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Queenstown officials move to redesign and rebid water project after USDA cites documentation, funding problems
Summary
Queenstown commissioners discussed USDA guidance that blocked bid award for the Water Improvement Project because of engineering-documentation errors and an apparent funding shortfall; engineers proposed a reduced scope limited to water main upgrades and commissioners instructed staff to proceed toward rebidding.
Queenstown commissioners on Feb. 6, 2026 reviewed guidance from the U.S. Department of Agriculture that advised the agency could not concur in awarding a bid for the town's Water Improvement Project due to multiple documentation deficiencies and a funding shortfall. Engineers said a reduced scope limited to water-main upgrades has been resubmitted and could be rebid quickly if the identified problems are fixed.
The USDA guidance, as read into the meeting record, listed several problems that prevented concurrence: the town lacked a valid engineering services agreement requiring approval by the State Engineer and State Office by Feb. 27, 2026; amended plans did not match the amended project engineering report (PER); plans were stamped 2022 while the engineering license shown on the plans had expired in 2024; an engineer's acceptance letter or a certified bid tab had not been provided; the engineer's seal and signature on the PER were incomplete or undated; and bid forms and bid-security forms were filled out incorrectly, including an insurance-company address mismatch and an unacceptable stipulation on a bid form. The meeting record states that, because of those defects, USDA considers the bid invalid.
USDA also told the town the available funds were insufficient for the full project and recommended rejecting the current bids, restructuring the project through redesign, phasing, or value engineering, and re-advertising for bids on or before March 15, 2026. The meeting record further states the obligation of the loan and grant would expire on March 31, 2025 and that the town may choose to de-obligate the loan and grant and reapply for the full amount; it also noted that the town could keep an $807,000 CDS grant but must provide a 25% match of $201,750 if it retains that grant to support project costs.
Engineer James Cook told the commissioners that USDA was agreeable to a reduced scope that would focus on water-main upgrades; Cook said those reduced-scope plans have been resubmitted and are ready to rebid once the cited deficiencies are addressed. Engineer Bob Rauch said the team believes it can have the necessary corrections completed within two weeks of the meeting date. Commissioners Al Hardee and Bryon Callahan agreed with that approach and instructed Rauch to proceed.
The work session concluded with a motion by Commissioner Bryon Callahan, seconded by Commissioner Al Hardee, to adjourn at 10:38 a.m.; the motion was recorded as passing in the meeting minutes.
Next steps: engineers and town staff will correct the documentation issues cited by USDA, consider a project redesign or phasing to address the funding shortfall, and move forward to rebid the reduced scope if corrective items are resolved.
