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Mon, July 15

Pipeline costs could<BR>top out at $80 million

Courtesy photo

The Big Chino Wash runs through the ranch property that Prescott and Prescott Valley are considering buying from the JWK Ranch. In the wake of heavy rains, the wash was running when employees with CIVILTEC Engineering recently flew over the area with local pilot and long-time rancher John Olsen.

City Manager Steve Norwood said the initial number he received this past week from CIVILTEC Engineering for building the 28-mile pipeline and its accoutrements is in the $79 million range.

That is nearly four times the $20 million-$25 million figure that the city initially worked with, when it was considering buying the CV/CF Ranch, which is adjacent to the JWK Ranch that is currently under consideration.

And it is about double the $35 million to $40 million estimate that city officials have been tentatively throwing out in recent months.

City officials have long questioned the estimate that former Environmental Services Director Brad Huza came up with several years ago for the pipeline cost. At that time, Huza set the cost for just the installation of the pipeline at $20 million, with an additional $5 million for other costs, such as the mitigation of the impacts of the pumping.

But Norwood explained this week that moving water from the Big Chino would require much more than just the pipeline. For instance, he said, much of the land that the pipeline would traverse is remote, with no utilities in place. Bringing electricity to the booster stations that would be necessary along the route will be expensive, Norwood said.

In addition, he said the water operation would require a well field that would be similar to the one the city already has in Chino Valley – another expense that was not a part of the original estimate.

Then, along with the booster stations, the pipeline would require reservoirs or water tanks along the route, in which to store the water. "Ten to twelve million dollars of this would be just for the reservoirs that would be storing all this water along the way," Norwood said.

The city's contract with CIVILTEC was for only a preliminary cost estimate of the pipeline, and Norwood noted that the firm added in about 20 percent in the cost estimate to cover unknowns. "About $15 million is just contingencies," he said.

The estimate involves the entire length of the pipeline, including the approximately 18 miles from the JWK Ranch to Paulden, as well as the 10.5 miles from Paulden to the city's well field in Chino Valley.

It also includes about $14.5 million for additional work that Norwood said might be necessary on the 10 miles of existing pipeline from Chino Valley to Prescott, which might include a new booster station and water reservoir.

In the early 2000s, the city paid a firm to do the engineering for a pipeline from its Dugan well property in Paulden to Chino Valley. The 2001 estimate for building that section was about $9 million.

But McConnell said questions remain about how much of that design and estimate is still valid. "Parts of it can be used," he said of the old design. "To what extent, I'm not sure."

Although CIVILTEC used the prior design to help come up with its estimate, McConnell said the firm was reviewing whether the capacity in the previous design is adequate in for the city's current plans to pump about 8,717 acre-feet of water from the JWK Ranch to the tri-city area. The new estimate includes an additional $250,000 for design of that 10.5-mile stretch.

Mayor Rowle Simmons said he "wasn't really shocked" when he heard the $80 million figure. "We knew that the original estimates flying around were going to be too low," Simmons said.

He added that he doesn't expect the estimated pipeline cost to cause the council to have second thoughts about the JWK project. "We'll just have to bite the bullet," Simmons said.

Norwood allows that the higher cost for the pipeline will dramatically change the financial picture for the city. Under the original plan, the city planned to finance its share (54 percent) of the cost of buying the CV/CF Ranch for $30 million, as well as the $25 million for the pipeline and mitigation.

Even factoring in the lower $23 million cost for the purchase of the JWK, the $80 million pipeline estimate would nearly double the city's costs for the entire project.

This past summer, the city imposed fee increases to cover the debt for the JWK purchase, with plans to increase the fees later to cover the bonds for the pipeline. This week, Norwood said, "We're going to have to go back and include (the higher costs in the fee structure). Those fees may more than double."

Although the city split the burden for the ranch purchase between current residents and builders of new homes, Norwood said, "My recommendation would be that 100 percent (of the additional burden for the pipeline cost) goes on developers, not on existing rate payers." He added: "It's unfortunate that the cost could be that high, but what's the choice?"

Simmons agreed. "I think we'll have to focus on development for this, without a doubt," he said.

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