The Rivanna Water and Sewer Authority (RWSA) yesterday released two conflicting sets of cost estimates for the engineering and construction of the expanded Ragged Mountain Dam. While the Free Enterprise Forum has not endorsed any specific community water supply option, we applaud the very public process the RWSA is pursuing.
Both cost estimates were increases from the concept costs provided during the 2004 community water supply meetings. In response to these competing estimates Tom Frederick, Executive Director of RWSA ask for Board approval to seat a professional panel of national experts to evaluate the differences between the two estimates. In addition, Frederick indicated that RWSA would cease work on the dam project until this panel had been seated and made its recommendation to the RWSA board. Brandon Shulleeta has the story in this morning’s Daily Progress.
In his memo to the RWSA Board, Frederick identified the drivers that resulted in the most recent cost adjustments:
The largest engineering challenge in designing a dam is to capture geophysical data regarding the location and integrity of hidden, underground rock formation, and to interpret this data to define the extent of excavations and size of the underground foundation. Given this challenge, adjustments to conceptual design assumptions are very common at this stage of the dam design process. To date, much of the Ragged Mountain preliminary design has been focused on obtaining and interpreting this geophysical data. This information is expensive to collect, yet extremely important, as the decisions regarding the design of the dam foundation can have a major effect on the overall quality and cost of the project.
Faced with an new estimated cost from Gannett Flemming of over $70 Million,the RWSA staff believed a second opinion was needed. On August 12th RWSA staff directed Gannett Fleming to stop work, and RWSA reached out to Schnabel Engineering to conduct a very limited review of Gannet Fleming’s work interpreting the geophysical data and the cost estimates related to this data.
The Schnabel report highlights one of the challenges with the 2004 estimate:
Starting in 2004 and continuing into 2007, there has been an appreciable rise in the cost of construction materials, especially diesel fuel. The project costs of many high profile dam projects had bid prices well above the estimates made by engineers during this period because of these rapidly increasing costs.
Schnabel’s report goes on to identify 15 different downward adjustments to Gannett Flemming’s design and cost estimate. In addition, the firm interviewed two different dam contractors to gauge the current market receptivity to bidding out such a project:
The contractors interviewed indicated that present conditions (i.e. 4th quarter 2008) facilitate a good bid environment for owners with this favorable condition likely extending into 2009, if not 2010. With the economy depressed, material prices are not likely to see large increases in the near future. Cement sales are predicted to decline by more than 10% this year and 5% in 2009.
While opponents of the Ragged Mountain Dam have taken this opportunity to call for resignations of the RWSA Board, The Free Enterprise Forum believes the opposite is true.
The RWSA Board (and the staff led by Executive Director Tom Frederick) should be commended for their commitment to public engagement. The detailed reports prepared by the consultants were made readily available. Since the inception of the community water supply planning meetings, given the choice, RWSA has routinely opted for transparency and sunlight on the water supply decision making process.
While individual citizens may disagree about the direction of the community water supply initative, the fact that these conflicting engineering reports are open to the public is helpful to building the community understanding of the process.