WASAs Approach to Financial Risk Mitigation in CSO Program Implementation

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WASAs Approach to Financial Risk Mitigation in
CSO Program Implementation
District of Columbia Water and Sewer Authority

• Presented to Wet Weather Partnership/
• National Association of Clean Water Agencies
• CSO Workshop
• National Perspectives, Developments and Advanced
  CSO Solutions
• Chicago, IL

April 23, 2007
Presented by Avis Marie Russell, Esq., General
Counsel
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Agenda

• What is WASA?
• CSO Program
• Financial Risk Mitigation Examples
• Synergy with Other Programs
• Alternate Project Delivery

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What is WASA?

• Independent Authority formed in 1996
• Formerly Water and Sewer Utility Administration
  (WASUA) under Dept. of Public Utilities

• Services Provided
• Water Distribution
• Wastewater Collection and Treatment
• Storm water Collection and Conveyance
• Serves
• District
• Parts of Maryland Virginia

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Blue Plains WastewaterTreatment Plant

• Largest advanced wastewater treatment plant in
  the world
• Capacity
• 370 mgd annual average
• 1076 mgd wet weather
• 740 mgd full treatment
• 336 mgd excess flow treatment
• Current average annual flow is 330 mgd

Blue Plains Wastewater Treatment Plant

• Serves about 2 million people

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Capital Improvement Program3.2 Billion
(FY2008-FY2017)
Basis FY2008-FY2017 Capital Program
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Projected Water and Sewer Retail Rate Fee
Changes
Basis Revised FY2009 and Proposed FY2010
Operating Budgets
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The Districts Combined Sewer System

• Typically located in older areas of the District
• Combined sewer area is about 12,478 acreas or 33
  of District
• 53 CSO outfalls listed in NPDES permit issued by
  EPA

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Separate Luzon Valley (completed)
Known Flooding Problem
F
Piney Branch Storage Tunnel
Rock Creek
Maryland
Pumping Station
P
Rock Creek Regulator Improvements
D.C
Low Impact Development-Retrofit (Multiple Sites
throughout District)
Separate CSO 031, 037, 053 and 058
F
Storage Tunnel
Anacostia River
Potomac Storage Tunnel
F
Potomac River
Combined Sewer Area
Rehab Potomac Pumping Station
P
Abandon Northeast Boundary Swirl
P
P
P

• LTCP 2.2 Billion
• Nitrogen Removal 950 M
• Total gt 3 Billion
• 20 yr implementation (2005-2025)
• 96 reduction in CSO

Separate CSO 006
P
Replace Poplar Point Pumping Station
D.C.
Maryland
Tunnel to Blue Plains
Tunnel Dewatering P.S.
P
Enhanced Clarification Treatment Nitrogen
Removal at Blue Plains
CSO and Nitrogen Removal Programs
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Financial Risk Mitigation Measures
Project cost control procedures
Formal Risk Register process
Value engineering
Many others
Financial Risk Mitigation Measures
Identifying experts and using their knowledge
Controlling scope creep
Tailor contracts to the marketplace
Alternate project delivery
Synergy with other programs
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Synergy with Other Programs Nitrogen Removal
Requirements

• LTCP was developed prior to nitrogen removal
  requirement at Blue Plains
• TN removal was a goal equivalent to about 7.5
  mg/L
• No effluent limit
• April 2007
• New TN permit limit added to NPDES Permit
• Hard annual cap effluent limit equivalent to
  about 4.16 mg/L TN
• WASA considered many alternatives
• By modifying the approach to treating wet weather
  flows, WASA could economically combine TN removal
  and wet weather treatment

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Synergy with Other ProgramsNitrogen Removal
Options
Innovative Regulatory Approach
Conventional Regulatory Approach
Blue Plains 370 mgd annual avg
High cost to provide BNR for this flow rate
Reducing peak flow to BNR reduces cost
Transfer more wet weather flow to new technology
Blue Plains 370 mgd annual avg
1076 mgd
1076 mgd
521 mgd
555 mgd Peak Factor 1.5
336 mgd
740 mgd Peak Factor 2.0
31 mg of storage
225 mgd
Complete Treatment ENR
Excess Flow Treatment, Plain Settling, Add 4
Primary Tanks, 22 M
Complete Treatment ENR
Enhanced Clarification Proprietary Process, 239M
Outfall 001
Outfall 002
Outfall 001
Outfall 002
Improve effluent quality so total pollutant loads
are less than conventional approach
1,435 M Cost Disbursement dollars
850 M Cost (Disbursement dollars)
Selected as WASAs Plan
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Synergy with Other Programs TN Removal Plan
McMillan
N
Northeast Boundary Tunnel

