Thanks for the update on IARWC
To the Editor,
Thanks you for the update on IARWC and Carlinville’s participation in it. While this project may have too much momentum to stop, Carlinville’s citizens should at least recognize the risks of the project and the considerable opposition to it that exists from the County Board, several members of the City Council, Prairie Farms and much of the public.
Firstly, the project is expensive, even with the financial package that has been announced. Carlinville’s engineering company for this project, MECO-Heneghan Engineers, estimate the total cost at $65 million. It is important to recognize that this is an early estimate based only on a feasibility study and not on completed engineering work. Also, MECO is an interested party who have already profited from their work with the City and who will gain more if the project goes ahead. It is the nature of these kinds of estimates to be overshot, sometimes by a large margin.
According to last week’s announcement, MECO estimates that the plant could produce water for the City at a cost of $3.92-$4.70 per 1000 gallons. Presently the City is producing water for $3.83 per 1000, so from the get-go, the citizens of Carlinville are looking at a large increase in their water bills.
Against this must be compared the offer that Carlinville has received from Litchfield. Litchfield has a brand new water plant with much excess capacity. Litchfield’s offer is in the form of a contract signed by the mayor of Litchfield, not a rough estimate of the costs resulting from a risky and complex project yet to be built. The price it offers IS the price the City will pay, not an estimate. This is the mother of all low-hanging fruits.
Litchfield offers to provide Carlinville with as much water as it needs, delivered to a take-off point on the west side of I55 near Route 16. The cost is $2.73 per 1000. All Carlinville needs to do is run a pipe from that point over flat ground with rights of way already in place and pump the water to Carlinville. Contrast this with a risky and expensive multi-city project that is not expected to break ground until 2020 or 2021. For that project IARWC must run pipes from Piasa to Carlinville, a distance of roughly 20 miles, through the hills and dales around Beaver Dam and Macoupin Creek where much of the rights of way must be purchased from landowners along the way.
One estimate I’ve seen puts the total cost of a pipe from Litchfield to Carlinville at $5 million. Assuming, to be supersafe, that it costs twice as much and that it receives financing on similar terms that were announced last week, the cost of the pipeline would add only $0.68 to the Litchfield price of $2.73 for a total cost of clean water delivered to Carlinville of $3.41 per 1000. This is less than the City’s current cost of producing water and way less than the $4.49 price that I get when running the numbers using MECO’s estimated cost of project and financial terms.
As noted at the beginning, it may be too late to stop the IARWC project but as it goes ahead it will be important for the citizens of Carlinville to remember what could have been and to keep in mind the following risks the City is exposed to:
1. The MECO/IARWC project will take much longer to execute than running a pipe from Litchfield. We could easily run out of our lake water before then.
2. The rights of way may be expensive and hard to obtain.
3. The probability of cost overruns.
4. The higher cost of the IARWC water.
Finally, the risk that this increase in the price of water causes Prairie Farms to close its Carlinville plant deserves special mention. Prairie Farms produces milk and other products here because it was started here, because Carlinville is a good location for distribution, and importantly, because the cost of water has been low. PF has 33 plants, probably more than it needs. It faces increased competition and has been looking for ways to economize. It is very concerned about the proposed water project and has expressed its concern to Mayor Demuzio and others on several occasions. If PF leaves, it would have serious knock-on consequences. Most obviously, there would be an immediate loss of good jobs. Then, there would be cutbacks in the several trucking oriented companies that exist around the PF plant. And there would be a large reduction in Carlinville’s use of water because PF is the largest user. Since the debt and other costs of the water plant would still need to be paid, the cost of water to the rest of us would go up, adding to the already high cost that is baked into the project.
IARWC could easily become a major train wreck.
William P. Armstrong,