Monroe County Commissioners unanimously approved on Thursday, Feb. 25 to proceed with a contract with Fairburn-based United Grading & Excavating to run water lines as part of Phase 2, Contract 1 of the ongoing Juliette/Rum Creek water project.
In a special called meeting that lasted an hour and 20 minutes, Commissioners reiterated their desire to move forward with the $16.3 million water project even after learning from its water system engineer, Joe Wood of Macon-based Carter Engineering, that the project costs could soar due to an unexpected rise in the cost of PVC pipe.
Wood told Commissioners that last week’s Texas snowstorm resulted in the forced shutdown of a number of resin-producing plants in the state. As a result, PVC pipe, which contains the resin, has skyrocketed in cost over the past week.
On Friday, Feb. 12, United Grading was the lowest of seven bidders at a public bid opening to install 69,600 linear feet (nearly 13.2 miles) of water lines as part of Phase 2, Contract 1, which includes Hwy. 18 from near its intersection with Jenkins Road to its intersection with Hwy. 87, Hwy. 87 from its intersection with Hwy. 18 to its intersection with Newton Road, and a portion of Christian Road.
Four days later, on Tuesday, Feb. 16, Commissioners unanimously approved to contract with United Grading, which was also the contractor on two of the three parts of Phase 1, at an amount of just under $4.5 million. At the time of the contract’s approval, County Manager Hedges told Commissioners that the nearly $4.5 million cost would mean $1.2 million of the remaining $1.7 million in contingency for the entire project would be used on just Phase 2, Contract 1.
However, on Monday, Feb. 22, before Commissioners had officially signed off on the Phase 2, Contract 1 deal, United Grading Municipal Utility Manager Matt Stonica notified Monroe County Manager Jim Hedges that the Texas snowstorm had caused PVC pipe prices to rise dramatically since United Grading submitted its bid. While Stonica reiterated a desire for United Grading to fulfill the contract, he said the new PVC pipe costs could either cause project work to slow down or a project price tag hike beyond the amount submitted for bid.
In response, County Manager Hedges convened a meeting on Tuesday, Feb. 23 with District 3 Commissioner John Ambrose, in whose district the water project is taking place, United Grading representatives and a pair of representatives of United Grading’s PVC pipe supplier, Lawrenceville-based Consolidated Pipe & Supply, Inc. At the meeting, Consolidated Pipe representative Roland Aldridge said the Juliette water project was one of two jobs at the top of the company’s list to receive PVC pipes but said he couldn’t guarantee that they could provide United Grading with the pipe in the coming weeks due to nationwide shortages. Aldridge said that due to a number of Texas resin production plants having declared force majeure as a result of the snowstorm, those facilities could not guarantee their product, leaving many projects nationwide in limbo. Aldridge added that with the force majeure clause, which frees those resin producing plants from liability, having been invoked, resin that would have been used for PVC pipes could potentially be re-directed by the federal government for other more pressing natural disaster cleanup needs.
Commissioners then met on Thursday to further discuss the matter. County Manager Hedges told Commissioners that in July 2020 when the county began Phase 1 of the water project, the cost of resin was just $0.34 per pound while last week it rose as high as $1.25 per pound following the Texas snowstorm.
With the much-higher costs in mind, Wood told Commissioners that in an effort to get the project back under budget, he could re-engineer the project, reducing the pipe sizes in some instances and eliminating roads that would receive water lines in others. Wood cautioned that he didn’t think PVC pipe prices would drop down to expected levels anytime soon. In response to Wood’s concerns, County Manager Hedges then advised Commissioners to pause the remainder of the Juliette water project for six to 12 months until PVC pipe costs can stabilize. He also recommended rejecting all bids, including United Grading’s, for Phase 2, Contract 1 since the contract had never officially been signed.
