CFPUA: Costs rise for construction of new wastewater treatment facility, now topping $250 million

Southside’s aging sewage treatment plant on River Road will be upgraded over the next decade, with a new estimate of $250 million for construction. (Courtesy/CFPUA)

WILMINGTON — A wastewater treatment project, needed to meet the county’s expansive growth, has doubled in price since it was first explored by Cape Fear Public Utility Authority in 2013. According to the CFPUA, it will likely raise customer rates by about 13% over a decade.

The utility company‘s long-range planning committee on Monday discussed funding strategies to build a new Southside wastewater treatment plant to replace the current one, located at 3436 River Road. First conceived nine years ago, with projections reaching $120 million, the installation price has come closer to $250 million.

READ MORE: CFPUA Receives Motion to Intervene as Chemours Challenges Landfill Permit

Also known as the M’Kean Maffitt Wastewater Treatment Plant, the 1970s facility has the capacity to dispense 12 million gallons per day.

“The existing plant is 50 years old with technology from the 70s,” deputy executive director of processing and engineering Carel Vandermeyden said Monday. “This is an aging infrastructure that is approaching the end of its useful life.

Before deciding to expand the plant on the south side, CFPUA moved more capacity to the north, to extend the useful life of the south. The Northside Wastewater Treatment Plant – serving the northern part of the county – has the capacity to handle 16 million gallons per day, according to Vandermeyden.

As for the future, Vandermeyden explained that the capacity needs to be moved to the Southside. The Northside is expected to peak at 16 million gallons per day by 2029, due to rapid population growth, particularly in the Sidbury, Holly Shelter Road and Greenview Ranches areas.

“It takes about five years to design and build a sewage treatment plant, so we need to start now,” Vandermeyden said.

The rebuilt Southside plant would also process 16 million gallons per day, which includes room for expansion.

To prepare for the project, the CFPUA identified in its capital improvement budget $150 million in 2019, based on an updated estimate in 2013. After assessing additional factors including inflation and volatility of the construction market, the costs are estimated between 217 and 238 million dollars, an increase of approximately 60%.

The range includes a 10% to 20% contingency, which CFPUA executive director Kenneth Waldroup said should take into account future inflation.

Adding another $8 million to update the design, closer to $3 million for sustainability efforts, the final price could be closer to $250 million.

Vandermeyden said that on top of that, the project will use large amounts of steel, concrete and copper – materials “in excess of general inflation”.

“So was what we spent a waste of money?” Commissioner and CFPUA member Rob Zapple requested the $9 million already given out for engineering in 2013.

Vandermeyden explained that was not exactly the case. The cost of updating plans is less than the $25 million it might cost to start from scratch, which includes construction inspection. The authority can still use its 2013 plans to some extent.

Committee chairman Larry Sneeden pointed out that if the project had gone as planned ten years ago, it would likely be complete by now, with a lead time of about five years from design to construction. Still, the CFPUA waited and instead decided to divert capacity to its other plant.

Vandermeyden also justified the delay with the CFPUA’s recently completed $43 million granular activated carbon project at the Sweeney Water Treatment Plant. Undertaking two major capital projects at once would have been too much, he explained.

GAC filters have already increased customer bills by approximately 8%, or $5 per month, with another 8% increase expected next year.

“70% of the rate increase over the next two years is due to Chemours,” Waldroup said. “A victory in the litigation with Chemours could help.”

The CFPUA sued Chemours in 2017 to cover the costs needed to upgrade its plant, blaming the company’s Fayetteville PFAS pollution in the Cape Fear River as the need for expensive filters. Discovery of the case is ongoing and a trial is not expected until 2024.

Another utility increase would be needed to help offset the cost of building the Southside plant.

CFPUA Deputy Executive Director and Chief Financial Officer John McLean estimated an increase of 13%, or an average of $4 per month.

The average customer bill for water and sewer combined is currently $69 per month, according to Waldroup. By 2029, projected increases show an increase to $93 per month.

The CFPUA expects no rate hike in fiscal 2025, but a 2.5% jump in fiscal 2026; 6% more in 2027, 1.5% in 2028 and an increase of 13.5% in 2029.

Zapple asked if spreading the increase more consistently was an option, to protect customers from a 13.5% hike on their bills. Waldroup said that’s still on the table, as nothing is finalized.

McLean explained that there are a variety of funding strategies to weigh in, including a public bond sale, low-interest federal loans and state loans. One option could come with a federal loan from the Water Infrastructure Finance and Innovation Act, but McLean said none have ever been approved in North Carolina. WIFIA is a federal credit program created in 2014 and overseen by the Environmental Protection Agency to finance up to 49% of water and wastewater infrastructure projects.

“The longer term and deferred interest, some of the things that make these financings attractive, the LGC is pushing back hard,” he added. “So that’s one of the reasons why we’re going to be meeting with a bond attorney next week to start going through some of the machinations involved in getting there.”

The likely path would be a combination of all of the funding options on offer, Waldroup said.

While financing details are being worked out, the authority must determine how to proceed with construction. Director of Engineering Craig Wilson has defined two construction paths – design-bid-build or design-build – to pursue necessary upgrades to the Southside facilities.

A design-bid-build would include two contracts: one with the engineer to design the plans and another with a construction contractor. Both would be selected through the RFQ process.

Wilson recommended the design-build process, which uses a single contract with a design-build team. He said this option has several advantages, including carrying out the project within a specific budget, rather than choosing the lowest bidder.

“There is a guaranteed maximum price through transparent open books,” Wilson said, meaning the CFPUA will have access to all the numbers throughout the process to monitor any budget excesses.

He explained that construction could also begin when the engineering design is around 60% complete, instead of waiting for the design plans to be nearly complete. This could cut around nine months from the process and allow the project to be completed by winter 2028.

Consensus was reached to recommend a design-build process to the board, although it is only a recommendation; the CFPUA Board of Directors will give final approval in December. If agreed, Wilson said he could submit a request for qualification for a design-build team by April 2023.

The finance committee will also discuss the Southside plant at its December 7 meeting.

Advice or comments? E-mail [email protected]

Want to know more about PCD? Subscribe now, then sign up for our morning newsletter, Wilmington Wire, and get the headlines delivered to your inbox every morning.


Comments are closed.