Grants Pass council approves guaranteed maximum price, clears way for replacement water treatment plant

The Grants Pass City Council unanimously approved a resolution authorizing the city manager to enter into an agreement with Slayton Construction Group Inc. for Phase 2 services to build a replacement water treatment plant.

The vote, made by Councilor Rick and seconded by Councilor Kathleen, was 7-0 in favor (Councilors Joel, Indra, Rick, Kathleen, Eric, Rob and President Victoria voted yes). The resolution adopts a guaranteed maximum price (GMP) and authorizes related temporary-power and permanent-power contracts needed to start construction.

Councilor Victoria Marshall said the city will begin using the new leadership structure to run meetings. The measure that authorized the contract passed without amendment.

The project team told council the plant has been in development since 2017 and has passed multiple design milestones. Jason, the city staff presenter, summarized recent design work, value-engineering and funding status and said conditional approval from the Oregon Health Authority drinking water program has been received, which permits construction to begin pending final approvals after construction and performance testing. "If you choose to adopt this resolution tonight, [Slayton] will be our on-site inspector for the duration of the project," Jason said, introducing contractors and the design-build team.

Jason described a multi-year development and bidding history, noting the project moved from a campus layout to a single, compact building and that a value-engineering effort reduced the 30% target price significantly. According to staff figures presented to council, a series of value-engineering steps reduced an initial 30% budget figure and produced roughly $14.6 million in identified savings; the project team reported a current assembled project cost estimate in the low- to mid-three-digit millions range and described additional elements that remain to be finalized, including intake structure modifications and associated smaller GMP items.

Jason also outlined estimated near-term and long-term financing and operations impacts: the city has identified a financing package that combines grants, loans, rate revenues and system development charges; staff said about $60 million of the financing was expected to be grant funding and about $49 million in loans, with portions of those loans at below-market interest. Staff said the city expects debt-service payments to peak a little over $3 million per year and settle at roughly $2.5 million annually over a 30-year repayment schedule; a treatment-plant replacement fee is projected to produce about $2.25 million per year toward debt service.

On power and site needs, staff told council that temporary power installation would cost about $57,177 and that permanent power improvements required by Pacific Power would total roughly $6.7 million; the city's share was described as just over $409,000 of which staff said there would be no immediate out-of-pocket charge. Jason said Pacific Power anticipates completing some substation upgrades in spring 2027 to support the finished plant.

Contractor lead Steven Flatt explained insurance and deductible choices: "When you go out and get insurance, those low deductibles aren't commercially available. If you were to get it, you'd have to buy up a policy and be very expensive, and we put that in our cost to the city as part of our GMP," Flatt said, describing how the design-build team budgeted commercially available coverage.

Councilors asked for clarifications on earlier contract amendments, insurance deductibles, local contractor participation and the project's timetable. Jason said the team had structured the work into many subcontract packages (58 packages) and had directly solicited roughly 330 subcontractors; staff reported relatively few local bids and several single-bid packages that came in higher than earlier estimates. Jason said the design-build team continued to negotiate and had realized additional savings of about $1.6 million after bids were received.

Construction sequencing presented to council called for a notice to proceed to the design-builder in February 2025, ground-breaking in late spring or summer 2025, construction through winter 2027, commissioning in winter 2027 through spring 2028, followed by a performance-testing period. "Commissioning and start up would begin in the winter of 2027 and run through spring of 2028," Jason said.

Council also heard brief public comment specific to the item; speakers including Brenda Sissen and Ruth Daley addressed the council with questions and opinions about water sources and support for the project.

The council's unanimous approval authorizes the city manager to execute Phase 2 agreements and to proceed with the related temporary and permanent power contracts; staff said several follow-up procurement items (inspection services and other smaller contracts) will return to council for separate action.

What happens next: staff will finalize financing and the intake-structure design elements required by certain grants and expect to return with follow-on contract authorizations and construction oversight agreements. Construction timing is contingent on final grant awards, contractor scheduling and Pacific Power infrastructure work needed to energize the new facility.

Sources: Grants Pass City staff presentation at the council meeting; statements by Jason (city project staff) and Steven Flatt (Slayton Construction lead).