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Commissioners approve $3 million extra borrowing for Marley-Taylor ENR upgrade to avoid EPA/MDE penalties
Summary
Faced with bids about $3 million above the engineer’s estimate and a consent order penalty timeline, the board authorized additional borrowing through the Maryland Water Quality Revolving Loan Fund to complete the Marley-Taylor enhanced nutrient removal project.
The St. Mary’s County Board of Commissioners voted Tuesday to authorize up to $3 million in additional borrowing to cover higher-than-expected bids for the Marley-Taylor enhanced nutrient removal (ENR) project, increasing the previously authorized loan amount to approximately $27.77 million.
County counsel and METCOM staff explained that the low responsive bid returned roughly $3 million above the engineer’s estimate — a 7.8 percent increase on the estimate — and that contractors for this specialized ENR work were drawn from out of state, which contributed to higher pricing. The board discussed options including seeking additional bids or delaying the project but was advised that missing the ENR completion deadlines specified in a consent order with the Maryland Department of the Environment would trigger penalties estimated at about $100,000 per month.
County Attorney and METCOM staff described the planned borrowing mechanism as a 20-year loan from the Maryland Department of the Environment Water Quality Revolving Loan Fund at a not-to-exceed rate of 5 percent; the actual rate anticipated was expected to be substantially lower (staff noted a March reference rate of 1.87 percent). METCOM’s system improvement charge revenue will serve as the repayment source.
Commissioner Todd B. Morgan moved the authorization and Commissioner Cynthia L. Jones seconded. After extended discussion and acknowledgement of the difficult choice between higher construction costs and steep contractual penalties, the board approved the loan documents and the additional borrowing by voice vote.
Staff said the project timeline is constrained by the ENR consent order; METCOM and county staff will proceed with loan closing and contract award to the low responsive bidder to meet the consent order schedule, with completion targeted ahead of the mid-2017 penalty start date if feasible.
