The Sequim City Council approved a measure that would provide additional funds - $157,435 - for the now completed Solana reservoir project during its Dec. 10 meeting.
In June 2006, the Solana reservoir was projected to cost a total of $1,115,535. Under the city's agreement with Solana's developers (Sequim Highlands LLC and Sequim Highlands Estate Homes LLC) the city received a 52,000-square-foot parcel for $10. In return, the city would have to pay 72 percent of the costs of building a reservoir on that same parcel.
The decision to enter into the agreement was prompted by a need for a reservoir on both sides of the table. In order to move forward with their project, Solana's developers needed to connect to the city's water and sewer. The development's approval also came with special requirements. According to the project's 2005 agreement, the development required the reservoir "for water pressure and fire protection purposes."
The city also needed the reservoir. By the time of the agreement in April 2005, Gov. Christine Gregoire already had declared a drought emergency.
As the agreement reads, "The City Council hereby finds that increasing the size of the required water storage facility to serve additional city purposes is immediately necessary because of the declared drought condition, and therefore possible emergency fire protection necessity, and Whereas it is not possible to find another supplier who is already building a water storage facility as required by the City, and in an area where the elevation is such that it is beneficial to City, and Whereas the City finds that an emergency exists ..."
According to its agreement with Solana's developers, Sequim would pick up 72 percent of the project's costs. In 2006 that 72 percent was estimated at $803,185 in 2006, but now cut to 2007. The project, which was completed four months ago, ended up costing more than was originally expected and the total expenditures to the city (according to Karen Goschen, the city's administrative services director) is $960,618. According to Public Works director Jim Bay, the additional costs are the result of increases in materials.
"The cost of piping has tripled," said Bay. Apparently during construction, areas in which 8-inch piping was thought to be required, 12-inch was actually used and vice versa, which is what attributed to the additional costs.
Some questioned why the city had not factored into its original estimates the trend of increasing construction costs or had left some financial cushioning in case anything were to go wrong.
"You base your bid and estimates on the current year," Bay said.
"In good bidding, proper tracking should be included," countered local architect and councilman-elect Ken Hays.
The council ended up approving the additional funding with a 4-1 (council members John Beitzel and Ron Farquhar were absent) vote.
"This is exactly what we agreed to do and our public has been greatly served by this agreement," said councilman Paul McHugh, adding that by working with the developer, the city had saved a significant amount of money.
According to Bay, the additional costs will not impact the 2007 or the 2008 budgets. The money simply needed to be transferred from the city's general facility fees sub-fund to the reservoir sub-fund.
"We actually have money in the budget, but we can't use the money until it's approved by the council," said Bay.
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