September 19, Mr. Tom L. Frederick Rivanna Water & Sewer Authority 695 Moores Creek Lane Charlottesville, VA 22902

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1 6445 Shiloh Road, Suite A Alpharetta, GA Phone (770) Fax (770) September 19, 2008 Mr. Tom L. Frederick Rivanna Water & Sewer Authority 695 Moores Creek Lane Charlottesville, VA Subject: Report, Rivanna Water & Sewer Authority, Ragged Mountain Dam, Reservoir Road, Albemarle County, Virginia (Schnabel Project No ) Dear Mr. Frederick: Schnabel Engineering, LLC (Schnabel) is pleased to submit this report to Rivanna Water & Sewer Authority (Rivanna), describing the limited engineering consultation provided with respect to the preliminary engineering analyses performed by Rivanna s Dam Engineering consultant, Gannett Fleming (Gannett), for the Ragged Mountain Dam project. While the work performed by Gannett is extensive, Schnabel s scope as described herein is limited to a review of key geotechnical issues pertaining to the project. In addition, we have provided input on the most recent opinions of construction costs, as provided by Gannett to Rivanna. Schnabel s scope of services to this date has not included a professional opinion of selected dam alternatives, other than the currently proposed RCC dam. We performed our services as described in our proposal dated last revised September 2, We proceeded with these services based on your written authorization of September 4, "We are committed to serving our clients by exceeding their expectations." Geotechnical Construction Monitoring Dam Engineering Geoscience Environmental

2 SCOPE OF SERVICES Schnabel s scope of services of this limited engineering consultation included the following: Limited review of key geotechnical aspects of the project, such as reports and findings developed by Gannett, relating to test boring, test pit, and geophysical data for the proposed new Ragged Mountain Dam and investigated rehabilitation of the Lower Ragged Mountain Dam (1, 2). The intent of this review is to comment on Gannett s recommendations regarding the design foundation depth and the extent of core wall construction for the new dam. As part of this scope of work, Schnabel is offering an opinion of the geotechnical and geophysical program completed to date. This scope item includes review of representative rock core samples by Schnabel s geotechnical engineering and geology personnel. However, a detailed review of rock core samples or other samples retrieved from the subsurface investigation is not included. Also, a detailed review of the geotechnical aspects of the project is not included. Preliminary review of Gannett s preliminary design level cost estimate, prepared in August 2008, for the proposed new Ragged Mountain Dam, and preliminary review of the assumptions made by Gannett while developing the August 2004 concept-level cost estimate for the proposed new Ragged Mountain Dam, as represented in the permit application for the Community Water Supply Plan (3,4). Note that this review is limited to providing comments on unit prices and quantities contained in the concept-level cost estimate and offering comments based upon Schnabel s experience with similar sized dam projects. Schnabel s services as described herein do not include a detailed quantity estimate review. Furthermore, this preliminary review is limited to providing opinions on the design concept assumptions and providing recommendations for additional studies. Meeting with Rivanna and Gannett personnel to be briefed on Gannett s approach to the design and the associated conclusions presented by Gannett to Rivanna to date. This scope item also includes a site visit by Schnabel s personnel with Rivanna and Gannett personnel. Project / September 19, 2008 Page 2 Schnabel Engineering, LLC

3 REVIEW OF ENGINEER S OPINION OF CONSTRUCTION COSTS Analysis of the 2004 Estimate Schnabel has been provided construction cost estimates prepared by Gannett (3, 4). A technical memorandum, published in February 2005, documenting the top four alternatives from the comprehensive water supply expansion study completed in July 2004, contained a cost estimate for the new RCC Ragged Mountain Dam (4). We understand that these costs were for the year 2004 and were not adjusted for inflation out to the scheduled construction date. Gannett did include a 20% contingency with the initial estimate to address the nature of the conceptual level estimate. Also, we understand that this estimate was based on broad assumptions since no subsurface work had yet been completed at the new dam location to evaluate foundation support limits. Gannett also indicated that an additional 25% contingency was applied to the entire project estimate, which already included an escalated 20% contingency for the dam. Gannett assumed that a good portion of the additional 25% costs would be applied to the dam because the greater uncertainties would typically apply to a large dam site. The 2004 cost estimate, which covered the cost of construction of the new dam but not reservoir clearing or breaching the two upper dams, was estimated at $15,745,000. This amount includes the 20% contingency but not any portion of the 25% project contingency. The itemized cost estimate is contained in Appendix A. Starting in 2004 and continuing into 2007, there has been an appreciable rise in the cost of construction materials, especially diesel fuel. The project costs of many high profile dam projects had bid prices well above the estimates made by engineers during this period because of these rapidly escalating costs. Impact of the appreciable rise in construction materials costs that started in 2004 was observed to affect construction of RCC dams on the East Coast with the bidding in 2005 of Elkwater Fork Dam in West Virginia at approximately $32 million and Hickory Log Dam in Georgia at approximately $41 million despite initial estimates for both which were considerably lower. These dams, while somewhat bigger than the Ragged Mountain Dam, reflected the rapid rise in the construction costs of RCC dams in the early to mid 2000 s. We anticipate similar increases should be considered for the Ragged Mountain Dam. Project / September 19, 2008 Page 3 Schnabel Engineering, LLC

