Appendix V. Hazen & Sawyer Technical Memoranda: A. Option 1: Expand Stone Quarry Reservoir and Supporting Tables With Results of OWASA Analysis

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1 Appendix V. Hazen & Sawyer Technical Memoranda: A. Option 1: Expand Stone Quarry Reservoir and Supporting Tables With Results of OWASA Analysis B. Evaluation of Adequacy of Raw Water Transmission Capacity from Cane Creek Reservoir and the Quarry Reservoir

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3 TECHNICAL MEMORANDUM Option 1: Expand Stone Quarry Reservoir PREPARED FOR: PREPARED BY: Orange Water and Sewer Authority Hazen and Sawyer, P.C DATE: July 22, 2009 (Final: February 10, 2010) 1.0 Description and Scope This water supply option involves the expansion of OWASA s existing Stone Quarry Reservoir through continued mining by the American Stone Company (ASC) at the adjacent quarry pit. The quarry volume that will ultimately be available for OWASA s water supply at the planned termination of mining activities in year 2030 will depend on the following: a. According to the OWASA-ASC lease agreement, ASC is contractually obligated to extract rock at a rate that would result in a total usable volume of at least 2.2 billion gallons; this is the sum of storage in the existing Quarry Reservoir and the active mining pit up to the design overflow elevation of 485 feet, as determined during previous studies; b. Total usable storage could increase to 3.0 BG or more at the higher rates of aggregate production projected by ASC assuming favorable market conditions; c. Usable storage will be limited to between BG if OWASA elects not to construct a new pumping station, as required to access deep storage, i.e., between elevation 385 feet (the lower operating limit of the existing Stone Quarry Reservoir pumps) and 265 feet (the effective bottom of the active quarry pit). In this technical memorandum (TM), the term Shallow is used to describe scenarios that do not involve construction of a new pumping station, and Deep describes scenarios that include a new pumping station. The Stone Quarry Reservoir is an off-stream reservoir and currently can be refilled by pumping from Cane Creek Reservoir when natural runoff is inadequate. The effective yield of this option will be affected by OWASA s ability to refill the reservoir, the volume of usable/accessible storage, and the rate at which water can be pumped to the Jones Ferry Road Water Treatment Plant (JFR WTP). The following scenarios have been evaluated in consideration of these variables. Under all scenarios, it is assumed that OWASA will require ASC to construct the passageway that the lease agreement addresses to connect the existing Stone Quarry Reservoir to the mining pit at the end of the lease term. Appendix V Page 1 of 39

4 Deep Scenarios The following scenarios all involve the construction of a new pumping station designed to access deep storage down to a minimum accessible elevation of 265 feet, 220 feet below the normal level of 485 feet and improvements to raw water transmission capability from Cane Creek Reservoir to increase the maximum refill rate from this source to 20. Refill and transmission improvements applicable to all Deep scenarios include the installation of a 30 diameter parallel transmission main from Cane Creek Reservoir to the expanded Stone Quarry Reservoir and a 24 inch parallel main from the Quarry Reservoir to the JFR WTP. Option 1a: Option 1b: Option 1c: Option 1d: Expand Stone Quarry Reservoir to 2.2 BG, which is consistent with the minimum aggregate production rate guaranteed in OWASA s lease agreement with ASC. Expand Stone Quarry Reservoir to 2.6 BG, which represents an intermediate ASC aggregate production rate. Expand Stone Quarry Reservoir to 3.0 BG, which is a conservative estimate based on ASC maximum projected aggregate production rate. Expand Stone Quarry Reservoir to 3.0 BG and, in addition to the improvements noted above, add the capability to refill from University Lake at a rate of 20. Additional raw water transmission improvements required under this scenario include (a) the expansion of the existing University Lake raw water intake and pumping facilities and the construction of a new refill booster pumping station at the JFR WTP, and (b) to address anticipated regulatory requirements associated with this option, transmission facilities to pump secondary effluent from the Mason Farm Wastewater Treatment Plant to augment streamflow below University Lake. Shallow Scenarios 1 Under the following two scenarios, OWASA would not construct a new pumping station at the expanded reservoir, nor any other major raw water transmission facility improvements. Usable storage would be limited to the design operating range of the existing pumping station of El. 485 feet to 385 feet. OWASA would continue to use the existing Cane Creek system connection to refill the quarry. Option 1e: Expand usable Stone Quarry Reservoir storage to 1.5 BG, which is consistent with the existing pump operating limits and the minimum 1 The presentation order reflects the fact that the Shallow Scenarios were added as a low-cost approach for increasing the water supply capacity of the Quarry Reservoir after a draft TM summarizing the Deep Scenarios had been completed. Appendix V Page 2 of 39

5 aggregate production rate guaranteed in OWASA s lease agreement with ASC. Option 1f: Expand usable Stone Quarry Reservoir storage to 2.1 BG, which represents the estimated usable storage accessible by the existing pumps under the most optimistic ASC aggregate production rate assumption. Figure 1: Schematic Illustration of Option 1 Deep Scenarios Cane Creek Reservoir Parallel 30 Main, Max: 25 Refill 20 (Options 1a, b, c & d) Existing Existing Delivery Delivery Cap. Cap (firm) (firm) Parallel 24 Main, Max Capacity: 30 (Options 1a, b, c & d) Expand Stone Quarry Reservoir (1.5 BG 3.0 BG Option Option 1d: 1d: Repump. Repump. Delivery Delivery Capacity Capacity 6 Increase Increase to to (Options (Options 1a, 1a, b, b, c & d) d) University Lake JFR WTP Delivery Delivery Capacity Capacity firm firm (20 (20 Max.) Max.) Option Option 1d: 1d: Max. Max. 2.0 Background The existing Stone Quarry Reservoir, shown in Figure 2, is owned by OWASA and has a total storage volume of approximately 270 MG 2, of which approximately 220 MG can be accessed by the existing Quarry Reservoir pumping facility. The ability to refill naturally is limited by the small (~0.5 square miles) drainage area. Refill pumping via a connection to the Cane Creek raw water main can utilize flow that would otherwise spill over Cane Creek Dam, effectively increasing system yield and reliability. The reservoir is a former quarry pit and is located directly to the east of the much larger active quarry pit, also shown in Figure 2, operated by ASC. As previously noted, mining will terminate in year 2030 pursuant to the terms of a lease 2 As estimated by OWASA from a 1980s contour drawing. Appendix V Page 3 of 39

