Water project costs for city, Intel soar 49% - SanTan Sun News SanTan Sun News

Water project costs for city, Intel soar 49%

July 5th, 2022 SanTan Sun News
Water project costs for city, Intel soar 49%

By Ken Sain
Staff Writer

If you are doing a major construction project at your home or business, you probably know that costs have soared.

A year and a half ago, the City of Chandler and Intel agreed to work on a joint water project that would cost $23.4 million. Since then, supplies are in short supply and those you can get cost a lot more. There’s also a shortage of workers, so labor is going up as well.

The City Council agreed to amend their agreement with Intel at its June 23rd meeting to reflect this reality. The new price of their joint water project: $45 million. That’s a 49% increase in the past 18 months.

“Well, the concerns that the nation has seen with supply chain and labor has been shown in spades in this particular project,” said John Knudson, the city’s public works director.

“We’re having difficulty even today, to get a contractor who will sign construction contracts, because of the difficulty of subcontractors will not maintain their price for 30 days,” he said.

“So this has been a real challenge, as all of our [capital improvement] projects, … to get contractors to bid on the project, and then maintain a price for more than 30 days.”

The project is part of the massive $20 billion expansion at Intel’s Ocotillo campus in Southern Chandler. It’s likely that project will cost a lot more than $20 billion now.

How much? So far, Intel is not saying. Representatives of the company declined to comment when asked.

If the 49% increase for this project is similar to others Intel is facing, then it would be just under $30 billion. It could be less if the company secured all their materials and workers before prices spiked.

The joint project is the Reclaimed Water Interconnect Facility (RWIF). The city and Intel agreed to split the cost 50-50, so the city is now on the line for $22.5 million.

Intel is paying for its half in two different ways. It will contribute 20% ($4.5 million) directly. The rest ($18 million) will come from a state fund of the sales tax generated by the expansion. The fund, Title 42, is meant to be used on infrastructure projects related to the project.

The RWIF helps both Intel and the city. Intel needs water for its new manufacturing facilities to run their cooling systems and Chandler wants better control of its water.

Right now, the city stores some of the water it owns in Glendale, near State Farm Stadium. The city is capable of pumping that water from its Chandler wells. However, members of City Council expressed concerns that Glendale or another city could use all the water in their aquifer, even water owned by Chandler.

The RWIF project would help increase capacity of Chandler’s aquifer, allowing the city to store its water here and eliminating that possibility.

Intel would be allowed to use about 5 million gallons of water a day once this project is complete, which is about 50% of its capacity. The other 50% would be used to recharge the aquifer below the city. That water is the city’s backup plan in case it faces drought-related restrictions on its daily water use.

Gregg Capps, the city’s water resources manager, says the city has 35 wells connected to its aquifer. They have the capacity to pump 73 million gallons of water a day.

“Out of the 35 stations, 94% of our wells are showing that [the water level is] either stable or rising,” Capps said. “Only 6% are decreasing.”

He said that’s very good. The areas that are decreasing are near agriculture, where the water demands are higher.

“So our groundwater levels are really good,” Capps said. “We have a pretty good bathtub underneath us to pump if we need it.”

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