Clean Water Facility

City Council Workshop – September 27, 2016

City Council Workshop 2

• GC/CM construction method• Schedule• Cost update• Funding update• Rates• Milestones• Questions

Agenda

9/27/2016

City Council Workshop 3

• GC/CM construction method• Schedule• Cost update• Funding update• Rates• Milestones• Questions

Agenda

9/27/2016

City Council Workshop 4

• General Construction / Construction Manager (GC/CM) allows the City to introduce a contractor before a project has finished design.

• GC/CM benefits a project by providing – • Value engineering• Cost estimating and scheduling• Constructability review• Ability to start construction as design progresses• Reduce project risk by starting critical phases early

Using GC/CM Construction

9/27/2016

City Council Workshop 5

• Recent Bid Openings (9/21/16)• Electrical, Instrumentation and Controls• Package Estimate = $15,525,295• Low Bid = $10,954,500

• Mechanical• Package Estimate = $25,015,165• Low Bid = $18,794,212

• GMP #9 = $33,265,589 + Sales Tax ($2,894,106)• City Council to consider approval on October 4th

• Assumed approved for the purpose of this presentation

Using GC/CM Construction

9/27/2016

City Council Workshop 6

• GC/CM construction method• Schedule• Cost update• Funding update• Rates• Milestones• Questions

Agenda

9/27/2016

City Council Workshop 79/27/2016We are here

City Council Workshop 8

• GC/CM construction method• Schedule• Cost update• Funding update• Rates• Milestones• Questions

Agenda

9/27/2016

City Council Workshop 9

• Definitions for presentation• Total Project Cost = Construction + Professional Services +

Overhead• Expenses thru 9/13/16 = Invoices paid by the City through

this date• Encumbered = Amount contracted but not expended• Anticipated = An estimate of the remaining costs

Project Costs Glossary

9/27/2016

City Council Workshop 10

• The following items are not included in the total project cost• Facilities Plan / Engineering Report• Preceded full project definition and cost estimate

• Outfall Design and Construction• “Outside the box” of new facility, essential facility independent of new

WWTP• Windjammer Park phases unrelated to the Clean Water Facility• “Outside the box” of new facility

Non-project Costs

9/27/2016

City Council Workshop 11

• Acquisitions (e.g., real property, property leases, etc.)• Administration• Finance• Professional Services - Design• Professional Service - Construction• Construction

Cost Categories

9/27/2016

City Council Workshop 12 9/27/2016

ACQUISITIONS$3,496,000

ADMINISTRATION$12,000

FINANCE$879,000

PROFESSIONAL SERVICES DESIGN$9,515,000

PROFESSIONAL SERVICES CONSTRUCTION

$10,093,000

CONSTRUCTION$97,997,000

Total Estimated Project Costs

TOTAL Estimated Project Cost

$121,992,000

City Council Meeting 13 10/20/2015

ACQUISITIONS$3,153,000

ADMINISTRATION$12,000

FINANCE$805,000

PROFESSIONAL SERVICES DESIGN

$8,335,000PROFESSIONAL SERVICES CON-

STRUCTION$1,933,000CONSTRUCTION

$12,741,000

Expenses through 9/13/16

TOTAL Expenses through 9/13/16 $26,979,000

City Council Meeting 14 10/20/2015

ENCUMBERED TO DATEACQUISITIONS$3,153,000

ADMINISTRATION$12,000

FINANCE$879,000

PROFESSIONAL SERVICES DESIGN

$9,230,000

PROFESSIONAL SERVICES

CONSTRUC-TION

$10,093,000

CONSTRUCTION$77,728,000

Expended and Encumbered

TOTAL Expended and Encumbered $101,094,000

City Council Meeting 15 10/20/2015

ACQUISITIONS$ 343,000

PROFESSIONAL SERVICES DESIGN

$ 285,000

CONSTRUCTION$ 20,269,000

Estimate to Complete Project

Estimated Cost to Complete Project

$20,898,000

City Council Workshop 16

Category Expenses Thru

9/13/16 Encumbered Anticipated Total ACQUISITIONS $3,152,000 $0 $343,000 $3,496,000 ADMINISTRATION $12,000 $0 $0 $12,000 FINANCE $805,000 $74,000 $0 $879,000 PROFESSIONAL SERVICES DESIGN $8,335,000 $895,000 $285,000 $9,515,000 PROFESSIONAL SERVICES CONST $1,933,000 $8,160,000 $0 $10,093,000 CONSTRUCTION $12,741,000 $64,986,000 $20,269,000 $97,997,000 TOTAL $26,979,000 $74,116,000 $20,898,000 $121,992,000

Project Cost Breakdown

9/27/2016

22% 61% 17% 100%

City Council Workshop 17

• Risk and Owner Contingency funds are built in to every GMP • Funds cover unknown situations, project emergencies and/or

owner changes• Standard practice in large construction projects• Currently maintaining ±$3.5 million in contingency funds• At end of project, funds return to City or can contribute to site

restoration and the Windjammer Park Integration Plan

Contingency

9/27/2016

City Council Workshop 18

• Project currently has “negative contingency”, meaning the money set aside for unanticipated/planned costs is growing not diminishing.

