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Oak Harbor City Council Meeting: GMP 9

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Update on GMP 9 for the Clean Water Facility in Oak Harbor, WA.

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Oak Harbor City Council Meeting: GMP 9

  1. 1. Clean Water Facility City Council Workshop – September 27, 2016
  2. 2. • GC/CM construction method • Schedule • Cost update • Funding update • Rates • Milestones • Questions Agenda 9/27/2016City Council Workshop 2
  3. 3. • GC/CM construction method • Schedule • Cost update • Funding update • Rates • Milestones • Questions Agenda 9/27/2016City Council Workshop 3
  4. 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 9/27/2016City Council Workshop 4
  5. 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 9/27/2016City Council Workshop 5
  6. 6. • GC/CM construction method • Schedule • Cost update • Funding update • Rates • Milestones • Questions Agenda 9/27/2016City Council Workshop 6
  7. 7. 9/27/2016City Council Workshop 7 We are here
  8. 8. • GC/CM construction method • Schedule • Cost update • Funding update • Rates • Milestones • Questions Agenda 9/27/2016City Council Workshop 8
  9. 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 9/27/2016City Council Workshop 9
  10. 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 9/27/2016City Council Workshop 10
  11. 11. • Acquisitions (e.g., real property, property leases, etc.) • Administration • Finance • Professional Services - Design • Professional Service - Construction • Construction Cost Categories 9/27/2016City Council Workshop 11
  12. 12. 9/27/2016City Council Workshop 12 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
  13. 13. 10/20/2015City Council Meeting 13 ACQUISITIONS $3,153,000 ADMINISTRATION $12,000 FINANCE $805,000 PROFESSIONAL SERVICES DESIGN… PROFESSIONAL SERVICES CONSTRUCTION… CONSTRUCTION $12,741,000 Expenses through 9/13/16 TOTAL Expenses through 9/13/16 $26,979,000
  14. 14. 10/20/2015City Council Meeting 14 ACQUISITIONS $3,153,000 ADMINISTRATION $12,000 FINANCE $879,000 PROFESSIONAL SERVICES DESIGN… PROFESSIONAL SERVICES CONSTRUCTION… CONSTRUCTION $77,728,000 Expended and Encumbered TOTAL Expended and Encumbered $101,094,000
  15. 15. 10/20/2015City Council Meeting 15 ACQUISITIONS $ 343,000 PROFESSIONAL SERVICES DESIGN… CONSTRUCTION $ 20,269,000 Estimate to Complete Project Estimated Cost to Complete Project $20,898,000
  16. 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 9/27/2016City Council Workshop 16 22% 61% 17% 100%
  17. 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 9/27/2016City Council Workshop 17
  18. 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 9/27/2016City Council Workshop 18
  19. 19. • GC/CM construction method • Schedule • Cost update • Funding update • Rate impact update • Milestones • Questions Agenda 9/27/2016City Council Workshop 19
  20. 20. 9/27/2016City Council Workshop 20 Project Funding 2015 SRF $8,260,000 2016 SRF - Loan $15,631,331 2016 SRF - Forgivable… 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 $2,482,165 Rates/SDF $17,301,894 TOTAL Estimated Project Funding $121,992,244
  21. 21. Funding Source Amount Term Rate 2015 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 $121,992,244 Project Funding 10/20/2015City Council Meeting 21
  22. 22. • GC/CM construction method • Schedule • Cost update • Funding update • Rates • Milestones • Questions Agenda 9/27/2016City Council Workshop 22
  23. 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 9/27/2016City Council Workshop 23
  24. 24. Utility Rates 9/27/2016City Council Workshop 24 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2010 Base Case $40.00 $42.00 $47.00 $52.00 $57.50 $64.75 $72.85 $81.95 $92.20 2010 Ord 1587 $40.00 $42.00 $47.00 $52.00 $57.50 $64.75 2016 Ord 1760 $77.70 $89.36 $102.76 $118.17 $135.90 Current Estimate $77.70 $89.36 $102.76 $110.98 $119.86 $40.00 $42.00 $47.00 $52.00 $57.50 $64.75 $72.85 $81.95 $92.20 $118.17 $135.90 $77.70 $89.36 $102.76 $110.98 $119.86 $- $20 $40 $60 $80 $100 $120 $140 $160 ResidentialUtilityRate
  25. 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 9/27/2016City Council Workshop 25
  26. 26. • GC/CM construction method • Schedule • Cost update • Funding update • Rates • Milestones • Questions Agenda 9/27/2016City Council Workshop 26
  27. 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 9/27/2016City Council Workshop 27
  28. 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 9/27/2016City Council Workshop 28
  29. 29. • GC/CM construction method • Schedule • Cost update • Funding update • Rates • Milestones • Questions Agenda 9/27/2016City Council Workshop 29
  30. 30. Questions? 9/27/2016City Council Workshop 30
  31. 31. 9/27/2016City Council Workshop 31

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