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PAWSD approves loans for Hatcher project

The directors of the Pagosa Area Water and Sanitation District approved two major loan agreements last Thursday and held a bid opening Tuesday, Sept. 1, for the first of three components of the American Recovery and Reinvestment Act (ARRA)-funded Highlands Lagoon Elimination project.

Constructed in the 1970s, the aging, outdated aerated lagoon facility on North Pagosa Boulevard, was designed to handle sewage from the Highlands and Hatcher subdivisions only. The facility has exceeded its expected life and capacity.

The first phase of the Highlands Lagoon Elimination project consists of the installation of approximately seven and one-half miles of sewer pipe (of varying diameters), a lift station, and the abandonment and reclamation of the current lagoon site.

Six bids were received for the project component, with the apparent low bidder being Triad Western Constructors, Inc. of Cortez, Colo. the company entered a bid of $3,524,189.00.

Five other bids were accepted for consideration:

  • Hart Construction, LLC, Pagosa Springs, $3,765,123.25.
  • Don Kelly Construction, Inc., Bozeman, Mont., $4,305,282.
  • Arapahoe Utilities & Infrastructure, Inc. Englewood, Colo., $4,764,707.
  • Weeminuche Construction Authority, Towaoc, Colo., $6,220,712.33.
  • Reynolds-Tierdael, Denver, Colo., $6,523,073.

The bids have not yet been verified, checked for accuracy, thoroughly reviewed, analyzed or checked for responsive content. All bids are subject to change after a review process has been completed.

Once the bid verification and analysis process has been completed, a recommendation of award from the project engineer will accompany a staff recommendation letter to the PAWSD Board of Directors for consideration at their next regularly-scheduled meeting on Sept. 8.

The board adopted a resolution at a special meeting last Thursday to approve entering into two loan agreements with the Colorado Water Resources and Power Development Authority (CWRPDA) for this project. Despite recent turmoil concerning district finances and policies, no one from the general public attended the meeting.

The zero-percent ARRA loan, in the amount of $4,801,942, requires semi-annual payments of $120,048.55 beginning on May 1, 2011.

The second loan, a zero-percent CWRPDA Direct Program Loan of $3,211,129, requires semi-annual payments of $80,278.23, also beginning on May 1, 2011.

Both loans have 20-year terms. The district also received an ARRA grant of $1,309,282 for a total authorization for the project of $9,322,353.

In order to accept these funds and enter into the loan agreements, the district provided a Parity Lien Bond Certificate to the Colorado Water Conservation Board, which required extensive independent scrutiny of the district’s financial position and ability to encumber the debt. This included independent review by a certified public accounting firm (Wall, Smith, Bateman and Associates, Inc.), independent bond counsel (Tom Weihe, Kutak Rock) and general counsel (James Mock, Collins, Cockrel and Cole).

Although the district has been approved for, and has the financial capacity to fully support, a $9.3 million stimulus project, it may not need to draw the total amount of loan funds if total project costs are less.

Bid solicitation for the second phase of the project, a secondary centrifuge, and the final phase, the biosolids beneficial use component, will occur later this fall so that by late autumn the total project cost will be finalized.