07-06-2020 Council Work Session Packet

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Feasibility Study Water Treatment Plant City of Lino Lakes, MN WSB Project No. 015822-000 Page 27 9. ESTIMATED COSTS AND FUNDING OPTIONS This section provides a financial analysis for the proposed water treatment facility and the future trunk watermain improvements. Preliminary water rate and Water Availability Charge (WAC) increases were calculated for funding the proposed improvements. All capital cost estimates are provided as present worth costs. The estimated costs for the water treatment facility and trunk watermain improvements are presented separately because the implementation of the trunk watermain improvements will occur in the future. The timing of the trunk watermain improvements will be dependent on the actual rate of development for the next 20 years and beyond. A portion of the recommended trunk watermain improvements may not be required in the future if a future wellfield and second water treatment plant need to be constructed in a remote area of the City due to the limited capacity of the Jordan Sandstone Aquifer in the general area of the central well field. The operation and maintenance (O&M) costs for the water treatment facility were also estimated for the first 20 years of plant operation and included in the preliminary water rate and WAC increases as follows: Plant Operations - The number of operating hours at water treatment facilities can be subjective to actual need versus personal preference. In one national survey of water operators, the number of operating hours at water treatment facilities varied from as little as ten (10) hours per week to as high as forty (40) hours per week. For this analysis, the estimated annual cost to add one additional full-time equivalent (FTE) or licensed water operator to assist and operate the proposed water treatment facility was included in the estimated O&M costs. Equipment Maintenance - The estimated O&M costs include 1.0 percent of the capital cost of the treatment and electrical equipment to cover the cost of ongoing maintenance that is necessary to keep these equipment items functional over their useful life. This annual replacement value is consistent with EPA protocol for comparative economic analysis of water treatment facilities. Chemical Costs – The addition of a water treatment facility may require slightly more chlorine to be fed than what is currently being fed at the City’s well houses for oxidizing iron to a filterable form. In addition, sodium permanganate may be needed to oxidize manganese to a filterable form. The additional chlorine and sodium permanganate costs could possibly be eliminated altogether, however, with a biological filtration gravity filtration system. For these calculations, it was assumed that additional chlorine and sodium permanganate will be needed at the water treatment facility. Heating, Cooling, and Dehumidification - Estimated O&M costs are included for the plant building heating, cooling, and dehumidification. Electricity – The additional electricity costs for the proposed water treatment facility will be minimal for the HVAC systems, lights, small pumping systems, etc. The additional electricity costs for pumping the treated water into the distribution system will be minimal since the City’s current wells are already pumping water into the distribution system and up into the water towers. A gravity filtration plant would add only about 25 to 30 feet of additional pumping head, at most, to the City’s current pumping heads at the wells. Property Insurance - The estimated O&M costs include an annual cost of $10,000 per year to amend the City’s current insurance policy to include property insurance coverage for the proposed water treatment facility. Building Maintenance – The estimated O&M costs include an estimated $500 per month for general building maintenance.