WESTERN WAKE PARTNERS

Report to the Policy Advisory Committee (PAC07-11)

Date: April 24, 2007 To: Policy Advisory Committee From: Steve Brown, P.E., – Associate Director of Engineering, Town of Cary Prepared by: Steve Brown, P.E., – Associate Director of Engineering, Town of Cary Subject: Western Wake Regional Wastewater Management Facilities Value

Engineering Consultant Selection

Background:

At its January 23, 2007 meeting, the Policy Advisory Committee delegated authority to the Technical Advisory Committee to select a firm to provide Value Engineering Services for the Western Wake Water Reclamation Facility and Effluent Pump Station and Pipeline projects. This staff report is a follow-up to that selection process to keep the Policy Advisory Committee informed of the results of that selection.

Value engineering (VE) is a systematic process whereby an engineering design is evaluated by a third party to balance quality, function, and long and short term costs. Important elements of this analysis will include:

• Information gathering, to determine the the requirements of the projects,

• Function analysis, to determine the facility’s required functions and performance characteristics,

• Alternative generation, to identify alternate ways of meeting requirements,

• Evaluation of the alternatives, to assess how well they meet the required functions and identify potential cost savings, and

• Presentation of recommendations to the Partners for possible implementation.

The Western Wake Project Partners received proposals for Value Engineering services related to the design of the Western Wake Water Reclamation Facility and Effluent Pump Station from three firms: HDR, EarthTech, and Brown and Caldwell.

For the WWRWMF projects, the selected consultant will conduct independent VE analyses of the design work at key milestones for the design teams. The Partners will then evaluate the VE results and decide which of the recommendations, if any, will benefit the long-term value of the project. VE efforts will focus on the technical aspects of the design work, such as equipment and technology selection, structural and electrical designs, sitework details, constructability, and cost estimating. To accommodate design schedules, firms were asked to base their price proposals on separate VE sessions for the WRF and the pump station. In order to provide further value to the Project Partners, two firms proposed concurrent sessions for both the WRF and for the pump station. Price proposals are summarized as follows:

* Brown and Caldwell presented a modified concurrent project approach.

All three firms proposed qualified teams of consultants to perform this work. However, after thoroughly reviewing the proposals, the selection committee unanimously recommended in favor of awarding the Value Engineering services for the Western Wake Regional Water Reclamation Facility Project to HDR. The selection committee felt that the overall value of HDR’s approach would best serve the project as demonstrated by their proposal and the strength of their highly qualified team of engineers and certified value specialists. The work will be managed locally and their cost proposal was the least expensive.

At the time of writing, a recommendation in favor of awarding the Value Engineering Services contract to HDR in the amount of $292,000.00 will be considered on March 8 by the Lead Agency. A summary of the contract award will be provided at the Policy Advisory Committee meeting on April 24.

Requested Action: No action is required by the Policy Advisory Committee.

WESTERN WAKE PARTNERS

Report to the Policy Advisory Committee (PAC07-12)

The Agreement for Design, Construction, Ownership, Management and Operation of Western Wake Regional Wastewater Management Facilities dated August 22, 2005 (“Agreement”) set forth design capacities and cost shares for each component of the Phase 1 Western Wake Regional Wastewater Management Facilities. For the Effluent Pump Station (EPS) and the Effluent Pipeline and Outfall , the Phase 1 capacity was based on the projected needs of each Partner through 2020 (Table 1). Expansion of the EPS and a second parallel pipeline would be required for Phase 2 to meet 2030 needs. Cost estimates were updated in Report PAC 07-08 (February 15, 2007). The preliminary engineering review of the Effluent Pipeline and Outfall includes evaluations of the pipeline sizes and material, and whether the pipeline should be initially sized for 2030 flows to avoid the need for a parallel pipeline.

Table 1: 2020 Flow Projections for Effluent Pump Station and Effluent Pipeline and Outfall

Preliminary Engineering Report

The preferred option outlined in the Preliminary Engineering Report (April 2006) was a dual pipeline arrangement that included construction of a 48-inch pipeline in Phase 1 for 2020 capacity and postponed construction of a parallel 42-inch pipeline until Phase 2 to meet 2030 needs. The advantage of this approach is the potential to reduce Phase 1 capital costs by delaying construction of 2030 capacity until demand in the surrounding area requires additional capacity.