6 agreement between ASC and OWASA, who owns the quarry property. The OWASA-ASC lease agreement contains the following provisions: a. ASC... will make its best efforts in light of market conditions, to produce a finished pit by December 31, 2030, suitable [for reservoir storage] by way of configuration and volume, when joined with the pit on the adjoining [OWASA] property, for storage of three billion gallons of water. b. ASC is required to remove at least 9.75 million tons of stone from below the 485-foot topographical contour after 22 years since all necessary governmental permits, including those necessary to move the road [Bethel- Hickory Grove Church Road] have been obtained; i.e., by October 21, c. In the event that OWASA elects to have American [ASC] join the new pit with the existing water storage facility, American shall be required to excavate between the two pits a passageway which shall have its minimum dimensions one hundred and fifty (150) feet deep to a top elevation of rock, and a minimum fifty (50) feet wide... Figure 2: General Arrangement of Existing and Proposed Quarry Facilities Future Mining Area Existing Reservoir Planned Passageway Appendix V Page 4 of 39

7 3.0 Conceptual Design 3.1 Design Capacity and Operating Range Development of the Stone Quarry Reservoir ultimately to a storage capacity of approximately 3 BG is a goal of OWASA s lease agreement with ASC, but actual usable storage will be about 2.2 BG if ASC extracts rock at the minimum rate of 9.75 million tons per year. These estimates are conservative compared with the calculated maximum and minimum storage volumes shown in Figure 3. All volumes are the sum of projected usable storage in the active quarry pit and usable storage in the existing Quarry Reservoir over an operating range of from El. 256 feet, which represents the probable lowest pumping limits near the bottom of the active quarry pit, as applicable to the Deep scenarios, and the overflow El. 485 feet. As previously determined by OWASA based on a review of the site topography, this is the approximate maximum level to which water can be impounded in the expanded quarry without the need to construct an impounding dike to prevent spillage. It is close to the overflow level of the existing reservoir. Options 1a-c represent three alternative levels of quarry storage development 2.2 BG, 2.6 BG and 3.0 BG, respectively (i.e., minimum, intermediate and maximum), consistent with the Deep scenarios, which assume that OWASA will construct a new pumping station in order to access storage below the lowest pumping limits of the existing pumping station. Option 1d represents maximum storage development with the addition of repumping from University Lake. Figure 3 : S tone Q uarry R eservoir S torage in year 2030 based on ASC s Estimates of Minimum and Maximum Aggregate Production Elevation (ft, MSL) El 485 ASC Min. Production 2,300 MG ASC Max. Production 3,400 MG Total Volume above El 265 feet in Million Gallons Options 1e and 1f represent minimum and maximum storage development options consistent with the Shallow scenarios, which assume that OWASA does not construct a new quarry pumping station. As shown in Figure 4, these scenarios would result in usable storage volumes of 1.5 BG and 2.1 BG, respectively. Appendix V Page 5 of 39

8 Figure 4: Storage Accessible by Depth Down to El. 385 ft. Operating Limit of Existing Pumping Station for Minimum and Maximum Mining Scenarios Elevation (ft MSL) Minimum Production Maximum Production ,500 MG 2,100 MG ,000 1,500 2,000 2,500 Volume Accessible by Depth Below Overflow EL 485 ft, in Million Gallons 3.2 Quarry Intake and Pumping Station The water pumping station at the Stone Quarry Reservoir has a rated capacity of 6 and can access storage down to a minimum elevation of about 385 feet. 3 Assuming that OWASA will require ASC to construct a passageway between the active quarry and the existing reservoir, this facility may be utilized to pump water from the expanded quarry within these limits, as applicable to the Shallow scenarios. To withdraw water at higher rates and/or to access storage over the full 220-foot quarry reservoir operation range, as applicable to the Deep scenarios, it will be necessary to construct a new intake and pumping facility. OWASA-ROM yield performance modeling, which is discussed below, indicates that an intake with a capacity of 8 to 9 would be sufficient to develop the maximum yield for all of the quarry storage and refill scenarios under evaluation. However, 20 is considered to be a more appropriate design capacity from an overall facilities planning perspective, where operational flexibility and system redundancy are key considerations. Figure 2 shows a logical location for the construction of future intake and pumping facilities. It is adjacent to the deepest point (i.e., sump) of the active quarry pit, at the pit s western edge and to the east of the aggregate stockpile area. It is also a location where ASC staff has indicated that, with proper coordination, engineering investigations, and even construction, new facilities could be completed without adversely affecting quarry mining operations. With 3 Pump tests indicate that actual pumping capacity exceeds 8 when the reservoir is close to its overflow elevation. Appendix V Page 6 of 39

9 careful planning, therefore, the time lag between the cessation of mining activities and the completion of the new reservoir facilities could be minimized. Intake concepts that should be explored at the project design stage include an onshore shaft-type intake, an off-shore tower or prefabricated intake, and an inclined intake similar to the existing Stone Quarry Reservoir intake. The concept selected for planning and cost estimating purposes is a conventional onshore shaft-type intake. This facility would consist of a vertical shaft excavated into rock at a point on land located directly adjacent to the quarry sump, with intake conduits tunneled (or microtunneled) through to the quarry face at five or more selected levels of withdrawal, as governed by water quality considerations. The shaft, which would also serve as the pump wet well (or, potentially, a dry well), would be about 240 feet deep, assuming that the operating level would be located 10 or more feet above the reservoir overflow level and that it would extend some feet below the bottom of the active storage pool (El. 265 feet). A shaft of this depth would present the following pumping application challenges: 1. Vertical turbine pumps are typically used in shaft application of this type. The motor in this case is mounted above grade, and the column and lineshaft assembly extends to the pump bowl(s) located at the bottom of the shaft. Column lengths greater than about 100 feet are rare, however, due to design and operation and maintenance considerations. Some of the related technical issues can be addressed by mounting submersible motors directly to the pumps (as in the case of the existing Stone Quarry Reservoir pumping station). 4 However, the entire 240-foot pump column, along with electrical conductors, must nevertheless be removed in order to service a pump. This would be a major undertaking. An alternative approach would be to locate the pumps in a dry pit at the bottom of the shaft. This approach would require the shaft be constructed with wet and dry compartments, at substantial cost. Access to the pump floor in this case would be provided by an OSHA-approved man hoist or elevator. 2. The reservoir water level will vary over a range of some 220 feet, from the normal to minimum operating levels. This range is beyond the variable head delivery capability of centrifugal pumps even when furnished with variable speed drives. Options that can be considered to address this issue include (a) add booster pumps to address the low operating level/high head condition, (b) install two sets of pumps, one low head set, for use when the reservoir is close to its normal operating range, and one high head set, for use when the reservoir level is low, or (c) install a throttling valve to burn off excess pump head when the reservoir is at or near its normal operating level (a condition that would exist most of the time). 4 Excessive shaft depth and operating head would preclude consideration of a rail-type submersible sewage pump for this application. Appendix V Page 7 of 39