4 Approach to the Review of the 2008 Estimate The more recent interim cost estimate developed by Gannett includes several spreadsheets covering the different aspects of the project (3). Schnabel s limited review focused on the two spreadsheets titled Package 1 Foundation Excavation and Package 2 New Dam and Dam Breaches. Based on Gannett s quantity estimates, the Ragged Mountain Dam s proposed size is 155,000 cy. In evaluating these cost estimates, Schnabel relied on the following information: Bid documents from Hickory Log Dam in Georgia, a slightly larger RCC gravity dam (216,000 cy of RCC) bid approximately three years ago, A 2008 cost estimate prepared by URS for the proposed Rocky Pen Run RCC Dam in Virginia (181,600 cy of RCC), and Schnabel s conversations with Barnard Construction and ASI Constructors, two of the most experienced RCC dam construction companies in the United States. Hickory Log Creek Dam cost about $41,000,000 (including clearing 350 acres for the reservoir) and was bid in two phases (2005 and 2006) as is being considered at Ragged Mountain. The design of Hickory Log has many similarities to the preliminary design of Ragged Mountain. Both dams have a precast panel upstream facing system with an attached Carpi Liner, a central overflow spillway with a stilling basin at the toe of the dam, gated outlet works, and similar typical cross section. The principal differences between the two dams are that Hickory Log did not use conventional concrete on the downstream non-overflow face as is shown on Gannett s drawings for Ragged Mountain. Grout-enriched RCC was used on the downstream non-over flow face for Hickory Log. Also, milled cutoff trenches were used through the partially weathered rock (PWR) abutments at Hickory Log, whereas at Ragged Mountain formed core walls are designed due to the hardness of the rock. Project / September 19, 2008 Page 4 Schnabel Engineering, LLC

5 Review of Cost Estimate In general, it appears that multiple levels of conservatism have been assumed that are leading to an estimated construction cost higher than what could be obtained in a bidding process. Even at this level of design (i.e %), we believe that there is sufficient information available where only a few areas would dictate using a 20% contingency. Based on our review, the following comments are offered for the item numbers having the larger cost impacts. Schnabel s suggested estimates of construction costs, compared to those assumed by Gannett, are shown in Appendix B. Schnabel s cost estimate includes suggested alternative lower contingencies for those values where current information allows. Note also that this itemized cost estimate does not include engineering costs or costs associated with the work at Interstate 64. Evaluation of Gannett s engineering costs and costs of the work at Interstate 64 was beyond the present scope of our services. We would be glad to evaluate these costs as an extension of our work, at your request. Our discussions outlining some of the work items where either cost and/or quantity appear high follows: Package 1 Foundation Contract: 1. Between Packages 1 and 2 there is over $2.19 million for cofferdams and foundation dewatering. If the existing lake could be lowered such that it could store/pass a storm event at the magnitude of the 10 to 25-year storm, very little monies would have to be used in cofferdams. Also, the cost estimate shows the foundation dewatering systems running for 15 months during Package 2 at a monthly cost of $46,000. The contractors with whom we discussed this issue thought the monthly rate or the duration was too high. After the RCC is brought up above the existing ground and backfill completed in the floodplain, the dewatering system could be reduced if not eliminated. 2. The interviewed contractors suggest lower unit prices for the foundation cleanup due to the three separate payment items, or alternatively, to remove one of the cleanups. 3. Under Excavation, the contractors suggested separate pay items for soil and rock. Package 2 New Dam and Dam Breaches 1. We do not see a need to put a high contingency on Bonds and Insurance. Project / September 19, 2008 Page 5 Schnabel Engineering, LLC

6 2. The Rock Fill (105,000 cy) is for backfilling on the downstream side of the dam. The right abutment is close to a 3H:1V slope, where soil backfill could work. The left abutment is approaching 2H:1V, where a rock toe with an earth slope above it could possibly be considered. 3. It appears that $3 million for the grouting program likely over estimates what the foundation conditions are showing, especially if the currently planned foundation grades stay the same. 4. If 5,800 cy of rock trimming is estimated, we are unclear as to where 6,300 cy of dental concrete goes. The estimation of these two quantities does have a high level of uncertainty in a dam project, but having the two high numbers combined appears conservative. 5. Unit prices for concrete and reinforcing bars appear conservative. 6. We believe that the RCC unit price could be bid around $85/cy. If an on-site aggregate source could be established, the RCC unit price could possibly be reduced further to around $80/cy. Both of the contractors that Schnabel interviewed have suggested that an on-site aggregate source be evaluated to see what the overburden depths are and how close the aggregate source could be established to the dam site. Additional savings are possible if the on-site aggregate source can also produce the rip rap, filter materials, and road surfacing aggregate. Before the savings can be accurately determined, additional field investigation work would be needed to identify where the on-site aggregate source could be established, and to quantify what those development costs might be. 7. A $1.4-million cost for bedding mix appears high. We suggest a retarded RCC mix be considered to reduce this cost. Even without a retarded mix, the contractors interviewed felt that this estimate was overly conservative. 8. The cost for the RCC test appears high. In Schnabel s opinion, if contractors are prequalified, we do not see the need to spend $300,000 on a test section. 9. The upstream facing system unit cost also appears high. The average costs estimated between the two contractors that we interviewed is in the low $30 s per square foot. If grout-enriched RCC is a viable option in lieu of the facing concrete, there could be a potential additional savings of over $1 million compared to downstream facing with Project / September 19, 2008 Page 6 Schnabel Engineering, LLC

