Step 2: Needs Identification


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Small agencies typically undertake an infrastructure project either because of a regulatory mandate or as part of a repair and replacement program. Understanding common infrastructure technologies and what they cost is an important part of developing initial budgets so that an agency or Tribe can begin the process of developing a multi-year Capital Improvement Program (CIP), applying for funding and understanding the impact of proposed improvements on rates.
Match Needs to Economical Technologies

The toolbox elements in this section include general overviews of technologies appropriate for small community water and wastewater systems and general cost estimating charts and other cost estimating tools. In combination, these tools can help a local agency or tribe arrive at “order-of magnitude” cost estimates. These tools are not a substitute for a detailed engineering evaluation but are rather a way to begin the process of understanding alternatives and budgets. The Utility Management Cycle Step 3, Create Viable Financing Strategies, contains additional tools to move from “order-of magnitude” estimates to financing and cash flow.

Toolbox Elements to Match Needs to Economical Technologies

Toolbox Element Description
Technology Overviews Overviews of common issues, technologies, and evaluation factors to help select alternatives.
General Cost Estimating Strategies Cost estimating strategies to produce order of magnitude estimates for various infrastructure projects.

The following sections provide a more information about the toolbox elements and describe how they can be used by small agencies to help a project progress through the Utility Management Cycle.

Technology Overviews

Technology Overviews

There are usually multiple technical options available that can be evaluated based on project specific characteristics. The challenge is in matching infrastructure needs with the most economical and appropriate technologies. Evaluating needs should be based on first identifying the problem to be solved or the requirements to be met and then matching candidate technologies to the situation. There are usually multiple technical options available that can be evaluated based on various project specific characteristics. These characteristics can include ability to meet technical requirements, complexity, ease of operations, and ease of maintenance. If a community is growing, the potential to expand should be evaluated. Regulations are ever changing, so the ability of a system to be adapted to future requirements is also significant.

The Technology Overviews provide information to introduce potential technologies for different applications and are contained in this toolbox element.

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Technology Overview - Element Overview

Why This Tool is Important

There is a vast array of technologies available to address water and wastewater needs that are appropriate for small communities. Technologies are ever evolving with new approaches being developed, tested, and approved for use. Determining the most appropriate technological approach to address the water or wastewater need of a small community is achieved through experience, analysis, and judgment of professionals familiar with technologies and their appropriate application.

It is not possible for this toolbox element overview to provide information for all technologies that may be available to address a particular need nor to provide a complete analysis and decision approach. Instead, this overview provides a number of examples of technologies, presented in several different formats, to give the user an appreciation for the range of solutions available. It is important that the representatives of small communities have this appreciation so that they are able to better communicate with regulators. Professional consultants can provide the necessary expertise to interpret requirements and match technologies to needs.

The use of the technology overviews should be considered in the context of cost, which is discussed further under the General Cost Estimating Charts Toolbox, and through the Toolbox Elements under Element 3: Create Viable Financing Strategies

A number of the organizations listed under the Additional Resources section below provide additional small community assistance at no cost. This type of additional assistance can be very valuable in further understanding the nature of the specific issues to be addressed and the potential options that may be available.

What the Tool Includes

This toolbox element provides examples of technologies that can address a small sample of resources for agencies; some have been developed by GHD, and some are references to other available resources. This is by no means a complete listing of technologies, nor a complete analysis of any single technology. Rather, the overviews and references provide examples of  resources available for small communities. This information should be augmented with professional assistance and further evaluation of the particular needs of the community.

How to Use the Toolbox Element

Addressing complex technical issues will, in most cases, require the assistance of professional consultants. Assistance with consultant selection is provided within the toolbox element Guidance for Hiring Professionals.

The technological overview toolbox element provides a decision guide to help navigate the process of identifying the need or the issue to be addressed and then matching technology overviews to help further understand the issue. Technology overviews are presented as both short fact sheets within this toolbox element and as references to web based resources available from regulatory agencies and other sources. There is no single source for all technical information that a small community may need and so it takes expertise and dedication to research and consider technologies for a particular application. This is, in part, where a local project champion and professional consultants can collaborate together to help the community develop the best solution.