10 The above issues will require careful evaluation at the project design stage, assuming OWASA elects to proceed with the construction of a new pumping station. Detailed evaluations should be completed of alternative intake concepts, including those identified above. For planning purposes, it should be understood that, whatever intake and pumping configuration is ultimately selected, this facility, as a result of its unusual depth, can be expected to cost considerably more than a typical reservoir intake. Planning for the possible later addition of a new pumping station should also be considered if OWASA elects to proceed with a Shallow scenario. An engineering economic evaluation should be completed to determine the cost of excavating the shaft and intake tunnels prior to impounding the expanded reservoir versus in-the-wet construction at a later date when upgrading to a Deep scenario System Interconnections and Repump Facilities The existing Stone Quarry Reservoir is connected to the 30-inch diameter section of the Cane Creek-JFR WTP raw water main (close to its transition from 24 inches) via an 18-inch diameter pipeline. It will be necessary to install a 30 inch diameter connector main to provide a delivery capability of 20 from the new reservoir intake to the JFR plant, as is desirable for long-term planning purposes. Consistent with the 2001 Master Plan projections for treatment capacity needs at buildout, it will also be necessary to parallel the existing 30- inch main to the WTP with a 24-inch main to provide a combined delivery capacity to JFR of 30 from Creek Reservoir and the expanded Quarry Reservoir. All of the above improvements are assumed to apply to the Deep scenarios, but not to the Shallow scenarios. As discussed in Section 4 Performance Evaluation, all scenarios under this option involve refilling the expanded reservoir from Cane Creek Reservoir. To refill beyond the present maximum transmission rate from this source of about 10, as applicable under the Deep scenarios, it will be necessary to parallel the 24-inch section of main that extends from Cane Creek Reservoir to the Quarry Reservoir. A 24-inch parallel main along this section would provide adequate capacity to meet the repump rates considered in Section 4 for the Deep scenarios. However, a 30-inch parallel main will be required to meet the overall goal of providing a 30 transmission capacity to the JFR plant; thus this diameter has been assumed to estimate project costs for all Deep scenarios. 5 In both cases, the shaft could be constructed in the dry, though there could be substantial additional costs associated with required grouting to seal cracks in the case where the reservoir is impounded. In addition, with the reservoir impounded, it would be necessary to construct the tunneled intakes (required to provide multi-level intake capability) using underwater microtunneling technology, the costs for which could be substantially higher than those for dry tunneling methods. Costs for in-the-wet construction of an offshore intake would also be expected to be considerably higher than a comparable offshore tower intake (similar to the Cane Creek Reservoir intake) constructed in the dry prior to impoundment. Appendix V Page 8 of 39

11 Under the Deep scenarios, Cane Creek Pumping Station would also be expanded to a capacity of 30. With all of the foregoing improvements in place, it would be possible to: Pump 30 from Cane Creek Reservoir, with either all or part being delivered to the JFR WTP and a balance of up to 20 delivered to the Quarry Reservoir. Pump up to 20 from the Quarry Reservoir to the JFR WTP. Pump 30 to the JFR from Cane Creek Reservoir and the Stone Quarry Reservoir under a range of pumping combinations. In addition to increasing Quarry Reservoir refill capability from Cane Creek Reservoir, Option 1d would add the capability to refill from University Lake at a rate of up to 20. The additional improvements required under this alternative are as follows: Expand the existing University Lake raw water intake and pumping facilities to a maximum capacity of approximately 40. Construct a new booster pumping station at the JFR WTP designed to repump up to 20 to the Quarry Reservoir along the transmission mains discussed previously. It is anticipated that Option 1d would trigger a review by the NCDENR Division of Water Resources (DWR) of instream flow requirements below University Lake Dam, with the likely outcome being the imposition of a minimum downstream requirement. To address this anticipated regulatory requirement, it is assumed that OWASA would be permitted to pump disinfected effluent from the Mason Farm Wastewater Treatment Plant to University Lake Dam and to use this for streamflow augmentation purposes in lieu of releasing water from the dam, with a resulting loss of reservoir yield. For cost estimating purposes, the related transmission facilities have been sized to deliver 1 of treated effluent to University Lake Dam. Under the Shallow scenarios, transmission capacity to the JFR WTP would remain around (corresponding to minimum and normal reservoir levels) from Cane Creek Reservoir and from the Quarry Reservoir. 3.4 Project Permitting and Implementation Issues Implementation of this water supply option will require careful coordination of the items discussed below in order to minimize avoidable construction delays and other possible adverse impacts to OWASA s water supply operations. As previously discussed, ASC is actively mining the area of land lying between the active quarry pit and the existing Quarry Reservoir. These operations will continue up to a certain limit, the exact delineation of which has yet to be determined, where the remaining land mass must be preserved as a safety buffer Appendix V Page 9 of 39

