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Report PAC09-28
Report to the Policy Advisory Committee (PAC09-28)
Date: March 5, 2009
To: Policy Advisory Committee
From: Steve Brown, P.E. – Town of Cary, Director of Public Works and Utilities
Prepared By: Leila Goodwin, P.E. – Town of Cary, Water Resources Manage
Subject: Western Wake Regional Wastewater Facilities Budget Update and Proposed FY10 Operating Budget
Section 3.3 of the “Design, Construction, Ownership, Management and Operation Agreement” dated August 22, 2005 (“Implementation Agreement”), specifies that:
“The Lead Agency shall prepare the Annual Budget for each Fiscal Year and as expeditiously as possible shall provide each of the Project Partners with the Annual Budget. The Lead Agency shall endeavor to prepare and provide to each Project Partner by each March 15 a preliminary Annual Budget for the ensuing Fiscal Year. To the extent possible, the Lead Agency shall prepare the Annual Budget so that it will be possible to determine from such budget the Current Expenses for the Wastewater Management Facilities that will be allocable to each Project Partner during the Fiscal Year.”
The Project Partners entered into two agreements specifying tasks to be undertaken by the Lead Agency, how costs for those tasks will be allocated, and anticipated budgets:
- The Interlocal Agreement for Regional Wastewater Management Facilities Land Acquisition and Preliminary Work, as amended (“Preliminary Work Agreement”), addressed purchase of land for the Water Reclamation Facility (WRF) and pump stations; permitting; and organizational, institutional and financial development. For budget discussion purposes, land costs will be included in facility design and construction costs.
- The Agreement For Design, Construction, Ownership, Management And Operation Of Western Wake Regional Wastewater Management Facilities, as amended(Implementation Agreement), addressed design and construction of the facilities, and defined Fixed Current Expenses, which includes project management expenses before facility startup.
Report PAC07-10 dated February 15, 2007 presented several potential cost allocations for implementation of the Apex/Site 14 Water and Sewer Extension Policy and although Option 1 was selected by the Policy Advisory Committee at that time and is used in this update for discussion purposes, the Policy Advisory Committee subsequently agreed to revisit the cost allocations for this item. The Lead Agency proposes bringing this item back to the Policy Advisory Committee after a Record of Decision is issued on the Environmental Impact Statement (expected late summer 2009).
Table 1 presents the cost shares for various components of the facilities.
Preliminary Work
The Preliminary Work included two items: permitting; and organizational, institutional and financial development. Table 2 shows a summary of the updated preliminary work budget. Additional funding over what was reported last year (PAC08-23) is included for planning and permitting related to the potential for a discharge to Harris Lake (PAC09-29). A portion of the permitting cost has been reimbursed from a State Revolving Fund (SRF) loan, for which repayment has already begun.
We anticipate that some of the unspent funds budgeted for the organizational, institutional and financial development will be needed to finalize the service agreements between the Lead Agency and each partner; therefore, the budget for that item remains unchanged.
Land Acquisition, Design and Construction
Costs have been updated based on the ongoing design of the facilities and increased knowledge of pipeline routes and potential easement costs.
Summary of Capital Costs
Table 3 presents the updated cost estimates for land acquisition and facilities. Table 4 presents a comparison of updated costs with the previously budgeted costs, by Partner. Note that total costs have increased by about 7% since March 2008 due in part to:
- Addition of compensatory mitigation costs for environmental impacts;
- Addition of rock excavation costs and length to some of the larger pipelines based on more detailed information from soil boring tests;
- Provision of an alternate solution for the manual bar rack at West Cary Pump Station that includes a comminutor;
- Increased costs for the pumps at Beaver Creek and West Cary pump stations.
- Addition of lab equipment in the estimates for the WRF;
- Increased commodity costs for ductile iron, steel and stainless steel; and
- Addition of a second mechanical screen for the Beaver Creek Pump Station in lieu of a manual bar rack.
Project Management
As has been discussed previously, there are operating expenses before startup of the facilities which are being billed to the Project Partners by the Lead Agency as Fixed Current Expenses. To date these include salary costs for a project manager, contract costs for land acquisition services, and the cost for the annual audit.
FY09 and Future Year Cash Flow Estimates
Table 5 presents an estimate of the timing of cash flow for the project, for each Project Partner. The cash flow estimates shown in Table 5 incorporate the use and repayment of the SRF loan of about $4 million received for planning and permitting (including some design). Table 6 shows the proposed FY09 Operating Budget broken down into permitting, capital, and project management costs.
