The Buckman Direct Diversion Board approved a nearly $181 million contract Wednesday for the design and construction of the long-awaited Buckman Direct Diversion project, which will eventually provide most of Santa Fe's water supply.

The $180,988,282 contract for the joint city/county water project was awarded to CH2M Hill and Western Summit. The four-member board voted unanimously for the contract after an hourlong executive session.

Officials hope the diversion project will be operating by mid-2010. When completed, it will take the place of water from the city's wells and reservoirs, except in times of drought.

"This is a huge step for our community, and (answers) the question of where will our water come from in the future," Virginia Vigil, a county commissioner and board member, said after the vote. "It is far more expensive than what I expected."

"I don't want any more increase in cost. Let's move forward," said Vigil, echoing other board members' sentiments.

The contract is about $25 million more than the amount the city and county planned for a couple of years ago. The cost will be shared between the city and county, with Las Campanas subdivision kicking in about $9 million in return for some of the water.

The City Council and the County Commission still must formally approve the contract.

CH2M Hill is a worldwide design, engineering and construction company based in Englewood, Colo. The company currently has projects in 31 countries and was named to Fortune magazine's 2008 list of 100 best companies to work for.

Western Summit is a water and wastewater construction company based in Denver. The company's projects include the new water treatment plant in Las Vegas, N.M.

It took a year and a half to find a bidder and negotiate a final contract, said Rick Carpenter, the city's Buckman project manager. Staff recommended the Buckman Direct Diversion Board approve the contract.

The contract includes designing and building a diversion structure on the Rio Grande to divert water from the river. That water is supplied by the city's share of San Juan-Chama project water that flows into the Chama River and joins with the Rio Grande. The contract also includes a sediment separation pump and tank, 11 miles of 30-inch diameter pipeline, three raw water pumps, a 15-million-gallon water treatment plant and two post-treatment pumps to send the cleaned water on to Santa Fe customers.

This was the second time the city had gone out for bids on the project. The first bids, made by Parsons Corp. out of Seattle, Western Summit and CH2M Hill, came in over the $155 million target cost the city estimated for the project at the time. "It's what we were shooting for, but it was based on no more than 10 percent of the (known) design work," Carpenter said.

Parsons Corp. dropped out of the bid process, and the city asked the other two companies to come back with their best and final offer. Their final joint offer was still higher than what the city hoped, and city staff worked to refine the projects scope and reduce cost, Carpenter said. Ultimately, though, the contract has "nothing substantially different" than the original plan, Carpenter said.

"This is a very large project that spreads out halfway across the county," Carpenter said. "It will have source water from Rio Grande and has to run at very low capacity and peak at very high capacity."

He said they want the water project's design to handle all current and coming stricter federal water-quality standards.

Funding for the diversion project will come from gross-receipts taxes, city and county bonds, and about $11 million so far from the state Water Trust Board. A guaranteed federal loan from the rural water program could be another source of money for the project.

Contact Staci Matlock at 470-9843 or smatlock@sfnewmexican.com.