12 between the active quarry pit and the existing Quarry Reservoir. The lease agreement gives OWASA two options at that point: 1. Convert the active quarry pit into a water supply reservoir, and operate this facility in parallel with the existing Quarry Reservoir, which would continue in service without interruption. OWASA does not plan to implement this option. 2. Require ASC to excavate a passageway to join the two pits to create a single water storage reservoir. Before this work can proceed, it will be necessary to drain the existing Quarry Reservoir in order to stabilize the passageway construction area. ASC estimates that that it will be necessary to keep the existing Quarry Reservoir drained for from five to seven years in order to complete mining of the area between the two pits beyond the point where stability and leakage would present safety concerns and of the passageway itself. There will be no water supply service from the Quarry Reservoir until the construction of the passageway has been completed, along with the construction of the new intake under the Deep scenarios. For planning purposes, OWASA should consider the following two possible ways to reduce the construction time associated with this interconnection: a. Allow ASC to narrow the bottom width of the excavation from 50 feet, as specified in the lease agreement, to about 5 feet, which is reasonable minimum for rock trenching techniques, and b. Tunnel between the two pits using either conventional drill-andblast tunneling techniques (minimum diameter about 6 feet), or microtunneling (minimum diameter of about 30 inches, as required for hydraulic conductivity). When compared with risks and costs associated with options for providing emergency backup during the 5 to 7-year down-time associated with the passageway concept, this could be a favorable option even if, as is likely, OWASA would be responsible for most or all of the associated construction costs, which are estimated at about $2 million. As estimated in the 2001 Master Plan, design and construction of the new intake, pumping stations, raw water transmission, and repump facilities necessary to convert the mined pit into an operational reservoir under the Deep scenarios can be expected to take from 2 ½ to over 6 years to complete. 6 Based on discussions with ASC, the location of the intake and pumping station shown in Figure 2 is such that engineering investigations and most, if not all, of the construction could be completed, with proper coordination, so as not to interfere with ASC s operations. Thus, with proper planning and coordination, related disruptions to OWASA s water systems operations can also be minimized. 6 Technical Memorandum 5.2: OWASA Water and Sewer Master Plan Planning Level Economic Evaluation of Raw Water Supply Options, prepared for the Orange Water and Sewer Authority, Carrboro, North Carolina, by CH2MHILL, August Appendix V Page 10 of 39

13 As discussed above under Section 3.3, the permitting process for Option 1d would likely result in the imposition of a minimum downstream requirement for University Lake Dam. A similar review by the DWR can also be expected in the case of the other refill scenarios. A resulting increase in the minimum release requirement downstream of Cane Creek Reservoir and/or the imposition of such a requirement on University Lake is not out of the question for Options 1a-c. If imposed, such requirements would reduce the effective yield of this option, or, at the very least, increase project costs, assuming that an alternative source of downstream flow (i.e., use of Mason FARM WWTP effluent) could be utilized. Because instream flow impacts are unclear at this time, they have been accounted for only in the case of Option 1d, where these impacts are expected to be more at issue. 4.0 Performance Evaluation 4.1 Deep Scenarios Table 1 summarizes the results of OWASA-ROM model analyses that were completed to evaluate the incremental increase in system yield that could be achieved for each of the three Deep storage scenarios over a range of potential repump scenarios. Figures 5 and 6 show the impacts of repump rates and reservoir storage development on reservoir refill times for five historically long droughts. All results include a storage reserve of 20 percent. The following conclusions can be drawn from these results: Yield is insensitive to the repump rate and the supply source or source combination (i.e., whether refilling is done from Creek Reservoir, University Lake, or a combination thereof). For each of the three storage scenarios, a maximum change in yield of 0.1 was calculated over the range of repump scenarios considered. Table 1: S ummary o f Y ield Results f or D eep S cenarios & Range of R efill Rates Quarry Reservoir Storage (BG) Min Pump Rate From Quarry () 1 Incremental Increase in System Yield () For Indicated range of Refill Rates (Cane Ck / Univ. L.) 2 10/0 20/0 20/5 20/10 20/20 0/ (1a) (1b) (1c) (1d) Minimum pumping rate from the Quarry Reservoir to the JFR plant required to develop yield; i.e., yield would decrease if rate is lowered but would not increase if rate is increased. 2. Selected scenarios are highlighted. Appendix V Page 11 of 39

14 Refilling at a rate of 20 from Cane Creek was selected for Options 1a, 1b, and 1c, on the basis of these results and those shown in Figure 5. The estimated net increase in operational yield for these three scenarios is 3.4, 4.0 and 4.6, respectively. Alternative 1d involves refilling at a rate of 20 from both Cane Creek Reservoir and University Lake. The net increase in operational yield for this scenario is 4.7. Figure 5: Impacts of Repump Rates on Reservoir System Refill Times 1 (With Quarry Reservoir Expanded to 3.0 BG and water demand equal to Yield for Record Drought) Months to Refill Drought /0 20/0 20/5 20/10 20/20 0/20 Refill Rate in from Cane Creek Reservoir / University Lake 1. System refill time (also termed drought duration) is measured as the interval that begins when the first of OWASA s reservoirs falls below full and ends when all reservoirs have completely refilled. Figure 5 shows that the refill rate has an impact on reservoir refill time, but the impact varies amongst individual droughts. This impact is moderate for some droughts and severe for others, most notably the drought. For the range of refill scenarios considered, the refill times for all droughts are lowest when the Quarry Reservoir is refilled at a rate of 20 from both Cane Creek and University Lake. As noted above, these results were considered in the selection process for the four Option 1 scenarios. For the same historical droughts shown in Figure 5, Figure 6 presents a summary of refill times for the existing Quarry Reservoir and the four Option 1 scenarios. These results show that the refill times for the expanded reservoir will increase by varying degrees on a drought-to-drought basis and from one Option 1 scenario to the next. Overall, Option 1d would involve the least impact on reservoir refill time and Option 1c the greatest. There is little Appendix V Page 12 of 39

15 difference between refill times for Options 1b and 1c and a slightly higher difference between Options 1a and 1b. Figure 6: I mpacts o f O ption 1 S cenarios on E xpanded Q uarry Reservoir Refill Times Months to Refill During Indicated Droughts Existing 2.2 BG (1a) 2.6 BG (1b) 3.0 BG (1c) Drought BG (1d) Quarry Reservoir Development Scenario 4.2 Shallow Scenarios Table 2 summarizes the results of OWASA-ROM model analyses that were completed to evaluate the incremental increase in system yield that could be achieved for the two Shallow scenarios and also to provide an indication of yield reduction for the condition where the Quarry Reservoir is temporarily removed for service (i.e., as required to construct the passageway to connect the two pits). Two storage/streamflow reduction scenarios were evaluated: storage reserve is set at 20 percent for both sets of results, consistent with the Engineering Basis TM (and the foregoing Deep scenario results); streamflow is reduced by 30 percent in the second column to represent potential hydrologic effects that might be caused by changes in weather patterns (climate) and/or land use/land cover in the watersheds. Pumping capacity from the Quarry Reservoir is assumed to be limited to 6 for all analyses except the offline scenario. The following conclusions can be drawn from these results: Taking the Quarry Reservoir offline would reduce system yield by 0.3 for the standard 20% storage reserve condition and by 0.4 for the reduced streamflow scenario. Appendix V Page 13 of 39

