Estacada officials press ahead to 90% design after contractor’s 60% estimate jumps to about $72 million

Estacada — City staff and contractors at an Oct. workshop presented a revised 60% construction estimate for the city’s wastewater treatment plant that, after markups, contingency and contractor fees, totals about $72 million — a major increase from the roughly $42 million figure previously cited.

The estimate emerged during a presentation by Kennedy Jenks and Slaton, the engineering and construction firms working on the project, and prompted councilors to direct staff to complete 90% design work, pursue required permitting and funding approvals and be prepared to competitively bid the project if the guaranteed maximum price (GMP) does not meet the council’s expectations.

Why it matters: The higher estimate would raise sewer rates for Estacada customers and could affect grant and loan conditions tied to state reviewers. Council members said they are concerned about affordability for residents on fixed incomes and want greater confidence in the numbers before asking voters or ratepayers to fund the work.

At the workshop, Sean Spargo, Kennedy Jenks project manager, summarized the firms’ work to date and the estimate: “We gave Slaton 60% drawings. They did a complete takeoff…64,000,000 after markups… and then on top of that, we had some contingency…and we get to a total of, 72, which is a pretty scary number.” Spargo explained that the 60% design added many detailed elements — buildings, ventilation, piping — that increase quantities and change unit-price assumptions compared with earlier (30%) estimates.

Slaton representatives said several market and scope drivers pushed the price higher. Eric Brammer, Slaton preconstruction manager, said some specialized materials and industrial concrete for hydraulic structures cost substantially more than typical building concrete: “For the hydraulic structures…you’re paying more like $280 a cubic yard, which is astronomically more than you would typically pay for any other commercial structure.” He added that short-term market pressures for items such as electrical gear and longer lead times also had raised bids in several recent regional projects.

Contract and permitting issues also shaped cost and schedule choices. Presenters said Pacific Gas & Electric (PGE) and the Federal Energy Regulatory Commission (FERC) raised jurisdictional and dam-safety questions about extending the plant’s outfall pipe behind the dam, and that Army Corps review had been expected for archaeology. Because those federal reviews have uncertain timelines, the project team recommended treating the outfall as a separate, deferred scope to avoid holding up plant construction while federal permits are resolved. That outfall work is also tied to meeting state mixing-zone requirements, presenters said.

Project team members outlined a value-engineering (VE) process after Slaton’s 60% takeoff. The firms said they reviewed 41 possible VE items and the city accepted or tentatively accepted 22 changes; implementing many of those items would reduce the construction price by about $16 million overall, but that total included roughly $3 million of work recommended for deferral rather than deletion. Examples of VE ideas included substituting bolted steel tanks for some concrete tanks (shorter life but lower near-term cost), precast wet wells instead of cast-in-place structures, raising buried elements to reduce excavation, and prefabricated modular options for the admin building.

City staff and councilors pressed the project team for more clarity on which costs were market-driven versus omissions in early estimating. Several council members described the 70% increase from the previously discussed number as alarming and urged additional review. The project team acknowledged they had not re-run the earlier 30% estimate after Slaton was engaged and said that more detailed 60% drawings — and contractor takeoffs — revealed quantities and specialized scopes that were not captured earlier.

Council discussion and direction

- Councilors expressed strong concern about affordability. Several said the city must be able to explain cost increases to residents and asked staff to pursue additional checks before committing the community to the full sum. - The council directed staff to continue design to 90% so the city can obtain a more complete GMP and market pricing, to continue value-engineering discussions, and to seek DEQ (Oregon Department of Environmental Quality) approval for deferring the outfall scope while permitting with federal agencies continues. - Council members asked staff to plan for a publicly advertised competitive bidding step at the GMP stage if the negotiated GMP is not acceptable. Staff and the project team said about 80% of the work is typically competitively bid and that Slaton’s self‑perform scope would comprise treatment‑specific items.

Rate and funding impacts

Presenters showed a rate model tied to a previously described $45 million capital scenario and compared potential rate outcomes if construction costs rose. The team said value-engineering and a lower interest rate tied to a state loan program could reduce rate impacts, but that even with VE the project is likely to be materially more expensive than earlier estimates. The $3 million of deferred work (the outfall and related items) is not fully reflected in the city’s previously shared rate projections; staff said that deferred work would be addressed in future rate planning.

Permitting and schedule

The team said the city must complete environmental review steps required by state and federal agencies before some funding can be released; they identified DEQ, FERC, PGE and the U.S. Army Corps of Engineers as agencies involved. Presenters recommended separating the outfall work (which may require FERC review because of proximity to the dam) from the plant construction to keep the project moving. The council directed staff to ask DEQ about timing and to request any needed extensions to the city’s compliance deadline (the MAO deadline) if schedule slips are likely.

What’s next

Councilors agreed to keep advancing design to 90% with the VE items the council supports, have Slaton and Kennedy Jenks refine pricing and assumptions, continue discussions with DEQ and federal agencies about the outfall, and prepare to solicit market pricing at GMP (with the option to competitively bid the project). Several councilors recommended getting additional independent estimating or ensuring the competitive bidding step is used as a check on the GMP.

Quotes (selected)

“We gave Slaton 60% drawings…64,000,000 after markups…and we get to a total of, 72, which is a pretty scary number,” said Sean Spargo, Kennedy Jenks project manager, during the presentation.

“For the hydraulic structures…you’re paying more like $280 a cubic yard,” said Eric Brammer, Slaton preconstruction manager, describing why treatment-plant concrete costs can far exceed standard commercial rates.

Staff and the project team said they would return to council after the 90% design, with refined pricing and information on permit timing and recommended next steps for procurement.

Ending

Councilors left the workshop united on one central point: the city needs more detailed, near-final pricing before it asks residents to shoulder higher rates. The immediate next steps are finishing the 90% design, reconciling VE choices with DEQ approval, and preparing a procurement plan that will either accept a negotiated GMP or move the full project to a competitive bid process.