Requested Action: The Technical Advisory Committee requests that the Policy Advisory Committee accept the recommended FY10 Operating Budget.
Table 1 |
Cost Share Allocations for Western Wake Regional Wastewater Management Facilities |
Project Component |
Apex |
Cary |
Holly Springs |
Morrisville |
Preliminary Work and Land Acquisition Agreement |
Preliminary Work (Permitting) |
26.9% |
44.3% |
22.5% |
6.3% |
Organizational, Financial, Institutional |
26.9% |
44.3% |
22.5% |
6.3% |
West Cary PS Land |
0% |
87.5% |
0% |
12.5% |
Beaver Creek PS Land |
34.7% |
57.2% |
0% |
8.1% |
Western Wake WRF Land |
34.7% |
57.2% |
0% |
8.1% |
Effluent Pump Station Land |
26.9% |
44.3% |
22.5% |
6.3% |
Design, Construction, Ownership, Management And Operation Agreement |
West Cary PS |
0% |
87.8% |
0% |
12.2% |
West Cary Force Main |
0% |
87.8% |
0% |
12.2% |
West Cary Force Main Land |
0% |
87.5% |
0% |
12.5% |
West Reedy Branch Gravity Sewer |
9.3% |
78.7% |
0% |
12.0% |
West Reedy Branch Gravity Sewer Land |
10.6% |
78.2% |
0% |
11.2% |
Beaver Creek Gravity Sewer |
100.0% |
0% |
0% |
0% |
Beaver Creek Gravity Sewer Land |
100.0% |
0% |
0% |
0% |
Beaver Creek Trunk Sewer and Tunnel |
50.0% |
43.8% |
0% |
6.2% |
Beaver Creek Trunk Sewer and Tunnel Land |
50.0% |
43.8% |
0% |
6.2% |
Beaver Creek PS |
21.3% |
69.0% |
0% |
9.7% |
Beaver Creek Force Main |
21.3% |
69.0% |
0% |
9.7% |
Beaver Creek Force Main Land |
34.7% |
57.2% |
0% |
8.1% |
Western Wake WRF |
34.1% |
57.7% |
0% |
8.2% |
Effluent PS, Pipeline and Outfall Design |
25.6% |
43.4% |
24.8% |
6.2% |
Effluent Pump Station |
25.6% |
43.4% |
24.8% |
6.2% |
Effluent Pipeline and Outfall |
26.9% |
44.3% |
22.5% |
6.3% |
Effluent Pipeline and Outfall Land |
26.9% |
44.3% |
22.5% |
6.3% |
Holly Springs Effluent Line on WRF Site |
0% |
0% |
100.0% |
0% |
Operating Budget |
Project Management(Fixed Current Expenses) |
26.7% |
59.6% |
5.3% |
8.4% |
Additional Items |
SCADA |
25.6% |
43.4% |
24.8% |
6.2% |
Value Engineering |
25.6% |
43.4% |
24.8% |
6.2% |
Apex/Site 14 W/S Extension Policy (Option 1) |
26.9% |
44.3% |
22.5% |
6.3% |
Table 2 |
Updated Budget for Preliminary Work |
|
|
Permitting (Cary Project SW 1109) |
|
Costs presented in March 2008 (PAC08-23) |
$5,169,330 |
|
|
Additional permitting costs for current tasks |
$100,000 |
CDM/CH2M Hill (preparing EIS with USACE direction) |
|
Brown and Caldwell (Partners’ EIS Consultant) |
|
Poyner and Spruill (legal review) |
|
|
|
Additional budget for Harris Lake discharge evaluation and permitting |
$200,000 |
|
|
Recommended Contingency |
$230,670 |
Total costs for budget planning purposes |
$5,700,000 |
|
|
Amount spent that was reimbursed by SRF loan |
$1,430,214 |
|
|
Total of SRF loan payments (11/01/2007 – 05/01/2027) |
$1,771,842 |
Total estimated costs not funded by SRF Loan |
$4,269,786 |
Total payments for budget planning purposes |
$6,041,628 |
|
|
Amount paid by Partners through 02/18/09 (including loan pmt) |
$2,468,885 |
Estimated additional FY09 payments |
$816,879 |
