The Gonzales City Council voted unanimously May 19 to award a $23,584,000 contract to Gateway Pacific Contractors to build the city’s industrial wastewater treatment facility, with a contingency budget of $1,646,000.

The project is the second of three major contracts to expand Gonzales’ wastewater capacity: an industrial pipeline contract (at about 95% completion) and a planned inspection/rehabilitation contract for an existing 21-inch collection line. The council’s action on May 19 awards the treatment-plant construction contract now and leaves the formal notice to proceed contingent on the city securing a pending $6 million amendment to its State Revolving Fund (SRF) loan from the State Water Resources Control Board.

City staff said the city solicited bids in January and received six proposals on Feb. 26; Gateway Pacific was the lowest responsive, responsible bidder. Staff told the council that the engineer’s estimate was about $20.5 million and the bids came in roughly $3 million higher than that estimate. To cover that gap, staff said they applied in March for a $6 million SRF amendment and were in active review with the State Water Resources Control Board as of the May 19 meeting.

"We recommend you adopt the resolution awarding the contract," a staff member told the council, noting the award must be made within the 90-day bid-hold window even though the formal notice to proceed will wait on SRF approval.

In the public-comment period, a resident asked whether ratepayers would cover the added costs. The resident asked, "Are you guys gonna raise water rates and sewer rates?" A staff member replied that prior rate adjustments had already been adopted and said the requested SRF amendment would be funded through the sewer enterprise and that the city believes its rates provide adequate debt coverage, though the SRF amendment still requires State Water Board approval.

Council members moved, seconded and approved the resolution. The agenda materials set a tentative construction schedule with a preconstruction meeting and mobilization in late summer or early fall and an expected construction completion date in mid-2027, subject to SRF timing and contractor mobilization schedules.

Why it matters: the treatment facility is intended to increase industrial wastewater capacity and allow the city to receive and treat higher-strength industrial discharges. The project is funded partially through the city's SRF loan package; if the SRF amendment is approved, construction will proceed to the formal notice-to-proceed and mobilization phases.

Next steps: staff said they will return with a notice-to-proceed after SRF amendment approval and will manage construction change orders within the adopted contingency.