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Otsego awards contracts for Wellhouse 3 water treatment plant; secures federal and state grant prospects
Summary
Council awarded construction and equipment contracts for the Wellhouse 3 drinking water treatment plant, accepted low bids from Rice Lake Construction and Karita America, approved an AE2S construction‑services amendment, and heard that a $1.5 million congressional/EPA grant plus emerging contaminants grant funding are expected to cover part of the project.
The Otsego City Council on May 26 accepted low bids and approved contract awards and an engineering amendment for the Wellhouse 3 drinking water treatment plant, a project city staff and the design firm said will improve treatment for iron, manganese and radium at a site north of town.
AE2S project manager Ryan Hansen told the council that the city split procurement into two packages to retain some sales tax exemptions: the pressure‑vessel procurement and the water‑plant construction/installation package. The low apparent bidders were Karita America, Inc. at $1,913,331 for the pressure vessels and Rice Lake Construction at $9,194,600 for the plant construction. Hansen summarized an approximate all‑in project cost of $13.9 million, including soft costs and a recommended 5% construction contingency.
“The low apparent bidder is Rice Lake Construction at $9,194,600,” Hansen said during the presentation, and he asked the council to award both bids and approve a construction‑phase amendment to AE2S for construction administration and related services.
Council adopted Resolution 2026‑43 awarding the construction contract to Rice Lake Construction and Resolution 2026‑44 awarding the pressure vessel procurement to Karita America. The council also approved an owner‑engineer amendment (professional services) with Advanced Engineering and Environmental Services LLC for roughly $1.45 million to provide construction administration, observation, instrumentation and controls, and project closeout services.
Hansen described funding that the city has pursued for the project: an expected congressional/EPA grant of $1.5 million and a state drinking water revolving fund emerging‑contaminants grant that could cover up to half of non‑EPA eligible costs (up to $5 million maximum for eligible items). He said the funding packages would cover the water treatment plant, wellhouse upgrades and the transmission main but not growth‑related work for a future Well 12, which must be funded separately.
Councilors asked practical questions about the schedule and public outreach. Hansen said construction could start as early as June with substantial completion targeted in March 2028, and that well drilling for Well 12 was expected this summer. Staff and the consultant also proposed a public‑facing GIS story map to show project timelines and maps; the council asked to preview the site before any public posting.
All three procurement and amendment motions passed by voice vote.
