The Greater Texoma Utility Authority Board and Sherman City Council approved a $23.8 million contract Monday for construction on a water project that will double Sherman’s water production capacity. This follows action by the GTUA and city of Sherman to issue $7.155 million of debt in December to expand the city’s water treatment plant.
“I’d say we’re coming down into the home stretch now,” Director of Utilities Mark Gibson said before the Sherman City Council unanimously approved GTUA’s plans Monday evening. “Two stipulations from the GTUA (meeting) were (that) city of Sherman approve it and that the money be available on Jan. 25. And the way I understand it from the finance people, the money is 100 percent going to be there on Jan. 25. So we’re ready to go.”
Despite only receiving two bids for the project, GTUA General Manager Drew Satterwhite recommended that the board accept the lowest bid contingent on receiving funds from the Texas Water Development Board. Sherman staff explained the low bid for the plant’s expansion was $23.805 million by MWH Constructors Inc. However, that bid combined with the cost of microfiltration components that will be added as part of the expansion surpassed the available funding for the work.
With the current state of the market, Satterwhite said he feared prices would only go up if the authority sought to rebid the project.
“Bottom line, this is a rather large project, and all we can think of is there are a lot of large scape projects in the Metroplex,” Satterwhite said, noting collectively this was the largest bond issue GTUA has seen.
Due to this and a need to progress on the project, Satterwhite urged the board to approve the project and allow it to move forward.
Gibson said the project is necessary as the city approaches its production capacity of 10 million gallons. He explained this update is also vital to keeping the city competitive with industries that are looking to relocate or open a new facility. Gibson said many industrial customers can use up to 4 million gallons of water each day.
“When industries check out Sherman for a location, the first question they ask is what is your water capacity,” he said.
With the contract approved by the Sherman City Council, Satterwhite said the contract will be signed as soon as the GTUA has access to the funding. From there, he said construction will likely start in March or April and take about 18 months to complete.
In November 2014, GTUA received $2.5 million for design and planning phases of the project through the Texas Water Development Board’s Drinking Water State Revolving Fund. The next year, it received an additional $27.31 million for the construction of the plant expansion and a new elevated storage tank along FM 1417. This included $2.35 million for the tower, about $18.9 million for the water treatment, and $3.35 million in equipment.
However, only two bids were submitted for the project with costs ranging from $23.8 million to $26.67 million, necessitating a second bond for the project. Satterwhite attributed the prices, in part, to the complexity of the project. The bidding documents and schematics for the project took up nearly 2,000 pages, he said as he tried to lift one of the documents Monday.
“When we first conceived this project back about two or three years ago, cost estimates were based on what construction was costing at the time,” Sherman City Manager Robby Hefton said. “We’ve seen about a 25 to 30 percent increase in costs just in that two years. So on a big project like this that’s 20-something million dollars, that’s not chump change. That’s millions of dollars of increase we’ve seen.”