Wichita’s water plant controversy resurfaces. Why does the cost keep going up?

Wichita Mayor Lily Wu expressed frustration Tuesday over the escalating cost of the city’s new water treatment plant and what she views as a lack of transparency surrounding the total cost of the project.

The City Council approved a contract with Wichita Water Partners — a joint venture between Burns & McDonnell and Alberici and several local firms — in 2019 to design and build the Northwest Water Treatment Facility, with a heavily touted “guaranteed maximum price” of $494 million.

But new expenses keep popping up.

The City Council has approved two change orders — or price increases — with Wichita Water Partners totaling $1.8 million. The council approved a $16 million budget increase for the project in March. Last week, the city added $85,000 for a consultant to figure out what to do with the existing plant when the new one comes online. On Tuesday, the council approved an additional $4 million contract for operational support and commissioning the new plant.

And more costs are on the way.

At least two more change orders with Wichita Water Partners are scheduled, according to a budget summary prepared by city staff. They will add another estimated $7.2 million to the Wichita Water Partners contract.

“I think it’s disingenuous when we say that this project is $494 million,” Wu said Tuesday, “because I would assume that that would include from design to operations . . . but in reality, it’s now increased. So the question then is what is the accurate amount in telling (the) community how much this project does cost?”

By the time the plant is finished, the city will have spent nearly $574 million, according to a cost breakdown provided to The Eagle by the city on Tuesday. All of that cost — plus some interest — will be passed on to Wichita water customers over the next couple of decades.

Wu, who has been in office for seven months, said the city should be more up-front about the actual cost of the project to ratepayers, especially given the controversy surrounding how the project was awarded. A 2019 Wichita Eagle investigation found former Mayor Jeff Longwell steered the contract to Wichita Water Partners after accepting gifts from contractors on that team, who he said were his longtime friends.

Wu tried to draw attention to that history on Tuesday.

“It’s the most obvious question but I think it’s a very direct answer: The question really is why was operational support not included in 2019?” Wu said.

The involvement of Wichita Water Partners

Gary Janzen, Wichita’s director of public works and utilities, said he wasn’t directly involved in the project at the time but believes the city made the right decision by dropping operations out of the design-build contract.

“I can’t speak to the specifics why the decision was made to move forward at that time, but I think that it was the right one, and it was the smart one, so that we could be here today to have a more accurate accounting of what we need to do,” he said. “Trying to estimate costs at that time, trying to estimate resources and staffing, I think would have been tremendously challenging and there would have been risk added, particularly on our side, of trying to figure out what the cost looked like in particular.”

The 2019 Eagle investigation found that Janzen, the chief engineer for the city at the time, traveled with Longwell and Wichita Water Partners contractors for a two-day golf trip to Oklahoma while the water plant contract was out for bid. Janzen has declined to comment on the golf outing.

Janzen was in charge of collecting and distributing questions to and from bidders on the water plant project and sat on the city’s selection and screening committee that unanimously chose Jacobs over Wichita Water Partners. Jacobs’ proposal included operational support for the first two years.

Operational support for the plant

Jacobs Engineering, one of the top water plant designers and operators in the country, dropped out of the competition when Longwell pushed to change the scope of a contract to design and build the plant, changing the qualifications to be more favorable for the low bidder — Wichita Water Partners. The change dropped a requirement that the contractor designing and building the plant also help commission it and offer short-term operational support, two other areas where Wichita Water Partners were at a disadvantage.

City staff had raised concerns about Wichita Water Partners’ statements that it would “learn things along the way” and a lack of a plan to commission the plant’s disinfection system. Jacobs had a more detailed commissioning plan, according to a city staff memo on the two competing proposals.

Wichita Water Partners identified two firms it would use as a short-term operator of the plant, and one of them “had high visibility challenges due to its operations of the Flint water system and recent litigation in Pittsburgh related to elevated lead levels after it took over water operations,” according to the staff report. Jacobs, ranked as one of the top operators in the country, would have helped operate the new plant for two years after completion.

So, instead of the startup operations being part of the original contract, the city awarded that contract separately on Tuesday. It went to Operational Technical Services, whose technical advisor Rhonda Harris helped evaluate the city’s water facilities when she worked for the local Jacobs subsidiary CH2M.

Operational Technical Services will be responsible for advising the city on startup, commissioning and operations. The Los Angeles-based company will also develop a disinfection plan, startup and commissioning plan, operations plan, training plan, site safety plan, risk management plan, maintenance and repair plans and training for city staff along with temporary staffing as the city attempts to hire new water operators.

“To restore trust in any organization, you have to give facts from the past,” Wu said.

On time and under budget?

Wu pointed out that only one sitting council member — Brandon Johnson — was on the council when Longwell moved to change the contract, and he voted against dropping operations from the contract.

Johnson said he would vote the same way if it came up for a vote today, but he defended the city’s decisions since then.

“While I disagree with changing the process, I do agree with the outcome,” Johnson said.

Council member Becky Tuttle said the $4 million contract approved Tuesday was inevitable and shouldn’t have been a surprise.

“We would have had these costs at the front end, or we have them now,” Tuttle said. “And the previous council decided . . . why this decision was made. So we have this decision now, and truly it’s an opportunity for us.”

“This is the largest piece of infrastructure the city of Wichita has had in 156 years, and it’s too important to not get it right,” Tuttle said. “We absolutely have to get it right because having water in our community is not discretionary. It’s the most basic need that we have. It’s an absolutely necessity.”

A lower cost was the primary reason cited by Longwell when he pushed to change the rules of the project bidding competition in 2018, leading city staff’s recommended contractor to drop out. Wichita Water Partners offered to charge less during the preliminary design and scheduling phase while Jacobs said spending more during that phase would save money on the back-end of the project.

Wichita Water Partners representatives said at the time that it planned to finish the project on time and under budget. The Wichita Water Partners website claims the team has a track record of “zero cost or schedule overruns, lost time incidents, or construction claims.”

In reality, the city had to approve a six-month extension for Wichita Water Partners — moving the completion date from late September 2024 to early April 2025 — because the original schedule called for performance testing during peak water demand season, a move that would limit the available water volume to 30 million gallons a day, “which is inadequate to test the complex systems,” according to the city.

Wichita Water Partners is expected to ask the city for an additional $6 million to pay for the delay, so the team can pay workers and extend warranties beyond the original project deadline. The City Council set aside money for that expense at its March 5 meeting but has not yet approved a change to the contract.

This story was originally published July 10, 2024 at 1:14 PM.