Chesterton Tribune

Yikes! Utility storage tank could cost $11.4 million; expect a rate hike

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A month ago Chesterton Town Engineer Mark O’Dell estimated the cost of building a 1.2 million storage tank at the wastewater treatment plant—part of an IDEM-mandated “long-term control plan” to reduce sanitary sewer bypasses into the Little Calumet River—“easily” at $5 million.

Just how easily O’Dell had no idea.

Try doubling that figure. Then add another mil and a half.

At Monday’s meeting of the Utility Service Board, Mark Nye of DLZ, the Utility’s contracted engineering firm, officially estimated the cost of that project at $11,441,600.

That sum breaks down as follows:

•Hard construction: $7,507,738.

•Add 20 percent as a construction contingency, given the fact that no soil borings have been completed yet and no surveys: $1,501,500.

•Add an inflationary 3 percent for each year before the project is let: $810,800, if the project does not begin until 2015.

•Engineering design: $900,900.

•Construction inspection: $720,700.

As Nye tactfully put it to the Service Board, “It’s something you’ll have to work with your financial consultant about, to see when you can afford this.”

At immediate issue now is when the Indiana Department of Environmental Management will actually approve the storage tank, basic plans for which DLZ will submit at the end of May. If it does so by the end of the year, then the Utility can expedite engineering, President Larry Brandt said, with the possibility that the tank and all supporting infrastructure can by completed by the end of 2014.

“Every delay increases the cost,” Brandt noted. “On top of that, every delay puts more crap into the lake. Let’s aggressively go ahead and get this done, the sooner the better.”

There is that pesky question, of course, of how exactly the Utility will pay for the project. Brandt envisioned on Monday a 10- or 20-year bond issue and fully expects the need for a sanitary sewer rate increase to go along with it. “Just off the top of my head, we’re looking at a 20 to 25 percent rate increase. That’s just a guess.”

What is not a guess is that the next biennial rate study to be conducted by H.J.Umbaugh & Associates, the Utility’s contracted rate consultant, will absolutely need to take the storage tank into consideration, Brandt added.

O’Dell did suggest that Nye’s cost estimate is not the final one. “We’re going to fine-tune a lot of this stuff,” he said. “We’re hoping the cost will go down.”

“Well, at least we know now what we’re talking about,” Brandt remarked.

It is, after all, “a big swimming pool,” Nye joked.

Part of the project will include an upgrade of the wastewater treatment plant’s main lift station, which in heavy rain events will pump a maximum of 1.2 million gallons away from the plant itself into the tank. When flow rates begin to decrease as the rain lessens and the plant is in a position to catch up, a gravity line will then flow the excess back to the pump station and then into the treatment plant.

The tank itself will be uncovered.

It will not be built on the State Park Little League fields or on any part of the area used for Little League parking.

Nye has said that a tank of this size would have alleviated the need to bypass sewage in all but four of the 27 bypass events in the last four years. Only a tank with a 12-million gallon capacity—which apparently even IDEM recognizes would be prohibitively expensive—would have precluded bypassing in all 27 of those events.



Posted 3/22/2011