River City Construction is based in Peoria, Ill.
River City Construction, LLC, will be the general contractor for the Hannibal Board of Public Works' (HBPW) granular activated carbon facility project. River City's bid of $8,461,000, the lowest of five bids received, was accepted by the HBPW Board during its meeting Monday.
Bids ranged from River City's of just under $8.5 million to almost $14 million. Black and Veatch, the HBPW's engineering consultant on the project, had estimated the cost of the project at $10.6 million.
In a memo to the HBPW, Black and Veatch wrote that it had recently worked with the Peoria, Ill., company on "several projects and for each project River City Construction completed the project on time and with good quality."
Matt Munzlinger of the HBPW said that when the cost of construction is added to other project expenses, such as the price of the carbon, the total cost will be very close to Black and Veatch's estimate.
"A lot of things could happen during construction. I don't want to jinx it," said Heath Hall, general manager of the HBPW, regarding the project's cost.
With the construction contractor on board the HBPW will now turn its full attention to the financing of the project.
"The plan is to sell $10 million in municipal tax exempt bank qualified revenue bonds," Hall said, adding that the bonds will likely be sold in March or April.
The project's cost that bond money doesn't cover will be paid for with cash reserves from the water fund.
Hall said a short-term loan from the electric department might be utilized if something unforeseen boost the project's cost significantly. Hall said that at this point, such a loan should not be necessary.
The fact the construction bid came in lower than the engineer's estimate is good news for HBPW water customers, who already will see water rates increase by 54 percent over the next five years. That will amount to about $19 a month for the average residential water customer.
A portion of the upcoming water rate increases are intended to offset the revenue loss that will occur when Ralls County Water ceases to be a HBPW water customer later this year.
"All in all this is positive news, like a Christmas present," Hall said.