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Sewer Improvement Project
What the Town Manager has told Mayor and Town Council about the sewer improvement project, report by report, since January 2022.
29 reports, January 2022 to March 2026
2026
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Sewer Improvement Project Update
This project is now complete. This will be the last month I will have it in this report.
As a reminder, this project was funded through the Bipartisan Infrastructure Law (BIL) through “pilot project” funding and therefore will require the town and our engineering consultants to monitor collection data at the town’s wastewater treatment plant for a period of one year and report to DEQ so that the success of the project can be tracked. I commend Mr. Luke Lowe and the staff at the Wastewater Treatment Plant for their diligent recordkeeping to document our findings.
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Sewer Improvement Project Update
This project is now complete. I appreciate the representatives from the Virginia Department of Transportation (VDOT) who met with town staff members last month to finalize the pavement patching on Bonham Avenue. This step allowed the town and our engineering consultants at Hurt & Proffitt to close out this project. In your agenda packet, you have the final pay request. The town has received our Certificate To Operate (CTO) from DEQ and we look forward to tracking how this project will improve efficiency in the collection system as well as at the wastewater treatment plant.
As a reminder, this project was funded through the Bipartisan Infrastructure Law (BIL) through “pilot project” funding and therefore will require the town and our engineering consultants to monitor collection data at the town’s wastewater treatment plant for a period of one year and report to DEQ so that the success of the project can be tracked. I commend Mr. Luke Lowe and the staff at the Wastewater Treatment Plant for their diligent recordkeeping to document our findings.
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Sewer Improvement Project Update
This project is now complete, with the exception of a final decision from VDOT on pavement patching along Bonham Avenue, where lateral lines were replaced. Once a determination is received from VDOT, any street repairs deemed necessary can be made and this project will officially be completed. At this point, the town is working with VDOT to coordinate an in-person site visit to flesh out the final approach to address this issue.
As a reminder, this project was funding through the Bipartisan Infrastructure Law through “pilot project” funding and therefore will require the town and our engineering consultants to monitor collection data at the town’s wastewater treatment plant for a period of one year and report to DEQ so that the success of the project can be tracked. I commend Mr. Luke Lowe and the staff at the Wastewater Treatment Plant for their diligent recordkeeping to document our findings.
2025
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Sewer Improvement Project Update
This project is now complete, with the exception of a final decision from VDOT on pavement patching along Bonham Avenue, where lateral lines were replaced. Once a determination is received from VDOT, any street repairs deemed necessary can be made and this project will officially be completed.
As a reminder, this project was funding through the Bipartisan Infrastructure Law through “pilot project” funding and therefore will require the town and our engineering consultants to monitor collection data at the town’s wastewater treatment plant for a period of one year and report to DEQ so that the success of the project can be tracked. I commend Mr. Luke Lowe and the staff at the Wastewater Treatment Plant for their diligent recordkeeping to document our findings.
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Sewer Improvement Project Update
With the completion of Change Order #4, this project is now complete with the exception of some pavement patching and closeout paperwork.
As a reminder, this project was funding through the Bipartisan Infrastructure Law through “pilot project” funding and therefore will require the town and our engineering consultants to monitor collection data at the town’s wastewater treatment plant for a period of one year and report to DEQ so that the success of the project can be tracked.
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Sewer Improvement Project Update
The town’s contractor, Portland Utilities, continues to wrap up small “punch list” tasks as this project winds down toward completion. Change Order #3, which you approved two months ago, is now complete. Change Order #4 is drafted and work is ready to proceed upon Town Council’s approval of it.
As a reminder, Change Order #4 will address a problematic manhole in the Seven Mile Ford section of our wastewater collection system.
Upon completion of the work specified in Change Order #4, this project will substantially be complete. Once the project work is finalized, you will be provided a summary of the project from start to completion. As a reminder, this $3.9 million project was funded through pilot program funding from the Bipartisan Infrastructure Law, so project reporting to the Virginia Department of Environmental Quality (DEQ) will be ongoing for two years after project completion and closeout.