16 For the existing system, the reduced streamflow scenario would decrease yield by 1.8, from 10.5 to 8.7. Option 1e would provide an incremental increase in yield of 2.1, or 1.8 for the reduced streamflow scenario. Related analyses indicate that increasing the pumping rate from the Quarry Reservoir above 6 would not increase yield significantly, though operational flexibility required to optimize yield for a range of drought conditions would be somewhat enhanced. Option 1f would provide an incremental increase in yield of 2.9 or 2.7 for the reduced streamflow scenario. Related analyses indicate that yield could be increased very marginally by increasing the pumping rate from the Quarry Reservoir above 6 ; operational flexibility required to optimize yield for a range of drought conditions would also be enhanced. Table 2: Summary of Yield Results for Shallow Scenarios & With Reservoir Offline System Yield () (Incremental Change±) Reserve Storage: 20% 20% Streamflow Reduction: 0% 30% Scenario Quarry Storage (BG) Offline (-0.3) (-0.4) Existing Option 1e (+2.1) (+1.8) Option 1f (+2.9) (+2.7) 5.0 Economic Evaluation 5.1 Deep Scenarios Table 3 is a summary of conceptual-level estimates of capital, operation and maintenance (O&M), lifecycle, and levelized unit costs for each of the Option 1 Deep scenarios. More detailed cost breakdowns for each alternative are provided in the attached Tables 1a, 1b, 1c, and 1d. All estimates are presented in 2009 dollars and have been developed in accordance with TM Engineering Basis for Technical Evaluations of Water Supply Alternatives. These are Appendix V Page 14 of 39

17 planning-level order-of-magnitude cost estimates, intended for use in comparing alternatives and for long-range planning purposes. In summary, Options 1a-c have the same capital costs, $64.6 million, because each involves the construction of the same reservoir pumping and repumping facilities; i.e., there is no incremental cost associated with an incremental increase in storage volume. Capital costs for Option 1d, $86.3 million, are considerably higher because this option involves the additional costs associated with repumping from University Lake. There is a small incremental increase in life-cycle costs moving from Option 1a to Option 1c due to increasing operating/repumping costs, which are based on yield. Life-cycle costs for all four options are lower than the corresponding capital costs, contrary to the economic evaluations for OWASA s other water supply options that involve major capital improvements. This apparent anomaly results from the fact that life-cycle evaluations in this case are based on project implementation in year 2030 rather than in year 2015 for the other options. Capital expenditures are thus pushed farther into the future and salvage values are increased, with the result that present worth of life-cycle costs are lower. Levelized costs favor Option 1c based both on total volume of water pumped and on the incremental increase in safe yield. This is not surprising since Option 1c has the same capital costs as Options 1a and 1b but a higher operational yield, whereas capital and lifecycle costs for Option 1d are substantially higher but yield is only marginally higher. Note that the anomaly discussed above between capital and life-cycle costs is balanced out in the levelized cost calculation process, so that levelized costs for this option can be fairly compared with those for the other options. Table 3: Summary of Option 1 Deep Scenario Project Costs Description Project Costs (Million 2009 Dollars) OPTION 1a 1b 1c 1d Construction Cost Subtotal $34.43 $34.43 $34.43 $46.04 Contractor Mobilization, Overhead, Profit $6.89 $6.89 $6.89 $9.21 TOTAL CONSTRUCTION COST $41.32 $41.32 $41.32 $55.25 Engineering Design and Construction Services $6.20 $6.20 $6.20 $8.29 Legal Fees, Permits, and Approvals $4.13 $4.13 $4.13 $5.53 Contingency (25%) $12.91 $12.91 $12.91 $17.27 ESTIMATED PROJECT CAPITAL COSTS $64.6 $64.6 $64.6 $86.3 PRESENT WORTH OF LIFE-CYCLE COSTS $42.3 $42.6 $43.0 $57.9 INCREASE IN OPERATIONAL YIELD (MGD) Estimated 50-Yr Levelized Cost ($/1,000 gallons) Based on Total Volume Pumped from Quarry R. $4.60 $3.85 $3.38 $3.68 Based on Incremental increase in Yield $1.13 $0.97 $0.85 $1.15 Appendix V Page 15 of 39

18 5.2 Shallow Scenarios Table 4 is a summary of conceptual-level estimates of capital, operation and maintenance (O&M), lifecycle, and levelized unit costs for the two Option 1 Shallow scenarios. In both cases, capital costs are limited to the addition of emergency power backup at the Quarry Pumping Station. No other improvements are included. Life-cycle and Levelized costs were developed in the same manner described above for the Deep scenarios. Owing to the low capital costs for these scenarios, Levelized costs are very favorable in both cases. Table 4: Summary of Shallow Scenario Project Costs OPTION 1e 1f Construction Cost Subtotal $0.73 $0.73 Contractor Mobilization, Overhead, Profit $0.15 $0.15 TOTAL CONSTRUCTION COST $0.88 $0.88 Engineering Design and Construction Services $0.13 $0.13 Legal Fees, Permits, and Approvals $0.09 $0.09 Contingency (25%) $0.27 $0.27 ESTIMATED PROJECT CAPITAL COSTS $1.4 $1.4 PRESENT WORTH OF LIFE-CYCLE COSTS $2.5 $3.9 INCREASE IN OPERATIONAL YIELD (MGD) Estimated 50-Yr Levelized Cost ($/1,000 gallons) Based on Total Volume Pumped from Quarry R. $0.28 $0.26 Based on Incremental increase in Yield $0.11 $ Conclusions and Recommendations The following are the major factors identified at this conceptual planning level of study that need to be considered in the evaluation and planning of this option: 1. The quarry volume that will ultimately be available for raw water storage at the planned termination of mining activities in year 2030 is expected to be in the range of 2.2 BG to 3.0 BG for the Deep scenarios and 1.5 BG to 2.1 BG for the Shallow scenarios. The low end of these ranges assume that ASC will mine rock at the minimum rate specified in its lease agreement with OWASA. The most optimistic scenario is based on favorable market conditions and maximum removal of rock from the quarry. 2. Implementation of this water supply option will require careful coordination of the following items in order to minimize avoidable construction delays and other possible adverse impacts to OWASA s water supply operations: a. When weighing whether or not to require ASC to excavate a passageway between the existing Quarry Reservoir and the active quarry pit (near the end of the lease agreement), OWASA should give careful consideration to the timeframe required to compete this Appendix V Page 16 of 39

