The Philomath City Council last week cleared the way for construction of the city’s long-planned water treatment plant, authorizing City Manager Chris Workman to issue a notice of intent to award the contract to ORR Inc. and to enter contract negotiations with the Stayton-based firm following a seven-day protest period.
ORR Inc. submitted the low bid at $13.8 million, higher than the city engineer’s estimate. Slayden Constructors Inc., out of Salem, was the other bidder. Workman told the council at the April 29 special meeting that staff, the city attorney, the public works director and the city engineer reviewed responses to a questionnaire and determined both bidders were responsible under Oregon procurement law.
Workman said the city is examining several optional items that could be removed from the project to reduce costs, including connecting a well on South Ninth Street.
“It’s not something that has to happen with construction of the treatment plant,” Workman said of the well. “If we need to rehabilitate that well and get it connected, we can do that at some point in the future. We’re just not going to do it as part of this project in order to save some costs there.”
He said removing optional items would not change the bidding outcome — ORR Inc. would remain the low bidder regardless.
A central concern driving the timeline is the looming deadline for American Rescue Plan Act funds. The city received a $12 million state grant funded through federal ARPA dollars, of which $3.4 million has already been reimbursed for design engineering and prepurchased filters. That leaves $8.6 million to spend before federal money is clawed back at the end of the calendar year.
“By the end of the year, everything has to be spent and resubmitted and reimbursed,” Workman said. “So our target is like November to try to finish spending the money and give ourselves time to get reimbursed.”
In a post-meeting interview, Workman said staff plans to “front load” the project by prepurchasing materials.
“We’re going to prebuy all the pipe, prebuy all the stuff,” he said. “That will be the task right now is to get a schedule agreed to with the contractor that allows us to fully utilize the remaining $8.6 million.”
Workman said city staff are working with Business Oregon and elected officials at the state and federal levels to explore flexibility on how the remaining grant funds can be applied.
“Every dollar of that $8.6 million grant we can spend is less money that Philomath utility rate payers have to spend,” he said. “So we’re trying to maximize that.”
He noted that an extension of the federal deadline does not appear likely.
“This is the final deadline for the federal government that’s taking the money back from the states that didn’t get spent,” Workman said.
The total project cost has grown to approximately $20 million, up from an initial estimate of about $16 million. The city had $4 million in savings and secured the $12 million state grant. To cover the gap, the city will likely need a loan with construction continuing into next year.
“Most of the water utility rate increases that we’re experiencing over the next 18 months are because the cost of the project has gone up,” Workman said.
Councilor Diane Crocker asked whether ORR Inc. has the personnel to work extended hours to meet the timeline. Workman said that question fell outside the scope of what the city was permitted to ask during the bidding process.
“We could only ask questions about their being a responsible bidder or not,” Workman said. “That’s not something that we could address. We will be looking at their schedule and looking at that during the contract phase and trying to ensure that we can frontload that project as much as possible.”
He acknowledged the risk of unforeseen delays.
“If we get two months into this and hit a substantial delay, we could be in jeopardy,” Workman said. “So there’s definitely concern about watching that time frame and watching the timelines closely.”
Mayor Christopher McMorran said he wants the council to revisit the project once construction is complete to assess what caused delays in earlier phases.
“I just want us to do a little post-mortem after the project just to make sure we don’t run into these same types of delays in the future,” he said.
In the post-meeting interview, McMorran acknowledged feeling some anxiety as the project transitions from planning to construction.
“It’s all been on paper and now it’s like the finish line is actually in sight and it’s getting real in a way,” he said. “There’s something different about something going wrong on paper versus something going wrong in real life.”
Workman said he expects to bring a contract agreement back to the council on May 11 with a final price after optional items are removed.
“I’ll exhale when the contract is signed for construction and you actually start seeing equipment on site,” Workman said. “I think I’ll exhale at that point, take a deep breath, and then it’ll be just working with what we anticipate will be a really good contractor and really good crews.”
ORR Inc. was established in 2021 and according to the company’s website, the firm specializes in municipal general contracting for public agencies across Oregon, Washington, Idaho, Montana, Wyoming, Utah and Nevada, with work that includes pump stations, water treatment plants, structural concrete and fuel systems.
