Initiative, which dates to 2008, has been marked by litigation and redesigns
Almost exactly 12 years after the City of Sarasota took its first step with the Lift Station 87 project, the City Commission this week voted 4-1 to award a $10,157,375.55 contract for the last phase of the work.
Commissioner Hagen Brody cast the “No” vote during the board’s regular meeting on May 18, arguing that city ratepayers will be paying for the problems — and litigation — that ended up boosting the total cost from an initial estimate of about $12 million to approximately $66.5 million.
“This is a very frustrating project,” Brody pointed out, “and I really think that we need to do a full review of what happened from the very beginning [and] in full transparency. I think the public is really entitled to a full review and an investigation and a report …”
The original design of the project likely would have led to the collapse of the bridge over Hudson Bayou, as representatives of an engineering firm the city hired in September 2013 — McKim & Creed — determined from a review of those plans. That first phase involved microtunneling under the bayou, to connect sewer lines to the new lift station.
As late as the summer of 2019, city staff estimated that the final expense for Lift Station 87 would be $32 million.
However, as city Utilities Director Bill Riebe explained to the commissioners on May 18, the effort to create a deep “wet well” in Luke Wood Park “was a very complicated project.” The lift station, which has been designed to withstand a Category 3 hurricane, is underground. As part of the Phase 2 initiative, a structure is being built over the site to blend in better with the surrounding homes and condominiums.
Phase 3 — the focus of the contract the commission approved this week — “will be complicated as well,” Riebe continued. New gravity sewer mains will be constructed to connect to existing lines on the south side of Hudson Bayou, and that will entail “cuts [that] are very deep,” he said.
Finally, Lift Station 7, which Lift Station 87 will replace, will be demolished and a neighborhood park will be created at that site.
Repeated failures of Lift Station 7 more than a decade ago resulted in spills of hundreds of thousands of gallons of untreated sewage into Hudson Bayou and Sarasota Bay, as documented at that time.
Miscellaneous water main and roadway improvements also are part of the Phase 3 work, City Manager Tom Barwin noted on May 18.
The new lift station, Barwin added, “will be a tremendous improvement for the next 100 years here. This thing will be hurricane-proof.”
It will handle approximately one-third of the city’s wastewater, Barwin continued, including service for the Sarasota Memorial Hospital complex.
Riebe told the commissioner that Phase 3 is expected to be completed in March 2021.
In December 2012, the estimated year of completion was 2015.
As Riebe and Barwin explained on May 18, the city will pay for Phase 3 out of the $35,660,400 it is borrowing from the State of Florida Revolving Fund Loan. “Terms of the agreements include extremely low interest rates (0.25% wastewater and 1.24% water) and a 20-year [payback] period,” as noted in the staff memo provided for the agenda item.
“It spreads our cost over time,” Riebe pointed out of the loan details. “It’s not a huge impact on our rate payers.”
The first debt payment on the state loan will not be necessary until August 2021, Riebe said, after the new lift station has come online.
However, Brody continued to emphasize the fact that, in July 2019, the majority of his colleagues approved a 3.5% annual increase in utility rates, and a portion of that extra money will be needed to cover the expense of the Lift Station 87 initiative. (Vice Mayor Shelli Freeland Eddie also opposed the hikes, which went into effect on Sept. 1, 2019 and will continue through 2030.)
Riebe reminded Brody that those rate increases will pay for close to $300 million in capital improvement projects for the Utilities Department over the next 10 years.
The contract for the Phase 3 work went to Garney Companies Inc. of Winter Garden, which was one of two firms to bid on the project, the staff memo said. The bid from the other company, Intercounty Engineering Inc. of Pompano Beach, was not deemed valid, the memo pointed out, “due to serious flaws … and failure [of company representatives] to attend the mandatory pre-bid meeting for the project.”
Questions and comments
During the May 18 discussion, Freeland Eddie asked Riebe whether what she read as a $1-million contingency built into the contract with Garney was higher than usual.
“We reduced the contingency from 10% to 5%, which was much more realistic for this project,” Riebe replied, especially based on what he indicated was the higher comfort level staff has with the design as this point. “We’ll save about $500,000,” he added, with the lower contingency.
According to the staff memo, the contingency at the 10% mark would have put the amount at $967,369.10; the 5% level reduces that to $483,684.55.
Then Freeland Eddie asked why staff would have to seek a loan amendment with the state fund that would increase the principal by approximately $6.1 million, as noted in the staff memo.
“The bids came in higher” for Phases 2 and 3, Riebe told her. That was partly due to the fact that “contractors were really busy” at the time the city advertised those segments of the project.
Additionally, he said, he believed the contractors “were pricing in risk on both of those phases.”
In making the motion to approve the contract, Commissioner Willie Shaw noted that he had been on the commission the longest of all the current board members and had seen firsthand far more of the problems with the Lift Station 87 initiative. “To come to the end,” he added, “[makes me feel] just over-gratified and very, very happy …”
Commissioner Liz Alpert seconded the motion. “From the very beginning,” she said, “this has just been a nightmare of a project. … I don’t think we have any choice but to bring this to fruition … We will at least have a really good facility … for the next 100 years …”
“We have discussed this project every which way that we can,” Freeland Eddie pointed out. Although “The numbers don’t add up” in the staff memo, she continued, she nonetheless felt that the commission had no choice but to conclude the project. Otherwise, she added, the neighborhoods in the area around Luke Wood Park likely would be suffering another 15 years of turmoil.