The cost estimate for Seward’s new wastewater treatment facility has seen a sharp spike over the past year, bringing the estimate to a whopping $38.8 million – about $14 million higher than originally expected.
The city is working with SEH Engineering to design a new, higher-capacity facility that will keep up with Seward’s anticipated growth over the next 20 years, but factors beyond the city’s control have put decision makers in a tight spot: find a way to fund the project now at a higher price or put it off and risk violating state regulations.
Colin Marcusen, senior project manager with SEH, said cost of labor increases, inflation, supply chain issues and scarcity of resources, including a cement shortage, have caused an upturn in price for most water-related facility projects.
He said the cost of pipe has gone up 30%, structural concrete 25% and labor costs 15-40%.
City Administrator Greg Butcher said it all comes back to an influx of COVID-19 relief dollars across the United States.
“When they pushed all these dollars into the economy, it really hit water and wastewater the hardest because there was so much money designated to them,” Butcher said.
Now, competition for labor and materials for those projects has quickly increased to get the work done within the timelines specified by federal and state rules.
“It’s just shoving this thing off a cliff,” Butcher said, adding that the city has seen the same trend with other projects like the wellness center and even some in the private sector.
Marcusen said the Nebraska Department of Environment and Energy’s Clean Water State Revolving Loan Fund bid 20 to 30 projects in the past year, and those projects came in 5-117% over their cost estimates.
SEH completed a basic facility plan in June 2022, taking into account Seward’s expected growth rate of 1% per year over the next 20 years.
According to U.S. Census numbers, the population grew from 6,964 people in 2010 to 7,643 in 2020. It is expected to reach 9,802 people by 2045 – the year the new facility would need updated again.
SEH also accounted for 250 acres of future industrial growth.
The problem is the current capacity is no longer sufficient for Seward’s existing population.
“When we started looking at this project back in 2022, we found that you had about 10% capacity left in the system,” Marcusen said. “We actually just revisited those numbers from a flow and loading standpoint and found that you’re up against capacity.”
The facility hasn’t had any major expansions since 1978.
“You’re up against a dangerous situation where if one of those tanks were to fail…you’re going to have trouble meeting effluent limits,” he said, meaning the facility would be out of compliance with state law.
Butcher said if the city does nothing, the state could mandate the construction of a new facility and restrict industrial or residential growth.
Overloading the current facility’s capacity could cause more problems by ruining the existing site and forcing the city to find a new location, which would cost even more.
SEH considered three different types of systems for a new plant and chose the most cost-efficient model with the smallest environmental impact – a sequencing batch reactor system.
Marcusen said construction drawings should be done by the end of May, then the design has to gain state approval. The project could be ready to bid by this fall, and construction could be complete in 2025.
“It likely won’t move forward until some funding is found,” Marcusen said.
The city council voted last fall to raise wastewater rates 15% in this fiscal year to help pay for the new plant, but Butcher said funding it completely through user rates isn’t a good option.
Marcusen said potential funding could come from congressional or state-directed spending, bonds or a low-interest USDA Rural Development loan, which can stretch over 40 years, though the lifespan of the equipment in the facility would only be about 20 years.
Seward’s median income is too high to qualify for grants for this project, he said.
The project may be paused until a solution is found.
“We have to really find some significant funding sources,” Butcher said. “We’re not going to tee this thing up yet. It’s just not safe for rates.”
