Hot Springs leaders hold line on costs for treatment plant

HOT SPRINGS — Action the Hot Springs Board of Directors took last week intends to hold the line on costs for the water treatment plant the city is building off Amity Road.

A resolution the board adopted at its March 7 business meeting approved a $1.59 million change order, raising the original $34.95 million cost of the new plant to $39.86 million and eliminating an amendment agreed to in September that made the city responsible for price escalations in materials, supplies and labor.

“Upon receipt of any such price increase, the contractor shall provide notice of the price increase to the city and the agreement shall be increased to incorporate such increase in price plus a markup of 15%,” according to the first paragraph of the addendum The Sentinel-Record first reported on in December.

A $3.32 million change order the city agreed to last fall raised the cost of the TOLM Group’s construction contract for the 15 million-gallon-a-day plant to $38.27 million, about $15 million more than the city and its contract engineers had estimated before the July bid opening.

The higher-than-expected bids put the Lake Ouachita water supply project over budget, leading the board to approve a rate increase in November that’s servicing more than $45 million in new water fund debt.

The $4-a-month increase, which goes into full effect in November, for city utility customers inside the incorporated area followed a series of rate increases that took effect from 2018 to 2021. The latter services the $109 million bond issue the board authorized in June 2020.

“With this change order to the contract, it’s still $8 million less than the next-lowest bidder,” Major Capital Projects Manager Todd Piller said, referring to the $47.60 million bid CDI Contractors of Little Rock submitted in July, told the board.

McKee Utility Contractors of Oklahoma bid $54.35 million, the highest of the three the city received.

The $3.32 million change order extended the plant completion date from spring 2024 to late 2025. Piller told the board last week that delivery times are more than a year for some equipment and materials. The city has blamed supply chain disruptions for increasing what was a $106 million project in 2019 to more than $150 million.

The change order approved last week will be paid for from the proceeds of a $45 million bond issue that the board authorized in November. Funds were deposited into the construction account at the end of January, but the city said no money had been spent as of last week.

The $1.25 million addition to Belt Construction’s $9.17 million raw waterline contract the board approved last month had yet to be debited from 2022 bond funds.

In addition to the nearly $40 million cost of building the new plant, contracts totaling more than $6 million have been awarded for site preparation and a 3 million-gallon clear well at the 33-acre Randall Road site the city acquired in 2019. Piller told the board last week that the 160-foot diameter clear well recently passed a leak test.

It will hold treated water and high-service pumps will distribute via the large-diameter finished waterline. Natgun Corp. was awarded the $4.19 million contract in 2021. Kajacs Construction completed the first 2.5-mile segment of the 13-mile finished waterline in 2021. It was awarded the $4.43 million contract in 2020.

CDI Contractors completed the $2.02 million site prep. It included building two 4 million-gallon backwash ponds for treated water that will be discharged into a nearby creek after it’s used to clean the plant’s filters.