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Local firms benefit from water treatment plant construction

Monday, November 1, 2010 by Michael Kanin

Since voters first approved its construction in 1984, the residents of Austin have debated the issues around the construction of Water Treatment Plant 4. While some still argue that the plant is not needed now and will negatively impact the Bull Creek watershed, a poll conducted for the city last spring showed that Austinites favored the plant 48 percent to 12 percent, with the remainder confessing uncertainty. In a 2009 poll, consultant Mark Littlefield concluded that Austinites favored the facility five to one. For those who favor the plant—including four of seven City Council members — the plant is a critical response to the water demands that will come as the city grows.

 

With each passing day, the plant becomes more of a reality. And as construction off Bullick Hollow Road continues, at least one solid picture of the project has emerged: The roughly $500 million plant is a mini economic stimulus package for local businesses, particularly construction and engineering firms.

 

Water Utility Director Greg Meszaros told In Fact Daily that this was by design. “We … (wanted) this plant to have a local impact,” he said. “We wanted a lot of local stimulus with this.”

 

To complete the project, the city hired MWH Constructors Inc. of Broomfield, Colorado, to serve as its construction manager at risk. In so doing, they assigned much of the subcontracting for the plant to that company.

 

MWH’s manager for the facility, Larry Laws, told In Fact Daily that his company does its best to keep the contracts for its projects in the community. “We take bigger projects and subdivide them into smaller packages,” he said. “We can keep probably on the order of close to 70 percent of the dollars in the local community.”

 

A spreadsheet that details work assigned by the firm through October 2010 reflects Laws’ statement. To date, just over $24 million worth of contracts have been parceled out. According to Laws, roughly $16 million of those have stayed local.

 

That figure includes nearly $6.27 million for local construction firm Austin Engineering, which will handle the construction of the plant’s upflow clarifiers. According to the numbers furnished by MWH, that will account for 40 projected jobs with the firm.

 

Houston-based construction group Laughlin-Thyssen will see about $5.8 million for building the facility’s clearwells. MWH figures show that contract will account for 30 local jobs.

 

The final large contract that has thus far been executed by MWH is for the excavation of the water treatment plant site. For that, local company Ranger Excavation will get $2.62 million and was able to employ another 40 workers.

 

MWH is also responsible for a host of smaller contracts that, so far, have added up to a hair over $2.8 million. According to Laws, about $1.784 million of that will go to Austin-area contractors.

 

He added that though the figures he shared with In Fact Daily account for only construction to date, MWH would continue a pattern of directing contracts, whenever possible, to local firms.

 

The deal for the design of the plant itself and its raw water intake system went to the local branch of Walnut Creek, Ca.-based Carollo Engineers. For its work to date, the company has received $27.6 million. Over 50 percent of that figure has been further committed to local subcontractors thus far.

 

The bulk of that will go to multinational engineering firm AECOM, which has an Austin office.

 

Firm partner Paul Walker told In Fact Daily that the contract to work on the plant has made a huge difference for Carollo’s Austin office.

 

“If we didn’t have this work, we probably would have had to shut down the (local) office long ago,” he said.

 

The Kansas City-based engineering consultants of Black & Veatch are responsible for the plant’s Jollyville Transmission Main line. For the project, they will receive $9.5 million. That figure has been or will be divided among 15 local subcontractors, who, the firm says, will ultimately account for 95 percent of its work.

 

Over its lifespan, that effort will employ over 80 workers.

 

The economic impact of the plant that Walker saw at Carollo has been repeated on a smaller scale. Rebar specialist Dan Bowling, whose wife owns Central Texas Reinforcement, has been responsible for some of the work on the plant’s foundation. He told In Fact Daily that the plant deal “has pretty much kept some guys working.”

 

“Private work has dried up,” he continued. “Everybody’s got to make a buck and there’s no fat work out there now.”

 

Without the work on the plant, Bowing says that the between eight and 20 men he employs on his crew would be looking for work elsewhere.

 

Both Meszaros and Laws pointed out that the dollars paid to local contractors would be exponentially increased as they filter through the city. “The stimulus sort of ripples through,” said Meszaros.

 

The plant project has also received high marks for its minority- and women-owned business participation figures. The local subcontracting contracts reflect this fact as well. Eighteen of the 31 subcontractors used to date by MWH are minority- or woman-owned, as are eight of the 11 subs used by Carollo. For Black and Veatch, that ratio is 12 of 15.

 

Council Member Sheryl Cole noted that fact. “This project is employing lots of local contractors,” she said. “In particular, it is employing many minority local contractors … Sometimes we meet (our minority- and women-owned goals) and sometimes we don’t. In this case we are and I think that is a very positive thing.”

 

For local engineering firm, Jose I. Guerra Inc., the minority-owned goals associated with the project coupled with its local focus make for a good opportunity. “Yes, we’re a minority-owned business,” said company President Rick Guerra, “but more significantly for the company, this was a major project for the city that we wanted to be a part of.”

 

He emphasized that his firm was “given the entire scope” of the contracts it had signed. These include deals for structural engineering and construction oversight work.

 

Guerra noted that, for the past three years, plant projects have made up about 10 percent of his firm’s revenue. “It has been a great contributor to our workload,” he said.  

 

Click on this link for a list of the contractors that have signed on to the project to date.

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