Ashland officials took some responsibility for why an upcoming city project is expected to cost more than three times originally expected and explained why the cost has gone up.
Public Works Director John Butler said during Tuesday’s city council meeting the city should have done a better job verifying its original cost estimate for a multi-million dollar water intake pipe project. The pipe stretches far into Lake Superior to draw in the city’s water, but is in need of replacement.
The city originally estimated in 2017 the project would cost about $2.5 million. Now the cost is expect to be more than $10 million.
“A lot has changed since then,” Butler said.
“The nature of construction was totally different then,” he said.
In agreement, City Administrator Brant Kucera said the pandemic “really changed how construction costs work for everyone.”
Seeing the roughly $8 million price hike didn’t sit well with City Council President Charlie Ortman at first. He contemplated not supporting the project because of the increased price tag, but now figures it is better to proceed with it rather than wait. If the city waits, he said, costs would continue to increase.
The current 26-inch diameter cast iron pipe extends 4,000 feet into the bay and was built in 1888, originally as part of an effort to bring an end to recurrent typhoid fever outbreaks caused by contaminated water. Its age puts it at risk of failure, and it gets clogged with ice, mussels and other debris, Butler said.
The solution is an entirely new pipe that will extend 4,500 feet into an area with clearer water than the current intake — ideally, away from the silt that flows into the bay during heavy rain.
The city has obtained a handful of grants to help fund the project, but not all of it. To round out the funding, the city is preparing to increase water rates. Ashland rates will be among the most expensive in the state, Kucera said. But he expects that to change over time.
The water rate increase is also higher than the city expected. The city planned to increase water rates by about 39%. The state’s regulatory agency, the Public Service Commission, is requiring the city to raise its rates by nearly 52% over the next two years. With the hikes a family of two will see a roughly $16.57 increase every two months in 2024 and $28.85 every two months in 2025.
City officials have expressed their concerns, asking the PSC to reconsider and lower the planned increase. So far the city has not heard anything from the PSC regarding their concerns. Residents are being encouraged to speak up about the matter. To do so, residents can voice their opinion by logging onto https://apps.psc.wi.gov/ERF/ERF/comment/filecomment.aspx?util=250&case=WR#=105, or stop by city hall, where a computer is set up to help people file their comments.
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