7 conventional concrete, even at the unit price for downstream facing concrete that Schnabel is recommending. 10. Between the two packages there is over $500,000 associated with on-site roads and traffic control. If an on site aggregate source is possible, the costs associated with maintaining these roads and traffic control would likely be less. In addition, in Package 3 Reservoir Clearing, there is another $188,000 for these same types of services. 11. Schnabel s opinion of costs assumes the same foundation grade that Gannett s estimate is based on. If this foundation grade is raised between 15 to 20 feet, there is a significant compounding effect on project cost reductions: there would be less excavation, less backfill, less RCC, less upstream facing panels, less foundation dewatering, less foundation cleanup, and a shorter construction duration. We conservatively estimate the range of possible savings could be from $3 million to $5 million, but possibly more. 12. A quick review of the Davis Bacon wage rates for the Charlottesville area indicates that they are higher than those for the Hickory Log Dam in Georgia but less than those in West Virginia for Elkwater Creek Dam. Both contractors stated that they felt that the project should not be divided into two phases but if it were, they would still have an interest in bidding the project. While two phases allow the design of the dam to proceed after the initial site work package is released, a single phase project may allow for an accelerated schedule and an earlier date on which work may begin. If enough time is allowed in the schedule to complete the foundation work with some allowance for uncertainties before the RCC placement window was impacted, the contractors interviewed felt the arrangements for staging areas, foundation dewatering, and stream diversion could be better handled by one contractor. If an on-site aggregate source is available, the contractors interviewed felt it was even more important that one contract be bid to avoid disputes over RCC aggregate gradations (e.g. if the first contractor delivers stockpiles to the second contractor and testing conducted later finds quality issues). The arrangement/location of the aggregate stockpiles can influence where the RCC contractor places his plant and conveyors. The contractors interviewed indicated that present conditions (i.e. 4 th quarter 2008) facilitate a good bid environment for owners with this favorable condition likely extending into 2009, if not With the economy depressed, material prices are not likely to see large increases in the near future. Cement sales are predicted to decline by more than 10% this year and 5% in Project / September 19, 2008 Page 7 Schnabel Engineering, LLC

8 Schnabel suggests that Rivanna consider contracting with one or more contractors at this stage of the design to develop a third independent cost estimate. Both ASI and Barnard have expressed interest in providing this service as long as it would not prevent them from bidding the project at a later date. SUGGESTED REVIEW OF DESIGN CRITERIA Schnabel s preliminary review of the preliminary design by Gannett (5) finds it to be well thought out but very conservative. Schnabel would recommend that some of the features presently included in the Ragged Mountain design be revisited to evaluate if there are some areas that do not need conservative features. We suggest that the following design features be studied further: 1. Downstream Facing Concrete: The cost estimate shows 4,900 cubic yards of facing concrete. Schnabel suggests that if the RCC mix design was at a slightly higher paste content and with a Vebe time around 15 to 20 seconds, grout-enriched RCC could be used for the facing areas except for the overflow spillway. As long as the RCC remains dry, freeze thaw cycles will have minimal impact on the durability of the RCC. Chemical retarding of the RCC would allow a significant reduction in the requirements for bedding mix, which is currently priced at $1.4 million. 2. Foundation Treatment: Addressing foundation issues is typically the area of greatest uncertainty for a dam project, which can affect both costs and schedule. However, Gannett s cost estimate includes 7,800 cubic yards of either dental concrete or backfill concrete, and 5,800 cubic yards of rock trimming. Schnabel suggests that if a large quantity of rock is to be trimmed, the volume of dental concrete should not be as high. While the uncertainly of these quantities is high, these two items combined appear overly conservative. Currently, the foundation design takes the foundation limits down to very sound rock over the entire footprint. If the foundation grade stays as currently shown, the cost of the grouting program ($2,660,000) appears high. Hickory Log s grouting program was around $550,000 and the estimate on Rocky Pen Run Dam is $1.22 million for the grout curtain. Based on Schnabel s limited review of the subsurface information, it does not appear likely that there will be excessive grout takes. 3. Core Walls: It is suggested that in lieu of the core walls that the abutments be grouted; and if seepage develops after the lake is impounded, a shallow drain installed to collect Project / September 19, 2008 Page 8 Schnabel Engineering, LLC

