Borough stays with Veolia for upgrade

NAUGATUCK — The borough is looking at a higher than expected cost for mandatory upgrades at the wastewater treatment plant.

The borough reached a settlement with Veolia North America, the company that runs the borough’s treatment plant, at the end of June. The settlement resolved many issues between the two sides, including how to proceed with upgrades to meet federal mandates to reduce the amount pollutants emitted. As part of the settlement, the borough agreed to pay up to $6 million for incinerator upgrades.

Veolia had 30 days to come back to the borough with exact costs for the upgrades.

Mayor N. Warren “Pete” Hess said on the 30th day the borough was told the actual cost was $8.2 million. Since the figure exceeded the originally proposed $6 million, the borough had the option of seeking out other vendors to do the work or to allow Veolia to move forward. The Board of Mayor and Burgesses decided last week to allow Veolia to continue the work.

Hess said there were two main drivers behind the significant increase in the price of the work: additional equipment and installation costs.

The plans now call for adding a conditioner, which costs approximately a $1 million, that was not included in the previous proposal, Hess said.

The conditioner is another step in the process to clean the output from the incinerator and keep it under the Environmental Protection Agency’s mandatory air quality standards.

Hess said the conditioner was included after a treatment plant in Lynn, Mass., which wasn’t using a conditioner, failed to meet the EPA’s air quality standards and experienced failures in its incinerator.

“They apparently are now moving forward to get a conditioner,” Hess said.

The installation cost for equipment also came in at approximately $1 million higher than had originally been projected, Hess said.

In addition to the conditioner, the incinerator upgrades will include a new heat exchanger, a new carbon absorber and new electrical equipment.

The borough is also bonding $300,000 for engineering review, Hess said. This brings the total cost of the bond from the originally projected $6.5 million to $8.5 million.

However, that does not mean the borough is going to spend that entire amount, Hess said.

“These numbers are worst-case numbers. They include significant contingencies for the equipment and for the instillation and an additional contingency of $745,000. So the pricing is going to be a not-to-exceed number. So if it comes in under we will pay less,” Hess said.

Hess said all of the work done at the treatment plant will be monitored by the borough’s engineers.

“There would be an open book basis,” Hess said.

Although the cost has increased, Hess pointed out it is still significantly less than the $16 million the borough was facing for incinerator upgrades last year.

According to Controller Robert Butler the borough will pay annual principal payments of $425,000 on the bond and the interest will range from $160,000 to $240,000 until the bond is paid off.