SUPPORTS ITEM NO. 4
CS&B COMMITTEE AGENDA
JULY 20, 1995
ADMINISTRATIVE REPORT
Date: June 30, 1995
Dept. File: 1.40.95.08
TO: Standing Committee on City Services and Budgets
FROM: General Manager of Engineering Services
SUBJECT: Contract Award for Design Services Related
to Water Storage and Transmission Capacity
RECOMMENDATION
THAT the General Manager of Engineering Services be authorized to
enter into contract, in consultation with the Director of Legal
Services, with Dayton & Knight Consulting Engineers Ltd. for the
second phase of the contract for engineering services related to
storage and transmission optimization, at a maximum cost of
$250,000 for this phase; funding to be provided by an increase in
the 1995 Water- works Capital Budget by debenture borrowing.
COUNCIL POLICY
Consultant contracts over $30,000 are to be awarded by Council.
Contracts are to be awarded on the basis of best value for fee.
PURPOSE
This report recommends that the second phase of the contract for
design services related to water storage and transmission capacity be
awarded to Dayton and Knight Consulting Engineers Ltd. This second
phase of work will include the identification and development of
feasible project options to be presented to Council in the fall.
SUMMARY
Based on preliminary results, there are several reasons to continue
work to optimize planned storage and transmission facilities within
Vancouver:
1. Vancouver would benefit from direct savings of approximately
$22 million through an optimized blend of city storage and
transmission work, when compared to constructing only
transmission improvements to increase system capacity to
meet future water demands.
2. A window of opportunity exists to save additional money on
the order of $10 million or more through the cooperative
development of regional projects with the GVRD.
3. Potential project
partners are available
to further defray costs
by developing joint use
facilities.
Authorization to proceed with
Phase II of the Storage and
Transmission Optimization Report
is required from Council to
jointly develop specific
projects, further quantify City
cost savings, and report back to
Council with specific options.
An increase to the 1995 Figure 1
Waterworks Capital Budget and
debenture borrowing authority is
required for this phase because the original budget approval was
postponed pending this report back to Council.
BACKGROUND
On March 7, 1995, Council authorized the General Manager of
Engineering Services to enter into contract with Dayton & Knight
Consulting Engineers Ltd. for the initial phase of the Storage and
Transmission Optimization Report with instructions to report back on
subsequent phases. Dayton and Knight is serving as the overall
project management firm. Other key firms include CH2M Hill
Engineering, Montgomery Watson Engineering, and firms which will
provide geotechnical engineering, construction management, public
relations, and landscape architectural support.
The March 7th report outlined eight steps for the overall project.
These steps have been grouped together into three phases, each of
which culminates with options to be brought before Council. Council
would then decide whether to proceed with the next phase.The reasons
for undertaking this work,
including Phase I of the storage
and transmission study, were
first presented to Council on
July 21, 1992 in the Waterworks
Long Range Capital Plan (LRP).
The LRP identified locations of
existing deficiencies in the
City s water system, and
identified a trend toward a
steadily declining level of water
service in many areas of the
City, as shown in Figure 1. In
addition, the LRP presented an
array of system improvements to
correct deficiencies within the
City of Vancouver, including
conveyance and storage Figure Figure 2
facilities. Construction of the
major improvements was proposed
for the next two Capital Plans (1997 to 2002).
Since completion of the LRP in 1992, the GVRD has made significant
progress on its Comprehensive Regional Water Supply Study. The focus
of the GVRD planning process is on regional system improvements;
however, because of the unique way that the City of Vancouver and GVRD
water systems are interwoven, potential opportunities have been
identified for cooperative development of solutions that may provide
mutual benefits to both the City and the GVRD. Co-operative de-
velopment assures an integrated plan is developed by eliminating
duplication of effort, and saves the ratepayer money.
DISCUSSION
The scope of work for the first phase of this project was to review
the cost effectiveness of, and the reasons for, developing storage
within Vancouver. Based on preliminary results and discussions with
the GVRD, there is potential for significant savings:
- through optimization of storage and transmission facilities
within the City;
- through an opportunity to cooperatively develop regional
projects with the GVRD; and
- by including other potential project partners to further
defray costs.
Optimization of storage and transmission will save the City money in
several ways. During the first phase, staff identified and evaluated
conceptual design solutions required to maintain the level of service
in the City for the next 15 years. Option A represents a continuation
of the current City practice of only constructing conveyance
facilities, with no storage. These facilities convey water from GVRD
connection points to distant areas of the City. Option B includes the
construction of storage facilities which will increase the efficiency
of the City s transmission system. These storage facilities would be
located in low pressure areas where they supplement existing City
conveyance facilities during high demand periods. The estimated costs
are:
Option A: conveyance only $73 million
Option B: primarily storage $51 million
Potential savings of B vs. A: $22 million
Based on these conceptual designs, approximately $22 million can be
saved over conventional City approaches through an optimized blend of
city storage and transmission projects. Storage facilities also
provide added value in terms of enhanced capability to respond under
emergency conditions, such as an earthquake. Additional savings can
also be realized through deferrals of distribution system
improvements, but quantifying these were beyond the scope of our
preliminary investigations. The Storage and Transmission Optimization
Report, which is on file in the City Clerk's office, describes the
options and the optimization process in greater detail.