The use of the technology overviews should be considered in the context of cost, which is discussed further under the General Cost Estimating Charts Toolbox, and through the Toolbox Elements under Element 3: Create Viable Financing Strategies.

Small community representatives are encouraged to explore the example technologies and references in this tool box as part of the overall education process associated with understanding the issues to be addressed. A number of the organizations listed under the Additional Resources section below provide additional small community assistance at no cost. This type of additional assistance can be very valuable in further understanding the nature of the specific issues to be addressed and the potential options that may be available. Use of these support organizations is a good step prior to selecting professional consultants to assist with more detailed technical analysis and design.

Technologies

Drinking Water Technologies

Wastewater Technologies

Additional Resources

There are a number of organizations that can provide additional information and assistance to small communities as part of the exploration of technologies. The following are examples of a number of the more commonly used organizations that could be of assistance to small communities in Northern California.

Drinking Water Organizations
Wastewater Organizations
Organizations Providing Technology Assistance for a Variety of Small Community Needs

The external information for this toolbox element was not created by NCRP and is provided as an additional reference that may be useful for the user. Other additional information may also be available to the user from outside references. NCRP is not responsible for the content available from other entities.

Since external resources are not managed by NCRP, the links provided may become broken without notice. Please report broken links to NCRP by e-mailing kgledhill@westcoastwatershed.com

General Cost Estimating Strategies

A general cost estimating tool and references to additional cost estimating guides and charts are presented in this element. These cost estimating guides provide tools for estimating “order of magnitude” costs also known as a “Class 5” cost estimate. This type of estimate can be conducted at a conceptual level of project development and is intended for screening of alternatives or use with preliminary funding applications.

Cost estimating charts are presented to help develop order of magnitude estimates for various types and sizes of infrastructure to begin scoping overall funding strategies.

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Element Overview

Why This Tool is Important

It is important to have a general understanding of different costs associated with projects to help determine feasibility and provide an estimate of funding needs. It is important to realize that municipal projects take many years to get from planning to completion. During this time, the costs involved will most likely increase due to inflation which should be accounted for. Similarly, because most municipal projects are government funded, they require that the construction crews earn prevailing wage. This can be a significant cost and must not be overlooked during planning and funding phases.

The general cost estimating tool and guides presented in this element are based on cost summaries from similar projects and are best used for the relative comparison of alternatives, rather than for estimating actual anticipated costs of a finished project. This is because at a conceptual screening level of analysis, the project is not sufficiently defined to accurately estimate actual costs. However, the tool can also be used to develop cost information for preliminary funding applications. During further development, that cost can be updated with more detailed project information.

Up-front costs typically include planning, permitting, engineering, and construction. Land acquisition and other up front capital costs may be required as well. It is always important, when evaluating alternatives, that costs should be considered based on what is most economical rather than what may initially appear to be a bargain. Evaluating what is most economical should be determined based on one time up-front costs (capital costs) as well as ongoing operational and maintenance costs. The useful life of facilities should also be considered when evaluating lifecycle costs so that all costs paid over the life of the facility are evaluated when considering alternatives.

The Project Cost Estimating (PCE) Tool is a spreadsheet that allows the user to input specifics about a project’s capital costs and percentage estimates of other costs to results in a Class 5 cost estimate for a project as defined by the AACE cost estimate classification system (see section below). The spreadsheet provides typical percentages for cost estimating, which can be adjusted if desired. The spreadsheet also breaks out costs into a pie chart for visualization purposes.