9 and control the flows. While the additional 50 feet of head needs to be addressed, seepage rates are likely manageable and would create a small deficit to the water balance of the reservoir. The cost of the core wall exceeds $3.5 million when the cost of excavation, backfilling, concrete, and reinforcing steel is included. 4. Upstream Facing System: If the foundation grades stay as currently shown, little to no settlement should be expected. This situation would make either a conventional concrete or grout-enriched RCC upstream face a viable option, which would be less expensive when compared to a precast panel with membrane. If the decision is made to raise the currently planned foundation grade and possibly have some minor but acceptable settlement, we believe that the geomembrane panel is the best option. PRELIMINARY EXCAVATION PLAN / GEOTECHNICAL DATA REPORT REVIEW General Findings Based upon Schnabel s limited review, it is our opinion that the current preliminary design (5) uses a conservative assessment of the foundation conditions that is likely close to a worst case scenario. The major reasons for this finding are the selection of a proposed foundation grade line that is up to 40 feet below the level at which the rock quality appears to be suitable for a roller compacted concrete dam foundation. We also understand that Gannett did not perform seepage, stability, and settlement analyses prior to developing the preliminary excavation plan. Design modifications based on the results of engineering analyses should allow the excavation depth and lateral limits of the excavations to be reduced, thereby reducing the total excavation volume and cost. Observations of Rock Quality as Related to Foundation Suitability Schnabel reviewed the boring logs, cross sections, and geophysical survey results provided to us by Gannett (1, 2), and reviewed selected core samples presently stored at Rivanna s Observatory Hill Treatment Facility. The predominant rock type encountered in the foundation is gneiss of the Lovingston Formation, a metamorphic rock with a relatively high strength due to the high silica content and crystalline structure. Rock quality is generally very good to good, with some areas of fair rock in the upper interval. This assessment of rock quality is based on strength, type and orientation of discontinuities, rock core recovery and Rock Quality Designation (RQD, a measure of the amount of fracturing in the Project / September 19, 2008 Page 9 Schnabel Engineering, LLC

10 rock core). Given the rock type and quality, very little of the rock in the interval that was rock cored will likely be removed with conventional excavation equipment. The Multi-channel Analysis of Surface Waves (MASW) geophysical survey indicates some weaker zones along the profile (GF-8 and GF-8a area, as discussed below), although the MASW results and observations of rock core have an expected amount of variation in results due to the different ways in which rock characteristics are measured. These weaker zones identified by the MASW survey suggest zones of lower strength rock and/or more highly fractured rock that will likely need deeper excavation and more grouting than other parts of the foundation. Permeability testing in the rock interval yielded test results that were typically very low (values less than 1 Lugeon, or about 1x10-5 cm/sec). Permeability measurements above 1 Lugeon generally exceeded 25 Lugeons. Grouting is generally effective above about 10 Lugeons. Grouting would therefore likely be effective at lowering the permeability of the open fractures identified during the permeability testing. Grouting of these fractures would be significantly less expensive than excavation and removal of these fractures zones. Impact of Weathered Zone on East Abutment A weathered zone was encountered in Boring GF-8 and in the subsequently drilled boring GF- 8a. This section of the report includes our discussion of the characteristics of this weathered zone and the east abutment with respect to the proposed Foundation Grade line. MASW geophysical surveys of the east abutment identified a zone of rock in the east abutment with a shear wave velocity less than about 2,000 feet per second (fps) (1). Rock with shear wave velocity below 2,000 fps is generally considered weaker, highly weathered, or intensely fractured rock. The low shear wave velocity zone was observed below a layer of harder rock (shear wave velocity ranges from 3,500 fps to 5,000 fps) from about dam station 7+40 to station Borings GF-8, GF-8a, and GF-9 penetrated the soft, highly weathered or intensely fractured rock below the harder rock as interpreted from the results of the MASW survey. Soft and weathered zones were observed in Boring GF-8 at an angled depth of 43 to 46.5 feet. The rock encountered from a depth of 6 to 43 feet had Rock Quality Designation (RQD) values varying from 60 to 100 percent, with the average value being about 84 percent. Boring GF-8a encountered rock at a depth of 0.6 feet and was advanced to a depth of 51.8 feet. Highly weathered zones, 0.6-feet and 2.8-feet thick, were encountered at depths of 22.5 and 49 feet, respectively. The rock in these zones had weathered to the consistency of a dense to very Project / September 19, 2008 Page 10 Schnabel Engineering, LLC

11 dense silty sand (SM). The RQD values of the rock that was not highly weathered in GF-8a varied from 44 to 100 percent, with an average value of about 92 percent. The subsurface conditions observed in GF-8 and GF-8a appear consistent with the results of the MASW survey. Boring GF-9 did not encounter highly weathered zones similar to those in GF-8 and GF-8a. The reported RQD values vary from 59 to 100 percent, with only three core runs having RQD values below 80 percent in the 248-ft deep hole. The rock observed in GF-9 appears to be of better quality than what would be expected based on the results of the MASW survey. We understand that the currently proposed excavation plan in the area of the east abutment described above requires the removal of about 35 to 45 feet of good quality rock to remove thin weathered zones observed at depth. The thin weathered zone was not encountered in all of the borings performed on the east abutment. As the project moves forward, stability, settlement, and seepage analyses should be performed to evaluate the impacts of leaving these thin, highly weathered zones in place. We recommend that the designer perform analyses to answer the following questions. 1. How much will the dam settle if the excavation is extended to depth of 50 feet to remove the highly weathered zones observed in the borings? 2. How much will the dam settle if the highly weathered zones at depth are left in place? 3. With the known variation in subsurface conditions and depth of the weathered zones, is abrupt differential settlement likely and how large could the differential settlement be, and over what horizontal distance would the differential settlement occur? 4. Based on the results of seepage analyses, what seepage gradients, seepage forces, and quantity of seepage is expected if the highly weathered material at depth is left in place? Assumptions regarding the continuity and connectivity of the rock fractures and weathered zones will likely need to be made because measurements of rock fracture orientations in the borings have not been provided. Based on Schnabel s experience, we would expect that the results of the above analyses will demonstrate that settlements will not be excessive and seepage forces and rates will be acceptable. The dam foundation may have seepage, but the seepage forces and gradients will be low enough that erosion (piping) of the material in the highly weathered zones of the rock would Project / September 19, 2008 Page 11 Schnabel Engineering, LLC