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Sewer Improvement Project Update
The town’s contractor, Portland Utilities, continues to wrap up small “punch list” tasks as this project winds down toward completion. Change Order #3, which you approved last month, is now underway and will address issues with leaking and unstable manholes in two areas and will replace approximately 700 feet of old sewer pipe along Sunset Drive. This line was not part of the original scope of work, but was identified by Public Works a few months ago and, after assessing the condition of this line, has been deemed a key area of I&I (Inflow and Infiltration).
Public Works has identified a final manhole in our system that we hope to address in a Change Order #4. Portland Utilities is compiling cost estimates at this time and I hope to have a plan to present to you at October’s Town Council meeting.
As a reminder, this $3.9 million project was funded through pilot program funding from the Bipartisan Infrastructure Law, so project reporting to the Virginia Department of Environmental Quality (DEQ) will be ongoing for two years after project completion and closeout.
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Sewer Improvement Project Update
The town’s contractor, Portland Utilities, continues to wrap up small “punch list” tasks as this project winds down toward completion. Change Order #3, which you approved last month, is now underway and will address issues with leaking and unstable manholes in two areas and will replace approximately 700 feet of old sewer pipe along Sunset Drive. This line was not part of the original scope of work, but was identified by Public Works a few months ago and, after assessing the condition of this line, has been deemed a key area of I&I (Inflow and Infiltration).
Public Works has identified a final manhole in our system that we hope to address in a Change Order #4. Portland Utilities is compiling cost estimates at this time and I hope to have a plan to present to you at September’s Town Council meeting.
As a reminder, this $3.9 million project was funded through pilot program funding from the Bipartisan Infrastructure Law, so project reporting to the Virginia Department of Environmental Quality (DEQ) will be ongoing for two years after project completion and closeout.
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Sewer Improvement Project Update
The town’s contractor, Portland Utilities, continues to wrap up small “punch list” tasks as this project winds down toward completion. Change Order #3 has been planned and will address issues with leaking and unstable manholes in two areas and will replace approximately 700 feet of old sewer pipe along Sunset Drive. This line was not part of the original scope of work, but was identified by Public Works a few months ago and, after assessing the condition of this line, has been deemed a key area of I&I (Inflow and Infiltration).
As a reminder, this $3.9 million project was funded through pilot program funding from the Bipartisan Infrastructure Law, so project reporting to the Virginia Department of Environmental Quality (DEQ) will be ongoing for two years after project completion and closeout.
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Sewer Improvement Project Update
The town’s contractor, Portland Utilities, continues to wrap up small “punch list” tasks as this project winds down toward completion. Our latest Progress Meeting was held May 7th, where the details of the Change Order Number 2 were discussed. Change Order Number 2 will address leaking and unstable manholes adjacent to Highway 11 in Seven Mile Ford and along Lyons Gap Road.
After payment is made to the contractor for the work undertaken with this most recent Change Order, we anticipate that enough funding will remain to perform much-needed repairs or replacement of old and failing lines in the West End of town, particularly along Skyview Drive. While this section of the town’s wastewater collection system wasn’t considered during the planning phase of this project, recent repairs by the Public Works Department brought the poor conditions of these lines to the town’s attention. Once I was made aware, conversations were initiated with Hurt & Proffitt, along with the funding agency, the Virginia Department of Environmental Quality (DEQ). DEQ quickly assessed that these new areas fall within the original purpose of the project, reduction of I&I (Inflow and Infiltration), so approval was granted for the town to look into possible courses of action.
As a reminder, this $3.9 million project was funded through pilot program funding from the Bipartisan Infrastructure Law, so project reporting to the Virginia Department of Environmental Quality (DEQ) will be ongoing for two years after project completion and closeout.
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Sewer Improvement Project Update
The town’s contractor, Portland Utilities, continues to wrap up small “punch list” tasks as this project winds down toward completion. Our latest Progress Meeting was held May 7th, where the details of the proposed Change Order Number 2 were discussed.