• Recent reductions:• Reconfiguring MBR sump reduced cost by $170,000• Deleted 98 stone columns by moving odor control $80,000• Reduction in micropile spoil handling reduced cost by $100,000

Contingency

9/27/2016

City Council Workshop 19

• GC/CM construction method• Schedule• Cost update• Funding update• Rate impact update• Milestones• Questions

Agenda

9/27/2016

City Council Workshop 20 9/27/2016

Project Funding

2015 SRF$8,260,000

2016 SRF - Loan$15,631,331

2016 SRF - Forgivable$463,154

2016 SRF - Grant$4,586,846

2017 SRF$44,766,854

DOC - Grant$2,500,000

.09 Funds - Grant$1,000,000

Bonds - Phase 1$25,000,000

Bonds - Phase 2$2,482,165Rates/SDF

$17,301,894

TOTAL Estimated Project Funding $121,992,244

City Council Meeting 21

Funding Source Amount Term Rate2015 SRF $8,260,000 20 2.70%2016 SRF - Loan $15,631,331 20 1.90%2016 SRF – Forgivable Loan $463,154 2016 SRF - Grant $4,586,846 2017 SRF $44,766,854 20 1.60%DOC - Grant $2,500,000 .09 Funds - Grant $1,000,000 Bonds - Phase 1 $25,000,000 30 3.43%Bonds - Phase 2 (Available = $25 million) $2,482,165 30 Est 3.50%Reserves $17,301,894

Total$121,992,2

44

Project Funding

10/20/2015

City Council Workshop 22

• GC/CM construction method• Schedule• Cost update• Funding update• Rates• Milestones• Questions

Agenda

9/27/2016

City Council Workshop 23

• Original rate structure established in 2009 (adopted 2010) based on $70M project, at the Lagoon Plant, with an unknown treatment method.

• Funding strategy included $15M from reserves with the remaining coming from bonds.

• Bonds assumed to be 20 years at 6%.• Six of the ten years from the analysis were adopted by Council in 2010.• In March 2016, Council adopted three additional years of rate

adjustments.

Rate History

9/27/2016

City Council Workshop 24

Utility Rates

9/27/2016

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 $-

$20

$40

$60

$80

$100

$120

$140

$160

$40.00 $42.00 $47.00

$52.00 $57.50

$64.75 $72.85

$81.95 $92.20

118.17

135.9

77.789.36

102.76 110.98119.86

Resid

entia

l Util

ity R

ate

City Council Workshop 25

• Seek 2018 State Revolving Funds (SRF)• Determine if we can refinance SRF loans at a lower rate and/or longer term• Continue keeping actual project costs below estimates• Manage contingency balances• Successful use of self-performed construction• Continue constructability reviews• Continue management of negotiated support service (NSS) amounts• Effective procurement practices• Efficient plant operation

Ways to Reduce Project Cost & Rate

9/27/2016

City Council Workshop 26

• GC/CM construction method• Schedule• Cost update• Funding update• Rates• Milestones• Questions

Agenda

9/27/2016

City Council Workshop 27

• Construction:• October 4, 2016 - GMP #9 – Electrical, Mechanical• Q4 2016 – GMP #10 – Process Structure Concrete• December 20, 2016 – GMP #11 – Admin / Maintenance• Q4 2017 – GMP #12 – Mitigation and Restoration

• Design:• November 1, 2016 – Contract Amendment for Park Design

• Costs savings or reductions:• Completion of self-performed concrete• Bid results for Admin / Maintenance

Upcoming Milestones

9/27/2016

City Council Workshop 28

• Project Costs• The project team continues to find was to reduce the project

cost• 83% of the project costs are well known

• Funding• Staff has aggressively sought low interest funding and grants.• Staff will continue to seek funding opportunities

• Rates• Even though the project has changed substantially since 2010,

the rates remain in check with what was proposed 6 years ago

Summary

9/27/2016

City Council Workshop 29

• GC/CM construction method• Schedule• Cost update• Funding update• Rates• Milestones• Questions

Agenda

9/27/2016

City Council Workshop 30

Questions?

9/27/2016

City Council Workshop 319/27/2016