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McCall to reject and rebid water‑plant bids after prices far exceed estimates; council readies bond option
Summary
Council heard that bids for a required water‑treatment expansion came in millions over estimate and that the two lowest bids had technical deficiencies; staff recommended rejecting and rebidding while preparing DEQ debt and a possible bond measure to close the funding gap.
Nathan Stewart, McCall’s public works director, told the council the city had secured a $16,500,000 loan from the Idaho Department of Environmental Quality and a $500,000 grant toward a water treatment plant expansion, but recent bid results surprised staff: the low bid came in about $5,800,000 above the engineer’s estimate. "We've secured a $16,500,000 loan from the DEQ," Stewart said, then described the bid shortfall and procurement challenges.
Consultants and staff explained several market drivers for the higher bids: a tight local subcontractor market, few concrete suppliers in Valley County, elevated US manufacturing costs and tariffs, and bidders applying large markups to cover volatility. Ross Hanson described how compounding subcontractor markup and local labor shortages pushed some bids far above the estimate.
Legal counsel and staff then reported problems with the two lowest bids: technical defects and incomplete bid documentation that created procurement risk. Based on legal review, staff recommended rejecting all bids and rebidding the project. Council directed staff to bring a formal 'reject all bids' item to the next meeting and to relaunch procurement with an expedited schedule to allow a new bid opening targeted for Feb. 17.
City finance consultant Greg Loescher and staff outlined financing options to cover any funding gap after rebid: cash‑funding would require steep short‑term rate hikes (roughly 10–15% over two years in a worst‑case cash scenario), while additional low‑interest DEQ debt (2.75% over 20 years) would keep rate impacts modest and short‑term. Bond counsel warned that judicial confirmation would be legally risky and recommended a traditional bond election and public outreach as the lower‑risk alternative.
Council unanimously instructed staff to reject and rebid the plant bids as quickly as possible, to work with consultants to firm a financing plan, and to prepare bond‑election language and public outreach in case voter authorization is needed.
