AgdaPkt 2005-08-22 - Laserfiche WebLink

Browse Search

~ /ð-/.:e 1.4.2 Cost Estimating Methods The costs for customer site retrofits in the 2002 Feasibility Studies were estimated to be a percentage of total recycled water project costs. The City Council subsequently adopted a "No Mandatory Use" policy which significantly changed the predictability of converting large residential landscape meters to recycled water in a scheduled, sequential process. The method for estimating customer site retrofits costs was then revised to be based on the individual site retrofits spread across a much longer period of time, which resulted in a substantial increase in professional services and labor throughout the process (including a need to develop and deploy a marketing effort for recycled water to potential commercial customers). While the cost estimate was being refined, the City began incorporating additional costs that had not been included in previous cost estimates. Among these are direct costs to the City (Le., City staff costs) and planning costs associated with environmental review, revised feasibility studies, project financing costs I bond market conditions, public information, and extended program management services. 1.4.3 Cost Escalation Over Time The refined project cost estimates have been compiled to reflect a multi-phased and longer construction schedule and all costs have been escalated into the mid point of construction of each phase or discrete project. This significantly increased the estimated cost of the project. The 2002 Water Recycling Feasibility Studies and Alternative TF cost estimates were planning level costs, were based on total project cost in 2002 dollars, and did not account for project phasing or projection of costs into the future. The original timeline for project planning, acceptance and construction has grown by approximately two years: Thus, duration and timing of construction are essentially double-driving cost escalation. 1.4.4 Volatility in Construction Industry Unit costs of construction materials have increased dramatically since 2002. Volatile market trends over the past three years for products such as steel, concrete and petroleum-based pipeline materials (such as PVC) have resulted in substantial cost increases in the City's recycled water project. The costs for these materials have increased from 100% to 200+% in a two-year period. Intensive construction in the Bay area, such as the Bay Bridge and other highway improvements, have further escalated prices due to reduced availability of, and increased competition for, limited goods and services capacity. The cost increases for this factor are combined with cost increases for project design changes (described above) due to the complexity of trying to quantify the two factors separately. 1.4.5 Creating Certainty in Cost Estimates During the process of reviewing the draft Progress Report with members of the Task Force, it became increasingly clear that everyone - Task Force and project team alike - is concerned about containing the cost of the project over time and creating a degree of certainty about the long-term economic outcomes. The project team will strive to keep expenditures within the parameters of the Water Financing Plan - 2004 Update, approved by the City Council in January 2004, and to engage the Task Force in discussions, should this goal be challenged as Redwood City Recycled Water Project Progress Report 2005 Redwood City Recycled Water Task Force Recommendations - Final Report p:\pw-proj\2004\0468025 I'M: recycled retofit & support svoltas!< 11 program supportltas!< force status report\final reportlprogre.. report on tl recommendationsJinaLdoc Page 4