COUNTY OF ROCKLAND SEWER DISTRICT NO. 1 4 Route 340 Orangeburg, New York 10962 (845) 365-6?! C. SCOTT VANDERHOEF Fax. (845) 365?6686 JULIUS GRAIFMAN . Chairman County Executive CHRISTOPHER P. ST.LAWRENCE Vice?Chairman DIANNE T. PHILIPPS, P.E. Executive Director REPORT ON COST INCREASES FOR WESTERN RAMAPO SEWER EXTENSION PROJECT JUNE 2010 - BACKGROUND In 2000, the Rockland County LegislatUre extended the boundaries of the Rockland County Sewer District No. (RCSD No. 1) to include the Villages of Hillbum and Sloatsburg and a portion of the unincorporated Town of Ramapo in order to provide public sewer service to this area, eliminate failing septic systems and protect public health, the environment and the Ramapo River Aquifer, a federally designated sole source aquifer and primary source of water for Rockland County. The original estimated cost for the project was $72 million, which included $52 million for the collection system sewers and pumping stations, and $20 million for a new 1.5 MGD tertiary wastewater treatment plant (WWTP). The Legislature initially authorized $52.5 million in funding for the project, which included $500,000 for a siting study, conceptual design report and environmental studies for the WWTP to serve Western Ramapo, with the intent that after these studies and reports were completed, the additional funding would be authorized to construct the WWTP. RCSD N0. 1 completed the siting study, conceptual design report and environmental studies, which included an Environmental Impact and Findings Statement under the NYS SEQR process for the WWTP. Based on extensive public outreach and input from various interested parties, including regulatory agencies, local municipalities, the proposed host community, enviromnental groups, and the public which included public meetings and hearings, it was determined that the would: I be located at a site selected in Hillburn; I include advanced wastewater treatment (AWT) to near drinking water quality standards; have a high level of architectural and aesthetic treatment; include dual outfalls with one discharging above the Ramapo Well Field to maximize the recharge benefit of the Ramapo Aquifer; require all process units to be covered and treat all air emissions in state of the art odor control systems. June 2010 . Page 1 The above items were conditions agreed upon in order to make the siting and construction of the AWT Plant acceptable to the various interested parties and the public. The site selected for the AWT Plant with the added features made it generally acceptable to the various interested parties and the public. and added environmental bene?ts that will further protect and enhance our environment, the Ramapo River and our water supply. Upon completion of the studies and report, and based on the above requirements, the cost estimate for the treatment plant was increased from $20 million to $42.6 million. The project amount was then increased to $94,600,000 based on the increased estimated cost for the AWT Plant. - In addition, it was determined that an interconnection should be installed between the AWT Plant and the existing sewer system. This interconnection (diversion force main) would provide redundancy should a catastrophic failure or other impairment to the AWT Plant occur that warranted temporarily diverting a portion or all of the wastewater generated in Western Ramapo into the existing RCSD No. 1 sewer system until such impairment could be corrected. The estimated costs for the project were updated in June 2004 to $125,000,000, which included . $68.1 million for construction of the collection system and pumping stations, $47.1 million for construction of the new 1.5 MGD AWT Plant, and $9.8 million for engineering, legal, ?scal, land acquisition, and miscellaneous other costs. The following cost table provides a breakdown of the $125,000,000 estimate. The County Legislature subsequently approved a bondincrease from $94,600,000 to $125,000,000 in 2006. Cost Table Western Ramapo Sewer Extension Project In Construction: I WR03-02 South Route 17, Hillburn and Tome Valley $18,800,000 I AWT Plant $47,100,000 Engineering (AWT Plant, Pump Stations, and Collection System) $6,400,000 Legal (Not Land Acquisition Related) $2,200,000 Fiscal Advisor (Hourly Rates Lump Sum) $30,000 Miscellaneous (Printing, Legal Ads, etc.) $5,000 Total Contracts Executed or Encumbered $74,500,000 Land Acquisition and Related Costs, Contracts Executed and Estimated $1,200,000 Future Collection System and Pump Station Projects: I WR03-01A Pump Stations Estimated $9,200,000 I WR03-03A The Flats Estimated $17,800,000 I WR03-03B North Route 17 Estimated (Included w/03A) I WR03-04A Pine Grove Estimated $11,600,000 I WR03-04B North Sloatsburg Estimated (Included w/04A) I WR03-04C Waldron Terrace and North Sloatsburg Estimated (Included w/04A) I WR03-05 Diversion Forcemain and Western Hillburn Estimated $5,000,000 I Overlook Drive, Eagle Valley Road, Johnsontown Road, Grinders Estimated $5,700,000 Total Project Budget $125,000,000 June 2010 Page 2 PROJECT STATUS UPDATE The status of RCSD No. 1 projects for the Western Ramapo Sanitary Sewer System is outlined below: 1. Construction Complete. a. Contract WR03-02 South Route 17, Hillburn and Torne Valley. Sewer installation in the Village of Hillburn on Tome Valley Road and up to the Sloatsburg border near Sterling Mine Road