As a reminder, this $3.9 million project was funded through pilot program funding from the Bipartisan Infrastructure Law, so project reporting to the Virginia Department of Environmental Quality (DEQ) will be ongoing for two years after project completion and closeout.
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Sewer Improvement Project Update
The relining of the planned sewer pipes is now complete, with the exception of a few small areas. The staff, engineers, and contractor have all thought we were very close to completion on more than one occasion, but as the project has progressed, areas have been identified that were not in need of repair, while other areas have been shown to be in need of repair. Obviously, every section that is found to not need relined results in a reduction in project costs. However, as the town is committed to the original project funding package, we are taking the opportunity to locate and address as many areas of the system as we possibly can to maximize these funds and reduce the I&I (inflow and infiltration) as much as possible.
The first Change Order resulting from these changes to the scope of the project allowed the town to address a very problematic section of the system along Bonham Avenue. Resulting from discussions at last week’s project progress meeting, I foresee a Change Order 2 very soon to address two sections of the system on the west end of town in the industrial park and near the intersection of Highway 11 and Sulphur Springs Road running toward the town shop. Town staff met with Hurt & Proffitt early last week to discuss other problematic areas of the system to consider in the Change Order. A manhole along Highway 11 in Seven Mile Ford and a manhole near Carlock Creek on Lyons Gap Road have also been identified for consideration.
The end result of this project should see a considerable reduction of the inflow and infiltration (I&I) entering our wastewater system. This reduction should correlate to reduced operating costs for our wastewater treatment plant, including reduced electricity consumption. Initial sampling at the wastewater treatment plant shows evidence that our project has been preliminarily successful toward this goal as flow rates have shown to be more steady instead of spiking during high rain events.
As a reminder, this $3.9 million project was funded through pilot program funding from the Bipartisan Infrastructure Law, so project reporting to the Virginia Department of Environmental Quality (DEQ) will be ongoing for two years after project completion and closeout.
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Sewer Improvement Project Update
The relining of the planned sewer pipes is now complete, with the exception of a few small areas. The staff, engineers, and contractor have all thought we were very close to completion on more than one occasion, but as the project has progressed, areas have been identified that were not in need of repair, while other areas have been shown to be in need of repair. Obviously, every section that is found to not need relined results in a reduction in project costs. However, as the town is committed to the original project funding package, we are taking the opportunity to locate and address as many areas of the system as we possibly can to maximize these funds and reduce the I&I (inflow and infiltration) as much as possible.
The first Change Order resulting from these changes to the scope of the project allowed the town to address a very problematic section of the system along Bonham Avenue. Resulting from discussions at last week’s project progress meeting, I foresee a Change Order 2 very soon to address two sections of the system on the west end of town in the industrial park and near the intersection of Highway 11 and Sulphur Springs Road running toward the town shop.
Manhole refurbishment continues to be underway. I had the pleasure of spending time with one of the rehabilitation crews who took time to explain the process to me, which I found very interesting. Attached to this report are pictures of the process.
The end result of this project should see a considerable reduction of the inflow and infiltration (I&I) entering our wastewater system. This reduction should correlate to reduced operating costs for our wastewater treatment plant, including reduced electricity consumption.
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Sewer Improvement Project Update
The relining of the planned sewer pipes is complete, with the exception of a couple of small areas that had been identified as needing repairs IF funding were to become available. Rehabilitation of manholes is now underway. The project will result in numerous leaking manholes being “dried in” which will result in less Inflow and Infiltration, while also adding years of life to these key components of the town’s wastewater collection system.
The work associated with Change Order Number 1 continues along Bonham Avenue. The “open cut” section of this project (running through the CHS band practice field) is now complete and the next phase (under Highway 11 and along Bonham Avenue to Old Stage Road) is well underway with laterals being connected as progress is made. Even after this work, our engineering consultants and contractors feel strongly that the town will have approximately $300,000 of our original funding package that can be used to reline areas not originally planned for this project. In addition to a section of line running from Pathway Park to the town’s wastewater treatment plant, Mr. Combs and Mr. Keen showed me a section of the town’s collection system running from Highway 11 under the river to the Town Shop that is in need of repairs. If all goes well, these two problem areas will be included in an upcoming Change Order.