In addition, there is potential for significant savings through an
opportunity to cooperatively develop regional projects with the GVRD.
Meetings between City and GVRD staff have been very encouraging in
that staff have identified several opportunities where there is a
potential to realize additional cost savings, on the order of tens of
millions of dollars. The GVRD has identified approximately $104
million of regional facilities which are needed within the City within
the next ten years. All will impact the City s system and many will
influence the design of proposed City facilities. Potential savings
could be realized through deferral, size reduction, or joint
development of projects. These opportunities require additional
analysis and it is recommended that these efforts be included as part
of the Phase II work tasks.
An example of these savings can be seen with the City s 11th Avenue
main project which is located near a proposed GVRD project, as shown
in Figure 2. Although the initial operational concepts for the two
facilities were different, staff have identified the potential to
cooperatively develop the two projects, which could account for an
overall savings of appro-ximately $10 million.
Other project partners, such as the Vancouver Fire Department and
Vancouver area hospitals, are potentially available to further defray
costs of facilities. The Vancouver Fire Department s proposed "Staff
and Equipment Deployment Study" is expected to look at potential sites
for replacement firehalls. The Fire Department has expressed interest
in cooperative planning for potential joint use of future reservoir
and firehall sites. In addition, Vancouver area hospital staff have
expressed interest in exploring ways to develop emergency storage in
Vancouver. The attached letter (Appendix I) from Vancouver Hospital
states its support and commitment to work with the City to consider
emergency water storage options.
SCOPE OF WORK
If approved the scope of work for the second phase of this project
includes:
1) Modify the City's existing hydraulic computer model
2) Identify feasible conveyance and storage project options
3) Perform preliminary hydraulic analysis of options
4) Cost and rank options
5) Develop implementation plan
Phase II work would result in the following deliverables which would
assist Council to decide whether to proceed with Phase III:
A. Recommendations on specific storage and transmission project
options including candidate sites for storage facilities, and a
proposed implementation plan for a public process.
B. Description of roles, responsibilities and options for cost-
sharing or joint development of facilities with the GVRD and
other potential project partners.
C. Definition of hydraulic benefits and coordination of
operational protocols with the GVRD.
It is expected that the scope of work will continue to evolve as the
project progresses. The consultants will be paid on a cost plus
overhead basis, and the contract will be structured such that the
scope of work can be adjusted based on the needs which arise as the
project develops. The work is divided into specific phases which can
be stopped or continued at the end of each phase. All funding will be
subject to Council approval.
The third phase of this project would include:
1) Council feedback on options and public process;
2) Public process concerning neighbourhood impacts
of proposed projects;
3) Council approval in selecting a site; and
4) Preliminary facilities design and cost estimate.
The total budget for all phases of this work is $550,000. We recommend
that Council authorize the General Manager of Engineering Services to
enter into contract to complete the second phase of work at a maximum
cost of $250,000. The General Manager of Engineering Services would
then report back to Council with specific facilities and siting
options for direction on whether to continue with the third phase and
enter a public process to assess the community impact of proposed
projects.
PROJECT TIMING
A window of opportunity exists to reduce costs through the co-
operative development of regional projects with the GVRD. Attached as
Appendix II is a letter from the District which concurs that
substantial savings may be realized by integrating our respective
water capital plans. The District is presently working on hydraulic
modelling required to refine their plans and expects to finish by the
fall of this year. An opportunity exists in the next few months for
staff from the District and the City to coordinate capital works
programs.
Also, Phase II work should proceed now because the water system has
immediate needs which must be addressed. Several of the major
upgrades identified in the LRP were placed on hold pending decisions
involving large City and District transmission pipeline and storage
improvements. These decisions should be made soon, because of the
cumulative effects they will have on other required upgrades, such as
the previously deferred transmission main replacements which are now
planned to begin in the year 2000.
Proceeding with Phase II now will also allow staff to explore joint
development opportunities with other organizations to further defray
costs. Both the Fire Department and Vancouver area hospitals have
expressed interest in cooperative planning of projects as the timing
could coincide with work that they are undertaking.
Finally, design and construction of large capital projects requires
significant lead time. The time required to complete the
investigation, design, and construction of a major trans-mission
facility or reservoir would be a minimum of two to three years.
FUNDING
Funding of $550,000 for design services related to storage and
transmission capacity was approved as part of the 1994Ÿ1996 Waterworks
Capital Plan; $150,000 was approved as part of the 1994 Waterworks
Capital Budget and the remaining funding was originally scheduled to
be approved prior to the 1995 Waterworks Capital Budget. However,
approval for the remaining funding for the second and third phases was
postponed pending this report back to Council. In order to apply
funding to the second phase of this project, $250,000 is required as
an increase in the 1995 Waterworks Capital Budget by debenture
borrowing.
Funding for specific capital works will be addressed separately
following completion of the project optimization process. Once a
combination of projects has been identified that maximizes efficiency
of both the City and District water systems, a cost allocation process
will be initialized with the GVRD to assess costs and benefits
associated with the various projects.
* * * * *