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Council hears $655,200 construction‑management amendment for reclaimed water project; $1.1M shortfall remains
Summary
City staff recommended a $655,200 contract amendment with RH2 for construction management of reclaimed water distribution improvements and reported a roughly $1.1 million life‑of‑project budget gap partially offset by an increased state loan. Council moved the item to non‑consent for further consideration.
City staff asked the Snoqualmie City Council to approve a $655,200 contract amendment with RH2 for construction management services on the city’s reclaimed water distribution improvements, and reported a roughly $1.1 million life‑of‑project shortfall even after an increase in a state loan.
The request, presented during the council meeting, said construction is scheduled to begin next month and that the improvements are expected to be completed before June 30, 2026. Staff said the amendment narrows RH2’s scope—limiting on‑site hours and bringing SCADA programming and operations‑and‑maintenance reporting in‑house—to provide the “minimum required service to provide construction management and inspection on this project.”
The council was told that city staff reviewed qualifications from three firms and determined RH2 to be the most qualified. The proposed amendment is for $655,200. Staff also reported a life‑of‑project budget shortfall of approximately $1,100,000, which has been partially mitigated by an increase in a state loan: the loan was originally approved at $8,600,000 and the state recently approved an additional $450,000, bringing the loan amount to $9,100,000.
The cost and scope drew questions from Councilmember Holloway, who flagged several line items and asked about the 1,500 hours shown for part‑time on‑site construction observation. Holloway said, “1,500 seems like a very round number which sounds like this,” and pushed staff for additional review to reduce what he described as the “death of a million dollars” caused by many small overruns.
City staff defended the hours and scope. They said the on‑site time assumes roughly three days a week of a resident engineer (about 24 hours) and that reducing that level “would make it extremely difficult to complete those” inspection and construction‑management duties, particularly given state funding requirements such as Davis‑Bacon wage compliance. Staff also explained that earlier edits to the consultant’s proposal—bringing SCADA programming and operations tasks in‑house and limiting weekly hours—reduced the original proposal by roughly $150,000–$200,000.
Finance staff explained financing implications. The presenter said the state loan increase reduces immediate pressure but will add to longer‑term debt service. Staff estimated the near‑term annual payment impact at about $4,124 compared with the assumptions in the city’s 2024 Utility Rate Study and said the city will submit monthly reimbursement requests to the state for project expenditures. Staff also noted that, generally, interest charges tied to the loan would not begin until the project is completed.
No final vote on contract award occurred at the meeting. Council directed that the agenda item be placed on the non‑consent calendar for further review and formal action at a later meeting.
Next steps: staff said they will bring an agenda bill to formally accept the increased state loan and will return with the contract amendment and any follow‑up material requested by council for the non‑consent discussion.
