Board poised to approve $15- to $20-million central facility next month

If all goes well, the Austin Utilities Board of Directors could approve a new $15- to $20-million central administration facility for the municipal power company next month.

Austin Utilities General Manager Mark Nibaur told the board during its public meeting Tuesday he had heard from 15 to 20 residents over the past few weeks as media reports about the project reached the public. He said most residents expressed concerns, but were ultimately swayed after hearing more about the project.

Directors say they’re for the most part convinced to go ahead with the new building, with $1 million in design fees spent this year, rather than renovate current spaces for $13-$16 million.

“The need is clearly there,” said Director Tom Sherman. “It’s not just a cost issue in my mind.”

Directors asked Nibaur to come to their March meeting with a complete presentation, including final concept drawings, before the board proceeds with hiring an architecture firm to draw designs and put the project out to bid.

The board also discussed whether to continue sending mailers to residents. Director Jeanne Sheehan asked whether more input would sway the board’s decision, but Sherman pointed out the mailers would continue to be necessary to let Austin residents know about the project.

Utilities officials are looking to consolidate office operations, including customer service, staff operations and administrative duties, from the seven buildings utilities workers use. Though Austin Utilities has for years looked at options to improve its efficiencies — utilities officials bought 23 acres south of Todd Park in 2009 to potentially host a new building — Nibaur previously said the time wasn’t right to move forward until utilities officials decommissioned the downtown power plant and looked at its options.

Utilities officials would likely need to raise utility rates to help offset project costs. Officials estimate the average residential utility bill would rise by $5 to $6 per month regardless of the project, while a small- to medium-sized business bill would increase an average of $44 to $70 per month, and a large business utility bill would increase an average $66 to $142 per month. Nibaur said the company will also look at federal and private grants to offset construction costs.

A new building would solve a lot of safety and regulation issues for the utilities company. Austin Utilities doesn’t have enough space to store essential supplies like water and gas pipes indoors, according to Nibaur, and there are numerous inefficiencies throughout utilities operations that could be eliminated through a new facility. Utilities officials estimate the company could save $2.5 million over the next 10 years with a new facility.

Moreover, the utilities company will need to create solutions to upcoming security regulations. A new facility would involve security measures for much of its operations which aren’t already in place, and Nibaur said a “hardened area,” which would be storm- and bomb-proof and would protect backup power generation for the city, which isn’t in place now.

The board will meet at 4 p.m. on March 18 on the second floor of Austin Utilities to make its decision.