12 not be expected. Grouting of the foundation would further reduce seepage forces, gradients, and leakage. Impacts of Weathering on West Abutment MASW survey results of the west abutment identified a low shear wave velocity zone at the ground surface. This low shear wave velocity represents the soil interval and some relatively highly weathered or highly fractured rock. The thickness of the observed low shear wave velocity zone generally increases from about 25 feet at the base of the west abutment (dam station 5+20) to about 50 feet at the top of the west abutment (dam station 1+40). A 100-ft wide zone where low shear wave velocities were measured to depths greater than about 80 feet was encountered between about dam station 2+00 and station Boring GF-2 was drilled in the upper portion of the west abutment and was advanced by spinning casing without sampling to an angled depth of 40.7 feet (drill hole angled at 30 o ). The rock encountered below an angled depth of 45.7 feet generally had very high RQD values. Borings GF-3 and GF-4 were drilled within the zone where low shear wave velocity rock was observed to extend to depths greater than 80 feet in the MASW survey. Coring of rock was started in borings GF-3 and GF-4 at angled depths of 33.2 and 17 feet, respectively. The RQD values reported on the log for GF-3 were below 50 percent for rock encountered above an angled depth of 41.6 feet and generally above 85 percent for rock below an angled depth of 41.6 feet. The RQD of the rock encountered in GF-4 was generally above 90 percent for the top 90 feet of the boring, with the exception of a 1.3-ft thick zone from 53 to 54.3 feet where the RQD was 54 percent. Boring GF-5 encountered coreable rock at a depth of 4.6 feet. The reported RQD values for the rock recovered in GF-5 were 75 to 100 percent, with the exception of rock cored at a depth of 24 to 29 feet and 34 to 39 feet where the RQD values were 20 and 40 percent, respectively. Test pits TP- 6, TP-7, and TP-8 were excavated on the west abutment. Rock was encountered in these test pits at depths of 4, 3, and 12 feet, respectively. Based on Schnabel s review of the MASW survey results, the test borings logs for GF-2 through GF-5, and the test pit logs for TP-6 through TP-8, the actual top of rock is probably higher than what is depicted on Gannett s subsurface profiles. This is consistently apparent for the lower portion of the abutment from about station 3+20 to 4+80, especially at station 4+80 (GF-5 location). Borings GF-3 and GF-4 encountered better quality rock than what would have been Project / September 19, 2008 Page 12 Schnabel Engineering, LLC

13 expected based on the results of the MASW survey. It may be possible that narrow zones with steeply dipping, fractured, and highly weathered rock exist, which were not intersected by the borings. Geophysical surveys can tend to average out rock properties and are not always consistent with test borings. It is likely that if steeply dipping, fractured, and weathered zones exist, they could be treated with local excavation and placement of foundation dental concrete and grouting. We understand that the zone where low shear wave velocity values were measured at depths greater than 80 feet is an area where Gannett is proposing additional explorations. A review of the proposed plan for the explorations is beyond the scope of this study. However, the possibility of terminating the RCC dam lower on the west abutment (to the west of station 3+20) and placing a short earth dam section on the upper portion of the abutment (above dam station 3+20) should be evaluated. An earth dam section would be expected to be less sensitive to encountering thick zones of weathered rock in the foundation than an RCC dam. The potential for including a short earth dam section will require obtaining penetration resistance values in the overburden and evaluating the permeability of the overburden, which was not included in the initial field explorations. Control of Seepage Through East and West Ridges The preliminary design includes performing large and deep excavations in the east and west ridges beyond the proposed RCC dam to allow reinforced concrete core walls to be constructed in the ridges. A grout curtain is also planned below the core walls. We understand that Gannett has provided these measures based on their concern about seepage through the ridges due to the narrow width of the ridges. A typical section of the core walls was shown in Sheet 7 of Gannett s preliminary design drawings (5). Schnabel provided a limited review of the results of the subsurface investigations and the proposed geometry of the typical core wall section and excavation. Our comments regarding the review of this information follow. Borings GF-1, GF-10, GF-11, GF-12, GF-18, GF-19, and GF-22 though GF-25 were performed on the ridges above the east and west ends of the proposed RCC dam (1). The borings were generally advanced without sampling residual soils and highly weathered rock zones by spinning drill casing. The depths where rock coring was started after spinning casing through the residual soils and highly weathered rock varied from 4.2 to 8 feet below the ground surface (bgs) on the right ridge above the dam abutment, and 2.6 to 32.5 feet bgs on the left ridge above the dam abutment. The variability and engineering characteristics of the material above coreable rock could not be evaluated because it was not sampled. The permeability of the rock is variable and several zones with high Lugeon values were encountered. The typical section shown in Project / September 19, 2008 Page 13 Schnabel Engineering, LLC

