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Spelman not predicting future of water plant

Tuesday, July 26, 2011 by Michael Kanin

The City Council may not be poised to hit the pause button on the Water Treatment Plant Number 4 project after all.


Council Member Bill Spelman told In Fact Daily on Monday that he doesn’t think that “anybody should presume we are going to have a resolution telling (City Manager Marc Ott) to stop construction of the plant.”


While he does not yet have a figure for the cost of delaying Water Treatment Plant 4, Spelman said, “If we were going to add $100 million just to delay it for five years it would be difficult to justify that kind of delay.”


On Friday afternoon, Council Members Spelman, Chris Riley, and Laura Morrison placed an item on the council’s Thursday agenda. If approved, it would instruct City Manager Marc Ott to develop a cost analysis of what the respective costs of five- and 10-year delays might mean for the city economically. It would also direct Ott to “halt further issuances of Notices to Proceed for construction of Water Treatment Plant 4 until these cost estimates have been provided to the Council and the public.”


On Friday morning, Rosie Truelove, manager of the contract procurement division, finished the process for the construction of the project’s Jollyville Transmission Main by signing the Approval to Proceed. Council Members did not know that the approval was completed when they turned in their resolution on Friday afternoon. In Fact Daily reported that fact on Monday.


Later on Monday, Assistant City Manager Rudy Garza sent a note to Mayor and Council members detailing the status of the contract for the Jollyville main. A copy of the Work Authorization Amendment that fully commits the city to the construction of that portion of the project was attached.


“It appears that there is some confusion regarding our fully executed and legal contractual obligation with GMP 5 – Jollyville TM,” Garza wrote. “Attached is the Work Authorization and on the 2nd page is the City Acceptance and ‘Approval To Proceed’ which completes the full execution.”


Spelman told In Fact Daily that, even with that document in hand, the Council could still halt work on Jollyville. “Just because we’ve let a contract doesn’t mean the contract is self executing,” he said. “The fact that we’ve let the Jollyville main is close to immaterial.”


Still, Spelman didn’t necessarily see an impending pause. “I am not saying that four people are going to postpone the contract,” he added. “There is at least a good chance it will make as good economic sense two to three weeks into the contract as it does now.”


Officials with the Austin Water Utility maintain that a construction shut-down would be far from simple (See In Fact Daily, July 11, 2011). In addition to the potential negative impact on the city’s bond rating, the loss of work by the host of contractors actively involved in the project, legal ramifications, and safety concerns, utility leadership also worries that there could be issues with the warranties offered by the manufacturers of some of the already-in-process facilities at the plant.


Austin Water Utility director Greg Meszaros told In Fact Daily that if the city stops the project, then rebids it sometime in the future, there would be “no way…to try and warranty the work that was done partially by another contractor.”                                            


“That just is not something that would happen,” he added.


He noted that that was only one of many concerns about the complicated nature of a work stoppage at the site. “You’d lose all of your permits – including permits from the Army Corps (of Engineers) … there’s just a whole series of questions that we would have to work through with the council if they wanted to pursue that kind of a course.”


Meszaros noted that the utility would also lose five years’ worth of strategic planning that was centered on the plant. “For the last half-a-dozen years, Plant Four has been the council’s direction to us – and our recommendation,” he said. “All of our decision making for the last five years – all of our capital planning, all of our operational planning has all been based on Plant Four being in service.


“There are just hundreds of decisions that have rippled through our utility over the last five years based on that plant being in service,” he added. “If you were to stop that now, you’ve got to tackle that too. Beyond just a practical side of what it would cost to abandon Plant Four while you’re this far into it, you’ve got to tackle, systematically, what does changing that plant mean to your system.”


He further noted that the “systematic” improvements offered by the construction of the plant should also be included in the calculus about its worth. “It helps us manage our existing plants and the risks associated there, our lake, transmission main infrastructure … those issues never seem to be discussed.”


Meszaros added that the utility – or any utility – benefits from consistent instruction. “As professionals running a water utility, we want consistent, clear, systematic decision-making. I think one of the worst things you can do is make systematic decisions that you change every few years,” he said. “That is a very inefficient and somewhat risky way to manage a water system.”


Though the utility’s recommendation remains that the city should push forward with the plant, Meszaros reminded In Fact Daily that his staff would approach the situation professionally, no matter the outcome of the council vote. “In the end, whatever the council decides: Whatever information they want, we’ll give it to them, whatever debate they want, we’ll participate in it,” he said. “And in the end, whatever they decide, we’ll carry out as professionals.”

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