Procurement News Notice |
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| PNN | 1163 |
| Work Detail | Cleveland Utilities has received state approval to seek bids on the final leg of a three-phase waterline project that — once completed — will significantly increase the city of Cleveland’s water supply, especially to its southern end. The massive initiative includes a combination of 20-inch and 24-inch water mains that will connect CU’s 3-million-gallon water storage tank on Eldridge Drive to the Hiwassee Utilities Commission filter plant in north Bradley County. The full distance of the project is about 15 miles. The first two phases each cost $3 million and the final phase will be $3.725 million. Unlike the first two legs of the project that were financed through conventional, higher-interest bonds, the third phase is being funded through the State Revolving Fund Loan Program. This latest SRF package to Cleveland Utilities includes a 1.11 percent interest rate and a 20-year fixed rate whose interest will not increase over the full term of the loan. “This is really good news,” CU Manager of Engineering Philip Luce said earlier of the Water Division financing plan. He was joined by CU President and CEO Ken Webb who told the Cleveland Daily Banner in mid-June, “A project like this is certainly preparing for the future.” Approval of the SRF loan was announced earlier this summer by Tennessee Gov. Bill Haslam and state Department of Environment and Conservation Commissioner Bob Martineau. In that joint announcement, it was pointed out Cleveland was one of six communities approved for low-interest, fixed-rate loans from the SRF program. In a recent gathering of the Cleveland Board of Public Utilities, Craig Mullinax, vice president of the CU Water Division, confirmed that the Tennessee Department of Environment and Conservation has officially signed off on the project, meaning CU is now free to advertise for bids for the work. TDEC coordinates the SRF loan program in partnership with the U.S. Environmental Protection Agency. If all goes as planned, construction on the third and final phase of the project is expected to get underway in September. Completion should take about seven months, according to Luce’s previous estimates. The waterline’s third phase, which will connect Phase 2’s northernmost end to the HUC plant, represents 27,000 linear feet — or about five miles — of 24-inch ductile iron waterline, according to a TDEC confirmation letter to Luce from Sam Gaddipati, environmental manager for the SRF loan program. “This letter, along with the plans and specifications bearing our approval stamp, constitutes the formal approval by the Tennessee Department of Environment and Conservation for construction [of this] project,” Gaddipati wrote. The letter adds, “You may now advertise for bids for construction of this project. Please remember that you must advertise for bids publicly for a minimum of 14 calendar days, allowing adequate time for bids to be competitive.” The letter is dated Aug. 23, 2016. When SRF loan approval was announced in June by Haslam and Martineau, it was welcomed news to Cleveland Mayor Tom Rowland and Webb. Rowland, who serves on the utility board representing the Cleveland City Council, said of the SRF funding, “Great, great news!” Webb pointed to how the completion of the 15-mile waterline will benefit the city. “This will give us some redundancy in the [water] system, should we have any failures,” he said then. Previously, Luce explained the history of CU’s strategy for beefing up its water supply. “Back five or six years ago, the HUC expanded their water plant,” Luce told the Banner. “At that time, Cleveland Utilities [contracted] to purchase additional water. But, we had to have the infrastructure to do it.” That infrastructure came in the form of the major waterline project which CU chose to place along the east side of Cleveland. One reason for the location was to better serve customers on the south side of town. Another was to prepare for anticipated growth that will be coming with the launch of the Spring Branch Industrial Park, as well as adjacent commercial development along APD-40. Access to both will be provided with the completion of the new interchange and north and south connector roads off the bypass, as well as with the major overhaul of the Exit 20 interchange on Interstate 75. CU’s current contract with HUC allows the local utility to purchase up to 9 million gallons of water daily from the regional water system. Currently, CU is buying about 5 million. Completion of Phase 3 of the water main project will give CU the needed infrastructure for meeting the daily maximum. CU’s proven partnership with the SRF loan program is allowing the local utility to make great strides in building — and sustaining — its infrastructure, while enjoying a major cost savings along the way. In a gathering of the CU board earlier this summer, Webb and Luce briefed the utility’s governing body on the amount of cost savings realized so far in a handful of water projects. To date, SRF funding has saved Cleveland Utilities $1,669,622 in loan forgiveness, and an estimated $5,291,200 in low-interest rates, they reported. Loan forgiveness refers to the amount of SRF packages that doesn’t have to be repaid by CU. Most of the interest rates have ranged from 1 to 1.5 percent. All have been 20-year, fixed-rate terms. Totaled, CU has received $20,084,000 in six SRF loans. The largest was a two-part, $10 million package for the SCOPE 10 sewer rehabilitation project which is upgrading sections of CU’s oldest, and most deteriorated, wastewater system. SCOPE 10 is an acronym referring to Strategic Commitment to Protect the Environment. It is a project originally thought to last for 10 years at a total cost of $30 million; however, both those numbers are expected to be higher because sewer rehab is likely to become an ongoing activity. SCOPE 10 was launched as a proactive strategy to correct severe inflow and infiltration problems caused by groundwater seeping into cracks and breaks of aging sewer lines. The infiltration was creating overflows in CU’s sewer system during periods of heavy rainfall, and these were causing the potential for health hazards. Many cities across America were facing the same issues and were being forced by EPA and state agencies to launch costly projects to correct them. The projects were to be funded through water and sewer rate increases. Some major Tennessee cities — such as Chattanooga, Nashville and Knoxville — were among those forced to raise customers’ rates. However, CU launched its SCOPE 10 initiative which allowed the local utility to coordinate a sewer rehab project on its own terms. In his announcement in June announcing the latest SRF approval for Cleveland Utilities, Haslam pointed to the need for Tennessee cities to address the growing issue of aging sewer systems. “It is important for our communities to address current infrastructure needs and prepare for future needs,” the governor said. “The funds available through the State Revolving Fund Loan Program helps fulfill these needs while protecting public health.” In his half of the announcement, Martineau talked of the importance of helping communities. “These loans will keep our communities moving forward,” the state commissioner stressed. “The loans and principal forgiveness help fulfill infrastructure needs that will protect public health and help communities foster economic development, especially in rural communities.” The SRF loan program operates like a bank whose customers are utility companies seeking to maintain, and to grow, modern water and wastewater systems. Utility companies — like Cleveland Utilities — borrow money from SRF for their projects and then repay the loans right back into the SRF program. Then, the repaid funds are funneled into new projects for different cities. In effect, the SRF loan program replenishes itself. n In the newest SRF loan application by Cleveland Utilities, TDEC has confirmed that its analysis of the utility’s audited financial statements show the current rate structure is sufficient to repay a $110,417.50 loan. This loan, which includes $5,520.88 in principal forgiveness, is for the purpose of completing the local utility’s AMI water meter transition program. If the loan is pursued by CU, and approved, it will finance an additional 355 modules and mounting kits for the new automated meters. SRF’s confirmation of CU’s financial status does not constitute approval of this latest loan. CU staff will now complete more planning and paperwork for TDEC’s consideration, Mullinax explained. |
| Country | United States , Northern America |
| Industry | Water & Sanitation |
| Entry Date | 02 Sep 2016 |
| Source | http://clevelandbanner.com/stories/utilitygets-okto-seekbids-on37mproject,41326? |