and NYS Route 17. AWT Plant. RCSD No. 1 completed negotiations and entered into a contract on May 26, 2006 for the design, construction, and operation of the AWT Plant. The AWT Plant is substantially complete and operational and homes are connecting to sewers which discharge to it. - 2. In Construction. a. b. Contract WR03-01A Pump Stations. Construction of Lincoln Street, Fourth Street, Torne Valley, and Sloatsburg Pump Stations (20% complete). Contract WR03-03A The Flats. Sewer installation along the Village of Sloatsburg, including along Sterling Mine Road, across NYS Route 17, and along the Ramapo River up to Mill Street and Waldron Terrace and within the Village of Sloatsburg (95% complete). Contract WR03-04B North Sloatsburg. Sewer installation along Seven Lakes Drive, through North Sloatsburg, and along Lincoln Street to the Lincoln Street Pump Station (construction start date was June 18,2010). - Contract WR03-05 Diversion Forcemain and Western Hillburn. Gravity sewer installation in Western Hillbum and force main sewer installation along NYS Route 17 in Ramapo and along NYS Route 202, Washington Avenue, and Memorial Drive in Suffern (98% complete). 3. In Design. Nearly 100 percent of land and easements required for all projects have been acquired. The remaining construction contracts will be finalized closer to their bid dates to check for any changes in ?eld conditions or approval requirements. The designs for the following construction contracts are 95-percent complete, with an estimated total cost of $40.6 million: I a. Contract WR03-03B North Route 17. Sewer installation in Sloatsburg from Ballard Avenue and Post Road and along NYS Route 17 to the Rockland/Orange County line. Contract WR03-04A Pine Grove. Sewer installation in the Pine Grove section of Sloatsburg. Contract Waldron Terrace and North Sloatsburg. Sewer installation along Waldron Terrace and remaining portions of North Sloatsburg. Contract WR03-06 Overlook Drive, Eagle Valley Road, Johnsontown Road, Grinders. Sewer installation along ohnsontown Road, Eagle Valley Road, and Overlook Drive. Also includes grinder pump installations where needed throughout the Western Ramapo system. June 2010 I Page 3 UPDATED PROJECT COST ESTIMATE An updated project cost estimate was developed and is outlined in the table below. The project cost estimate was developed based on the following: I ?nal costs of completed projects I bid costs and projected ?nal costs for projects in construction I current contracts and projected future costs for engineering, legal, and ?scal services I projected costs for projects to be bid at a future date I anticipation of unforeseen conditions I in?ation Bid prices received for Contracts WR03-03A (August 2008) and WR03-05 (May 2008) were utilized to update the estimated costs for the collection system contracts currently in the design phase. For those contracts which are anticipated to be bid in the ?rst quarter of 2011 (WR03-03 B, WR03-04A, WR03-04C and WR03 -06), a 5 percent adjustment was also added to account for in?ation. The updated project 'cost estimate results in the need for an increase in the total project cost of $43,000,000 to a ?nal cost of $168,000,000. Cost Table June 2010 Western Ramapo Sewer Extension Project Construction Complete: I WR03-02 South Route 17, I-Iillburn and Tome Valley $21,500,000 I AWT Plant $43,700,000 In Construction: I WR03-01A Pump Stations $13,200,000 I WR03-03A The Flats $12,700,000 I WR03-04B North Sloatsburg $2,800,000 I WR03-05 Diversion Forcemain and Western Hillburn $10,500,000 Engineering (AWT Plant, Pump Stations, Collection System) $9,400,000 Other Engineering $4,800,000 Legal (Not Land Acquisition Related) $5,200,000 Fiscal Adviser (Hourly Rates Lump Sum) $30,000 Miscellaneous (Printing, Legal Ads, etc.) $5,000 Total Contracts Executed or Encumbered $123,800,000 Land Acquisition and Related Costs, Contracts Executed and Estimated $3,300,000 Future Collection System and Pump Station Projects: I WR03-03B North Route 17 Estimated $11,100,000 I WR03-04A Pine Grove Estimated $10,300,000 I WR03-04C Waldron Terrace and North Sloatsburg Estimated $8,400,000 I WR03-06 Overlook Drive, Eagle Valley Road, Johnsontown Road, Grinders Estimated $10,800,000 Total Project Budget (Rounded) $168,000,000 June 2010 Page 4 In comparing the project cost estimate completed in 2004 with the current estimate, it is noted that the largest cost increases are associated with construction of the collection system and pump stations. A discussion of the reasons for the increase is presented below. Throughout construction of Contracts WR03 ~02, WR03 -03A and WR03-OS, complexity of ?eld conditions and unforeseen obstacles found during construction has led to a signi?cant number of requests for cost increases requiring documentation, correspondence, meetings, mediation, and settlement, which has resulted in an increase to the total cost for construction, engineering and legal services. The most signi?cant increases during construction were associated with the following: I unknown utilities I mismarked utilities I high groundwater elevations I buried abandoned man-made structures and debris I inconsistent and changing strata of bedrock and boulders I I collapsing streambeds and banks I contaminated soils I compliance with NYSDOT revised requirements Crossings of railroads, state highways, NYS Thruway, rivers, and