However, Commissioner Ambrose said he was reluctant to stop Phase 2, Contract 1 altogether since warm weather is fast approaching and he doesn’t think the PVC pipe prices will stay as high as they are now. Commissioner Ambrose said he preferred making official the contract with United Grading and allowing its crew to begin necessary jack and bore work along Hwys. 18 and 87 in the meantime until Consolidated Pipe has PVC pipe available. District 1 Commissioner Lamarcus Davis immediately agreed with Commissioner Ambrose that the county should proceed with the project.
In response, County Manager Hedges reminded Commissioners that they could not obtain any additional bonded funds beyond the $20.3 million already approved. Hedges said Stifel Managing Director Brian Huskey, who brokered the bond agreement, recommended extending the time length of the Juliette water project from two to three years.
“The scope of work that as currently designed, you can’t afford it. It’s that simple,” County Manager Hedges told Commissioners. “So you either change the scope or you leave something out.”
Stonica then revealed that subsequent conversations between United Grading and Consolidated Pipe representatives had enabled him to extend an offer to Commissioners that United Grading would stick to the original bid quote that Commissioners had voted to accept on Feb. 16. Stonica said Consolidated Pipe representatives had agreed to take some of the financial hit associated with rising resin costs and indicated the supplier could get PVC pipe into United Grading’s hands by no later than late April. Stonica said both United Grading and Consolidated Pipe are willing to do what they can to keep the project moving.
District 4 Commissioner George Emami, who phoned into the meeting, said he wants documentation of when United Grading placed its supply order for PVC pipe with Consolidated Pipe. Stonica said he ordered pipe as soon as he was notified that Commissioners had approved his bid on Feb. 16 but said the order could not be made official until he had received final contractual paperwork from Wood, which took several days after Commissioners’ approval. Wood told Commissioners that nothing with respect to time was unusual about the Phase 2, Contract 1 approval process. Wood said a notice to proceed is never granted to a contractor until County Attorney Ben Vaughn gives final approval on the contract.
Commissioners then considered whether opting for more cost-effective 8-inch pipe over larger, more durable 12-inch pipe could be an option. However, Jeff Dorough of Utility Partners, who manages the county’s water system, said if the county opted for a “shortcut” now by choosing 8-inch pipe, it would likely pay for it when more growth comes to the area later. Bentley Cox, the county’s former water system manager who is overseeing the Juliette water project, said 10-inch lines could work in some places, but he too thinks 8-inch mains are insufficient.
After just over an hour of discussion, Commissioners approved by a 5-0 vote to issue a notice to proceed to United Grading for Phase 2, Contract 1.
Commissioners then had to decide what, if any, action to take on the remainder of the project since Phase 2, Contract 2 had already been put out for bid and was slated for a bid opening on Friday, March 5.
Pine Lane Trail resident Karl Cass said Juliette residents are very appreciative of the work Commissioners have done on the water project. However, Cass urged Commissioners to remain diligent in coming up with a solution that will allow the project to be fully completed. Cass said Monroe County should consider alternative locations closer to home than storm-riddled Texas or Louisiana to purchase resin for PVC pipes, saying his brother-in-law is a plant manager of a major resin production factory in South Carolina. Cass said he had not heard of any resin shortage issues at his brother-in-law’s facility.
Cass said, “Don’t give up. Get the eye of the tiger. Focus on what we need help with. I came up here with the thought that I was going to support the fact that we needed to just wait. . . But I think we can think out of the box. And I think we can explore other avenues for the best of Monroe County.”
In response to Cass’ comments, District 2 Commissioner Eddie Rowland said he wants Juliette and Rum Creek residents to know that Commissioners have taken no action to stop the water project as indicated by their choice on Thursday to proceed with Phase 2, Contract 1.
After about 15 additional minutes of discussion, Commissioner Ambrose motioned to postpone accepting bids for Phase 2, Contract 2 for up to four months to give ample time for PVC pipe prices to stabilize. After Commissioner Davis seconded Ambrose’s motion, the motion passed unanimously.
