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Select Water Committee approves sponsor contingency for Dayton water project to reduce local rate pressure
Summary
The committee approved a $39,750 sponsor-contingency allocation for the Dayton Water System Rehabilitation project, contingent on AG review, to cover part of a post-bid cost increase and avoid a full legislative amendment cycle.
The Select Water Committee approved a sponsor-contingency request to help the Town of Dayton cover increased costs on its 2024 water-system rehabilitation project.
Staff told the committee the project’s eligible portion (an infiltration gallery and piping) was originally estimated at approximately $400,000 but design changes—moving from a proposed 12-inch stainless steel wire-wrapped pipe to a 24-inch HDPE pipe, additional quality-control testing and other scope adjustments—caused bid-driven cost increases. Bill Brewer, deputy director of construction, said the eligible portion’s cost creep was about 40 percent, larger than typical contingency usage and larger than staff’s initial expectation for sponsor contingency support.
At the Water Development Commission meeting the prior day, commissioners recommended splitting the additional eligible cost with the sponsor; the commission proposed a 25 percent grant from contingency rather than funding the full overrun. The commission recommended $39,750 in contingency funds to be tapped when the initial $200,000 balance is exhausted; the remainder of the project would be financed through drinking-water SRF (State Revolving Fund) resources and sponsor funds. Staff and the commission emphasized the contingency approval would be contingent on a formal amendment to the agreement subject to Attorney General review.
Dayton Mayor Clifford Reed testified online that Dayton has an aging population on fixed incomes and planned to use local tax-cap funds and about $700,000 in local contribution to complete the project; he said the contingency would reduce the town’s loan burden and avoid steeper water-rate increases for residents. Dave Ingalls, the project engineer with Engineering Associates, supported the town’s testimony and offered to answer technical questions.
Committee action: Following discussion and the commission’s recommendation, a committee member moved to approve the commission’s contingency recommendation and conditional agreement amendment; the motion carried by voice vote and was recorded as carried. The approval is contingent on AG review of the agreement amendment and documentation of the allocation plan.
What’s next: Staff will pursue the agreement amendment with Dayton and submit the amendment to the Attorney General’s office for review; funds would be made available contingently if AG review clears the amendment.
