July 29, 2008

Disagreement Stops Talks on Sewer Line

By Dana Tims, The Oregonian, Portland, Ore.

Jul. 29--Lake Oswego's City Council members will meet in executive session this morning to figure out what to do now that talks have broken down with the contractor on the city's $100 million project to replace an aging sewer line on the bottom of Oswego Lake.

Negotiations between the city and Barnard Construction of Bozeman, Mont., were halted when the two sides couldn't agree on a maximum price for the so-called Lake Oswego Interceptor Sewer.

"It's very disappointing," said Councilor Donna Jordan. "We had hoped to have this project done and over with sooner than later."

Jordan added that the delay may not drive up costs of the project, previously estimated at around $100 million. That's because some in-water work and purchasing of materials needed to replace 24,000 feet of concrete and cast iron sewer piping can proceed while the council continues to mull selection of a contractor to complete the work.

The project, representing the most expensive capital project in Lake Oswego's history, was envisioned as the world's only buoyant gravity sewer line. Talks with Barnard had called for crews to drive 460 individual ground anchors, placed at 22-foot intervals, about 10 feet down in the lake's bedrock.

Under a standing order from the state Department of Environmental Quality, the city has until 2012 to complete the project. The new line, which would serve about two-thirds of the city's residences, is deemed necessary to avoid the type of sewage overflows that have already resulted in $54,000 in fines from the state.

Arduous negotiations between the city and Barnard Construction appeared to set up a construction timeline where the 415-acre lake would have been drawn down in September to commence the work. City officials had hoped to complete most of the project by end of October 2009.

Now, with talks having broken down, delays in that timeline are possible, said John Turchi, Lake Oswego council president.

"We could well miss that date," he said. Turchi added, however, that he still expects the city to meet the DEQ's 2012 deadline.

He also said the city appears to have options other than Barnard.

"There are other possibilities out there," Turchi said. "And as for this costing more in the future than if we started sooner, I'm not sure about that. A lot of people are looking for work out there. This may actually turn out to be cheaper than we had predicted."

Joe Nelson, Barnard Construction's vice president, did not return calls to comment.

In Jordan's view, negotiations broke down because of uncertainties in how much the subcontracts Barnard would have to let to round out the work ultimately would cost.

"It was difficult for them to give us a guaranteed maximum price that didn't include a lot of overhead for risk and other unknowns, such as the amount of the various subcontractors' contracts," she said. "In the end, we figured this was just too big a project to proceed in the manner we were doing it."


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