Watertown council reviews scaled-back plan and funding options for new street facility

A presentation at the City of Watertown council work session laid out a revised plan and funding options for a new street facility, with staff saying design cuts and site modifications could reduce the project estimate from about $23.5 million to roughly $18.5 million.

The council heard that the building as originally designed was a little more than 53,000 square feet. After proposed reductions — including deleting cold storage, removing a wash bay, eliminating one repair bay and trimming office space and pavement — the heated vehicle storage portion would be about 34,000 square feet. Consultant estimates presented to council ranged from roughly $15 million (early, local contractor review of an earlier design) up to JLG’s current estimate of about $18.5 million after reductions.

The presentation described line-item savings: a wash bay deletion estimated to save about $2.3 million, dropping one repair bay worth about $1.2 million, a reduction of roughly $1.2 million in office area and site-modification and miscellaneous reductions estimated to save as much as $1.8 million. Staff also said redesign to reflect the cuts would cost about $125,000.

City engineer Justin Peterson and street staff member Rob explained that some items labeled “cuts” are technically defe rals: several features could be added later because the design accommodates future additions. Peterson recommended keeping the second repair bay as a bid alternate: "If we only had one repair bay, that could be taken up for months," he said, meaning routine maintenance work could be delayed if the single bay is occupied with longer repairs.

On materials and methods, JLG and staff reported metal construction is currently the lower-cost option; a precast option was estimated to add about $2.3 million. Staff said the reduced plan is bid-ready as of February 2024 but would require the $125,000 amendment for redesign to formalize the proposed cuts.

Council members and staff discussed likely project costs in the current market. Peterson said JLG’s $18.5 million figure is based on recent regional bid experience; a local contractor’s earlier review of the prior design was about $15 million, meaning the current design reductions could put actual bids between the local estimate and the consultant estimate. Peterson: "It's possible it could be less than 18 and a half, but JLG is basing it off their experience."

Staff outlined a funding approach that mixes cash and debt. The draft financing shown to the council included roughly $6 million cash on hand (including proceeds from a land sale), about $1 million remaining in an ice-arena bond account, a proposed $1.5 million allocation from the 2026 CIP, and a $10 million bond amortized over 20 years at an assumed 4.9% interest rate producing an estimated $810,000 annual payment. Peterson sketched a tentative schedule: finalize redesign midyear, adopt a bonding resolution August/September, bid in October/November, award in December and start construction in 2026 with an 18-month duration.

Council members repeatedly pressed staff to clarify what is a permanent cut versus a deferral, and how operation efficiencies from the new facility offset debt service. Rob said heated storage will reduce breakdowns and overtime and contractor emergency hires during storms; contracting rates cited in the meeting ranged from about $125 per hour for truck hauling to up to $275 per hour for hired motor graders during major storm events. That operational context informed questions about whether $810,000 in annual debt service could be offset by reduced contractor and repair expenses.

Staff next steps identified in the presentation: ask the council whether to direct JLG to proceed with the $125,000 redesign to incorporate the proposed cuts, then return updated cost estimates and a refined financing plan for further council direction.

Votes at the meeting did not decide whether to proceed with design or bonding for the street facility; staff said they were presenting options and seeking further direction.

Ending: Staff asked council for any additional information needed for the next presentation. Peterson said, "If the council would like us to move forward, we would come back with the redesign and more detailed financing scenarios."