Remaining Budget Amount for FY10 and later |
$2,755,864 |
|
|
|
|
Organizational, Institutional, Financial (Cary Project SW1113) |
$600,000 |
(Amount spent through 2/18/09) |
$67,320 |
|
|
|
|
Total Preliminary Work budget (SW1109 and SW1113) |
$6,300,000 |
Table 3 Phase 1 Project Component Costs |
|
Total Updated Project Costs (either actual spent or 2009 $) |
|
|
|
Facility (design basis) |
Engineering Costs |
Construction Costs |
Land costs |
Subtotal Eng & Const Costs (2009 $) |
Total Updated Costs |
Mar 2008 costs |
Increase (Decrease) |
West Cary PS (peak hourly) |
$1,217,111 |
$15,208,000 |
$318,000 |
$16,425,111 |
$16,743,111 |
$14,726,111 |
$2,017,000 |
14% |
West Cary Force Main (peak hourly) |
$743,376 |
$8,690,000 |
$509,800 |
$9,433,376 |
$9,943,176 |
$11,602,976 |
($1,659,800) |
-14% |
West Reedy Branch Gravity Sewer (peak hourly) |
$866,675 |
$11,125,000 |
$312,500 |
$11,991,675 |
$12,304,175 |
$11,357,175 |
$947,000 |
8% |
Beaver Creek Gravity Sewer |
$23,890 |
$1,971,110 |
$70,000 |
$1,995,000 |
$2,065,000 |
|
$253,110 |
|
Beaver Creek Trunk Sewer and Tunnel |
$0 |
$4,734,500 |
$65,500 |
$4,734,500 |
$4,800,000 |
|
$125,000 |
|
Beaver Creek PS (peak hourly) |
$769,450 |
$18,517,400 |
$680,000 |
$19,286,850 |
$19,966,850 |
$18,035,950 |
$1,930,900 |
11% |
Beaver Creek Force Main (peak hourly) |
$1,068,287 |
$25,680,000 |
$743,700 |
$26,748,287 |
$27,491,987 |
$26,668,987 |
$823,000 |
3% |
subtotal raw ww conveyance |
$4,688,789 |
$85,926,010 |
$2,699,500 |
$90,614,799 |
$93,314,299 |
$82,391,199 |
$4,436,210 |
5% |
Western Wake WRF (maximum month) |
$10,826,000 |
$142,157,000 |
$7,585,000 |
$152,983,000 |
$160,568,000 |
$148,411,000 |
$12,157,000 |
8% |
Effluent Pump Station (maximum month) |
$1,002,560 |
$9,600,000 |
$1,235,000 |
$10,602,560 |
$11,837,560 |
$10,837,560 |
$1,000,000 |
9% |
Effluent Pipeline and Outfall (maximum month) |
$1,203,960 |
$39,605,000 |
$1,464,900 |
$40,808,960 |
$42,273,860 |
$39,149,080 |
$3,124,780 |
8% |
Holly Springs Effluent Line on WRF site |
$73,300 |
$862,000 |
$0 |
$935,300 |
$935,300 |
|
$107,000 |
|
subtotal effluent conveyance |
$2,279,820 |
$50,067,000 |
$2,699,900 |
$52,346,820 |
$55,046,720 |
$49,986,640 |
$4,231,780 |
8% |
SCADA 1 |
$1,100,000 |
$0 |
$0 |
$1,100,000 |
$1,100,000 |
$1,250,007 |
($150,007) |
-12% |
Value Engineering 1 |
$292,000 |
$0 |
$0 |
$292,000 |
$292,000 |
|
$0 |
|
SUBTOTAL |
$19,186,609 |
$278,150,010 |
$12,984,400 |
$297,336,619 |
$310,321,019 |
$282,038,846 |
$20,674,983 |
7% |
Water and Sewer Extension Policy 2 |
$270,600 |
$2,706,000 |
$250,000 |
$2,976,600 |
$3,226,600 |
$3,000,000 |
$226,600 |
|
TOTAL |
$19,457,209 |
$280,856,010 |
$13,234,400 |
$300,313,219 |
$313,547,619 |
$285,038,846 |
$20,901,583 |
7% |
1 SCADA costs allocated according to EPS design/construction cost allocation
2 Costs allocated according to preliminary work (permitting) cost allocation
Table 4 |
|
Updated Allocation of Western Wake Regional Wastewater Management Facilities By Project Partner |
|
