ELKO – City Council members accepted a revised cost to develop a water main under Interstate 80 at exit 298 with a 3-2 vote at their Nov. 28 meeting.
The motion faced opposition from Mayor Chris Johnson and Councilman Robert Schmidtlein.
“I’m not at $186,000 on this project,” Johnson said. “I feel that it should be closer to $117,000 for this water system. The project is viable because of the economic development due to the freeway and the traffic on the freeway, but I just do not want to motion on it.”
Council members Reece Keener, John Patrick Rice, and Mandy Simons approved the motion.
This decision was reached after a 45-minute discussion at the Nov. 14 city council meeting and subsequent discussion Nov. 28.
The developer wants to extend the water line from Cattle Drive down the full frontage of the property. It will serve a truck stop planned by Golden Gate Petroleum of Nevada, which is expected to include a gas station, convenience store, fast-food service and small casino.
The council advised the developer’s engineer to go back to the drawing board to decrease the city’s costs on the project at the Nov. 14 meeting, and he returned with revised figures at the Nov. 28 meeting.
The new agreement among the City of Elko, developer and subsequent stakeholders lists the total costs for the city close to $186,588. This breaks down into the $148,520.51 for the I-80 extension, and $38,067 costs for over-sizing the pipe from 10 to 12 inches in diameter.
Other stakeholders in the City of Elko special reimbursement agreement are Barrick Goldstrike Mines Inc., and Bruce and Sidnie Miller. Reimbursable funds from the city will be up to $52.32 per foot.
“What makes these negotiations of this project unique and different is the perpendicular alignment of the pipe to the interstate,” Assistant City Manager Scott Wilkinson said. “Usually these lines are parallel to the interstate, but here there is no true frontage on the property where it is based.”
Tom Ballew from High Desert Engineering requested reimbursement to cover the upgrade from a 10-inch water main to a 12-inch main, as well as an extension connection fee reimbursement at the Nov. 14 meeting, and answered subsequent questions on financing at the Nov. 28 meeting.
Ryan Limberg, city utilities director, presented the three parts of the developer’s proposal to the city council at the Nov. 14 meeting.
“The first part of the proposal is dealing with the oversizing with the 12-inch line where the minimum size needed is a 10-inch line, so the city will pick up the cost difference of $3,800,” Limberg said. “Part two includes an extension fee for the developer to pay to run the pipeline past other parcels and to reimburse those parcels, such as Barrick and Miller parcel, for the frontage development as a 50-50 split. The third part is the cost breakdown of the agreement … breaking down the deal where the city would split one-third of the cost with other parcels.”
Rice commented that he sees the advantages of the development on that portion of Elko but discussed at the Nov. 14 meeting whether certain portions of the project cost would be prorated back to the city.
At the same meeting, Simons also discussed her concerns about opening reimbursement possibilities for developers on future projects. Schmidtlein concurred with Simons, claiming that the city would set a precedent on this project.
Limberg made suggestions to cut several costs, such as engineering costs, administrative fees, and contingency feels.
The city does not often work with developers, making this project a special case that could open up the city to future development projects within the next few months, Limberg said at the Nov. 28 meeting.
The City of Elko initially will collect water extension connections for the project and pay for materials and labor construction for the project water line extension and over-sizing fees, but not for the mobilization, traffic and erosion control, contingencies, costs of design, construction management, or the minimum 10-inch diameter water line.
At the Nov. 28 meeting, Rice continued to comment on the economic development of the project, and Simons still expressed some resistance to using a private developer on this particular project. Limberg responded that it would cost more for the city to do the work than going through a private developer.
Schmidtlein said the City of Elko would receive tax returns and that the city would be reimbursed, but he could not agree to vote in favor of the project at the Nov. 28 meeting.
Rice moved to accept the new agreement for the City of Elko, and the motion was seconded by Keener. It passed with a 3-2 vote.
Work on the project is set to begin in early March, Ballew said.