Conference Agenda

An ongoing challenge for municipalities and public agencies is developing long-range capital project cost estimate projections during early planning and conceptual design phases. All too often, initial estimates cannot fully consider the large number of project variables and potential future changes that may impact the completed project. Estimators in the early phases of a project must rely on limited and conceptual scope information that is often subject to speculation, influenced by prior project experiences, and affected by unpredictable market forces.

Historically King County’s Wastewater Treatment Division (WTD) used project request forms to collect project needs and anticipated costs. A review of those projects, from initial budgetary request through preliminary design, revealed cost fluctuations of at least 200% by the time the capital project was constructed and operational, sometimes higher for large complex projects. Further investigation revealed that costs increased due to a combination of limited project definition and unforeseen scope changes, assumption of lowest cost technical options, and lack of inclusion of future external cost and schedule drivers (e.g. environmental permitting, regulatory changes, community relations, constructability). This fluctuation and discrepancy in cost made it difficult to forecast capital borrowing, set utility rates, or better manage the larger project portfolio.

To improve capital project budgeting, WTD developed the Project Formulation Program (Program) and later a Portfolio Planning and Analysis unit. The Program uses a dedicated team and consistent approach to develop a defined project need and objective that can be the basis for a Class 5 estimate. The intent is to identify and evaluate a feasible technical approach and consider the external inputs needed to develop more informed initial, pre-funding estimates. The project’s current scope, assumptions, opportunities, risks, and basis of costs are consistently documented in highly defined cost estimate tools and basis of estimate documents.

Large capital projects move slowly, and few formulated projects have been implemented since the program’s start in 2016. However, recent project estimates appear to be closer to expected actual project costs, leading WTD to consider how best to expand the Program.

The City of Tacoma, like many wastewater utilities in the Pacific Northwest today, is facing big decisions about investments that are needed to meet new regulations, address aging infrastructure, and adapt to changing conditions; the scale of which haven’t been experienced in decades. These decisions will impact the utility, its ratepayers, and the surrounding community for decades to come. However, they also present opportunities to foster understanding of the importance and value of wastewater services, bolster support and buy-in for continued delivery, and prioritize investments in a way that meets broad community values and utility goals.

To support decision-making, the City is developing a Comprehensive Wastewater Plan to balance concurrent investment needs, achieve success in its goal areas, and meet the expectations of internal and external stakeholders. In this presentation, we will review the plan development process and how we are taking broad community values and incorporating them first into utility goals that align with City initiatives and resonate with the community and, second, into measurable technical targets that demonstrate success and can be used for capital planning. At its outcome, success for this planning process means not only developing and implementing a capital improvement plan, but demonstrating to the community that the utility is meeting its commitments in a responsible way that supports broad community values and continues to provide an essential community service.

We will present the comprehensive planning process, the big decisions the City of Tacoma is facing, and the opportunities they have to solve them using transparent and repeatable methods that produce defendable and supported solutions. We will make the case for incorporating broad community feedback into the planning process and show how it sets us up for a sound future.