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USDA withdraws wastewater funds

Questions surrounding the town’s ability to treat its wastewater recently became complicated by two issues: the loss of federal funding to pay for that treatment and the apparent disregard for local contractors in a bidding process.

Last Wednesday, the Pagosa Springs Sanitation and General Improvement District (PSSGID) received word from the USDA that an application for those funds had been considered, “voluntarily withdrawn” and that the money would be, “de-obligated.”

Over a year ago, the Town of Pagosa Springs received notice from the USDA that it would receive funds for the construction of a wastewater treatment facility. The money included $3,145,000 in loans (at 2-percent interest) and $787,000 in grants.

Along with other funds secured three years ago (a $2 million loan from the Colorado Water Resources and Power Development Authority and a $1.25 million grant from the Department of Local Affairs), the Town of Pagosa Springs had just over $7 million to construct the plant.

The wastewater treatment plant project had been beset with multiple problems over the past few years. The Colorado Department of Public Health and Environment (CDPHE) mandated construction of a new plant in 2006, after the current wastewater treatment system reached capacity and was subject to several outflow violations. Furthermore, state and federal regulators had determined in 2006 that lagoon systems for wastewater treatment (what the town is currently using) were obsolete and needed to be phased out.

Originally set for construction in October 2008, the project ran into funding and permitting problems during the planning stages. The project was further hobbled with construction on the plant delayed indefinitely and with contract bids for construction of the facility far exceeding the amount the town had secured for the project.

Bids for construction of the wastewater treatment plant, submitted in mid-April 2009, ranged from $5.9 million to $8.8 million. Unfortunately for PSSGID, even low bids for the project came in around $1.15 million over budget.

USDA funds, although obligating the town to nearly four decades of debt and town sewer customers to fees almost 130 percent above Colorado average rates, would have allowed the PSSGID to construct a plant meeting CDPHE standards for wastewater treatment.

With that funding pulled, it is unclear how the town will treat its sewage, despite a plan proposed late last year by Pagosa Area Water and Sanitation District representatives to pump the town’s sewage to a newly-constructed $9.3 million facility operated by PAWSD.

That proposal, contingent on the results of a feasibility study started three weeks ago, is far from a certain solution to the town’s wastewater treatment problems.

In fact, PSSGID supervisor Phil Starks stated that he was hoping to retain USDA funding at least until results of the feasibility study were ready (due later this spring) or until the deadline on using those funds came up later this year.

“I just wanted to have those to fall back on in case pumping with PAWSD didn’t work out or if estimated costs exceeded those for a new plant,” Starks said.

Starks faulted numerous miscommunications between the PSSGID board and USDA representatives as part of the reason why the funding fell through.

However, Starks also said that USDA representatives had read stories in The SUN regarding the proposed project with PAWSD and had determined that the town was “not serious” in using those funds to pursue the construction of a new wastewater treatment plant.

“They were educated by you guys,” Starks said.

The PAWSD proposal involves installing about seven miles of pipe from the south side of Pagosa Springs to feed sewage to PAWSD’s Vista wastewater treatment plant. That infrastructure project would also require the installation of two lift stations in order to pump sewage from the town basin uphill to the PAWSD plant to the west.

That workaround scheme with PAWSD, eliminating the necessity for the town to build its own wastewater treatment plant, has raised further questions, however, especially in regards to the process in which PAWSD and the town secured a contractor for conducting the feasibility study.

According to Patrick O’Brien, owner of the local Briliam engineering firm, the process by which contractors were solicited to bid on conducting the feasibility study had been gamed from the moment PAWSD representatives drafted the Request For Qualification (RFQ), with language in that document favoring larger firms and putting smaller, local firms at a disadvantage.

O’Brien pointed to a portion of the RFQ that stipulated, “The Firm will be selected based on the qualifications and experience of the Firm designing projects of similar scope, the ability of the Firm to furnish all disciplines utilizing in-house staff, with a minimum of one-years employment with the Firm,” stating that, while various positions needed for the project might not be on Briliam’s staff, there had not been a problem subcontracting out those duties on past projects.

“That intentionally excludes us,” O’Brien said.