The monthly progress meeting for this project was held on February 5th. A copy of the meeting minutes is provided in your agenda packet.
The end result of this project should see a considerable reduction of the inflow and infiltration (I&I) entering our wastewater system. This reduction should correlate to reduced operating costs for our wastewater treatment plant, including reduced electricity consumption and overall better efficiency.
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Sewer Improvement Project Update
The relining of the planned sewer pipes is complete, with the exception of a couple of small areas that had been identified as needing repairs IF funding were to become available. As we discussed last month, our contractors at Portland Utilities Construction Company have coordinated with the town’s engineering consultants for this project, Hurt & Proffit to locate areas that has originally been planned to reline, but were deemed to be in good working order after visual inspection.
As you will recall, you approved Change Order Number 1 to this project last month, that was made possible due to these identified areas that allowed the town to redirect funding to this problematic area along Bonham Avenue. The “open cut” section of this project (running through the CHS band practice field) is now complete and the next phase (under Highway 11 and along Bonham Avenue to Old Stage Road) began this week.
The monthly progress meeting for this project was held on January 8th. I typically provide you a copy of the minutes, but since that was just one day before I present this report to you, it is not yet available. I will provide it to you with next month’s report.
The end result of this project should see a considerable reduction of the inflow and infiltration (I&I) entering our wastewater system. This reduction should correlate to reduced operating costs for our wastewater treatment plant, including reduced electricity consumption and overall better efficiency.
2024
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Sewer Improvement Project Update
The relining of the planned sewer pipes is almost complete. This phase of the project is expected to be completed by year’s end. Fortunately for the town, there were some areas of the project that were unexpectedly found to be in good shape, which allowed them to be bypassed resulting in a cost savings that the town can now use to focus on other problem areas of our wastewater system. It was determined that the section of our system that causes the highest level of problem is the main line that runs along Bonham Avenue from Old Stage Road, under Highway 11 and under the Chilhowie High School parking lot, then on to its connection to another main line near the railroad tracks near the high school’s grass practice field for the band.
The cost savings from the reline work has allowed us the opportunity to address this problematic section of the system. This first Change Order of this project will see the contractor, with approval from the town’s engineering consultant, initiate work on this area by first completing an open-cut replacement of the old line in the grass field, which will begin in the first few days of January, weather permitting. The remainder of the work is slated to be done by the pipe bursting process, which allows the lines to be upsized and replaced while also ensuring no or minimal damage to above ground property. This phase of the project is expected to be completed by the end of February, weather permitting. I have attached a copy of Change Order Number 1 to this report for your review and consideration.
The end result of this project should see a considerable reduction of the inflow and infiltration (I&I) entering our wastewater system. This reduction should correlate to reduced operating costs for our wastewater treatment plant, including reduced electricity consumption.
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Sewer Improvement Project
The contractor selected to undertake this project, Portland Utilities Construction Company, is now staged on site and has begun work on this renovation project. Pre-lining CCTV work on the 15-inch main has started and the relining crew is mobilized and set to begin. Pay Requests are being processed in a timely manner and the Mount Rogers Planning District Commission has stated that all Labor Compliance interviews have been completely upright and proper.
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Sewer Improvement Project
The contractor selected to undertake this project, Portland Utilities Construction Company, is now staged on site and ready to begin this renovation project. The actual relining work is expected to begin approximately one week from today. Most of this project area will be in the section of the town’s sewer system running from behind Chilhowie High School through Seven Mile Ford and terminating near the Smyth County Technical School. As a reminder, the goal of this project is to reduce the amount of Inflow and Infiltration (I&I) coming into our system, which will help reduce the load, and therefore expenses, at our wastewater treatment plant. A copy of the funding page for this project and a copy of minutes from our September 4th Progress Meeting are in your agenda packet.
