Project 101 Westside Pump Station Abandonment Project Costa Mesa Sanitary District …an Independent Special District Protecting our community’s health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Memorandum To: Board of Directors Via : Scott Carroll, General Manager From: Rob Hamers, District Engineer Date: July 22 , 2014 Subject: #101 Westside Pumping Station Abandonment – Project Update Summary Recently, District staff met with Orange County Sanitation District (OCSD) staff to discuss an agreement proposed by OCSD. The agreement requests the Costa Mesa Sanitary District (District) commit to constructing the entire Project #101 to insure OCSD has sufficient wastewater flows to maintain sufficient velocity in the system so the system performs self cleaning. Flows above 2 feet per second are needed to keep the wastewater moving and flows above 3 feet per second are needed to insure scouring occurs after nighttime low flows occur. The District’s General Manger is currently reviewing the agreement and then District Counsel will review the document . This report provides an update of the proposed OCSD/District agreement, an update of the potential project costs, and an update of the funding options for the District for the project. Some of OCSD’s proposed sewers and some of the District’s proposed abandonment sewers will be located in the Talbert Regional Park. In additional meetings with OCSD staf f, OCSD has determined that Talbert Park’s initial one -time restoration costs will be approximately $500,000 per disturbed acre and the District Engineer has calculated the District will have approximately 0.97 acres of disturbed area in Talbert Park and 0 .34 acres of disturbed area in Canyon Park. Assuming the same restoration costs apply similarly to Canyon P ark, the total restoration cost for the District approach is $655,000 .
Board of Directors July 22 , 2014 Page 2 of 5 There are also ongoing 3 -5 year maintenance costs for the replacement veget ation that have not yet been identified . There is also the possibility the aforementioned restoration costs are under estimated due to the concept that for every one native tree and/or plant is damaged, the regulatory agency may require more than one tree and/or plant to be replaced. A ratio of 3:1 replacement to removed may apply, or in some cases there may be a ratio of 5:1 replacement. This would increase the restoration and maintenance costs. Additionally, OCSD staff roughly calculated the cost of the CMSD improvements for the new gravity pipelines that will replace the abandoned pumping stations, and although OCSD tends to agree with the base construction costs as calculated by the District, OCSD went on to apply an additional 82% for various markups and contingencies. Applying a factor of 82% equates to an increase of another $3 million dollars to the District’s project costs. As a summation of the above, including additional costs further described in the analysis section of this staff report, the p urpose of the Board of Directors special meeting is to discuss the potential cost increases of $4 million to the District’s budget. Staff Recommendation 1. Direct the District Engineer to again meet with various pipeline and drilling contractors and prepare a second engineer’s estimate for the District’s portion of the project. The initial engineer’s estimate in the amount of $3.77 million is attached hereto as Attachment A . It may be preferred to actually hire one or two contractors (one pipeline contractor and one drilling contractor) to obtain reliable estimates that can be used for the District’s budget. 2. Consider excluding Aviemore (Valley) Pump Station in the abandonment project and direct staff to revise projected costs. 3. Direct the Finance Manager to provide funding options including delaying the project in order to make additional yearly contributions into the project balance , increasing the annual contribution or using debt as a financing mechanism. Current yearly contributions are approximately $40 0 ,000. Analysis The Costa Mesa Sanitary District first prepared the pumping station abandonment study in 1989, so the project has in effect been in one stage or another for the past 25 years. Had the project been completed when first reviewed and approve d by OCSD, the costs would have been significantly less and millions of dollars would have been saved.
