King County's Brightwater sewage-treatment plant will cost more than its $1.8 billion budget, but it isn't known who will pay $240 million in costs under dispute with a contractor and the state Department of Revenue.

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King County’s Brightwater sewage-treatment plant will cost more than its $1.8 billion budget, but exactly how much more remains unknown, a consultant said on Tuesday.

That’s partly because it hasn’t been decided who will pay approximately $240 million in costs that are in dispute, in one case between the county and the state Department of Revenue, and in another, between the county and one of the project contractors.

It’s also because engineers are still trying to figure out how to do what project-oversight consultant Art Griffith called “one of the riskiest aspects” of the project: connecting two tunnel sections of different diameters at a place where a damaged boring machine has been idled deep underground near Lake Forest Park for more than a year.

Project manager Gunars Sreibers told the Metropolitan King County Council’s Government Accountability and Oversight Committee on Tuesday that the county hasn’t decided whether to dismantle and remove the broken machine or tunnel around it.

Two boring machines, both operated by Vinci/Parsons/Frontier-Kemper, were shut down in May 2009, when it was discovered they were damaged. The contractor repaired one machine, which completed its journey from Kenmore to Bothell last month.

County Executive Dow Constantine pulled the Vinci group off the Kenmore-to-Shoreline segment and hired Jay Dee/Coluccio to finish the job. Jay Dee will use the same machine that completed another of the four tunnel segments, from Point Wells to Shoreline.

King County last month sued the Vinci group and its performance-bond provider, Travelers Casualty and Surety, claiming they should bear all costs resulting from the tunnel-boring problems.

Vinci attorney Peter Ralston said Tuesday, “There are obviously a number of disagreements between VPFK [the Vinci group] and the county, and VPFK does dispute the county’s claims.”

Tunneling overruns have reached $178 million but are likely to top $200 million, Griffith’s company, R.W. Beck, reported Tuesday.

Also potentially adding to the project cost is a dispute over a sales-tax exemption.

The county plans to sue the state Department of Revenue over its rejection of the county’s request for a $41 million exemption on equipment purchased to produce biosolids and reclaimed water, both of which are to be sold.

County officials said they received exemptions for biosolids-related equipment at the existing West Point and Renton treatment plants. Department of Revenue tax-policy specialist Gary Grossmann said the exemption is available only to taxpayers classified as manufacturers, and sewage plants are not considered manufacturers.

Grossman said he could not explain why the exemption had been extended to other sewage plants.

Government Accountability and Oversight Committee Chairwoman Kathy Lambert urged Wastewater Treatment Director Christie True to ask Gov. Chris Gregoire to intervene on the county’s behalf in the tax dispute.

The county estimates Brightwater, a year and a half behind schedule, will cost between $1.816 billion and $1.857 billion, depending on whether the county can reverse the Revenue Department’s tax decision.

If the county ends up paying some or all of the tunnel cost overruns, that could drive up its costs by $200 million.

Keith Ervin: 206-464-2105 or