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Talent water tank nearly $1 million over estimates

Talent City Council has voted to seek an additional $1.5 million in loans so that a new 2.5-million-gallon water tank project can be completed.

Rising construction costs have bumped the project price up nearly $1 million since estimates were prepared in 2017.

“In general, construction costs have risen sharply over the last two years, particularly with the concrete products this project requires,” City Manager Sandra Spelliscy wrote in a report to the council, which approved the action at its Dec. 4 meeting.

Residents, who already were hit with a $2.64 per month water rate increase in July, won’t see any further increases from the project in the near term, but it could happen in later years, said Spelliscy. Rates have increased more than 50% since 2012.

“It’s a tough market with these reservoirs. There are only four companies in the whole Pacific Northwest that do this kind of construction,” said Spelliscy. “We need the reservoir.”

Work on a 3,400-foot-long water pipe that connects the reservoir to the city water system has been finished. Table Rock Excavation was awarded a $556,307 contract to put in the 16-inch line that connects a new site off Helms Road to a main line under Talent Avenue.

“We went back to Business Oregon asking for additional funding. It is what it is,” said Spelliscy.

Estimated cost of the project in November 2017 was $3.169 million. The city signed an agreement with Business Oregon’s Safe Drinking Water Revolving Loan Fund at that time to accept loan funding with a 1% interest rate and the possibility of $1 million in loan forgiveness if specified criteria are met.

Talent’s 2019-20 budget projected $2,696,000 for project, including construction of the reservoir tank, which was estimated at $1,765,000 in 2017.

Council voted to ask for an additional $1.5 million in loan money to provide a buffer against any unexpected contingencies. Any leftover funds after construction would remain with the loan fund. Fund officials indicated the additional amount requested is available.

“You are dealing with a tough market in terms of getting a contractor to do this work. We had held off because everyone was booked out,” said Spelliscy.

In June, City Council voted to increase system development charges for new water hookups by 61% to $5,185 to help cover water system costs. The rate had seen only inflationary increases since it was set at $2,495 in 2004.

The City Council also approved a contractor for the project Dec. 4. Low bidder Skaar Construction was awarded the contract to build the reservoir. Skaar bid $3,639,000. JW Fowler was second-lowest at $3,674,774. Ward Henshaw at $4,130,147 was highest of the four bidders.

Location of the tank was determined based on studies of system water flow. Talent bought 1.47 acres of land west of Helms Road and an easement for $200,000 in 2008.

A 2016 routine inspection of the 1973 1.5-million-gallon tank at the Belmont Road site found large pieces of cement coating had broken away, exposing retention cables. A seismic engineer determined there was need for a major structural retrofit or replacement of the tank. City officials chose to go with a new tank.

A second million-gallon tank at the Belmont site was built in 2001. A third reservoir that holds a half-million gallons is located on Wagner Creek. The city water system has just over 2,000 customers, and more than 80% are single-family residences.

Reach Ashland freelance writer Tony Boom at tboomwriter@gamil.com.

Photo courtesy cityoftalent.org