Bastrop approves $2.4M contract to rehab wastewater facilities

The Bastrop City Council on Tuesday approved a $2.4 million contract to rehabilitate two of the city’s wastewater treatment plants, allowing City Manager Sylvia Carrillo to negotiate the rate the contractor would pay if it doesn’t meet the project’s deadline.

Curtis Hancock, the city’s water and wastewater director, said rehabilitating Wastewater Treatment Plants No. 1 and No. 2 was “long overdue.” The two plants, built in 1975 and 1988, have accumulated “grit and debris,” resulting in a loss of treatment capacity, according to a city staff report.

Wastewater Treatment Plant No. 3 came online on May 7, 2024, nearly doubling the city’s treatment capacity. Plant 3, on the west side of town, will treat the city’s wastewater during the refurbishment.

Hancock said the project will receive $2.2 million from the 2021 American Rescue Plan Act, a federal infrastructure program. The city’s wastewater department will cover the rest of the project’s budget, approximately $112,000.

Mayor Pro Tem John Kirkland raised concerns about the contract’s terms on liquidated damages, or the amount the parties agree to pay if they breach the contract’s terms. The draft presented to the council on Tuesday called for a $100 late fee for each day the project was overdue.

“That feels useless to me,” Kirkland said.

Kirkland proposed a steeper rate to incentivize on-time construction. He recommended changing the contract to impose a $3,295 penalty for each day the project is late.

“If you were two years late when you’re done, you get nothing,” Kirkland said. “If you’re a year late, then you get 50% of the money. That would be $3,295 a day.”

City staff explained that the contract’s wording came from a template provided under the American Rescue Plan Act, which recommends the $100 minimum for the daily late fee.

Carrillo said the city needs to find a balance between the current $100 daily late fee and the amount that Kirkland proposed. She said the city could negotiate this with the other party, Emerson Construction Company Inc., before signing it.

“While I think $100 is low, I think the other end is very high, extraordinarily high,” Carrillo said. “I’m not sure we would get anybody on the line for that. Where that number is, soft spot, I think it bears a good conversation with the bidder on what that is.”

Carrillo said this contract offers the city an opportunity to use American Rescue Plan Act funds to buy time for its wastewater infrastructure as the city continues to grow.

City Attorney Stanley Springerly said the city needs to find a “Goldilocks zone” when negotiating the contract’s liquidated damages clause. He said most contracts stipulate $1,500 to $2,500 per late day.

“If the liquidated damages are stated too punitive, the courts may not enforce it,” Springerly said. “You can’t go too high. You can’t go too low.”

Hancock warned that if the council set the rate too high, the contractor might back out, further delaying the project. He said the city’s wastewater infrastructure couldn’t support the growing demand with further delays.