The Minden Town Board awarded a $2.66 million contract Wednesday for the construction of a new booster station on the north side of Minden to Sierra Nevada Construction.
The booster station is in the first phase of water delivery system improvements to allow for pumping water to Carson City, Indian Hills and Douglas County.
Town engineer Bruce Scott said the low bid came in much higher than anticipated.
The town had estimated the cost at $1.825 million.
"We believe it is attributed to increases in material and construction costs as the construction market appears to be returning to a more realistic bidding climate with contractors no longer attempting to 'buy' projects," Scott said in a memo to the board.
He said the town was able to work with Sierra Nevada Construction to cut nearly half a million dollars in costs without compromising the project.
In addition, Scott said the Carson Water Subconservancy District committed $200,000 to the project.
"We don't want to rebid," Scott said. "We have a cooperative contractor. What we're asking is for you (the board) to approve the bid with an immediate change order. It's not a redesign, it's a scaling back."
Board member Steve Thaler said it had been a long time since he had seen bids that far from the engineer's estimates.
"It's very competitive," Scott said. "Labor and material costs have gone through the roof. It's been an awakening for us how much supplies and material have gone up when we think we're in a recession and the economy is dead."
Scott said cost reductions include lowering the height of the building, removing a crane system and a change in the number of pumps and piping sizes.
"The changes are reasonable," Scott said. "They won't compromise the look or the function of the building."
The new booster station will be expandable for future demands up to or more than 12,000 gallons per minute.
The project, located on Heybourne Road, consists of site work, piping, pumps, controls, electrical improvements and a 40-by-60 metal building on the north side of Winhaven.
The cost of the Heybourne Booster Station Project is being reimbursed by Douglas County, Indian Hills General Improvement District and Carson City.
"These partners in the regional water system are ultimately paying the bill for the project," Scott said. "We have taken the extra effort to coordinate with these entities on the cost reductions to ensure they are comfortable with proceeding."
Scott said the town was acting as the bank for the project, but was being reimbursed on a monthly basis.
The town has set a public workshop for 5:30 p.m. Tuesday for a discussion and presentation on a water rate study prepared by Tom Pavletic and Marv Winer of Municipal Financial Services.
The town contracted with the Henderson, Nevada, company to come up with wholesale and retail rates after analysis of existing rates.
The board will take public comment, but no action is scheduled on the rates.
Pavletic and Winer attended Wednesday's board meeting to outline their process in the rate study.
The cost of the rate study is not to exceed $45,000.