Ripley Writes To The CC, But Is Anyone Listening?

The following excerpt will be/is part of the “public comment presented” to the Coastal Commissison for their Hearing tomorrow. Fifty million dollars will buy a lot of bananas. It’s also strange that the CC says they’re interested in “cost,” but is that anything more than window-dressing and/or an optional consideration? And what about the goal of competitive bidding as promised in the 218 vote? More window-dressing? More options? And what’s with the reference to “change orders,” which, of course, equals a no-cap, open ended, sky’s the limit cost.

Well, anybody want to lay odds on how the votes as to how “cost” and fair-bids  and change orders will fare Friday? Naw, me neither. Not here in “Chinatown,” at any rate. Done deals is done deals and if the community wants a more expensive project, then who is the Coastal Commission to deny them their wish?

Honorable Commissioners:

I am Dana Ripley, team leader for the Los Osos Wastewater Plan Update1

The process schematic of the 2006 Update Plan is very similar to the process schematic that I prepared for inclusion in the recently published “Water Reuse” textbook (McGraw Hill, 2007) as Figure 13-15. Thecaption of that figure reads:prepared in 2006 for the Los

Osos Community Services District.

Our final report was completed in August 2006 and was validated by the National Water Research Institute in December 2006. Septic Tank Effluent Pump (STEP) collection isfundamental to the “2006 Update Plan” and is, in my opinion, fundamental to the long term success ofthe Los Osos wastewater project.

Schematic flow diagram of comprehensive water reclamation and reuse plan incorporating STEPsystems for low-, medium-, and high-density communities.



A copy of this schematic is provided as Attachment A. It represents what I believe to be state-of-the-artin small community wastewater collection, treatment, and reuse whether constructed for a new development or for an existing community upgrading to central collection and treatment.

My testimony to the Commission today will focus on cost and affordability. CC staff recognizes the importance of affordability to Los Osos homeowners and businesses as follows:

The affordability of the project has been and will continue to be a major concern for the residents of Los Osos2


1 Ripley Pacific Company, Los Osos Wastewater Management Plan Update for the Los Osos Community ServicesDistrict, San Luis Obispo County, CA, Wastewater Collection Treatment, Storage, and Water Recycling: Beneficial Reuse of Water and Nutrients. Digital and hardcopy provided to CC-Santa Cruz staff on February 8, 2010..

2 Application A-3-SLO-09-055/069 staff report, May 27, 2010, p.2

The single largest factor influencing affordability is obviously the project’s construction cost. The estimated construction cost of the 2006 Update Plan prepared by our team is presented as AttachmentB3. For comparison, San Luis Obispo County’s latest cost estimate for the gravity-based system is presented as Attachment C4

Based on my review of the two construction cost budgets, assuming service to both developed and undeveloped properties and cost escalation to 2010 dollars, the cost difference between the two systems is at least $50 million. That is, the 2006 Ripley Update Plan cost utilizing STEP collection technology is at least $50 million less than the cost for the County’s gravity-based collection, treatment, and reuse plan..

The actual cost difference between the two system alternatives could in fact be substantially greater than $50 million. For STEP construction, there is relatively low construction cost risk since excavations are shallow and impacts of unforeseen conditions can be mitigated easily. For this reason, the STEP contractor has offered a guaranteed maximum price cost basis to SLO County.

For gravity construction, however, construction cost risk is significantly higher due to deeper excavations and difficulty of dealing with unforeseen conditions such as high groundwater and archeological sites. The contractor will be required to fuse-weld at least 12% of the collection system and more if high groundwater is encountered beyond that already mapped. SLO County would be compelled to accept change orders for these unforeseen conditions which in essence provides for an open-ended contract, irrespective of what the winning competitive bid cost number is. Of course, the extent of change order costs cannot be known until project construction is complete.

I also note that the County’s budget for Broderson leachfields does not include a redundant disposal option as recommended by the project hydrogeologist due to the uncertainty of winter dispersal capacity at that site5

Based on the foregoing comments, it would be likely that the completed cost difference between the two systems could be substantially greater than the $50 million difference represented by the two attached budgets.

The Broderson leachfield system is a $6.1 million line item that may need to bereplicated at one or more other undetermined locations to provide sufficient winter dispersal capacity. Even with the minimum $50 million cost difference, the Commission is faced with at least two issues inconsistent with the Coastal Act if the applicant’s gravity collection system is constructed.

First, Coastal Act Section 30604(g) states:

The Legislature finds and declares that it is important for the commission to encourage th eprotection of existing and the provision of new affordable housing opportunities for persons of low and moderate income in the coastal zone.

3 2006 Ripley Update Plan, Table ES-5.
4 San Luis Obispo County, from SWRCB Credit Review Checklist, April 23, 2010, Table 1.1.
5 Spencer Harris, hydrogeologist, San Luis Obispo Planning Commission, June 30, 2009; “You’d better have capacity somewhere else.”
3Los Osos Wastewater Project Dana Ripley, PE CA Coastal Comm. June 11, 2010 De Novo Hearing Public Comment

A cost difference of this magnitude has a direct impact on affordability. A lower project construction cost will lessen the impact to low- and moderate-income residents living within the coastal zone.

Secondly, Coastal Act Section 30120 defines treatment works6

. . any devices and systems used in the storage, treatment, recycling, and reclamation of
municipal sewage or industrial wastes of a liquid nature to implement section 1281 of this title, or necessary to recycle or reuse water at the most economical cost over the estimated life of the works. .

, as follows:

Consistency with this section of the Coastal Act would require that the most economical plan be implemented, irrespective of any technology preference by the project owner. The $50 million difference in the two estimates would likely preclude the gravity system as a viable alternative.

I am aware of the applicant’s technology preference against STEP collection for reasons such as green house gas emissions, soil disturbance numbers, nitrogen removal, on-lot easements, and on-lot pumping. I believe that each of these issues can be resolved in favor of STEP collection given the opportunity in an open forum. It also must be reiterated that the STEP collection alternative was CEQA certified as environmentally superior in 2001, was determined to be a viable collection alternative in the current project EIR, and was intended to compete with gravity collection through the bidding process pursuant to the Proposition 218 assessment vote in 2007. Finally, the Request for Qualifications prepared by SLO County in December 2008 presented both gravity collection and STEP collection as accepted alternatives for interested design-build teams bidding on the Los Osos wastewater project.

Only with elevation of the STEP team into the competitive bidding process with guaranteed maximum bids can the $50 million cost differential presented above be ascertained one way or the other. The Commission should seek the assurance that the competitive bid process promised by the Proposition 218 vote will be preserved and that consistency with Coastal Act Sections 30120 and 30604 is upheld.

Including this requirement as a permit condition today will not only assure Proposition 218 and Coastal Act consistency, but will assure that project timelines remain in place to “maximize the project’s eligibility to receive funding support that can offset local costs” as urged by SLO County and your staff. Thank you for your consideration of these cost and affordability issues, and I am available for questions.

/dr

6 Definition of treatment works as set forth in Federal Water Pollution Control Act per Coastal Act Section 30120.