TOWER-SOUDAN— Officials here were hopeful this week that a Tuesday bid opening for a long-planned drinking water treatment facility shared by both communities here would help bridge a funding gap that has kept this project on hold for more than three years.
It wasn’t to be. Instead, the lone contractor, Lakehead Construction, which submitted a $9.1 million bid for the project last year, offered the sole bid this year, at an only marginally improved price tag of $9.05 million.
Tower clerk-treasurer Michael Schultz and Breitung wastewater manager Matt Tuchel, who were both on hand for the 1 p.m. bid opening, both expressed disappointment at the number of bidders as well as the price tag. They had worked extensively answering questions and touring the site with a second contractor, Magney Construction, and had even extended the bid deadline by two weeks at their request. But the company ultimately backed out just minutes before the bid deadline.
The Tower-Breitung Waste Water Board, or TBWWB, which oversees the drinking and wastewater treatment infrastructure for the two communities, has obtained a $3.375 million federal grant from the Army Corps and appears to qualify for a combination of grants and loans from the state’s Public Facilities Authority, or PFA, of potentially as much $5 million, of which $1.125 million would be a loan.
That leaves the TBWWB with a roughly $675,000 funding gap, not including project management costs and potential overruns, which could easily add several hundred thousand dollars to the final price tag.
The continuing delay in the project hasn’t been kind to the numbers. Original estimates for the project, which date back to 2020, pegged the project at $4.5 million, three-quarters of which was expected to be covered by the Army Corps grant. But delays due to the COVID pandemic and the rising cost of construction, pushed the engineer’s estimates to $5.5 million, which prompted officials to look for additional ways to bridge that funding gap.
That funding gap became a canyon last year when Lakehead submitted the lone bid on the project, for $9.1 million.
The communities will now have to face the tough decision of whether to reject the latest bid, which would likely delay the project another year and potentially push the construction costs still higher. In the alternative, the communities could gamble that they’ll find other sources of funding if they move forward with the project. If not, the extra cost could end up as a significant increase in water rates for customers of the TBWWB.