Board of Directors July 22 , 2013 Page 3 of 5 Attachment C is the cost estimate prep ared by OCSD staff that includes the 82% increase for markups and contingencies. Adding in the $1 million mitigati on cost for park restoration , there is an approximate $3 million difference in estimates between the District and OCSD. However, OCSD used 82% for contingencies while the District used 10%. I t also appears the quantities used by OCSD were slightly over -es timated because the staff member did not have access to the preliminary engineering plans. One potential savings the District may consider is not to abandon the Valley Pump Station. The station is extremely small and pumps wastewater for only 26 residenc es, but the abandonment cost is one -half million dollars for construction and another one -half million dollars for park restoration. Spending $1 million to abandon such a small station is rather expensive. The costs the District must reconcile prior to ha ving an accurate budget the District can rely on are shown below . To date, these costs have been either estimated or not yet considered. • Hire contractors to re -check construction costs • Permit costs • Hire consultant to administer permitting process • Construction • Mitigation and restoration costs • 3 -5 year park maintenance costs including overview by biologist • Amending the EIR if a new alignment is chosen for the Valley gravity line • Final Engineering design costs (known) • Contract administration/inspectio n phase costs • Contingency • Other mitigation costs The schedule provided by OCSD shows a 2 -year construction period beginning on March 22, 2017 and ending on March 25, 2019. Strategic Plan Element & Goal This item complies with Strategic Plan Element 1.0, Sewer Infrastructure and Goal No. 1.4 System Wide Sewer Replacement and Repair Program. The strategy for this Strategic Element is : ”We will do this by the careful management of the collection infrastructure using prudent planning and maintenance, with financial strategies to maintain sufficient capacity and respond to changing regulatory demands.”
Board of Directors July 22 , 2014 Page 4 of 5 Legal Review None at this time; however, District Counsel will review and comment on the proposed agreement p repared by OCSD and will present the final version to the Board for your consideration. Environmental Review The project will impact the environment and an environmental impact report (EIR) has been filed. The report states that with mitigation, the impacts can be reduced to a level less than significant. The OCSD Board of Directors will be considering certifying the EIR in the near future. Although the project is large and creates an impact on the environment, it does not represent an increase in c apacity or an enlargement of the sewer system. Rather, the purpose is to decrease operating costs and to lessen future impacts to the environment. Financial Review Below are some projected costs for this project, which includes reconstructing new pipelin e and abandoning six sewer pump stations. These costs are estimates, but it should give the Board a good idea of the potential costs to complete this project. 1. Hire contractors to re -check construction costs: $ 5,000 2. Permit costs: 50,000 3. Hire consultant to administer permitting process: 50,000 4. Construction: 3,771,350 5. Mitigation & Restoration: 655,000 6. Design (construction & restoration @ 10%): 442,635 7. Contingency (construction & restoration @ 10%): 442,635 8. Contract Administration & Inspection @ 10%: 442,635 9. Annual maintenance cost including a biologist: 65,500 10. Other mitigation costs (e.g. Archeo & Paleo monitoring ) 12,500 TOTAL ESTIMATED COST: $5,937,255 Excluding abandoning Valley Pump Station from this project will save the District $1 million. The Westside Abandonment Project carryover budget from fiscal year 2013 -14 is approximately $2,100,000. The current year appropriation is $400,00 0 for a total available budget of $2,500,000 as July 2014. To achieve saving $5 million dollars by the Spring of 2017 (the projected start date by OCSD), the Board of Directors has several options to consider, such as: 1. Appropriate $1,250,000 per year as t he annual contribution to this project for the next two fiscal years to reach a total project budget of $5,000,000 by March 2017.
Board of Directors July 22 , 2013 Page 5 of 5 This would require using $1,700,000 of the Retained Earnings in the Asset Management Fund , which is approximately $6,900,000 at June 30, 2014. 2. Appropriate $850,000 per year as the annual contribution to this project for the next three fiscal years to reach a to tal project budget of $5 ,050 ,000 by July 1, 2017 . If the project started in March 2017, the project budget would be $4,200,000 with the remaining $850,000 available July 1, 2017 , which is the start of the 2017 -18 fiscal year. This would require using $1,300,000 of the Retained Earnings in the Asset Management Fund , which is approximately $6,900,000 at June 30, 2014. 3. Staff could look into financing options, however this approach is not recommended. Public Notice Process Copies of this report are on file and will be included with the agenda packets for the July 22, 2014 Board of Directors special meeting at District he adquarters and on District’s website. Alternative Actions 1. Refer the matter back to staff for additional information. 2. Direct staff to contact OCSD and assess the possibility of delaying this project 3. Attachments: A – District Engineer’s Construction Estim ate B – Estimated Capital & Energy Savings C – OCSD Construction Cost Estimate Reviewed by: Wendy Davis Finance Manager