19 work and to the following options to reduce the construction time associated with this interconnection: (i) allow ASC to narrow the bottom width of the excavation from 50 feet, as specified in the lease agreement, to as little as 5 feet, or (ii) tunnel between the two pits using either conventional drill-and-blast or microtunneling techniques. b. Assuming OWASA elects to implement one of the Deep scenarios, design and construction of the new intake, pumping stations, raw water transmission, and repump facilities necessary to convert the mined pit into an operational reservoir can be expected to take from 2 ½ to over 6 years to complete. Project planning should include careful review of the siting and construction staging for the new intake and pumping station (see Figure 2). The time lag between the cessation of mining activities and the completion of the new reservoir facilities may be minimized through careful coordination with ASC. c. Planning for the possible later addition of a new pumping station should be considered if OWASA elects to proceed with a Shallow scenario. An engineering economic evaluation should be completed of the cost of excavating the shaft and intake tunnels prior to impounding the expanded reservoir versus in-the-wet construction at a later date when upgrading to a Deep scenario. On the other hand, these evaluations should also consider that the permanent deep pumping facilities could potentially be deferred indefinitely if OWASA makes suitable provisions to ensure that, in the event of a severe water emergency, temporary rental pumps and piping could be installed in the deep pit to access storage below the limits of the Shallow scenario. 3. For the Deep scenarios, the estimated operating reservoir range of 220 feet will present some technical challenges in connection with the design of the intake and pumping facilities, and the construction of these facilities can be expected to cost considerably more than a typical reservoir intake. 4. The permitting process for any of the scenarios considered under this option will probably trigger a review by the DWR of instream flow requirements. Any resulting increase in the downstream release requirements for Cane Creek Reservoir and/or the imposition of such requirements at University Lake would reduce the effective yield of this option, or, at the very least, increase project costs, assuming that an alternative source of downstream flow (i.e., use of Mason FARM WWTP effluent) could be utilized. Appendix V Page 17 of 39

20 Appendix V Page 18 of 39

21 Table 1a. OWASA Long-Range Water Supply Plan Update Conceptual-Level Project Cost Estimate Option 1a: Expanded Stone Quarry Reservoir to 2.2 BG, Refill from Cane Creek Only No. Description 1 CAPITAL COST Pipe Diam. Allocated Fraction 2009 DOLLARS Quantity Unit Unit Cost Total Cost 2 Raw Water Intake Structure Raw Water Intake Shaft (20 ft finished diameter) 275 VF $30,000 $8,250,000 3 Intake Piping Microtunneling (minimum 30") 30 in 600 LF $2,000 $1,200,000 Pipeline to new RWPS (Vertical) 24 in 275 VF $200 $55,000 4 Raw Water Pump Station 20 MGD Capacity w/ Lake-Tap Configuration 100% 1 LS $6,470,000 $6,470,000 5 Raw Water Transmission Parallel Raw Water Trans. Main from Quarry to JFR WTP 24 in 27,800 LF $200 $5,560,000 6 Raw Water Outlet Structure Energy Dissipation valve/structure 1 LS $210,000 $210,000 7 Cane Creek Refill Supply Incremental Costs (1) 10 MGD Raw Water Pumping Station Expansion 100% 1 LS $2,310,000 $2,310,000 Parallel Raw Water Trans. Main from Cane Creek to Quarry 30 in 100% 33,000 LF $260 $8,580,000 8 University Lake Refill Supply Incremental Costs (2) 9 University Lake Flow Low Flow Augmentation Costs (3) 10 Emergency Generators Raw Water Pump Station 100% 1 LS $1,790,000 $1,790, CONSTRUCTION COST SUBTOTAL $34,430, CAPITAL COST ALLOWANCES 13 Contractor Mobilization, Overhead & Profit (@ 20% x Line 11) 20% $6,886, TOTAL CONSTRUCTION COST $41,316, Engineering Studies, Design, and Construction Services (@ 18% x Line 11) 18% $6,197, Subtotal $47,513, Property & Easement Acquisition (Estimate) N/A 18 Subtotal $47,513, Legal Fees, Permits and Approvals (@ 10% x Line 14) 10% $4,132, Subtotal $51,645, Contingency (@ 25% x Line 20) 25% $12,911, ESTIMATED PROJECT CAPITAL COST $64,600, PRESENT WORTH OF LIFE-CYCLE COSTS: (4) $42,300, INCREASE IN OPERATIONAL YIELD, MGD: Estimated 50-Yr Levelized Cost ($/1,000 gallons): Based on Volume Pumped: $ Based on Incremental Yield: $1.13 (1) Applicable to Stone Quarry Expansion options requiring the upgrade of transmission facilities at Cane Creek Reservoir (2) Applicable to Stone Quarry Expansion options requiring the upgrade of transmission facilities at University Lake. (3) Applicable to Stone Quarry Expansion options requiring flow augmentation at University Lake in the form of WWTP effluent. (4) Refer to attached life-cycle evaluation. CALCULATION OF LIFE-CYCLE AND LEVELIZED COSTS Discount Rate: 5.0% per year Annual Escalation Factor for Fixed O&M Costs: 6.0% per year Annual Escalation Factor for Rehab & Replacement: 5.0% per year Annual Escalation Factor for Variable O & M Costs: 4.0% per year Capital Costs Debt Financing Issuing Expense: 1.0% Rate: 5.0% per year Term: 25 years Improvements implemented in Year: 2030 Annual O&M Costs Lag between issuance of CIP bond and construction completion: 3 years Fixed Annual O&M Costs Incremental staffing and other costs, where applicable: per annum Variable O&M Costs for Pumping, etc. Energy Cost: $0.08 per kw-hr electrical energy Quarry Pumping to WTP 8.0 Pumping Head: 220 feet % effective yield pumped at Beginning & End of Life-Cycle: 4% 19% Cane Creek Refill Pumping 20.0 Pumping Head: 270 feet % effective yield pumped at Beginning & End of Life-Cycle: 1% 2.80% University Lake Refill Pumping Appendix V Page 19 of 39