14 Gannett s design drawing shows a relatively wide ridge. The width of the ridge is actually slightly wider than a typical earth dam section, having a 20-foot-wide crest and 3H:1V slopes. Figure 1 in Appendix C includes our sketches consisting of a mark-up of the profile showing the concept of terminating the RCC section prior to reaching the top of the west abutment. Figure 2 in Appendix C shows a comparison between the geometry of a typical earth dam and the geometry of the ridge as shown on Gannett s typical core wall section. Based on Schnabel s preliminary review, we recommend that seepage analyses be performed to evaluate the potential for seepage through the east and west ridges. It is likely that the design could be modified to eliminate the deep excavations and the reinforced concrete core walls and potentially add features such as a grout curtain to reduce seepage and other features to filter and collect seepage through the ridges. CONCLUSIONS AND RECOMMENDATIONS Foundation Grade Line The gneiss rock encountered in the borings is of generally high quality (relatively high strength, high core recovery, and high RQD). This material is generally suitable for a roller compacted dam foundation, with variations in the top of rock surface to be expected. The rock foundation has some higher permeability fractures that have characteristics that would allow effective grouting to lower the seepage through the fractures. The proposed Foundation Grade is well below the level where rock quality is suitable for an RCC dam foundation (5). The proposed Foundation Grade will likely require blasting and subsequent backfilling with concrete for much of the proposed excavation below the Top of Rock line shown on the drawings. Much of the rock proposed for excavation is to be removed to expose a deeper fracture zone. These zones of softer and/or more fractured rock in the foundation may be better treated with grouting than with total excavation and replacement. The Foundation Grade line and Grading Plan should be re-evaluated based on seepage, stability, and settlement calculations. The re-evaluation should also consider constructability and cost issues associated with removal of rock. Several dams constructed in the Piedmont have been founded on rock of much lower strength and quality than was encountered at the Ragged Mountain Dam site. These dams include Buckhorn Dam (Wilson, NC), Big Haynes Dam (Atlanta, GA), and Hickory Log Dam (Canton, Project / September 19, 2008 Page 14 Schnabel Engineering, LLC

15 GA). Combination RCC / earthfill dams have also been designed to reduce the amount of proposed excavation/concrete backfilling on the abutments (such as Deep Creek Dam 5D in Yadkin County, NC, also in the Piedmont). Consideration should be given to these options as a way to avoid the cost of the proposed core wall sections. Additional Explorations Gannett has proposed to perform additional explorations at the site to better define the variability of the rock. It is our understanding that the additional explorations include additional borings and cross-hole resistivity testing (a geophysical method capable of providing data on the conductivity of materials) on the west abutment and in the stream valley. Previous attempts at using MASW survey methods in the stream channel were reportedly unsuccessful due to seismic noise generated by water flow in the stream and in the pipelines located along the stream channel. Schnabel has not reviewed Gannett s plan for additional explorations but agree that some additional explorations would be beneficial. The scope of the additional explorations should be based on the need to collect additional data to evaluate potential design refinements or modifications. It may also be possible to use less expensive geophysical methods than downhole geophysics. Potential items Gannett should consider when finalizing the scope of work for additional explorations include the following: 1. Using 2-D surface resistivity in-lieu of cross-hole resistivity. Cross-hole resistivity is more expensive than surface methods and cross-hole resistivity provides data only between the test borings where it is performed in. A series of parallel surface resistivity lines will allow a 3-D model to be developed. Surface resistivity may be most beneficial in the valley along the stream channel where the uniformity of the rock surface is in question. 2. Additional MASW survey lines parallel to the previous surveys performed on the dam abutments. The additional surveys will assist the designer in evaluating the continuity of low shear wave velocity zones identified in the previous surveys. 3. Borings offset from the presently proposed alignment, not only to better evaluate conditions in the suspect areas suggested by the geophysical surveys, but to evaluate potential alternative alignments of the new dam. We suggest that additional subsurface explorations focus on evaluating conditions within 50 to 60 ft of the surface, given an adequate number of deep borings have been drilled. Project / September 19, 2008 Page 15 Schnabel Engineering, LLC

16 4. If additional evaluations of potential on-site aggregate sources are performed, performing a two-stage investigation of potential aggregate source sites using seismic refraction and test borings. 5. Test borings in the west abutment to evaluate the engineering properties of soil overburden if the potential for using a short earth embankment on the upper portions of the west abutment is determined to be worthy of evaluation. 6. If borings are done on the west abutment, we additionally suggest that borings be drilled dipping to the east to increase the potential for intersecting steeply dipping joints that would have an orientation similar to the highly weathered zone identified in the MASW survey (i.e. angled in the opposite direction of GF-3 and GF-4). Final selection of additional exploration methods and exploration locations should be based on an evaluation of how the additional explorations will either help the designer refine the design to reduce construction costs or to better define the subsurface conditions so that there is less risk of a contractor filing a differing site conditions claim. Limitations We have endeavored to complete the services identified herein in a manner consistent with that level of care and skill ordinarily exercised by members of the profession currently practicing in the same locality and under similar conditions as this project. No other representation, express or implied, is included or intended, and no warranty or guarantee is included or intended in this document or other instrument of service. Project / September 19, 2008 Page 16 Schnabel Engineering, LLC

17 We are pleased to be of service to you on this project. If you have any questions concerning this letter, do not hesitate to contact us. Sincerely, SCHNABEL ENGINEERING, LLC Gerald Robblee, P.E. Associate Gary D. Rogers, P.G. Senior Associate Randall P. Bass, P.E. Principal O. Christopher Webster, P.E. Principal References Appendices: Appendix A: Favorable Water Supply Alternatives Evaluation Appendix B: Itemized Cost Estimate Comparison Appendix C: Schnabel Sketches, Figures 1 and 2 Appendix D: Gannett Boring Location Plan, Figure 3 Project / September 19, 2008 Page 17 Schnabel Engineering, LLC

