Chelan PUD closes books on Service Center project

WENATCHEE — Chelan County PUD commissioners approved a $1.5 million increase Monday to close out the district's Service Center project, resolving the final construction claims on one of the largest capital projects in the utility's history.

The board unanimously approved a resolution ratifying Change Order No. 45 with Absher Construction, which served as the project's general contractor, bringing the project's total budget to $166.04 million and allowing the district to begin contract closeout.

Project Delivery Manager David Lodge said the final settlement resolves the last remaining claims stemming from delays caused by cultural resource discoveries during construction and the rapid escalation of labor and material costs following the COVID-19 pandemic. While the district had previously settled with nearly every contractor involved in the project, one significant claim involving Schmidt Electric remained unresolved until after construction was complete.

Following the building's completion in 2024, the district conducted a detailed audit of contractor costs and negotiated a three-party settlement totaling $5.5 million to resolve the remaining claims. The agreement brings Absher's final contract amount to approximately $131.1 million. Lodge said the district had already reserved $4.5 million within the project budget for a final settlement, with Monday's action providing an additional $1.5 million, plus sales tax, needed to complete the agreement.

"While no settlement perfectly reflects every party's position, I believe this is a fair and reasonable outcome for the district and our construction partners," Lodge told commissioners.

Although the resolution focused on the project's financial closeout, commissioners spent much of the discussion reflecting on what the completed facility has meant for employees and customer service.

Lodge said the Service Center "was never just about replacing an aging facility," but about creating a workplace that would help employees better serve Chelan PUD customers for decades to come. He said the project's value lies not only in the building itself but in how employees have adapted to work together within it.

Commissioner Randy Smith recalled how discussions about replacing the district's former headquarters began years ago after leaders documented the shortcomings of the old facility, particularly the customer experience.

"When I go down in the lobby and I see a completely different customer experience than what our customers had at our old headquarters, it was a very worthwhile journey," Smith said. "Maybe it's ready to launch us on that next 50 years."

Other commissioners highlighted improved collaboration among employees, better protection for expensive utility equipment and the building's role in supporting the district's long-term strategic goals. Commissioner Garry Arseneault also noted the project was completed without increasing customer rates, saying years of financial planning allowed the district to fund the facility while continuing to modernize other utility infrastructure.

With the settlement approved, Lodge said the district will proceed with contract closeout before returning to the board one final time to seek formal acceptance of the completed project.

Andrew Simpson: 509-433-7626 or andrew@ward.media