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Sewer Rehabilitation Project
Work continues to progress on this project in a timely manner. One issue that arose was a disagreement over right-of-way on Norfolk & Southern’s property at the trestle in Seven Mile Ford. Town and Hurt& Proffit staff met virtually with the consultant handling the railroad’s rights-of-way to discuss the request to access their property for the purpose of installing a temporary bypass from one manhole to another. With an agreement being unable to be reached in a timely manner, Hurt & Proffit opted to just move on with the project, leaving out the approximately 40 foot section of sewer line under railroad property. The impacted line was deemed to be in good shape as is currently exists and a work stoppage due to this issue would have put the already underway project on hold indefinitely.
I have reached out to Norfolk & Southern to arrange a meeting so that we can discuss this issue and ensure better coordination and cooperation moving forward.
The monthly progress meeting was held on August 7th.
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Sewer Infiltration and Inflow (I&I) Project Update and Presentation of Requestion Request Number 2
On May 1 we had our Preconstruction Meeting with the Contractor Portland Utilities of Portland, Tennessee. You have a copy of the outline of that meeting and the attendance sheet. Representatives at the meeting included Portland Utilities were Hurt and Proffitt (H&P), Mt. Rogers Planning District Commission (PDC), Virginia Department of Transportation (VDOT), and the Town Staff including finance and public works. As your can see a variety of issues were discussed. Portland Utilities was the low bid on the project at $3,439,825.88. The Notice to Proceed was issued at July 15, 2024. The project has 210 Days to be Substantially Completed or February 15, 2025, and 240 days for Final Completion on March 15, 2026. Weather exclusion days are not included in these dates.
You also have in your agenda packet the May 2 letter to Ms. Karen Dorean of the Department of Environmental Quality (DEQ) prepared by Hurt and Proffitt (H&P). The request is for $138,194.29. It includes $75,546.80 to H&P for Engineering, $42,000 for Surveying to H&P, and $20,647.49 to Spilman, Thomas and Battle, our bond counsel. $150,000 had previously been paid to H&P for Engineering and Design, and Surveying, which was reimbursed partially to the Town by a $100,000 grant from Mt. Rogers PDC. The balance of those items H&P had been carrying since early 2023 by agreement until the project had been Closed. Thank you, H&P. I believe this requisition for those items makes up whole now.
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Sewer Project Conditional Parity Approved
We had a conference call with a variety of agencies on February 22 on the status of the Sewer Infiltration and Inflow (I&I) project. Involved in the conference call were personnel from the Department of Environmental Quality (DEQ), the Virginia Resources Authority (VRA) and Rural Development (RD). Dennis Amos of Hurt and Proffitt (HP)participated in the call in the office along with Clerk Treasurer Felicia Eller and me.
The VERY good news is that Rural Development said the national office had approved the parity. They said it was a “conditional” parity that would require some agreement between VRA and RD. The way it was discussed this was not a big deal but something that RD is now requiring. * It was explained that the “conditional” parity would not involve the Town. That is a good thing because we had to literally produce hundreds and hundreds of pages of documents, as we had previously reported, and had to pay our accountant about $6,000 for their services.
AS you know from the last meeting DEQ gave us another $529,610 of grant money (principal forgiveness) to cover the low bid to take the grant amount up to $2,338,378 and the total project to $3,604,990. The loan package remains at $1,266,612 at 0% over 30 years. The breakdown is now 64.9% grant and 35.1% loan, and excellent breakdown.
Dennis Amos of HP will be at the council meeting to go over the project again. This time there will be more details on the loan closing, Notice-to-Proceed, start dates, project duration, etc. A factor that could play into all this is a potential government shut down , but hopefully that will be avoided.
*After I wrote this section regarding “conditional” parity we found out that that parity requirement had been waived. We are now only waiting for a date between now and March 31 for the Closing.
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Bid Opening on Sewer Infiltration and Inflow (I&I Project
On December 21 sealed bids were opened up for the I&I Project. The project had been advertised in both the Bristol Herald Courier and Roanoke Times. A pre bid conference was held on November 29.
Two companies submitted bids for the project. They were Portland Utilities Construction and Morgan Contracting Inc. Both companies were from near Knoxville, Tennessee. The two companies that attended the non mandatory pre bid conference did not submit bids. The apparent low bid on the project was Portland Utilities Construction at $3,439,825.88.
