Friday Aug 14 2009
Stop the presses: Project bids lower than estimate
By: Jim Ruffalo
Looking Behind the Scenes
Bronzing the notebook while wondering why so many people decline to let their deeds stand as a memorial and, instead, keeping pushing for a statue or brass plaque ... On the other hand, one person who would truly deserve a granite pigeon roost in their memory is whomever solves the dilemma of what to do with our sewage. As just about every taxpayer knows by now, not only do sewer rates emulate gasoline in their never-ending race to the ionosphere, the former also increase drastically because some ersatz scientist has found yet another particulate or chemical which needs to vanish from our drinking water, and the more expensive the solution, the better. After all, who of us would ever had predicted that chlorine would someday be a contaminant, especially after all of the legislative shenanigans it took to get it mandated as an additive in the first place? And don’t get me started on the subject of MTBE (Methyl Tertiary Butyl Ether)! What started this thought train chugging down the track was the recent Journal article reporting that the feds have come up with two-million of the taxpayers’ hard-earned to fund preliminary design work on a county regional wastewater treatment plan. A sizable chunk of that hard-earned is said to be for a cost-analyzation in order to get some hard, fast figures from which to make proper estimates. Forget — if you can — that former City Councilman Bob Snyder years ago tried to get the very same thing done, and the cost then was guesstimated at about $40,000. But that’s probably the way government works, if you’ll pardon the oxymoron. Still, it’s a step in the right direction. Auburn has already put in place a noticeable rate hike for sewer fees, and that’s just for a mandated update for the local treatment plant. Fortunately, this latest study just might get us onto that yellow brick road leading to regionalization. “All things being equal, regionalization is the right way to do this,” Snyder says, while allowing that the council’s recent vote to upgrade made “good economic sense” at that time. “Just about everybody agrees that (regionalization) is a no-brainer as a concept,” he added, pointing out that the only real question is one of economics. “A regional operation allows the making of water, which is a valuable commodity these days, and it also allows the users to make any future mandated improvements much cheaper than if they all had to do it separately,” he continued. Truth is — and at last glance I wasn’t drawing a paycheck as the city’s press agent — Auburn has been very farsighted on a number of issues, including wastewater treatment. For example: Because it insisted on having correct facts and figures (to the point of having consultants sharpen their pencils twice), it got a pretty good estimate on the cost of re-doing the local plant. According to City Manager Bob Richardson, the original price tag of about $25 million eventually was whittled to where a nearly $8 million bond sale was sufficient to cover all costs. “Then, because of the current economy, all the bids came in under $6 million, with the lowest being just over $4 million,” Richardson said. Maybe the lead got buried here, because a government project getting bids less than the lowest estimate probably should be bannered across the front page. Of course, there now arises the question of what to do with the extra money. Don’t worry, it may already have been spoken for. Mayor Mike Holmes said that up to $2 million of the bond money might be used to purchase “additional capacity” in the pipelines leading to Lincoln’s Supersewer. As it was explained to me, “capacity” is how much extra room remains in the already installed pipeline running to Sierra College Boulevard. “Buying that capacity would be a good investment in that if we eventually need it, we’re buying at a very low price, and if it turns out we don’t need it, we can sell it at a profit,” the mayor said. But would that be fair to the bondholders? Richardson points out that very possibility was spelled out — in writing — to bond purchasers. “Bondholders understand that ’capacity’ is a worthy commodity. When the council earlier voted on the concept of purchasing capacity, it decided it would save us money in the long run because if we eventually have to put in pipelines of our own, it’s going to cost a lot more than buying this capacity at present,” he said. Snyder, who keep a hawkish eye on fiscal matters, supports the idea. “It’s a wise move, especially now with the current economic situation,” he said, adding, “we’ll save a lot of money doing this now and the worst that could happen is we sell (the capacity) at a profit down the road.” Jim Ruffalo can be reached at email@example.com.