18 REFERENCES 1. Gannett Fleming. Ragged Mountain Dam and Related Facilities Package 2 Geotechnical Plans and Sections. August Gannett Fleming Project No Gannett Fleming. Feasibility Study for Upgrading the Ragged Mountain Dams. February 28, Gannett Fleming Project No Gannett Fleming. Engineer s Opinion of Probable Construction Cost Packages 1, 2, 3, and I-64 Embankment Modifications August 11, 2008 Interim Estimate. August Gannett Fleming Project No Gannett Fleming. Technical Memorandum Concept Development Ragged Mountain Reservoir Expansion. February 16, Gannett Fleming Project No Gannett Fleming. Ragged Mountain Dam and Related Facilities Package 2 Preliminary Drawings. July Gannett Fleming Project No Project / September 19, 2008 Schnabel Engineering, LLC

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20 Appendix B Package 2 Ragged Mountain - RCC New Dam Prices are 2008 Figures Package 2 New Dam and Dam Breaches Gannett Fleming Schnabel Engineering Item Number Units Quantity Unit Price Extended Price Quantity Unit Price Extended Price 1 Mobilization & Demobilization a. General LS 1 $3,620,000 $3,620,000 1 $2,789,392 $2,789,392 b. Bonds and Insurance LS 1 $2,270,000 $2,270,000 1 $1,046,022 $1,046,022 2 Reservoir Road Maintenance and Traffic Control LS 1 $275,000 $275,000 1 $225,000 $225,000 3 Construct /Maintain/Restore Temporary Onsite Roads LS 1 $90,000 $90,000 1 $75,000 $75,000 4 Care and Diversion of Water a. Erosion and Sediment Control LS 1 $400,000 $400,000 1 $200,000 $200,000 b. Cofferdam(s) and Divert Water LS 1 $300,000 $300,000 1 $150,000 $150,000 c. Foundation Dewatering MO 15 $46,000 $690, $35,000 $525,000 5 Clearing and Grubbing AC 2 $20,000 $40,000 2 $15,000 $30,000 6 Demolition and Removal of Structures LS 1 $10,000 $10,000 1 $10,000 $10,000 7 Excavation a. Unclassified Excavation and Stripping CY 5,000 $15 $75,000 5,000 $15 $75,000 8 Foundation Preparation a. Foundation Clean-Up Secondary SY 9,600 $15 $144,000 9,600 $10 $96,000 b. Foundation Clean-UP Final SY 9,600 $20 $192,000 9,600 $12 $115,200 c. Rock Trimming CY 5,800 $75 $435,000 3,000 $75 $225,000 d. Rock Fracture Treatment LF 200 $20 $4, $20 $4,000 9 Foundation Drilling and Grouting LF 26,600 $100 $2,660,000 20,000 $80 $1,600, Fill a. Select Fill CY 22,000 $6 $132,000 22,000 $6 $132,000 b. Random Fill CY 48,000 $5.50 $264,000 48,000 $5.50 $264,000 c. Rock Fill CY 105,000 $9 $945, ,000 $9 $945,000 d. Fine Drain Fill CY 2,500 $55 $137,500 2,500 $55 $137, Slope Protection a. Rip Rap CY 500 $100 $50, $100 $50,000 b. Slush Grouted Rip Rap CY 320 $175 $56, $175 $56,000 c. Bedding Material (Coarse Aggregate) CY 200 $55 $11, $65 $13, Conventional Concrete (Includes Waterstop) a. Structural Concrete CY 2,600 $1,000 $2,600,000 2,600 $775 $2,015,000 b. Outlet Works Encasement Concrete CY 280 $1,000 $280, $800 $224,000 c. Corewall Concrete CY 2,800 $1,000 $2,800,000 2,800 $650 $1,820,000 d. Downstream Facing Concrete CY 4,900 $800 $3,920,000 4,900 $450 $2,205,000 e. Paving Concrete CY 450 $450 $202, $450 $202,500 f. Dental Concrete CY 6,300 $350 $2,205,000 6,300 $300 $1,890,000 g. Backfill Concrete CY 1,500 $350 $525,000 1,500 $300 $450, Steel Reinforcing Bars Lbs 568,000 $2.80 $1,590, ,000 $1.60 $908, Roller Compacted Concrete CY 155,000 $100 $15,500, ,000 $85 $13,175, Bedding Mix LS 1 $1,400,000 $1,400,000 1 $500,000 $500, Dam Construction Joints LS 1 $100,000 $100,000 1 $100,000 $100, Trial RCC Placement and Testing LS 1 $300,000 $300,000 1 $150,000 $150, Precast Concrete Panels with Geomembrane Liner SF 84,000 $40 $3,360,000 84,000 $32 $2,688, External Geomembrane Liner SF 17,000 $30 $510,000 17,000 $30 $510, Precast Parapet Walls LF 1,600 $60 $96,000 1,600 $60 $96, Drilled and Grouted Anchor Bars EA 80 $500 $40, $500 $40, Drilled Foundation Drains LF 3,600 $40 $144,000 3,600 $40 $144, Outlet Works a. Ductile Iron Pipe and Fittings - 42 inch Dia LF 540 $500 $270, $500 $270,000 b. Ductile Iron Pipe and Fittings - 24 inch Dia LF 800 $300 $240, $300 $240,000 c. 6 inch Minimum Release Pipe LS 1 $12,000 $12,000 1 $12,000 $12,000 d. Sluice Gates and Accessories - 42 inch EA 5 $60,000 $300,000 5 $60,000 $300,000 e. 42 inch Blowoff Valve EA 1 $30,000 $30,000 1 $30,000 $30,000 f. Water Intake Trash Racks EA 5 $15,000 $75,000 5 $15,000 $75,000 g. Valve Vault Accessories LS 1 $20,000 $20,000 1 $20,000 $20, Chain-Link Fence LF 120 $45 $5, $45 $5, Instrumentation LS 1 $200,000 $200,000 1 $200,000 $200, Rock-Lined Swale LF 1,500 $60 $90,000 1,500 $60 $90, Select Material Surfacing - Access Road SY 2,500 $12 $30,000 2,500 $12 $30, Guide Rail LF 780 $50 $39, $50 $39, Security Gates EA 2 $5,000 $10,000 2 $5,000 $10, Landscaping and Site Restoration a. Topsoil, Permanent Seeding and Mulching AC 5 $10,000 $50,000 5 $10,000 $50, Breach Existing Lower Ragged Mountain Dam LS 1 $1,000,000 $1,000,000 1 $1,000,000 $1,000, Breach Existing Upper Ragged Mountain Dam LS 1 $450,000 $450,000 1 $450,000 $450,000 Subtotal: $51,194,800 $38,702,814 Contingency (%): 20% 10% Subtotal Estimated Costs Plus Contingency: $61,433,760 $42,573,095 Note: The above Mobilization & Demobilization costs are computed as a percentage of the sum of the other estimated costs, before the contingency factor is applied. Gannett Fleming uses percentages of about 8% and 5%, respectively, for General costs and Bonds & Insurance. Schnabel considers percentages of 8% and 3%, respectively.