22 Option 1a: Expanded Stone Quarry Reservoir to 2.2 BG, Refill from Cane Creek Only Pumping Head: % effective yield pumped at Beginning & End of Life-Cycle: Effluent Pumping Pumping Head: % effective yield pumped at Beginning & End of Life-Cycle: Periodic Rehabilitation & Replacement (R&R) of Capital Improvements Cost of Replacement Components as % Total Construction Cost: 15.0% per year (equals 64.0 % of project capital cost) Replacement Occurs Every: 20 years feet feet Life-cycle for Calculation of Salvage Value: 50 years Year Base Yr. (1) Water Pumped () (2) OWASA Capital Cost (on Year Implemented) Except as Noted, All Costs in Actual (inflated) Dollars Rehab. & Replacement Fixed Base Costs O&M Costs (3) Variable 2030 $181,773,000 $230, $706,700 Total Annual Costs Total Annual Net Present Worth 2009 Dollars Levelized Costs (4) ($/1000 gals) Based on Vol. Pumped Based on Inc. Yield Year Annual Costs Running Totals $12,283,000 $12,283,000 $4,409,000 $ $12,283,000 $12,283,000 $4,199,000 $ $12,283,000 $12,283,000 $3,999,000 $ $12,283,000 $154,000 $12,437,000 $3,856,000 $ $ $12,283,000 $165,000 $12,448,000 $3,676,000 $76.86 $ $12,283,000 $177,000 $12,460,000 $3,504,000 $56.55 $ $12,283,000 $189,000 $12,472,000 $3,341,000 $45.66 $ $12,283,000 $203,000 $12,486,000 $3,185,000 $38.65 $ $12,283,000 $217,000 $12,500,000 $3,037,000 $33.65 $ $12,283,000 $232,000 $12,515,000 $2,896,000 $29.84 $ $12,283,000 $248,000 $12,531,000 $2,761,000 $26.81 $ $12,283,000 $265,000 $12,548,000 $2,633,000 $24.32 $ $12,283,000 $282,000 $12,565,000 $2,511,000 $22.23 $ $12,283,000 $301,000 $12,584,000 $2,395,000 $20.45 $ $12,283,000 $321,000 $12,604,000 $2,285,000 $18.90 $ $12,283,000 $342,000 $12,625,000 $2,180,000 $17.54 $ $12,283,000 $364,000 $12,647,000 $2,080,000 $16.34 $ $12,283,000 $387,000 $12,670,000 $1,984,000 $15.27 $ $12,283,000 $411,000 $12,694,000 $1,893,000 $14.31 $ $12,283,000 $437,000 $12,720,000 $1,807,000 $13.45 $ $12,283,000 $46,269,000 $464,000 $59,016,000 $7,984,000 $13.97 $ $12,283,000 $493,000 $12,776,000 $1,646,000 $13.15 $ $12,283,000 $523,000 $12,806,000 $1,571,000 $12.40 $ $12,283,000 $555,000 $12,838,000 $1,500,000 $11.71 $ $12,283,000 $588,000 $12,871,000 $1,432,000 $11.09 $ $624,000 $624,000 $66,000 $10.32 $ $661,000 $661,000 $67,000 $9.64 $ $700,000 $700,000 $67,000 $9.02 $ $741,000 $741,000 $68,000 $8.47 $ $785,000 -$352,935,000 -$30,777,000 $4.60 $1.13 Salvage Value (5): -$314,240,000 -$39,480, ,935,000-30,777,000 $4.60 $1.13 Total: -$353,720,000 TOTALS: 25 $307.1 M $46.3 M $10.8 M $10.5 M $42.3 M $4.60 $1.13 (1) Year(s) in which corresponding capital projects are implemented (and corresponding capital debt financing is transacted). (2) Used to calculate levelized costs based on volume of water pumped. (3) All base year O&M costs are in 2009 dollars. Calculated annual O&M costs are in actual (inflated) dollars and commence on the year in which the corresponding capital cost commences. (4) Levelized costs are calculated by dividing the total present worth of annual capital and O&M costs by (a) the total volume pumped, or (b) the effective yield (5) Salvage values are calculated by straight-line depreciation of capital/r&r costs over indicated lifecycle and escalated to actual dollars using indicated discount rate. Appendix V Page 20 of 39

