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Chippewa Wastewater project hits BABA rules; contractors raise price, staff says loan savings may offset increase
Summary
Staff told commissioners that Build America/Buy America requirements increased the prime contract by about $2.6 million but triggered an approximately one‑percentage‑point interest reduction on the Ohio EPA loan, which staff estimated could save around $400,000 a year and roughly $8 million over the life of the loan.
Medina County project staff updated the Board of Commissioners on new financing implications for the Chippewa Wastewater Treatment Plant after the Ohio EPA designated the project as subject to Build America/Buy America (BABA) requirements.
"Basically, the Ohio EPA gets money from the feds, so they have to match a 1 to 1 with complying with federal requirements," said Jeremy, the project representative who briefed the board. He said the prime contractor (identified in the meeting as Great Lakes) sought domestic‑manufacturing compliance from its subcontractors, and that effort raised the contract price by about $2,600,000.
Jeremy said the Ohio EPA will reduce the loan interest rate by one percentage point as part of the BABA designation — from an earlier 3.25% figure to about 2.25% — and that staff estimates the 1‑point reduction saves roughly $400,000 per year in debt service, or about $8,000,000 over the life of the loan. "The savings on that 1 point is 400,000 a year or $8,000,000 over the course of the loan," he said.
Jeremy said staff plans to present a change order to accommodate the contractor’s price adjustments at next week’s meeting. When a commissioner asked whether the county could expect further price increases tied to the change, staff replied that they expect this to be the last increase related to the current change order.
No formal action was taken on the change order at this meeting; staff indicated the change order would be presented for board action at a subsequent meeting.
Why it matters: The contractor’s price increase and the offsetting interest reduction shift the project’s cost profile. If the county approves the forthcoming change order, the net long‑term debt service impact will depend on the final change‑order amount, loan term and any additional contingencies.
What’s next: Staff will present the specific change order to the board in a future session for formal approval. The county’s finance and administration teams will need to reconcile contract adjustments with project budgets and loan documents.