What the Tool Includes

How to Use this Toolbox Element

The general cost estimating tool and guides presented in this element are based on cost summaries from similar projects and can be used for the relative comparison of alternatives. The cost estimates derived from the tool are best used for comparing the relative magnitude of costs of alternatives rather than for estimating actual anticipated costs of a finished project. This is because at a conceptual screening level of analysis, the project is not sufficiently defined to accurately estimate actual costs. The order of magnitude costs are useful for determining which alternative is less expensive to construct. This can be an aid in selecting which alternative to further develop and evaluate. However, the tool can also be used to develop cost information for preliminary funding applications. During further development, more detailed capital and operations and maintenance costs can be developed.

Up-front costs typically include planning, permitting, engineering, and construction. Land acquisition and other up front capital costs may be required as well. It is always important, when evaluating alternatives, that costs should be considered based on what is most economical rather than what may initially appear to be a bargain. Evaluating what is most economical should be determined based on one time up-front costs (capital costs) as well as ongoing operational and maintenance costs. The useful life of facilities should also be considered when evaluating lifecycle costs so that all costs paid over the life of the facility are evaluated when considering alternatives.

The Project Cost Estimating (PCE) Tool is a spreadsheet that allows the user to input specifics about a project’s capital costs and percentage estimates of other costs to results in a Class 5 cost estimate for a project as defined by the AACE cost estimate classification system (see section below). The spreadsheet provides typical percentages for cost estimating, which can be adjusted if desired. The spreadsheet also breaks out costs into a pie chart for visualization purposes.

Use the AACE Cost Estimate Classification System (see section below) to help understand the importance of cost estimating throughout the different phases of a project.

Additional Resources

The external information for this toolbox element was not created by NCRP and is provided as an additional reference that may be useful for the user. Other additional information may also be available to the user from outside references. NCRP is not responsible for the content available from other entities.

Since external resources are not managed by NCRP, the links provided may become broken without notice. Please report broken links to NCRP by e-mailing kgledhill@westcoastwatershed.com

AACE Cost Estimate Classification System

The AACE cost estimate classification system provides guidance for choosing methods for cost estimation based on project maturity and the associated need for accuracy. Table 2-1 is an excerpt from the AACE Cost Estimate Classification System document (AACE International, 2011). For more information, see the the full document available through the AACE International website (as of February 2020, the latest Revision is dated March 6, 2019; Document 18R-97).

The below Table defines the cost estimate classifications. Cost estimate classifications are defined by the level of accuracy they can produce and are a function of project maturity level and cost estimate method used to perform the estimate. The cost estimate accuracy determines the reasonable end-use for the estimate.

Table – Cost Estimate Classification Matrix for Process Industries

Primary Characteristic Secondary Characteristic

ESTIMATE CLASS

MATURITY LEVEL OF PROJECT DEFINITION DELIVERABLES

Expressed as % of complete definition

END USAGE

Typical purpose of estimate

METHODOLOGY

Typical estimate method

EXPECTED ACCURACY RANGE

Typical variation in low and high ranges[a]

Class 5

0% to 2%

Concept screening

Capacity factored parametric models, judgement, or analogy

L: -20% to -50%
H: +30% to +100%

Class 4

1% to 15%

Study or feasibility

Equipment factored or parametric models.

L: -15% to -30%
H: +20% to +50%

Class 3

10% to 40%

Budget authorization or control

Semi-detailed unit costs with assembly level line items

L: -10% to -20%
H: +10% to +30%

Class 2

30% to 75%

Control bid/tender

Detailed unit cost with forced detailed take-off

L: -5% to -15%
H: +5% to +20%
Class 1 65% to 100% Check estimate or bid/tender Detailed unit cost with detailed take-off

L: -3% to 10%
H: +3% to +15%

Notes: [a] The state of process technology, availability of applicable reference cost data, and many other risks affect the range markedly. The +/- value represents typical percentage variation of actual costs from the cost estimate after application of contingency (typically at a 50% level of confidence) for given scope.

AACE International. (2011) Cost Estimate Classification System – As Applied in Engineering, Procurement, and Construction for the Process Industries.  Document 18R-97. https://web.aacei.org/