Utility project has some 'firsts'

Friday, October 22, 2010

Lewisburg's Water and Wastewater Department has never conducted a project with money borrowed from the State Re-volving Fund and, depending on how the construction bid call is written, there might be other "firsts" for the utility here.

Perhaps the "first" that is of greatest interest to many Marshall County residents, especially the ones who are skilled in the construction trades, is the one that leaves utility Superintendent Kenneth Carr most uncertain, largely because it may be subject to various legal requirements.

During a two-hour interview with the Marshall County Tribune on Oct. 15, Carr was asked if the construction contractors - those hired to build the city's $13 million expansion of the sewage treatment plant -- could be required to hire local residents, especially since the county has suffered unemployment rates that have been the highest and second highest in the state all year.

"We've never done it before," Carr replied. "My feeling is that I'd like them to hire local labor, but a lot of it depends on how far the general contractor is from the work site. In this case, the farther away, the better."

In various skilled trades, a contractor's workers are housed in rented quarters at a town where the project is conducted. Under those circumstances, the tradesmen are not normally living within what would be considered an easy commuting distance, and therefore wouldn't be county residents.

"I don't know that we could require it," Carr continued as he responded to the question about people in the county's labor force having an early opportunity to work on the $13 million project. "But we could encourage it."

Much of the construction work will require skilled tradesmen and not laborers hired off the street, he said. The $13 million plant expansion must be built to state and federal specifications.

"If the labor force is here," Carr said, "I'd like to see them hire them."

The interview with Carr also confirmed what some close observers might consider a standard requirement when federal money is spent on such a public works project.

Wages are going to be "good," Carr confirmed.

That's because of federal laws put into effect because of the Davis-Bacon Act of Congress in 1931 that started the requirement for paying prevailing wages on public works projects. Those prevailing wage rates are established on a county-by-county basis.

"Our Davis-Bacon rate won't be like what's paid in Metro Nashville, or in the Washington, D.C., area," Carr said.

Federal law will also encourage female- and minority-owned businesses to bid on the construction project, Carr said.

While discussing the $13 million project, the utility superintendent: consulted various documents; spoke with the utility's consulting engineer; and reported that Clarksville, Tenn., offered to pay five percent more for local contractors who could meet the specifications for a project there.

Carr anticipates that the Water and Wastewater Board will issue a call for contractors' bids to be delivered to the utility's office on Feb. 1, or thereabouts. Construction should be underway by April 1, Carr continued.

The Tennessee Department of Environment and Conservation has set a Dec. 31, 2011, deadline for completion of the project that would increase the sewage treatment plant's capacity from three million gallons a day to six million gallons a day. It also requires construction of a 10 million gallon holding tank with a lid to contain odor. The tank is to receive wastewater when it's arriving at the plant faster than the plant can treat raw sewage. That's typically during and after a rainstorm when groundwater seeps into sewers, thereby increasing flow to the plant.

"I don't know how strict they are going to be" about the Dec. 31, 2011, deadline, Carr said. "If we have substantial completion by then, we may be alright.

"Speeding it up" to have work done faster to meet a strict deadline, he said, "will cost more."

He anticipates two contracts will be written for the project. One for the holding tank and one for the expansion of the plant's capacity. The tank may cost about a quarter of the total construction price.

Furthermore, a delay in the start of the construction project "may come from how long it will take State Revolving Loan Program employees to process the loan," Carr said.

"SRF must approve the engineering," he explained. "They want to know what they're paying for. They have an engineer and people who close the loan."

Lewisburg's water and wastewater utility has never borrowed money from the SRF, a financial system operated by TDEC, Carr said. It's "quite possible" that no other part of the city has borrowed money from the SRF.

"And this is with $2 million of forgivable principle," he said.

The American Recovery and Reinvestment Act of Congress -- supplying what's commonly called economic stimulus money -- is providing $2 million to the SRF for Lewisburg because the sludge-handling portion of the project is considered part of a "green," or environmentally-friendly, project.

That part of the equipment for the expansion project, a sludge press, could be purchased by the city instead of a contractor, thereby avoiding sales tax payments and lowering the cost of the project, Carr said.

Pumps, lime mixers and other equipment might also be bought by the city, he said.

Without the stimulus money and various other steps to economize on the project, Carr estimates that the $13 million project's price tag could be $20 million. No small part of that is avoiding the interest cost on the $2 million provided by the federal government to TDEC, according to Carr's figures.