City discusses budget overruns and savings from bonded water & sewer projects
Published 11:04 am Friday, September 29, 2023
The City of LaGrange has approved pulling $2 million in reserves to complete water and sewer projects that were bonded in 2021.
The city issued bonds two years ago for water and sewer improvements, including lift stations at Hills and Dales, Whitesville Road and Moody Bridge Road. Then-mayor Jim Thornton had also asked for $2 million for Infiltration and Inflow Rehabilitation (I&I) to rainwater out of the sewer system.
Utilities Director Patrick Bowie said those projects were originally estimated to cost $7.3 million. Fortunately, the lift stations are currently coming in under budget at $5.8 million, but the I&I had to be removed from the list of projects.
“We were coming up short on other projects that we felt like we just didn’t have the money to put into the I&I. We saved about $1.5 million on the lift station aspects of the projects to apply them to the other projects,” Bowie said, noting the I&I ended up being more expensive than they expected.
Bowie explained the city was able to save about $500,00 by using city crews for the force main at Whitesville Road.
Some savings were also seen in the project to relocate water and sewer infrastructure for the Hamilton Road widening. It was initially budgeted at $7.2 million but the current estimate is about $6.3 million.
The city was able to save some money on those projects, however, bids for the Rosemont extension and the Long Cane wastewater plant came in well over budget.
Bowie said the water extension for the new Rosemont school came in about a million dollars over budget due to inflation. The budget for the extension was set at $2 million in 2020, but the project has since jumped to around $3 million now that it has been bid out.
Bids for the Long Cane wastewater were also significantly over budget. The final contract ended up being $7.3 million on a budget of $4.1 million.
“That was $3.1 million over budget, and it just wiped out all those savings,” Bowie explained, saying that if the project had included all that they wanted to do it would have been $8 million over budget. “Even after taking out all of the extra work, we’re still $3.1 million over budget.”
Finally, Bowie said the water filter plant repairs were budgeted at $6.1 million. They are now expected to cost $6.3 million but that number does not include much-needed rehabilitation for the 1969 filters.
Bowie explained that the plant was built over three sections. One part was built in 1949, the next in 1969, and the most recent in 1992. The 1949 filters, which have been rehabbed, and the 1992 filters are looking good, but the 1969 filters are nearing the end of their useful life if they are not rehabbed.
Bowie said staff originally thought they could get by without rehabbing the 1969 filters but increased use has shown that they are needed to fulfill the city’s water needs, so he asked for an additional $2.8 million to add the 1969 filters back to the project list.
The budget for all of the bonded projects was $26.8 million. The current estimate is about $28.8 million, so about $1.9 million over budget. With the 1969 filters back in, the projects are about $4.8 million over the bonds issued.
Bowie said the good news is that the county and school system contributed $1 million for the Rosemont water extension, and Hillside Montessori contributed $300,000 for the Hills and Dales extension.
With interest earnings of about $622,000 and $731,000 reclaimed from the Ridley Park bond fund, the shortfall is about $2 million with the 1969 filters back in the project.
Bowie asked that $2 million be pulled from reserves so that the 1969 filters could be rehabbed and the city could continue meeting its water demands.
City Manager Meg Kelsey said the funds come from next year’s budget, but staff needs approval to begin working on the project as there is a significant lead time needed for the repairs.
The council later unanimously approved moving forward with the 1969 filter rehabilitation.