Intake Project Now Estimated To Cost $42.3M, Council Approves Request for Additional $12M

Published Tuesday, August 23, 2016 at 8:14 am

By Jesse Wood

The Boone Town Council voted 4-1 to request an additional $12 million in USDA loans for the town’s water intake project. The project’s total cost is now estimated to be nearly $42.3 million.

This compares to the $25-million bond referendum that town voters approved in 2008 for the water intake and the $20.5 million loan that the town accepted from the USDA to finance the project in 2010. The most expensive line item on the project is the 63,000-foot transmission line that will bring the water from the proposed intake in Todd to the town’s water treatment plant in Boone.

The town has already spent about $4.1 million on the project for property and easement acquisitions and engineering and legal fees.

Town Manager John Ward, who took over as town manager in late 2014, said that by utilizing debt service that is expiring for the Jimmy Smith Wastewater Treatment Plant; planning for a new interest rate of 2.25 percent for both the original loan and the new $12-million loan in the form of a revenue bond; and utilizing about $4 million in current water and sewer funds, the town council could “move forward without any additional water or sewer rates. All based on current sales [of water/sewer].”

Prior to Monday’s meeting, Ward told High Country Press that several factors played out into the disparity between the original loan amount and the new estimated costs: “Number of bidders, change in economy, the conditions placed on the work associate with DOT controlled roads, timing involving the potential for the contracts to be approved and the notice to proceed lining up with the start of winter and some under calculations for material costs on behalf of the engineer.”

In fact, WK Dickson, the engineer hired by the town for the project, submitted to the USDA in December 2015, a total estimated cost breakdown of just over $30 million, as Deborah Greene, a member of New River Advocates, which formed in opposition to the intake project, said during the public comment portion of the meeting, where a few others spoke out against the project.

“WK Dickson did a poor job estimating this project,” Greene said.

The loan nay vote was Council Member Loretta Clawson, who questioned the need for this water, along with some of the speakers during public comment.

She once supported this project as mayor and has been against the project for a while now. Clawson said that she’s seen her water and sewer fees double because of this project. She said that the town will have to sell water to bigger “mega projects” in order to pay for the water intake and would prefer to see that money go towards older infrastructure that is in bad shape.

“This is mind-boggling to me,” Clawson said.

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