One disadvantage of this approach is duplication of effort in engineering, design, project management and easement acquisition, which increases long term costs and reduces efficiency of construction delivery. Another drawback is the potential risk of damage to the first pipeline, which would be in operation while the Phase 2 pipeline is under construction in the same general pipeline corridor. From the perspective of community relations, this approach would subject impacted residents to enduring a second major construction project.

Current Design

During the preliminary engineering evaluation of the effluent pump station and pipeline project, multiple options for the effluent pump station and pipeline were evaluated to determine the best value for the Project Partners. One of the first steps in the current design process was to evaluate potential route and location possibilities for the effluent pipeline and determine the most efficient routing from the water reclamation facility to the Cape Fear River. After conducting numerous evaluations of the potential route possibilities, the engineering design team began to focus on one preferred route. Similar to the route reviewed in the preliminary engineering report, the length of the current preferred alignment is approximately 60,000 linear feet or 11.4 miles.

The engineering design team also reviewed pipeline sizing options to meet the needs of the Project Partners. After conducting a new evaluation of the pump station and pipeline design criteria, the Phase 1 pipeline diameter was increased from 48 inches to 54 inches since that would substantially reduce pumping power requirements and thereby significantly reduce life cycle costs associated with operating the combined pump station and pipeline system. This dual pipeline option which includes a single 54inch Phase 1 pipeline with a second 42-inch pipeline in Phase 2 will be referred to as Alternative 1.

In addition to the dual pipeline option, two other single pipeline options including a 60inch pipeline (Alternative 2) and a 64-inch pipeline (Alternative 3) were added that would provide adequate capacity for 2030 demand levels in Phase 1. A summary of the 2030 flows is provided in Table 2 below.

Table 2: 2030 Flow Projections for Effluent Pump Station and Effluent Pipeline and Outfall

Capital Costs

The updated Phase 1 capital cost projections for the effluent pump station and pipeline/outfall for the three alternatives, including both ductile iron and steel material options, are listed in Table 3. Effluent pump station costs are included for comparison purposes because a smaller pipeline will require pumps with higher horsepower motors to overcome the additional friction losses in the pipe. Therefore, the pump station cost for Alternative 3 is significantly less because fewer, lower horsepower pumps and smaller electrical distribution equipment is required. The cost data also show that a 64inch steel pipeline can be constructed at a lower capital cost than a 54-inch ductile iron pipe (DIP) given current market conditions. The choice to use steel pipe will be confirmed upon receipt of the consultant’s final report on pipe materials.

Table 3: Phase 1 Capital Cost Projections in 2006 Dollars for Pipeline Alternatives 1, 2 and 3

Present Worth

In order to determine the best value for the Project Partners, a present worth analysis was conducted by Hazen and Sawyer for each of the three potential pipeline alternatives and is summarized in Table 4 below. The present worth analysis provides an objective means to consider operational costs in combination with capital costs to better forecast how capital improvement choices affect the long term cost of constructing, owning and operating a facility. The present worth analysis demonstrates that the 64-inch pipeline, Alternative 3, provides the best long term investment. Although the 54-inch pipeline costs less when considering Phase 1 construction, a substantial long term investment of $16.2M is required to construct the future parallel 42-inch pipeline in Phase 2. Based on the present worth cost analysis, the design team’s recommendation is that the Partners move forward with Alternative 3, a single 64-inch pipeline that will meet the Partners’ needs through 2030.

Table 4: Present Worth for Effluent Pump Station and Pipeline Alternatives Other Considerations

In consideration of the three alternative approaches outlined herein, it’s important to note that wastewater conveyed through the effluent pipeline will have been treated in accordance with State permitting requirements before it is discharged to this pipeline. Nearly all of the maintenance problems encountered with the abrasive nature of raw wastewater are not design considerations with this pipeline. The treated effluent conveyed through this pipeline will not contain abrasives, grit or debris. Through most of the pipeline routing, the pressure requirements are low and there are essentially no minimum velocity requirements other than maintaining a sufficient flow rate for operational flexibility. These factors all lend themselves to ease of maintenance and repair, particularly in the case of utilizing a steel pipeline, which can be readily welded.