The bid was several hundred thousand over the estimate of Hurt and Proffitt (H&P), our engineer on the project. Since the project specs include of about 15,000 linear feet of six, eight, twelve inch gravity mains, 45 manhole repairs, and 24 cleanout repairs, the scope could be reduced. This however, would have to be agreed upon by the contractor. Dennis Amos of H&P is working on that now and should be able to make a report at Council’s January or February Meeting. Also in your agenda is Dennis’s January 5 letter to the Department of Environmental Quality asking for more Principal Forgiveness funds.
2023
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Steps Required to Achieve “Parity” on the Approximately $1.2 million Loan Portion of $3.2 Million Infiltration and Inflow Study (I&I)
Another issue pending is achieving “Parity” on the existing Rural Development Bond (approximately $1.7 million on the Regional Water Treatment Plant) in relation to the $3.2 million sewer I&I project. As I understand it the Virginia Resources Authority (VRA) requires this action because our sewer revenues do not exceed 115% of sewer expenses. As a result, we have to make this new $1.2 million bond a General Obligation Bond from a Revenue Sewer Bond. In order to do this Rural Development has to evaluate and do a “Parity” evaluation that determines that one bond holder has equal rights with the other. In this case it would be Rural Development to VRA (through the Department of Environmental Quality).
Attached in your packet is a 12 item list of items needed for Rural Development (RD)to grant “Parity” on the new sewer bond. These are shown in Area Specialist Robert Hilt’s November 15 letter. As I told the Committee on December 5 that while we could do much of this work, we are dependent on our Auditor Greg Tucker of Bostic and Tucker to draw much of this information out of the 2021-22 audit, particularly since our present finance staff is inexperienced in these matters. Hurt and Proffitt also has responsibilities. Robert Hilt has indicated to me that the parity determination is now made on the Federal level, since the State Director has retired and not been replaced, and it will take an undetermined amount of time for them to do the review. As a result of that I asked that all these action steps be completed by December 15 and sent to Robert Hilt. We have to be Closed on this project by March 31, 2024 to move forward.
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Bidding of $3.2 Million I&I Sewer Project and Related Issues
You have in your agenda packet the roster of a Prebid Conference for the project held on November 29. While there were only two contractors there at the Prebid Conference it was non mandatory and anyone can bid on the project. Dennis Amos provided an agenda that is also attached. It included a short scope of work, bid schedule, etc. Also, the requirements of the Department of Environmental Quality were discussed including minority and women business enterprise required actions, American Iron and Steel requirements, Davis – Bacon wage requirements, etc.
The project was bid in the Bristol Herald Courier and Roanoke Times on November 19. As stated above the Prebid was held on November 29 and the bid opening is at 2:00 on December 21.
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Status of $3,318,505 Infiltration and Inflow Project (I&I) Sewer Project Following Zoon Call
Another significant Public Works Project is on the horizon, hopefully, is the system wide sewer I&I project. We had a Zoom call with various agencies on the line including the Department of Environmental Quality (DEQ), the Virginia Resource Authority (VRA), our engineer Hurt & Proffitt; Spilman, Thomas and Battle (bound Counsel) and our staff.
To briefly summarize, we are asking Council’s permission to move forward on the project and begin advertising. If granted ads will appear in the Bristol Herald Courier and Roanoke Times on November 19. The Pre bid meeting is slated for November 29th and on December 21 the bid opening is slated. In order to be compliant with some public financing requirements some type of hearing may be required at Council’s December 14 meeting.
VRA stated we have until March 31, 2024 to Close on the project considering the 2021-22 audit is now completed. VRA said the three existing wastewater bonds will have to be converted to General Obligation Bonds, along with this one, since our revenue to expenditure ratio is not 115%. They further stated that Rural Development would require “Parity” on these bonds and this could take several months considering recent retirements and this process now a having to be done on the state or federal level now.