streams byjack and bore and directional drilling methods have been extremely time consuming and dif?cult based on the subsurface conditions encountered. Contractors have been required to repeatedly remove, realign, or use different or larger equipment in order to avoid con?icting existing utilities, underground man-made obstacles, and formations of bedrock and boulders. Some portions of the work were changed to be open cut to allow the installation to be completed. Streambeds have collapsed during pipe installation causing ?ooded out boring pits and requiring removal and realignment. The delays and realignments have led to a signi?cant number of requests for cost increases due to lost time, additional work, and additional utility or road owner inspection servrces. Con?icts with and breakage of existing utilities, including gas, electrical, sewer, drainage, and most signi?cantly water, has resulted ?'om no markouts, mis-markouts, or encountering unknown utilities due to lack of information provided by utility organizations during design and construction. This has resulted in a considerable number of requests for cost increases associated with damaged utilities and repairs, occurring while excavating for the new sewer system, and while blasting for rock removal. Contractors have also been required to complete additional exploratory excavations, work around existing utilities, and relocate portions of the new sewer system, subjecting RCSD No. 1 to more requests for additional mobilization/demobilization, additional time and material, changes in invert elevations, and modi?cations to manholes and pipe. In addition, substantial amounts of contaminated soils (as classi?ed under new NYSDEC regulations) were encountered during excavation of pipeline trenches, resulting in change order requests for testing, disposal, and handling of the material. Also, excessive groundwater elevations encountered during installation of the new sewer system caused ?ooding of trenches and residences and has led to numerous requests for cost increases due to lost time and additional dewatering, and has also slowed the progress of the work. June 2010 Page 5 The increase in cost for Contract WR03-04 (including Contracts 04A, 04B and 04C) is primarily due to the work involved (excavation, shoring, dewatering, sewer support, etc.) in installing the sewer at deep'depths (25 to 30 feet) in high groundwater conditions with boulders and cobbles on Waldron Terrace. The deep installation was done to avoid the need to add an additional pump station in the system, which would require years of operation and maintenance costs. All remaining collection system work for the system not completed in other projects, including installation of household grinder pumps, is planned to be bid under Contract As a result, the amount of work and cost included under the contract has increased from the original estimate. That coupled with the increase in unit price pay items, and consideration of in?ation has caused the overall increases in cost for WR03-06. Lastly, based on the Engineering News Report (ENR) Cost Construction Index, the percent change between 2004 and 2010 for in?ation is equal to approximately 15.67 percent. This increase is responsible for approximately $20 million of the increase in the overall cost estimate for the future RCSD No. contracts. COST REDUCTION EFFORTS RCSD No. 1 has taken several steps to reduce costs. The AWT Plant is being built under a design/build/operate (DBO) procurement process in accordance with New York State special legislation. Through this process, RCSD No. 1, working with their consultants, was able to negotiate numerous cost saving measures to offset the rise in construct-ion costs. Cost savings were achieved by combining the process and administration buildings, reducing of?ce and maintenance space, revised layout to reduce rock removal and utility relocations, and revised some material requirements. As this project is the ?rst DBO of a WWTP in New York State, the project attracted top vendors in the industry. The selected vendor, Veolia Water North America Northeast, LLC, through their experience and expertise, brought many cost saving ideas to the project. It has been estimated that RCSD N0. 1 saved 12 percent to 13 percent, compared tothe conventional design/bid/build process. Additionally, the size of future sewer construction contracts will be reduced to increase competition. EFC noted that the bids on smaller construction contracts ($10 million range) did not increase at the same percentages as larger contracts (over $15 million). CONCLUSION The past bidding environment, dif?cult construction conditions, and extended construction periods have caused costs to increase more than originally projected. The ?nal design costs have been updated and re?ect an increase to the project of $43,000,000 for a revised total project cost of $168,000,000. The proposed cost increases for the Western Ramapo Sewer Extension Project are necessary and it remains in the best interest of the public to complete this essential project. This project will eliminate failing septic systems and several older treatment plants in order to protect public health, the environment, and the Ramapo Aquifer, a federally designated, sole source aquifer which provides approximately 30 percent of Rockland County?s water. June 2010 . Page 6