23 Table 1b. OWASA Long-Range Water Supply Plan Update Conceptual-Level Project Cost Estimate Option 1b: Expanded Stone Quarry Reservoir to 2.6 BG, Refill from Cane Creek Only No. Description 1 CAPITAL COST Pipe Diam. Allocated Fraction 2009 DOLLARS Quantity Unit Unit Cost Total Cost 2 Raw Water Intake Structure Raw Water Intake Shaft (20 ft finished diameter) 275 VF $30,000 $8,250,000 3 Intake Piping Microtunneling (minimum 30") 30 in 600 LF $2,000 $1,200,000 Pipeline to new RWPS (Vertical) 24 in 275 VF $200 $55,000 4 Raw Water Pump Station 20 MGD Capacity w/ Lake-Tap Configuration 100% 1 LS $6,470,000 $6,470,000 5 Raw Water Transmission Parallel Raw Water Trans. Main from Quarry to JFR WTP 24 in 27,800 LF $200 $5,560,000 6 Raw Water Outlet Structure Energy Dissipation valve/structure 1 LS $210,000 $210,000 7 Cane Creek Refill Supply Incremental Costs (1) 10 MGD Raw Water Pumping Station Expansion 100% 1 LS $2,310,000 $2,310,000 Parallel Raw Water Trans. Main from Cane Creek to Quarry 30 in 100% 33,000 LF $260 $8,580,000 8 University Lake Refill Supply Incremental Costs (2) 9 University Lake Flow Low Flow Augmentation Costs (3) 10 Emergency Generators Raw Water Pump Station 100% 1 LS $1,790,000 $1,790, CONSTRUCTION COST SUBTOTAL $34,430, CAPITAL COST ALLOWANCES 13 Contractor Mobilization, Overhead & Profit (@ 20% x Line 11) 20% $6,886, TOTAL CONSTRUCTION COST $41,316, Engineering Studies, Design, and Construction Services (@ 18% x Line 11) 18% $6,197, Subtotal $47,513, Property & Easement Acquisition (Estimate) N/A 18 Subtotal $47,513, Legal Fees, Permits and Approvals (@ 10% x Line 14) 10% $4,132, Subtotal $51,645, Contingency (@ 25% x Line 20) 25% $12,911, ESTIMATED PROJECT CAPITAL COST $64,600, PRESENT WORTH OF LIFE-CYCLE COSTS: (4) $42,600, INCREASE IN OPERATIONAL YIELD, MGD: Estimated 50-Yr Levelized Cost ($/1,000 gallons): Based on Volume Pumped: $ Based on Incremental Yield: $0.97 (1) Applicable to Stone Quarry Expansion options requiring the upgrade of transmission facilities at Cane Creek Reservoir (2) Applicable to Stone Quarry Expansion options requiring the upgrade of transmission facilities at University Lake. (3) Applicable to Stone Quarry Expansion options requiring flow augmentation at University Lake in the form of WWTP effluent. (4) Refer to attached life-cycle evaluation. CALCULATION OF LIFE-CYCLE AND LEVELIZED COSTS Discount Rate: 5.0% per year Annual Escalation Factor for Fixed O&M Costs: 6.0% per year Annual Escalation Factor for Rehab & Replacement: 5.0% per year Annual Escalation Factor for Variable O & M Costs: 4.0% per year Capital Costs Debt Financing Issuing Expense: 1.0% Rate: 5.0% per year Term: 25 years Improvements implemented in Year: 2030 Annual O&M Costs Lag between issuance of CIP bond and construction completion: 3 years Fixed Annual O&M Costs Incremental staffing and other costs, where applicable: per annum Variable O&M Costs for Pumping, etc. Energy Cost: $0.08 per kw-hr electrical energy Quarry Pumping to WTP 9.0 Pumping Head: 220 feet % effective yield pumped at Beginning & End of Life-Cycle: 4% 21% Cane Creek Refill Pumping 20.0 Pumping Head: 270 feet % effective yield pumped at Beginning & End of Life-Cycle: 1% 4% Appendix V Page 21 of 39

24 Option 1b: Expanded Stone Quarry Reservoir to 2.6 BG, Refill from Cane Creek Only University Lake Refill Pumping Pumping Head: % effective yield pumped at Beginning & End of Life-Cycle: Effluent Pumping Pumping Head: % effective yield pumped at Beginning & End of Life-Cycle: Periodic Rehabilitation & Replacement (R&R) of Capital Improvements Cost of Replacement Components as % Total Construction Cost: 15.0% per year (equals 64.0 % of project capital cost) Replacement Occurs Every: 20 years feet feet Life-cycle for Calculation of Salvage Value: 50 years Year Water Pumped () (2) Except as Noted, All Costs in Actual (inflated) Dollars OWASA Capital Rehab. & O&M Costs (3) Cost Replacement Fixed Variable (on Year Implemented) Base Yr. (1) Base Costs 2030 $181,773,000 $259, $706,700 Total Annual Costs Total Annual Net Present Worth 2009 Dollars Levelized Costs (4) ($/1000 gals) Based on Based on Vol. Pumped Inc. Yield Year Annual Costs Running Totals $12,283,000 $12,283,000 $4,409,000 $ $12,283,000 $12,283,000 $4,199,000 $ $12,283,000 $12,283,000 $3,999,000 $ $12,283,000 $189,000 $12,472,000 $3,867,000 $ $ $12,283,000 $203,000 $12,486,000 $3,687,000 $67.90 $ $12,283,000 $218,000 $12,501,000 $3,516,000 $49.65 $ $12,283,000 $234,000 $12,517,000 $3,353,000 $39.88 $ $12,283,000 $251,000 $12,534,000 $3,197,000 $33.60 $ $12,283,000 $268,000 $12,551,000 $3,049,000 $29.13 $ $12,283,000 $287,000 $12,570,000 $2,908,000 $25.73 $ $12,283,000 $307,000 $12,590,000 $2,774,000 $23.04 $ $12,283,000 $328,000 $12,611,000 $2,647,000 $20.84 $ $12,283,000 $350,000 $12,633,000 $2,525,000 $18.99 $ $12,283,000 $373,000 $12,656,000 $2,409,000 $17.42 $ $12,283,000 $398,000 $12,681,000 $2,299,000 $16.07 $ $12,283,000 $424,000 $12,707,000 $2,194,000 $14.88 $ $12,283,000 $452,000 $12,735,000 $2,094,000 $13.83 $ $12,283,000 $481,000 $12,764,000 $1,999,000 $12.90 $ $12,283,000 $511,000 $12,794,000 $1,908,000 $12.07 $ $12,283,000 $543,000 $12,826,000 $1,822,000 $11.32 $ $12,283,000 $46,269,000 $578,000 $59,130,000 $7,999,000 $11.74 $ $12,283,000 $613,000 $12,896,000 $1,662,000 $11.04 $ $12,283,000 $651,000 $12,934,000 $1,587,000 $10.39 $ $12,283,000 $691,000 $12,974,000 $1,516,000 $9.81 $ $12,283,000 $733,000 $13,016,000 $1,449,000 $9.27 $ $778,000 $778,000 $82,000 $8.63 $ $824,000 $824,000 $83,000 $8.05 $ $874,000 $874,000 $84,000 $7.53 $ $925,000 $925,000 $85,000 $7.06 $ $980,000 -$352,740,000 -$30,760,000 $3.85 $0.97 Salvage Value (5): -$314,240,000 -$39,480, ,740,000-30,760,000 $3.85 $0.97 Total: -$353,720,000 TOTALS: $307.1 M $46.3 M $13.5 M $13.1 M $42.6 M $3.85 $0.97 (1) Year(s) in which corresponding capital projects are implemented (and corresponding capital debt financing is transacted). (2) Used to calculate levelized costs based on volume of water pumped. (3) All base year O&M costs are in 2009 dollars. Calculated annual O&M costs are in actual (inflated) dollars and commence on the year in which the corresponding capital cost commences. (4) Levelized costs are calculated by dividing the total present worth of annual capital and O&M costs by (a) the total volume pumped, or (b) the effective yield (5) Salvage values are calculated by straight-line depreciation of capital/r&r costs over indicated lifecycle and escalated to actual dollars using indicated discount rate. Appendix V Page 22 of 39