Pro-Rata Cost Shares

The pro-rata cost shares currently specified in the Agreement for design and construction of the Effluent Pipeline and Outfall are based on 2020 flow capacities (Table A-5, Agreement). The distribution of 2030 flow capacity is slightly different than 2020 as shown in Table 2, so it is recommended that the pro-rata cost shares for the Effluent Pipeline and Outfall construction (including engineering services during construction) be modified in an amendment to the Agreement. Design engineering costs would continue to be shared based on 2020 capacity since the design is already underway and no increase in the engineering costs is anticipated due to a change in the design criteria.

Table 5 shows the current Partners’ costs as included in the February 15, 2007 budget update (Report PAC 07-08), as well as the estimated costs based on the revised pipe size for dual pipelines (Alternative 1) and the cost estimate for the recommendation to construct the Effluent Pipeline and Outfall based on 2030 flows (Alternative 3). Easement acquisition costs are not included.

Table 5: Pro-rata Shares and Capital Costs for Effluent Pipeline and Outfall Construction (2008 dollars)

Summary:

In summary, the present worth analysis demonstrates that the best long term value for the Project Partners is Alternative 3, the single 64-inch pipeline that provides both Phase 1 and Phase 2 capacity. Although this pipeline will cost more to construct in the initial phases, it will serve the long term needs of the project and provide a much lower life cycle cost than the parallel 54” and 42” pipelines required for Phase 2 capacity under Alternative 1. A portion of the operational cost savings realized by Alternative 3 are directly attributable to reduced power consumption by the effluent pump station when pumping through a 64-inch pipeline as compared to a 54-inch pipeline.

In addition to cost factors, the community impacts created by subjecting the residents along the pipeline route to a second phase of construction are also significant and have not been quantified in this analysis. In consideration of the long term benefits associated with constructing one pipeline to provide both Phase 1 and Phase 2 capacity, the recommendation of the Technical Advisory Committee and design team is to proceed with the design of a single 64-inch pipeline for the Effluent Pipeline and Outfall Project.

Requested Action: It is requested that the Policy Advisory Committee 1) approve the design and construction of a single 64-inch diameter effluent pipeline that will provide 2030 capacity for the Project Partners and 2) approve submittal, to of each of the Partners’ respective governing boards, of an amendment to the Agreement revising the Effluent Pipeline and Outfall pro-rata shares and capacities based on 2030 flows as outlined herein.

WESTERN WAKE PARTNERS

Report to the Policy Advisory Committee (PAC07-13)

Background:

As the Committee is aware, the Town of Holly Springs is in a limited partnership with the towns of Apex, Cary and Morrisville regarding the construction of the effluent line to the Cape Fear. Since the final contract documents were formed regarding the ownership and operation of the facilities on August 22, 2005, all parties understood that the Town of Holly Springs was participating in the joint venture only to the extent that the treated effluent line was involved. It is clearly spelled out in those documents that Holly Springs will not participate in the construction or operating costs of the plant itself.

The Policy Advisory Committee of the Partnership has recently voted to require Holly Springs to participate in suggested mitigation measures for the construction of the plant. These measures involve paying approximately $675,000 toward the construction of private sewer and water connections for the expansion of the Town of Apex’s utility infrastructure for citizens near the plant, to be served by Apex only.

It is the opinion of Holly Springs town staff that these mitigation measures are entirely related to the construction of the plant and bear nothing in relation to the construction of the treated effluent line; therefore, the Town of Holly Springs has no contractual obligation to share in the costs.

Further, Holly Springs Town Attorney John Schifano has opined that spending public funds for the construction of utility infrastructure that will become the property of Apex to serve properties that are not in the corporate limits of Holly Springs fails to meet the statutorily required public purpose as it relates to the expenditure of public funds for Holly Springs.

On April 3, 2007, the Holly Springs Town Council adopted the attached resolution stating its case and asking that the PAC reconsider its earlier vote to require Holly Springs to participate in mitigation measures.

Requested Action: That the PAC approves a motion to withdraw or reconsider its decision to require the Town of Holly Springs to financially contribute to the proposed mitigation measures, consistent with the partnership agreement.

THE TOWN OF