Preliminary Work (Permitting, Organizational, Institutional) |
Apex |
Cary |
Holly Springs |
Morrisville |
Total |
|
26.9% |
44.3% |
22.5% |
6.3% |
|
Costs in ILA (amended) |
$704,000 |
$1,159,300 |
$588,800 |
$164,900 |
$2,617,000 |
Costs from Mar 2008 update (PAC08-23) |
$1,482,400 |
$2,441,400 |
$1,240,000 |
$347,200 |
$5,510,958 |
Updated Preliminary Work Costs |
$1,625,200 |
$2,676,400 |
$1,359,400 |
$380,600 |
$6,041,628 |
|
|
|
|
|
|
Increase (Decrease) from Mar 2008 |
$142,800 |
$235,000 |
$119,400 |
$33,400 |
$530,670 |
% |
10% |
10% |
10% |
10% |
10% |
Facilities and Land |
|
|
|
|
|
Costs in ILA |
$62,363,000 |
$137,425,000 |
$12,341,000 |
$19,386,000 |
$231,515,000 |
Costs from Mar 2008 update (PAC08-23) |
$79,216,658 |
$173,007,988 |
$12,626,271 |
$24,562,676 |
$289,413,593 |
|
|
|
|
|
|
Updated Facility Costs (excluding land) |
$81,498,381 |
$177,534,355 |
$13,091,967 |
$25,211,917 |
$297,336,619 |
Updated Land Costs |
$3,988,167 |
$7,346,421 |
$607,478 |
$1,042,334 |
$12,984,400 |
Updated Facility and Land Costs |
$85,486,548 |
$184,880,776 |
$13,699,444 |
$26,254,251 |
$310,321,019 |
|
|
|
|
|
|
Increase (Decrease) from Mar 2008 |
$6,269,890 |
$11,872,787 |
$1,073,173 |
$1,691,575 |
$20,907,426 |
% |
8% |
7% |
8% |
7% |
7% |
Total Preliminary Work, Facilities and Land Costs |
|
|
|
|
|
Costs in ILA |
$63,067,000 |
$138,584,300 |
$12,929,800 |
$19,550,900 |
$234,132,000 |
Costs from Mar 2008 update (PAC08-23) |
$80,699,058 |
$175,449,388 |
$13,866,271 |
$24,909,876 |
$294,924,593 |
Updated Costs |
$87,111,748 |
$187,557,176 |
$15,058,844 |
$26,634,851 |
$316,362,619 |
|
|
|
|
|
|
Increase (Decrease) from Mar 2008 |
$6,412,690 |
$12,107,787 |
$1,192,573 |
$1,724,975 |
$21,438,026 |
% |
8% |
7% |
9% |
7% |
7% |
Apex/Site 14 Water and Sewer Extension Policy |
$ 867,955 |
$ 1,429,384 |
$ 725,985 |
$ 203,276 |
$ 3,226,600 |
Total Costs |
Apex |
Cary |
Holly Springs |
Morrisville |
Total |
Total Costs from Mar 2008 update (PAC08-23) |
$81,506,058 |
$176,778,388 |
$14,541,271 |
$25,098,876 |
$297,924,593 |
Updated Total |
$87,979,703 |
$188,986,560 |
$15,784,829 |
$26,838,127 |
$319,589,219 |
|
|
|
|
|
|
Increase (Decrease) from Mar 2008 |
$6,473,645 |
$12,208,171 |
$1,243,558 |
$1,739,251 |
$21,664,626 |
% |
8% |
7% |
9% |
7% |
7% |
Table 5 |
|
Western Wake Regional Wastewater Management Facilities Phase 1 Implementation |
|
Estimated Cash Flow by Fiscal Year for Each Project Partner |
|
Fiscal Year |
Apex |
Cary |
Holly Springs |
Morrisville |
Total |
Cary + Morrisville |
Through FY09 |
$ 5,528,200 |
$ 14,727,300 |
$ 1,490,900 |
$ 2,079,300 |
$ 23,825,700 |
$ 16,806,600 |
FY10 |
$ 9,396,200 |
$ 16,408,300 |
$ 605,400 |
$ 2,331,900 |
$ 28,741,800 |
$ 18,740,200 |
FY11 |
$ 28,557,200 |
$ 57,433,500 |
$ 2,985,600 |
$ 8,172,900 |
$ 97,149,200 |
$ 65,606,400 |
FY12 |
$ 36,865,300 |
$ 83,194,700 |
$ 8,488,400 |
$ 11,818,600 |
$ 140,367,000 |
$ 95,013,300 |
FY13 |
$ 7,049,100 |
$ 16,249,700 |
$ 1,921,800 |
$ 2,296,400 |
$ 27,517,000 |
$ 18,546,100 |
FY14 |
$ 75,700 |
$ 138,800 |
