Kodiak weighs borrowing up to $10 million more to replace its main sewage pump station

The Kodiak City Council votes Thursday on whether to borrow up to $10 million more from the state to replace the pump station that handles most of the city's sewage. The only construction bid came in at more than twice the engineer's estimate.

The resolution would raise the city's loan limit from the state's Alaska Clean Water Fund for Lift Station 5 from $7.4 million to $17.4 million.

The station is the city's largest. "80% of our sewage goes through Lift Station 5 before it goes to the wastewater treatment plant," Chris Lynch, the city's project manager, told the council in September.

It was built in the mid-1970s, and its pumps, controls and equipment have reached the end of their design life, according to the council packet. About 20 years ago, a break in the pipe carrying sewage from the station sent sewage directly into Mission Lake. A similar failure in May 2019 cost the city more than $250,000. City staff wrote that the Alaska Department of Environmental Conservation would likely levy heavy fines if it happened again.

Under a state compliance order the city agreed to, the replacement must be finished by the end of 2027. That date could be extended because of logistics and supply chain delays, Interim City Manager Tim Putney wrote to the council, "but we have no other choice but to complete this project."

The trouble is the price. Brechan Construction bid $16.3 million in June, against an engineer's estimate of about $7.2 million from DOWL. With contingency and other costs, staff put the project's total at about $18.3 million. The city has about $4.6 million on hand and a pending $3.25 million federal grant from the EPA, leaving a gap of about $10.5 million.

One reason may be underground. The new station needs an excavation more than 35 feet deep in a congested spot close to the lake, and the piling to hold back the soil "may not have been fully appreciated in the estimate," a staff report said.

It's the second time a bid has come in far above the estimate. In 2023, the first round brought a $17.7 million bid against a $7.14 million estimate, and the city rejected it. It then split the project in two, separating the station from about 1,600 feet of new sewer line.

The city has kept moving in the meantime. It built a temporary bypass to protect Mission Lake, and it ordered a $1.95 million factory-built dry well for the new station, which arrived in Kodiak last month. It also bought a lot and cleared it so the station can sit about 100 feet farther from the lake. In September, the council approved more test drilling at the site, hoping better soil data could shrink the costly shoring.

The loan would be repaid from the sewer utility's revenue. The resolution says neither the city's taxing power nor its "faith and credit" is pledged.

Approving it would let the city apply to the state for the extra money. The council would still have to approve the final loan by ordinance, and the city says it will borrow only what the project needs.