I explained that Clerk Treasurer Felicia Eller has never dealt with this process before and we do not know what information Rural Development will be asking for to complete the “Parity” process. Hopefully it will be boilerplate information that will be needed like budget and audit numbers. We may be need to rely more than normal on our auditors for this information. As said above we have until March 31,2024 to get this done.
The 2022-23 audit needs to be completed by March 31, 2024. If that is done we will have a full year from April 1, 2024 to get Closing on the project. Juan Garcia of Hickock, Brown and Company of Abingdon said that if Greg Tucker of Bostic and Tucker of Lebanon had the audit report to him by January 1, 2024, he could get the report written up by the March 31 deadline.
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Second Award from the Department of Environmental Quality (DEQ) on Infiltration and Inflow (I&I) Project
You have in agenda packet a June 23 email and letters from Ms. Karen Doren of DEQ for the I&I Project. We had gotten an earlier award in December of 2022 for the project.
This package was somewhat confusing in that it was from two pools of money. After talking with Dennis Amos and some DEQ personnel we were able to sort it out. One pool of money for principal forgiveness (grant) was for $224,250 and the other $275,162. With the total second award being $1,248,531 the balance of the money is a 30 year 0% loan. The loan / principal forgiveness allocations is 60% loan and 40% principal forgiveness.
The funding for the project is now secured. As you can see by a handwritten breakdown I prepared on June 23, the total first and second award packages is $3,318,505, with $2,051,893 grant and $1,266,612 loan. This breaks down to a 61.8% grant and 38.2% loan for the total package. Taking the loan amount of $1,266,893 over a 30 year period would be $42,220.40 yearly. Using this fiscal year’s sewer expense at $918,584, the $42,220.40 would only be an additional 4.6% increase.
We had hoped to bid the project out this month. Hurt and Proffitt has completed the design. But the Virginia Resources Authority will not let us close on the project until the 2021-22 audit is completed. The first part of the report has just been completed but now it was be certified by another auditor. At this writing I don’t expect the project to be closed on until this Fall, and the project bid out later this year with a late winter / early spring of 2024 for construction to commence.
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Second Funding Package in the amount of $1,248,531 for the Sewer Infiltration and Inflow (I&I) Project Through the Department of Environmental Quality (DEQ) and Virginia Resource Authority (VRA)
You have in your agenda packet a January 13 letter from Shawn B. Crumlish of the VRA offering the Town a 30 Year 0% loan of $1,248,531 for the second phase of the I&I project. This second phase of the project will deal with the part of the system east of Chilhowie and into Seven Mile Ford. As you recall in January Council accepted the first funding package of $2,069,974 with 75% of that package being principal forgiveness (grant).
Clerk Treasurer Marlene Henderson and I had a conference call on the this second phase of the project on Monday, January 23 with DEQ personnel. While the current funding has no principal forgiveness on the $1,248,531 package, the DEQ personnel seemed very optimistic that we could receive up to 50% in principal forgiveness. We emphasized that if we did up to that amount it would make the second phase much more palpable for us as a staff to recommend to Council for its adoption.
Assuming we receive 50% principal forgiveness on second package, and taking into account the known 75% on the first package, of the $3,318,505 total allocation $2,176,746 will be principal forgiveness or 65.6%. The remaining $1,141,757 over the 30 year term would only be $38,058.63 per year. I have attached a December 1, 2022 letter from DEQ including notes showing those figures. Using figures for this fiscal year that would entail only about a 3.6% increase in the rates.
We will recommend Council to approve this package at this stage. As you can see in Andrea Pearson’s email of the VRA on January 13, Council adoption now will not forgo any possible principal forgiveness in the future. If we do not receive any principal forgiveness on the project we will revisit acceptance of the second phase.
2022
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Status of Department of Environmental Quality (DEQ) Infiltration and Inflow (I&I) Project
We had a conference call with DEQ personnel on May 26 to discuss the $6 million I&I Project with Project Engineer Dennis Amos of Hurt and Proffitt. Among other things discussed Dennis stated the design was moving along and that the project is still scheduled to be bid out in March of 2023.
