Loans

East Bay sewer district gets $250 million federal loan for upgrades

East Bay sewer district gets $250 million federal loan for upgrades
Written by Publishing Team

Union City – Union Health District will receive a $250 million federal infrastructure loan to modernize its aging waste treatment facility.

The infusion of cash will help support the district’s nearly $510 million plan to upgrade Union City’s 33-acre sewage treatment facility, the largest improvement project it has ever undertaken. Officials said the project will take an estimated seven to 10 years to complete.

Old equipment, including huge aeration tanks and filters that treat wastewater, will be replaced in stages. New infrastructure will be built to help the facility remove about half of all nitrogen in its wastewater, as well as up to 90% of ammonia before it is pumped back into the bay, mitigating the area’s impact on local waters.

“We are thrilled to support the Union Sanitary District and their project, which will help protect our dear San Francisco Bay,” Martha Guzman, EPA’s regional officer for the Pacific Southwest, said in a statement.

Guzman announced the loan Wednesday at a press conference with local and state officials. The loan is supervised by the Environmental Protection Agency (EPA) and made possible under the Water Infrastructure Financing and Innovation Act of 2014.

Through a 2014 law, Guzman said, “We are improving California’s water infrastructure to provide better safe drinking water, protect our natural resources, and build stronger and more resilient local economies.”

“We look forward to accelerating investments in water infrastructure under the bipartisan infrastructure law,” she said.

Much of the major equipment at the district’s main facility, located on the edge of the bay, dates back to the late 1970s and early 1980s, according to Paul Eldredge, the district’s general manager.

“They’re showing their age, and they’re not able to keep up with the techniques and treatments we’re trying to achieve,” Eldredge said.

Eldredge said the loan, which would have a low interest rate of about 1.8% and a flexible redemption deadline, would save the district and its clients about $50 million over the life of the project.

The district’s board of directors earlier this month approved awarding a $120 million construction contract to WM Lyles of Fresno to build the first phase of the project, which will mostly include upgrading and adding aeration ponds.

District staff said W.M. Lyles was the low bidder, but the amount was still about $34 million higher than the district engineer’s estimate.

Eldredge said the long schedule of various projects, as well as steep rises in material costs, a tight labor market and supply chain constraints, contributed to the higher bids.

The overall project will also include the construction of a new building that will house the administration, operations and maintenance departments, depending on the district.

Eldredge said those three jobs are currently located in three separate buildings, all of which either need to be renovated or replaced.

Although the loan is estimated to save the area significant funds over time, Eldredge said it would not prevent the planned rate increases that have already been approved. District managers agreed in May 2020 to raise prices for customers by about 45% over five years.

At the time, the district said more than half of that money would be required for about $644 million in infrastructure upgrades over the next decade, including the sewage facility project, as well as the routine maintenance of nearly 840 miles of sewage lines and pumping stations. . .

The total cost is now close to $713 million, Eldredge said, and that number is expected to rise again by tens of millions of dollars if the cost of the next phase of construction for the sewage project is also higher than estimated bids.

“The initiative we’re talking about is really a culmination of efforts that started years ago, really seriously in 2015. We are delighted that we are at this point and that we are able to move forward. It has been a long way to get here,” Eldredge said.

The district provides sanitation services to more than 350,000 people in Fremont, Newark and Union City.

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