Unknowns abound if city taps stimulus grant for its new $86M wastewater treatment plant project
WILLMAR -- A federal stimulus grant might save $150,000 on a $2.2 million pump station contract that's part of the city's new $86 million wastewater treatment project.
But no one knows how much the savings might actually be because the cost of additional management of paperwork, documentation and auditing associated with receiving federal stimulus funds might eat up some of the savings.
And then there's a question of whether or not contractors would be able to comply with "Buy American'' iron and steel requirements because the final rules governing use of stimulus funds haven't been written yet.
Rhonda Rae, program manager for project consultant Donohue and Associates, says the city may qualify for a 20 percent stimulus grant, which could provide $457,590 of the estimated $2,287,950 pump station contract.
"How much risk are you willing to take to try to get a cost-efficient project for the city? That is the question. How much risk is using the stimulus funds for the city?'' said Rae.
Willmar City Council members will be asked by Rae and city staff on Monday night to approve plans and specifications and call for bids to be opened on June 2 for construction of two wastewater pump stations: one located at Benson Avenue and 11th Street Southwest, and the other at 1701 30th St. S.W.
The winning bid would be considered by the council's Public Works/Safety Committee on June 9 for a recommendation to the council on June 15.
The council will decide whether the bid specifications should include requirements for compliance with "Buy American'' along with the 1931 Davis-Bacon Act, which requires paying prevailing wages on public works projects.
"If you were a contractor, how do you bid something if you don't know what wage requirements you're under and if you don't know what kind of materials you can and cannot buy. How can you do a bid?'' said Rae.
Rae, along with City Administrator Michael Schmit and Public Works Director Mel Odens brought the issue to the attention of the Public Works/Safety Committee earlier this week.
The committee voted to approve the plans and specs that included the stimulus requirements.
If the council decides to remove the "Buy American'' provisions, the project could still proceed as planned, Rae said.
"It's just a couple of paragraphs in the specifications,'' Rae said. "It's the paragraph telling the bidders what they need to do to qualify.''
Schmit said staff wanted to make council members aware of the issue.
"Staff thinks using the stimulus money will save the city $150,000 on the contract, but we don't know for sure,'' said Schmit. "It probably won't affect ratepayers.''
Committee member Ron Christianson opposed using the stimulus because the rules are not yet known. He recommended the council continue with the contract as planned.
"We can bid with or without the stimulus and still be on schedule,'' said Rae.
Committee member Rick Fagerlie said council members "were excited'' a couple of weeks ago about saving $50,000 with an alternative sewer line boring method.
Committee Chairman Doug Reese said $150,000 was not a lot of money. "But it all adds up,'' he said.
The committee asked city staff to present their savings calculation at the council meeting.