Moline officials hear $100M+ estimate for South Slope wastewater upgrade, move to secure IEPA loan application

Moline officials heard Tuesday that design changes and new federal requirements have pushed the estimated cost to rebuild and upgrade the South Slope Wastewater Treatment Plant to roughly $100 million to $110 million, and the council approved staff to proceed with an application for low-interest financing from the Illinois Environmental Protection Agency (IEPA).

The presentation by Strand Associates emphasized three drivers of the cost increase: mandatory flood-elevation work to meet FEMA and city ordinance requirements, compliance with Build America, Buy America (BABA) provisions that raised equipment prices, and unexpectedly large underground piping and electrical work. Troy Stinson of Strand Associates told the council that the plant’s useful equipment life and changed regulatory requirements left few options short of substantial reconstruction.

The IEPA loan application resolution the council approved authorizes the mayor and city clerk to execute loan paperwork and lets finance and utility staff submit payment requests and reimbursements if the city decides to borrow. Council later advanced (to second reading) a separate ordinance authorizing borrowing under the IEPA Water Pollution Control Loan Program; advancing the ordinance does not by itself obligate the city to borrow.

Why it matters: South Slope handles wastewater for Moline and some neighboring jurisdictions. The project must meet a new phosphorus limit in the plant’s MPDS permit and be resilient to flood conditions; both regulatory drivers increase capital cost. If the city pursues the IEPA loan and bids the project on the schedule staff outlined, the work will affect rate forecasting and capital planning for the next decades.

Key details from the presentation: - Planning history and scope: Strand reviewed the plant’s construction history (original structures from the 1950s, expansions in the 1960s and 1980) and said much of the site is aged, with several unit processes and structures beyond typical useful life. The recommended plan consolidates separate processes, removes older RBC units, expands activated sludge capacity, and switches to UV disinfection. The package includes new inflow/preliminary treatment, new final clarifiers, solids handling, a blower building, operations and maintenance facilities and upgraded pumping and piping. - Cost trajectory: Consultants said the 2021 planning opinion was about $70 million. During design, unanticipated needs and market conditions pushed a September 2024 60% design estimate into the $80–85 million range. After factoring flood-elevation work, Build America/Buy America compliance, electrical and piping increases seen in recent regional bids, and a higher contingency for a thin bidding market, consultants said the opinion of probable cost is now roughly $100–$110 million. Strand said the city’s debt-authorization ordinance before council was drafted at $120 million to provide a buffer; that ordinance only sets a borrowing cap and does not itself commit the city to borrow. - Funding and financing: The city has a reserved IEPA Intended Use Plan allocation of $73.5 million (staff said that figure appears on the IEPA list for this fiscal year). Strand and city finance staff presented scenarios that blend IEPA loan funds with local bonding. IEPA loan terms noted in the presentation included a current interest rate near 1.87% and a new option to amortize over 30 years; staff said an environmental discount of 0.20% will be requested because the project addresses nutrient removal. Strand warned the council that additional bypass funds could become available in February if other projects on IEPA’s list are not ready, but that additional funding is not guaranteed. - Operating and scheduling impacts: Consultants said the site must be phased to keep treatment operating during construction; they recommended advertising for bids by mid-February to meet IEPA funding timelines, opening bids in March and starting construction in August, with about a four-year construction period to substantial completion. Strand and finance staff noted interest accrues during construction; the first principal-and-interest payment on an IEPA loan would not be due until substantial completion, currently projected in the schedule. - Cost-control options discussed: staff and consultants described bid alternatives that could reduce initial capital cost, including making the new operations building a deductive alternative (estimated capital savings ~ $4–$5 million), specifying less-costly screening equipment, downsizing standby generators, substituting piping materials, or eliminating a fermenter (a biological phosphorus removal item) in favor of increased chemical dosing. Each trade-off has operational consequences (for example, eliminating the fermenter reduces capital cost but raises chemical operating costs). - Market factors and procurement risk: Strand highlighted a thin contractor market on recent comparable projects (examples cited included bids in Ames, New Lenox and Cedar Rapids), high copper and electrical-material prices, and uncertainties about BABA compliance that had raised some equipment estimates by large percentages; Strand increased contingency to reflect the risk of limited bidders and higher contractor overhead.

What council approved and next steps: The council approved a resolution authorizing the mayor and city clerk to execute IEPA loan application documents (staff may complete and submit the application). Council then advanced the related borrowing ordinance to a second reading; that ordinance, if adopted later, would authorize borrowing under the IEPA loan program up to the ordinance amount. Staff said they will continue design work, pursue additional IEPA bypass funding if available in February, and return with final bid documents and ordinance language. If the project proceeds, construction would be phased to maintain operations and could take about four years.

Noted cautions and questions: Councilmembers pressed staff about whether capacity was increasing (consultants said the upgraded plant will handle peak flows and is more efficient but that average flows are well below permitted capacity), the impact on rates (finance staff presented illustrative scenarios showing modest per-residence monthly increases in later years if the larger cost estimate is needed), and the reliability of market estimates. Staff said they will continue to refine design, seek value-engineering and present concrete bid alternatives before awarding any contract.

Ending note: Staff emphasized that the council’s loan-application resolution is a procedural step to preserve access to IEPA funds and does not commit the city to borrow; council members said they wanted continued vetting of alternatives and close cost review before any final borrowing or construction authorization.