Riviera water treatment plant estimates explode to $300 million. Will water bills rise?

The cost estimate for a new water treatment facility in Riviera Beach has soared to $300 million, alarming City Council members and residents who are unsure how the city could pay for such a massively expensive project.

"Right now, do we have the debt service capacity for this project?" Riviera Beach Finance Director Randy Sherman asked during a Utility Special District meeting on April 17. "The answer is no."

The $300 million estimate is triple what the plant was expected to cost three years ago, when Riviera Beach chose the joint venture of Haskell-CDM Smith to design and build the facility.

Haskell-CDM Smith issued a statement then that included an estimate of $100 million to $150 million.

City Council members, who serve as the district's board of directors, expressed bewilderment and anger about the exploding costs.

"I think I need to have a meeting one-on-one with you guys because this was an issue we took up five years ago, and it was $100 million," Councilwoman Shirley Lanier told Haskell-CDM Smith representatives after they provided an update.

"And then, after the pandemic, it was $200 million. Now, we're up to $300 million. That is ludicrous. People build water plants for $80 million. So we really have to have some conversations about where we are in this process."

The cost of building or expanding water treatment plants vary widely, depending on their capacity and the scope of the work.

Water Online, a web newsletter that tracks the water and wastewater industry, noted five facilities where construction was expected to begin this year.

The City of Austin, Texas, has a $500 million project. A utility in Nashville, Tennessee, has a $403 million project. Manatee County has a $193 million project in the works, and Sioux Falls, South Dakota, has one expected to cost $116 million. Avondale, Arizona, has another expected to cost $109 million.

Why has the cost for Riviera Beach's new water treatment facility skyrocketed?

Mike Hoisington, who is managing the Riviera Beach water plant project for Haskell-CDM Smith, said a variety of factors have contributed to its higher cost, including what he described as the "lengthy" negotiations between the firms and the city before a contract agreement could be reached. Haskell-CDM Smith did not get started until January, Hoisington noted.

In the five years since the city decided to build a new water treatment plant, the cost of labor and materials have increased.

Mayor Ronnie Felder, Lanier and her colleagues asked for specifics on what led to the higher estimate, but Hoisington gave no clear answer, saying instead that his team is reviewing various aspects of the project to see where costs could be reduced.

Riviera Beach officials are unanimous in declaring a new water treatment plant as the most important project in the city.

That importance was underscored in January, when the utility district informed council members that water in a well had tested positive in June 2023 for E. coli, a fecal contaminant that, if consumed, could lead to stomach cramps, vomiting and severe diarrhea.

The district acknowledged to city officials that it had not immediately informed neither the public nor the state Department of Health, as is required by law. The contaminant did not make it into the city's drinking water system, the district said.

Riviera Beach mayor: Fecal contaminant was found in a second well

Felder announced an investigation into the positive test and the city's response to it. In announcing that investigation, he said Palm Beach County water quality experts told him the fecal contaminant was found in not one but two wells and that it did make it into the drinking water system.

Residents were enraged, packing City Council meetings and demanding answers. One resident, truck driver Jose Rivera, filed suit in February, saying he began having stomach problems late last year after drinking city water.

"Sometime in the middle of September, early October, I was going through different type of things, like sweating," he said during a news conference held in March. "Every time I tried to eat something, I could not hold it. I could not go anywhere. I had to go to the bathroom. The minute something touch on my stomach, it was horrible."

Online court records do not show that the city has filed a response to Rivera's complaint.

RIVIERA BEACH NEWS: Estimated date for new water treatment facility has residents frustrated

In the face of resident anger and confusion about their drinking water, city staff members have been circumspect, citing the investigation initiated by Mayor Ronnie Felder and another by the state Department of Health.

That circumspection has displeased Lanier, who said she and Michael Low, the Utility Special District's director, "had a very contentious meeting this morning" when she asked about the positive test.

"We are almost in June again have not heard anything about what happened with that incident — who was responsible, who we need to hold accountable," Lanier said. "Nothing has been done about it."

Felder urged council members and the public to wait for the results of the investigations and grew frustrated when Lanier continued to press for answers now.

Lanier said she is asking questions she's been getting from residents.

"The public has a right to know what happened," she said.

Why Riviera Beach desperately needs a new water treatment facility

A new water treatment plant serves as the ultimate answer to questions about the city's drinking water. It also would be a huge economic driver and another step forward in addressing what city officials have described as long-ignored infrastructure needs.

But estimates for the new plant have soared into staggering ranges.

Sherman explained that the city will need to raise water and wastewater rates to help cover the cost of the new water treatment facility. Those rates were raised sharply for this year and next year, with residents being told the increases were implemented to lay the financial groundwork for a new plant and to manage the current plant, which was built in 1958 and has been in need of replacement for decades.

In addition to a new water treatment plant, Riviera Beach wants to build a new City Hall, a new headquarters for its police department, a new fire station and new parks and recreation facilities. City Manager Jonathan Evans said another $98 million needs to be spend on roadway improvements.

The huge costs won't be easy for Riviera Beach to digest.

U.S. Census Bureau figures from 2022 show that median household income in Riviera Beach was $57,851 and that 20% of the city's residents live in poverty.

West Palm Beach had median household income of $64,044, and 16% of its residents were in poverty. Palm Beach Gardens had median household income of $106,544, with 6.3% of its residents in poverty.

Despite the tough economic circumstances faced by many residents in Riviera Beach — or, perhaps, because of them — voters in the city approved a trio of bond measures that will allow the city to raise $115 million in bond money for a new police headquarters, a new fire station and new parks and recreation facilities.

Now, though, with $300 million or more needed for a new water treatment plant, some residents are wondering if it was the right move to pass those bond referenda, which will cost homeowners about $292 more per year for every $250,000 in assessed property value.

"This is very concerning to the residents," Riviera Beach resident Erica Davis told council members during Wednesday's meeting. "We just voted on three bonds for $115 million or more. We knew that we had a dire strait project of our water department. We should have been voting on a bond to do this project before we did the park (bond)."

RIVIERA BEACH NEWS: Voters approve $115 million in bond money for new facilities

Evans and Sherman have said the city plans to pursue state, federal and any other available money to help offset the cost of the water treatment plant.

The push to get state or federal money, however, would be easier if Riviera Beach had a guaranteed maximum price for the plant.

State and federal legislators are loathe to push for funding for a project whose ultimate costs are unknown. That would put them at risk of securing dollars for a project that doesn't get built.

City Council members said they expected to get a guaranteed maximum price this spring. Then, they said they were told it would be provided this summer. Now, they aren't expected to get a maximum price until this fall.

Haskell-CSM Smith is putting various aspects of the plant project out to bid. Its representatives say that, rather than rush to provide a guaranteed price for the plant, they're working to lower costs wherever possible.

City Council members expressed concern about that approach on Wednesday.

"I do understand that construction costs continue to rise," Councilwoman KaShamba Miller-Anderson said. "So I do factor that in. But at what point are we able to lock into a price? Is there a point where we say, 'This is what it is. This is what's going to be?' Because if we don't do that, we could be up to five, six, $700 million, especially with the way construction costs are increasing."

Wayne Washington is a journalist covering West Palm Beach, Riviera Beach and race relations at The Palm Beach Post. You can reach him at wwashington@pbpost.com. Help support our work; subscribe today.

This article originally appeared on Palm Beach Post: How much will Riviera Beach's water plant cost and will bills increase?