Cole Tank problems may lead to water rate increase

By Sarah Pridgeon

 

Though funding has been secured to resituate the Cole Water Storage Tank, despite the Wyoming Water Development Commission’s insistence that someone should be held accountable for its failure, water rates for City of Sundance residents may need to increase next year to help match the grant.

“Who’d have thought that, three years ago, we would build a tank for $638,000 and now the replacement is $1.3 million?” said Mayor Paul Brooks.

Sundance's troubled Cole water tank.

Sundance’s troubled Cole water tank.

“That’ a phenomenal number to try to grasp when you’ve got 700 water meters. I lost sleep last week just trying to get the numbers to jive.”

Clerk-Treasurer Kathy Lenz visited the Water Development Commission last week and successfully secured the $348,283 needed to resituate the tank at a 67-33 percent split. The city will now need to raise $115,000 as a match.

To this end, Lenz presented recommendations for rate increases across the board next year, though not all were connected to the Cole Tank. The council considers rates on an annual basis and will need to factor in the water tank issue during next month’s review.

The city has experienced issues with Water Development that began with the tank’s original placement and increased over time, said the mayor. Securing funding to place it in a new location has proved more difficult than expected.

The crux of the matter is that the engineers were never held accountable for the site’s failure and the financial losses that caused.

“[They] said it’s nothing personal, we’re mad at the engineers,” explained the mayor. “But we don’t want you to have the money because we want the engineers to have their feet held to the fire.”

The city secured funding for the tank at a better-than-average rate of 75 percent, with a 25 percent match. This, said the mayor, was largely thanks to the assistance of Senator Ogden Driskill and the city’s friendship with other legislators.

“People on the commission felt left out and witnessed us get a better deal than some of their constituents got,” he explained, describing this as the first rift.

The second came when the state felt that too much was spent on land acquisition for the tank’s replacement site.

“I guess we had a disconnect with them, we thought that was ours to spend on land acquisition,” said Brooks.

“We were going nowhere with any of the [neighboring landowners] and we wanted to close the deal, so we offered that amount. It has been pointed out that we gave a lot of money for what we got.”

The final rift is associated with how the city handled the situation when the water tank site failed. Instead of pursuing the engineers for damages, it chose to accept disaster funding from FEMA and concentrate on the process of resituating the tank.

Accepting the disaster money, said the mayor, makes it difficult to justify also suing the engineers.

“The ongoing thing that keeps rearing its ugly head is that Wyoming Water Development wants the right to sue the engineering firms that were involved with this because they believe that, had the engineering been done correctly, the tank wouldn’t have failed,” he said.

“We’ve been assured in almost all of these instances that we are not personally being held responsible, but it has been brought to our attention that there is some dismay at the way we handled it.”

Clerk-Treasurer Lenz asked for guidance from the council on how to proceed with negotiations for funding to replace the tank. The city had two options, she explained.

The first was to request that the city be awarded all the overage funding necessary to replace the tank. This would be granted at a 67-33 percent split and would require the city to pay a share of around $115,000.

The second option was to wait until spring and seek funding from the full Legislature at a better 75-25 split. This would be a more difficult process and would not provide the stability to go to bid with a confirmed figure in mind, ready for spring construction.

The council gave Lenz approval to use her best judgment to decide which option would be best.

“I don’t know the people or the mood of the room while you’re there, so in my mind I leave that decision to you,” said Council Member Hugh Palmer.

The funding will allow the city to go to bid on the project to resituate the tank in time for the spring. Palmer, however, questioned how the city will raise the match money for this funding.

“We’re going to have to raise rates to accommodate it,” responded the mayor. “Our rate structure is not built to support a $1.3 million water tank.”

Though Council Member April Gill suggested cancelling other projects to help cover the cost, the mayor explained that shuffling funds is not an easy process. The option has been discussed but, as the engineering is underway on most of them, the SLIB board is committed and the funding for them must be spent by July, it would be tough going to make that happen.

“The other side of this is that the original water tank went on the hill for some $638,000. A lot of it was looking at sites we didn’t get to use and a lot was just a plethora of stuff, but by the time we get the tank erected and tied into the system we’re going to be at $1.3 million, so roughly double,” said the mayor.

“Everybody wants to sue, and I certainly understand that, but we’re really the one that’s damaged. The rate payers in the town of Sundance are the ones who are damaged.”

Brooks noted that Water Development has maintained all along that the city should sue the engineers but that the damages should go straight to the commission, as they provided most of the funding.

“That’s been their message all along but, if we’re going to pay for a $70,000 lawsuit, we want at least our 25 percent back,” said the mayor.

“They never offered that, to the best of my knowledge.”

Lenz presented the rate schedule to the council to open the discussion on increases in time for December’s meeting.

The tank placement is not the only reason for the proposed increases; as the city borrowed from its water fund to pay for a rate study on the sewer fund, for example, it will need to address paying that money back. Her recommendation was to raise sewer by 30 percent for this reason.

Water rates may meanwhile increase by three to five percent to address the Cole Tank issue and stay ahead of the game when the Level II Water Study begins. Garbage may increase by 10 percent to address landfill and transfer station costs.