We did receive some good news on the project regarding possible additional grant funding. As it stands now the approximately $6,000,000 project is one half grant and one-half loan. But it was revealed at the meeting, DEQ is getting around $75,000,000 from the Federal Government through the American Rescue Plan Act (ARPA) and that money can be put against loan amounts. I am unsure at this writing the process of applying for this money, whether we need to formally apply or if the money will be distributed by DEQ based on the project or equally among the projects on the books.
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Update on Sewer System Infiltration and Inflow (I&I) Project and Contract with Hurt and Proffitt (H&P)
On April 14 we had a Zoom Call with Allen Cornett of the Virginia Department of Environmental Quality (DEQ), Clerk/Treasurer Marlene Henderson and Dennis Amos of (H&P). The question at hand was if another $1,000,000 was appropriated on top of the promised $2,000,000 (half grant, half 30 year 0% loan) would the additional money be offered in the same terms?
Allen said the additional $1,000,000 money would be offered in the same terms, namely $500,000 grant and $5000,000 30 year 0% loan, which is excellent news. The existing $2,000,000 can be used on the area within the corporate limits and immediate area, and the additional $1,000,000 will be used to address the areas east of Chilhowie and into the Seven Mile Ford Service area. According to Dennis Amos there still may be an additional shortfall of around $300,000, according to his budget numbers, but we can deal with that as the project moves forward.
The $3,000,000 should address virtually all our I&I problems when the project is complete, and make the system whole for the next generation to come. As stated many times before, I&I that includes ground water and surface water getting into the sewer system, runs up electrical costs, taxes equipment and processes by treating water and new sewer, and can be an environmental hazard by the system being overloaded and not getting a sufficient “kill” or disinfection of waste water going back into the river.
We have already gotten a commitment letter from DEQ on the $2,000,000 on December 21, 2021, and Mr. Cornett advises we will be getting another letter from DEQ on the additional $1,000,000. In rough numbers the $1,000,000 30 year no interest loan will be $30,333 a year or $2,525 a month. Another $500,000 in loan will increase that number to $50,000 yearly or $4,167 per month.
Dennis Amos will be appearing before Council to present a contract for the preliminary design, final design, approvals and bidding for the project. As you can see on his attached schedule, after design and DEQ approvals, the project is slated to be bid in January, 2023 and construction to start in the Spring of that year.
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Formal Notification of Funding for Sewer Infiltration and Inflow (I&I) Repair Project
You have in your agenda package a December 21, 2021 letter from Ms. Karen Doran, Clean Water Financing and Assistance Program Manager, of the Department of Environmental Quality (DEQ) confirming the Town’s $2,069,974 award by the State Water Control Board’s (DEQ) meeting on December 14.
As you are aware we completed the Sewer System Evaluation Study (SSES) Phase I several months ago, which encompassed the areas within the corporate limits and immediately outside. The Phase II study began the end of 2021 and is slated to be completed by April 1, 2022. The finding of both Phase I and Phase II will be prioritized by Hurt and Proffitt and then incorporated in the bid specs and bid out late this year or early 2023 within the above mentioned budget of $2,069,974.
Regarding the above mentioned award, the amount stated is loan money. I questioned our DEQ contact in the Abingdon Office, Allen Cornett, about the letter listing that amount as only loan. We had received notification earlier that half that amount would be Principal Forgiveness / grant. Allen acknowledged that. He said we would be receiving a letter this Spring stating that of that total amount would be grant, or $1,034,987. I noted that conversation in the letter and made a handwritten note at the bottom.
Regarding the loan amount, we received an extraordinary rate of 0% and 30 year term on the remaining $1,034,987. If we amortize that for 30 years that is only $34,499.57 per year. Just our electric bill shows a difference of about $1,500 a month, or $18,000 a year, between wet weather months and dry weather months because of I&I. That does not count other cost increases caused by I&I like wear and tear on equipment, chemicals, personnel, etc.
While I am not saying that the $2,000,000 project will take care of all our I&I problems, and eliminate our extra costs, I believe that it will take care of a significant amount of those issues.