In what may be a sign of the construction times, the Santa Maria City Council awarded a contract Tuesday night that was roughly $4 million below what staff engineers had anticipated.

Stanek Constructors of Golden, Colo., was awarded a $15.9 million contract to expand the city's wastewater treatment plant, a job that the city had estimated would cost $20 million.

After years of rising costs, a nationwide slowdown in construction has created more competition for contracts that require bidding, said Dave Whitehead, public works director and city engineer.

Officials hope to see other qualified bidders submit competitive prices for other upcoming projects as well, he noted.

The sewage treatment plant expansion includes building new facilities at the Black Road plant to increase treatment capacity from 9.5 million gallons per day to 13.5 million gallons per day.

In recent years, with the increasing cost of oil and other construction materials, many city projects were coming in over the staff's estimates.

For example, construction of the library building that's now under way was estimated to cost about $16 million, but the lowest bid came in at $18.5 million; many other park and street maintenance projects were also coming in higher than estimated.

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The wastewater treatment plant expansion is expected to add enough capacity to handle the city's projected needs until 2024, when the population is estimated to be around 116,000.

The project includes seven new structures and modifications to existing structures.

The treatment plant receives the city's wastewater and through bio-treatment processes reduces the amount of bio-solids to state-approved levels and then recharges the groundwater basin through percolation ponds.

In anticipation of the expansion, including more percolation ponds, the city annexed roughly 270 acres near the plant on the western edge of town last year.

Money for the expansion is slated to come from growth mitigation fees fund, which are charged to developers, and the city's wastewater fund. Staff members expect the growth fees to cover 45 percent of the cost, since that is the amount associated with increasing capacity and not merely upgrading existing equipment.

According to the council's written staff report, sufficient funds are included in the current budget cycle and additional funding is expected to be included in the 2008-10 budget. The city is also still waiting to hear if its application for state grant funds for the project was successful.

After some concern from audience members Tuesday night, Santa Maria Utilities Director Rick Sweet told the council that sufficient funding is in the growth mitigation fund to cover the cost of the project.

In the current fiscal year $1.7 million is being used for engineering costs for the final design, a construction management contract and initial construction costs, according to the staff report.

In addition to awarding the treatment plant contract, the council opened the bidding Tuesday night for two other public works projects.

The first is the annual chip seal project that is part of the city's street maintenance program. It is intended to “rejuvenate” the asphalt and extend the life of the road. City streets are rotated through the program on a seven- to nine- year cycle for residential streets and four- to five-year cycle on commercial and industrial streets, according to the council staff report.

Funding for this program comes from the city's share of Measure D funds, which are generated through a countywide, half-percent sales tax that is earmarked for transportation purposes.

Due to the specialized nature of chip sealing, Whitehead said he can't be sure that the bids for the project would also come in under estimates.

The second call for bids is for improvements to South College Drive, which includes working on the drainage cross gutters that create the dips in the road from Mariposa Way to Camino Colegio. The project also includes installing 12 handicap-accessible ramps in the area.

Since this is a small project, Whitehead said, he anticipates local contractors and lower bids. This project is being paid for using state grant funds.

Malia Spencer can be reached at 739-2219 or mspencer@santamariatimes.com.

May 21, 2008