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FREQUENTLY ASKED QUESTIONS ABOUT THE 2004 MWMC WASTEWATER FACILITIES PLAN AND SYSTEM DEVELOPMENT CHARGE METHODOLOGY operating and maintenance costs for Alternative 5 are slightly lower compared with the other alternatives. Facilities Plan Question 7. What is the basis of the project cost estimate? The cost estimates are developed for each project based on the current understanding of that project. These estimates are generally broken down by construction categories (e.g., sitework, excavation, concrete, major treatment equipment, etc.). An industry standard 25% contingency is added to the construction subtotal to account for variability in equipment prices, fluctuations in bidding climate, and for unknowns associated with the project. For some of the projects an allowance has been added to improve the projects aesthetic appeal to the neighbors. Depending on the project, this allowance may vary, but it is typically 10 % of the construction subtotal. An addional 25 % allowance is added to account for surveying, geotechnical exploration, engineering, design, construction management, legal, and administrative costs. The resulting project cost estimates are "ground-truthed" by comparing the facilities plan estimate to projects of similar scope and size that have recently been constructed. For example, Corvallis recently completed construction of a digester for $5.5 million. The facilities plan estimate for a fourth digester at the WPCF which is similar in scope and size to the Corvallis project is $4.5 million. A second example is the headworks expansion, and the Facilities Plan estimate is $12.8 million. Portland recently completed the design of a similar project estimated to cost $13.2 million. Facilities Plan Question 8. A previous 10-year project list was estimated at $100 million. Why has the cost of implementing these projects increased by $44 million? The previous project list was developed from prior planning efforts. At the time when those planning efforts were being done there were less stringent discharge permit requirements. In May of 2002, when the new NPDES permit was issued for MWMC, some new permit requirements were added. Those additions to the permit impact the cost of treating wastewater. The current 20-year project list is a key outcome of the more comprehensive 2004 Facilities Plan and includes capital investments to address the more stringent discharge permit and other regulatory requirements. Also, the following projects have been added to the 20-year project list at the direction of the Commission and to fulfull previous policy direction as outlined in the 1997 Biosolids Management Plan and the 2001 adopted Wet Weather Flow Management Plan (WWFMP): · Odor Control at MWMC Treament Plant - $6.9 million · Class A Digestion - $9.2 million (two thirds of Digestion project) · Conversion from chlorine to liquid bleach (sodium hypochlorite) for disinfection - $4.1 million · Effluent Reuse as a means to meet the new thermal load requirement - $20 million These items total approximately $40 million. The 20-year project list was reduced by $6 million by eliminating the 5th storage lagoon at the Biosolids Management Facility. Elimination of this project was enabled in part by the additional of the Class A portion of the digestion project. SHAWNS COMMENTS TO FAQ'S ON 4-16-04_1.DOC PAGE 7 OF 13