider today.”
The Management Board and the Authority approved the action unanimously.
Video
The video below is of the joint Oct. 19 meeting of the Hard Labor Creek Reservoir Management Board and the Walton County Water and Sewer Authority.
The meeting took place at the historic Walton County Courthouse in Monroe.
Discussion of the costs of the water treatment facility begins at 2:59 in the video.
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