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Gonzales issues notice to proceed for $23.6M industrial wastewater treatment plant after state loan amendment approved
Summary
The Gonzales City Council authorized a notice to proceed and related construction management and design-support task orders after the State Water Resources Control Board approved a $6 million loan amendment to address a bid shortfall for the industrial wastewater treatment facility.
GONZALES — The City Council authorized staff to issue a notice to proceed to Gateway Pacific Contractors for construction of an industrial wastewater treatment facility after the State Water Resources Control Board approved a $6 million amendment to the city’s $29 million SRF loan, filling a funding shortfall tied to competitive bid results.
City staff summarized a multi-year capital program to expand industrial wastewater capacity. The industrial wastewater treatment facility was bid on Jan. 25, 2025; six bids opened on Feb. 26 and the lowest responsive bid came from Gateway Pacific Contractors at $23,584,000. That low bid exceeded the engineer’s estimate such that the overall wastewater program had a $6 million gap (combined with earlier shortfalls, the program faced a $3 million to $6 million funding gap at different points).
In mid-March staff submitted a $6 million loan amendment request to the State Water Resources Control Board. On May 30 the board notified staff that the requested amendment had passed financial review. City staff said the board advised the city to proceed with a notice to proceed in parallel with the state’s preparation of the formal amendment documents; staff recommended acting now to avoid a three- to four-month delay.
Staff said the full industrial wastewater program totals approximately $38 million (soft costs and hard costs) and that careful sewer-rate planning adopted in November 2023 provided sufficient coverage and cushion to meet the state’s required debt-coverage ratios without an additional rate increase. Staff recommended, and the council approved, a resolution authorizing the notice to proceed to Gateway Pacific, authorizing task order 3 with Judith Consulting for design support during construction and task order 4 with M&S Engineers for construction management and inspection services.
Schedule and next steps: staff anticipates a preconstruction meeting, contractor mobilization in mid-August, and construction completion in spring 2027. Staff will return with the formal SRF amendment documents for council signatures once the state finalizes them.
Why this matters: The project is the largest capital-improvement program in city history and will expand wastewater capacity to serve residential growth and industrial customers in the industrial business park; award and construction move the city from planning and permitting to active construction.
Public comment: No public testimony opposed to construction was recorded at the hearing; the council voted to adopt the resolution and issue the notice to proceed.
