An aerial shot of the current, 135-year-old reservoir with the Tanglewood neighborhood along its side and the state capital in the background. It is currently two 4.6 million gallon tanks that house Frankfort’s drinking water. (file photo)

The Frankfort Plant Board unanimously voted to award a contract in the amount of nearly $7.1 million to Smith Contractors Inc. of Lawrenceburg for the replacement of its reservoir in the Tanglewood neighborhood. 

After receiving two bids, the other from Judy Construction Co., the board opted to award the contract to the low bidder. Judy Construction’s bid exceeded $8 million.

The contract price far exceeds what the board had budgeted for, with this fiscal year’s budget allotting $4.8 million for the project over two years.

“It's important to point out obviously, that this is going to be somewhat higher than what we had hoped for,” board Chairman John Cubine said. “It's a combination of things. Everything, at this point, is extremely expensive. For example, plywood has gone from about $8 to $32 and some people say it's headed to $40.

"We took competitive bids and we extended the bidding to get more bids in. I don't think there's any reason to think that in delaying it, both from a public safety standpoint and from pricing, that anything will change.”

David Billings, director of water operations for the Plant Board, pointed out that FPB had consulted with Strand Associates regarding Smith Contractors and determined that Smith was responsible in its business dealings.

Billings said that the upcoming fiscal year 2021-22 budget allocation for the whole reservoir replacement project will be $7.45 million, higher than the $7.1 million due to updated construction costs and a contingency percentage.

Board member Dawn Hale asked Adam Weber with Strand Associates, who has long been attached to the project, when construction would begin. Weber responded that groundbreaking would take place “hopefully” in early May.

Board member John Snyder asked whether the costs of the Tanglewood project might be offset by federal stimulus funds for COVID-19 recovery.

Billings responded that he wasn’t sure, but he didn’t think that those funds would apply for a couple of different reasons.

“A lot of us in the industry are expecting (the bill) will include prevailing wage rates, as well as ‘buy American’ requirements,” Billings said. “Some of the previous projects have been done that way. We don't have those in the specifications on this project. So I don't think it will.”

As for financing the project, FPB Finance Director David Denton said that the electric department will give an internal loan to the water department to cover costs. Since the price went up from the initially budgeted amount, he said he thinks that FPB could increase the loan amount by $2 million but he would be more sure about it in the coming weeks.

“If they feel it’s too much, they would look at going out on the bond market for the additional $2 million,” Denton said. “I don’t see any reason not to move forward from a budgeting standpoint.”

The reservoir's replacement was once a source of controversy among FPB, the city of Frankfort and members of the Tanglewood Neighborhood Association.

Initially, the FPB forwarded a lower-cost option for the tank's replacement, but the Tanglewood Neighborhood Association, the Frankfort-Franklin County Planning Commission and eventually the city of Frankfort dissented. The FPB sued the city over the issue.

Litigation was later dropped and the current option was agreed upon as a compromise.

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