• Extend tunnel by 3.5 miles
• 23 feet diameter
• 1.5 miles of 3.5 miles holds 31 mg sewage for
  peak flow reduction at Blue Plains
• 2 miles of 3.5 miles is extended LTCP tunnel
  without increase in total LTCP tunnel volume (126
  mg)

RFK Stadium
Main O Branch Tunnel
Nationals Stadium
Anacostia River Tunnel
Anacostia River
Poplar Point

• Construct at Blue Plains
• Nitrogen removal facilities
• Enhanced Clarification Facility (ECF)
• Tunnel Dewatering pumping station

Blue Plains Tunnel
Potomac River
BP Tunnel Dewatering Pump Station
Blue Plains ENR
Enhanced Clarification
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Synergy with Other ProgramsBenefits

• Save rate payers more than 500 M
• Lower pollutant loads to Potomac River, better
  water quality
• Shorter schedule
• Achieves LTCP level of CSO control on Anacostia
  by 2018 instead of 2025

• Savings would not be possible without willingness
  to
• Consider changing LTCP (changing consent
  decree)
• Propose innovative regulatory approach

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Alternate Project DeliveryBlue Plains Tunnel
N

• 23 dia soft ground tunnel
• 23,384 long
• 4 Shafts
• Construction cost 250 to 300 M

Tunnel Shaft at Main P.S.
Anacostia River
Tunnel Shaft at Poplar Point for ART Outfall
Sewer diversions
Tunnel Shaft at Bolling for new Tunnel Overflow
Blue Plains Tunnel
Potomac River
Tunnel Shaft at Blue Plains
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Alternate Project Delivery Risk Settings for
Tunnel are Different than for a Conventional
Project
WWTP Traditional WASA Project
Tunnel Project
CRITICAL PATH
RECOVERY
SHAFT
REMOVE
TBM
MINING
SHAFT
LAUNCH
TBM
510 FT
1
TUNNELS SYSTEM
51,000 FT 23

DIA
Enough Unknowns
Enough Unknown
to Cause Problem
to Cause Problem

• Optional Paths Available
• Nature of Work Can Absorb Delays/Damages for
  Unforeseen Conditions
• WASA Traditionally Transfers Risks to Contractor
  in Various Ways

• Work Path Linear and Complex
• Nature of Work Will Exacerbate Delays/Damages for
  Unforeseen Conditions
• Risk Sharing (Defining Responsibilities) is Means
  to Control Risk for Owner

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Alternate Project DeliveryProcess for
Evaluating Delivery Systems

• Benchmark against what others have done
• Test the marketplace
• One-on-one discussions with major tunneling
  contractors
• Project delivery workshop
• Bring together WASA departments consultants
• Identify WASA characteristics
• What would need to change (both culture
  procedures)

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Alternate Project DeliveryWorkshop Approach
Identify the 3 biggest political pressures that
might impact use of alternate project delivery
Identify 3 project risks that you expect to be
mitigated by the project delivery system
Identify 5 most important goals for project

• Break into groups and recommend a delivery
  approach
• Design - bid build
• Design - build
• CM at risk
• Private - public partnership
• Other

Identify the 5 most significant characteristics
of WASA as the owner of this project that could
impact success
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Alternate Project DeliveryKey Workshop
Conclusions

• Project would benefit from early contractor
  involvement
• Shift risk of most design problems
• Facilitates confidential discussions with
  contractors pre-bid
• Enhances alternative technical approaches
• Schedule compression and flexibility
• Need for early price certainty
• Procurement must have some element of price
  competition
• Need to be sensitive to marketplaces concerns on
  risk allocation and procurement confidentiality
• Successful use of the proposed alternative
  project delivery approach elsewhere

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Alternate Project DeliveryBenefits of
Design-Build Model for Blue Plains Tunnel
Next Steps Board review of alternate project
delivery approach
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Overview

• CSO Program
• high cost
• Risk of cost escalation due to nature of work
  (tunnels)
• WASA using multiple techniques to mitigate risk
• Synergy look across program boundaries for
  opportunities to save costs ? reduces concrete
  steel cost
• Programmatic/Management
• The market place
• Contract terms and conditions
• Look at how jobs are procured to mitigate cost
  risk (alternate project delivery)