$ 25,000 |
$ 19,800 |
$ 259,300 |
$ 158,600 |
FY15 |
$ 74,400 |
$ 136,400 |
$ 24,600 |
$ 19,500 |
$ 254,900 |
$ 155,900 |
FY16 |
$ 73,100 |
$ 134,100 |
$ 24,100 |
$ 19,100 |
$ 250,400 |
$ 153,200 |
FY17 |
$ 98,800 |
$ 176,100 |
$ 46,200 |
$ 25,100 |
$ 346,200 |
$ 201,200 |
FY18 |
$ 97,500 |
$ 173,700 |
$ 45,800 |
$ 24,800 |
$ 341,800 |
$ 198,500 |
FY19 |
$ 96,200 |
$ 171,400 |
$ 45,400 |
$ 24,400 |
$ 337,400 |
$ 195,800 |
FY20 |
$ 68,000 |
$ 124,800 |
$ 22,500 |
$ 17,800 |
$ 233,100 |
$ 142,600 |
FY21 |
$ 66,800 |
$ 122,400 |
$ 22,000 |
$ 17,500 |
$ 228,700 |
$ 139,900 |
FY22 |
$ 65,500 |
$ 120,100 |
$ 21,600 |
$ 17,100 |
$ 224,300 |
$ 137,200 |
FY23 |
$ 64,200 |
$ 117,700 |
$ 21,200 |
$ 16,800 |
$ 219,900 |
$ 134,500 |
FY24 |
$ 62,900 |
$ 115,400 |
$ 20,800 |
$ 16,500 |
$ 215,600 |
$ 131,900 |
FY25 |
$ 61,700 |
$ 113,100 |
$ 20,400 |
$ 16,100 |
$ 211,300 |
$ 129,200 |
FY26 |
$ 60,400 |
$ 110,700 |
$ 19,900 |
$ 15,800 |
$ 206,800 |
$ 126,500 |
FY27 |
$ 59,100 |
$ 108,400 |
$ 19,500 |
$ 15,500 |
$ 202,500 |
$ 123,900 |
TOTAL |
$ 88,420,300 |
$ 189,876,600 |
$15,871,100 |
$ 26,964,900 |
$ 321,132,900 |
$ 216,841,500 |
Notes: |
|
1. Includes loan payments for $4M Planning and Permitting SRF Loan |
|
2. Includes O&M costs through FY12, up until startup |
|
3. O&M costs for FY13 and later are not included |
|
Table 6 |
Proposed FY09 Operating Budget |
|
Total Cost |
Spent Thru 2/18/09 1 |
Estimated Spent Thru Remainder of FY09 2 |
Proposed FY10 Operating Budget 2 |
|
Permitting |
$6,041,628 |
$3,872,834 |
$4,715,978 |
$754,080 |
Organizational, Institutional, Financial |
$600,000 |
$67,320 |
$67,320 |
$100,000 |
West Cary PS |
$16,743,111 |
$5,326,048 |
$5,360,210 |
$52,027 |
West Cary Force Main |
$9,943,176 |
$337,636 |
$429,190 |
$423,301 |
West Reedy Branch Gravity Sewer |
$12,304,175 |
$420,758 |
$496,600 |
$292,815 |
Beaver Creek Gravity Sewer |
$2,065,000 |
$21,501 |
$28,740 |
$49,358 |
Beaver Creek Trunk Sewer and Tunnel |
$4,800,000 |
$0 |
$6,550 |
$45,850 |
Beaver Creek PS |
$19,966,850 |
$412,612 |
$448,296 |
$735,649 |
Beaver Creek Force Main |
$27,491,987 |
$501,170 |
$632,252 |
$611,746 |
Western Wake WRF |
$160,568,000 |
$11,230,855 |
$11,808,029 |
$23,753,071 |
Effluent Pump Station |
$11,837,560 |
$1,633,024 |
$1,670,527 |
$164,218 |
Effluent Pipeline and Outfall |
$42,273,860 |
$546,509 |
$758,744 |
$1,133,627 |
Holly Springs Effluent Line on WRF Site |
$935,300 |
$17,750 |
$23,305 |
$8,333 |
SCADA |
$1,100,000 |
$317,086 |
$395,377 |
$117,437 |
Value Engineering |
$292,000 |
$233,058 |
$262,529 |
$29,471 |
Apex/Site 14 Water / Sewer Extension Policy |
$3,226,600 |
$0 |
$27,060 |
$290,590 |
SUBTOTAL |
$320,189,247 |
$24,938,161 |
$27,130,707 |
$28,561,573 |
Operating Budget |
Project Management |
NA |
$97,516 |
$196,000 |
$180,000 |
TOTAL |
$320,189,247 |
$25,035,677 |
$27,326,707 |
$28,741,573 |
1 Includes some funds reimbursed by, and payments that began in November 2007, for SRF loan of $3,958,770 |
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