Following initial objections to RFQ language from Briliam and Davis Engineering (another Pagosa Springs firm), PAWSD projects manager Gregg Mayo said that an addendum to the original RFQ was released in an attempt to meet objections from local contractors.

O’Brien said that addendum provided no substantial recourse for a local firm’s ability to compete with larger, out-of-state firms.

Language changed in the RFQ dropped a demand for qualified in-house personnel, but included a stipulation of, “the ability of the Firm to at all times respond with resolutions to questions or issues that may arise in less than 30 minutes time, the personnel assigned to the project and their qualifications and lastly, the billing terms.”

“That’s unreasonable and wrong,” O’Brien said.

Davis Engineering owner Mike Davis supported O’Brien’s contention that the process was composed in favor of a larger firms.

“The way it was worded,” Davis said, “made it evident to me that they weren’t looking for a local firm.”

Both said that they believed the RFQ had been tailored to suit the engineering firm of Bartlett & West, Inc., a company out of Topeka, Kan.

Prior to taking his position as district manager for PAWSD, Ed Winton was the public works superintendent in Topeka, working with Bartlett & West on several projects.

Winton said that he had recused himself from the selection process of a contractor for the town/PAWSD feasibility study.

“I didn’t want the perception of any impropriety,” Winton said.

“I had talked with public works employees in Topeka,” Winton said, “And we inadvertently heard from Bartlett and West. It was not something I had expected.”

The RFQ addendum also contained language that read, “Consideration will be given to full service in-house design firms and or firms expressing a desire to open a ‘satellite’ or ‘branch’ office in Pagosa Springs.”

It was that language that caused further concern from O’Brien and Davis.

“Why give preferential treatment to another firm, based on that, and not preferential treatment to a firm that is already here?” O’Brien asked.

“We were very interested in doing the work because ninety to ninety-five percent of the work was doable by our firm,” Davis added.

Despite allegations by Davis and O’Brien that the RFQ process was skewed to favor a Kansas firm, Winton continued to position the issue as the failure by either local firm to provide a Statement of Qualification (SOQ) at the completion of the job-bidding process.

“It’s disappointing that they feel we’ve passed them aside,” Winton said.

“If the PAWSD was surprised or concerned that we did not submit an SOQ,” O’Brien asked, “why didn’t they inquire? We have not heard a word from them, neither has Davis.”

In the end, Winton said he felt that the RFQ process, “Was being ramrodded from the town,” and that PAWSD employees merely responded to those pressures to move things along. Furthermore, Winton said committee head Mark Weiler was, “Determined to find someone who could bring it in under budget. Weiler was looking for a full-service firm to cut costs.”

The issues of cutting costs and apparently sidestepping local labor dovetails back to the town losing over $4 million in USDA funds for a needed wastewater treatment facility, as officials dropped the ball while pursuing a cheaper option.

Jerry Tamlin, Director of Community Programs for the USDA said that it was the town’s inability to provide necessary information or file paperwork required to complete the funding process that led the agency to “de-obligate” that money.

Saying that his office has a vested interest in helping municipalities secure federal funds, Tamlin said, “That money just goes back into the (U.S.) Treasury and doesn’t stay in Colorado. It’s our job to create jobs in Colorado and help communities in Colorado create jobs.”

Although Tamlin said that the issue of funding was, unfortunately, settled, both Pagosa Springs Town Manager David Mitchem and Mayor Ross Aragon stated that they felt confident in getting that funding back.

“I feel we can exert some political pressure to get it back,” Aragon said.

“We’re having Bob Cole (the town’s attorney) look into that,” Mitchem said. “We’re moving forward. We think we have the issue with the USDA handled and the funding will be available for the plant.”

Tamlin and Starks expect different outcomes, however.

“The CDPHE could look at this and decide we have failed to do what we were supposed to do, and potentially start fining us,” Starks said. “But I don’t know what will happen.”

Tamlin was similarly disappointed in the decision to pull funding for the plant.

“It’s a black eye for both sides,” Tamlin said. “The citizens are the ones who lose out on this.”

jim@pagosasun.com

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