21 Appendix B Package 2 Ragged Mountain - RCC New Dam Prices are 2008 Figures Package 1 Ragged Mountain Foundation Excavation Prices are 2008 Gannett Fleming Schnabel Engineering Item No. Units Quantity Unit Price Extended Price Quantity Unit Price Extended Price 1 Mobilization & Demobilization a. General LS 1 $550,000 $550,000 1 $500,232 $500,232 b. Bonds & Insurance LS 1 $340,000 $340,000 1 $187,587 $187,587 2 Care & Diversion of Water a. Erosion and Sediment Control LS 1 $300,000 $300,000 1 $200,000 $200,000 b. Cofferdam(s) and Divert Water LS 1 $300,000 $300,000 1 $200,000 $200,000 c. Foundation Dewatering LS 1 $800,000 $800,000 1 $500,000 $500,000 3 Clearing and Grubbing AC 10 $20,000 $200, $15,000 $150,000 4 Demolition and Removal of Structures LS 1 $20,000 $20,000 1 $20,000 $20,000 5 Excavation a. Unclassified Excavation and Stripping CY 310,000 $15.00 $4,650, ,000 $15 $4,650,000 6 Foundation Preparation a. Preliminary Foundation Clean-up SY 19,200 $15.00 $288,000 19,200 $12 $230,400 7 Water Supply Temporary Bypass Piping LS 1 $150, $150,000 1 $150,000 $150,000 8 Overhead Electrical Relocation LS 1 $10, $10,000 1 $10,000 $10,000 9 Reservoir Road Modifications and Traffic Control LS 1 $112, $112,500 1 $112,500 $112, Construct & Maintain Temporary Onsite Roads LS 1 $30, $30,000 1 $30,000 $30,000 Subtotal: $7,750,500 $6,940,719 Contingency (%): 20% 10% Subtotal Estimated Costs Plus Contingency: $9,300,600 $7,634,791 Note: The above Mobilization & Demobilization costs are computed as a percentage of the sum of the other estimated costs, before the contingency factor is applied. Gannett Fleming uses percentages of about 8% and 5%, respectively, for General costs and Bonds & Insurance. Schnabel considers percentages of 8% and 3%, respectively. Package 3 Reservoir Clearing Item No. Unit Quantity Unit Price Extended Quantity Unit Price Extended 1 Mobilization & Demobilization LS 1 $121, $121,000 1 $121,000 $121,000 2 Reservoir Clearing AC 140 $5, $742,000 1 $742,000 $742,000 3 Reservoir Road Maintenance and Traffic Control LS 1 $70, $70,000 1 $70,000 $70,000 4 Construct/Maintain/Restore Temporary Onsite Roads LS 1 $118, $118,000 1 $118,000 $118,000 Note: Gannett Fleming's subtotal has been corrected to reflect the sum of the Extended cost estimates. Subtotal $1,051,000 $1,051,000 Contingency(%) 20% 20% Subtotal Estimated Costs Plus Contingencies $1,261,200 $1,261,200 Total Project Costs Plus Contingencies $71,995,560 $51,469,086 The costs shown above are in 2008 dollars. Actual construction costs may be higher due to inflation. The project costs associated with engineering fees, construction quality control services, legal fees, and other professional fees are not included. In addition, costs associated with the work at the culvert at I-64 are not included.

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