CITY OF SEATTLE, WA
Mayor Norm Rice

  • Population: 521,000
  • Service Area Population: 1.3 million

For additional information, contact: Liz Kelly Project Coordinator Seattle Public Utilities 720 3rd Avenue, 10th Floor Seattle, WA 98104 (206) 386-9779 FAX (206) 684-0206

DESCRIPTION OF PARTNERSHIP ARRANGEMENT

The City of Seattle has initiated a unique process for the development of the Tolt River Water Filtration Plant. Seattle's first water filtration plant will be implemented through a design-build-operate (DBO) approach. Under the DBO approach, responsibility for the design, construction, start-up, testing and long term (up to 25 years) operation and maintenance of the Tolt facility will rest with one private entity. The City will own and provide financing for the project.

Initially, Seattle planned to utilize a traditional procurement approach for the Tolt project (awarding a competitively bid construction contract based on a design engineers specifications, followed by operation by City employees or a private operations firm). The City, after completing preliminary pre-design work, decided to explore the DBO approach to see if economies could be realized. A two-step procurement process (Request for Qualifications and Request for Proposals) was developed, which resulted in the receipt of four proposals. The proposers were required to submit proposals that met the City's technical and business specifications and produced a savings of at least 15% from the benchmark cost estimate. In addition, proposers were required to comply with the City's minority and business contracting standards, to ensure that workers are paid prevailing wages and to pursue environmentally-sensitive approaches to plant design and operations.

In March, 1997, the City announced the selection of a team headed by Camp Dresser & McKee, Inc. and Phillips Utilities Management Corporation (CDM-PHILIP) for initiation of negotiations. Negotiations were successfully completed and on May 27, 1997, the Seattle City Council formally authorized Diana Gale, Managing Director of the Seattle Public Utilities (SPU), to sign the Service Agreement.

ESTIMATED/ACTUAL COST SAVINGS -- IMPACT ON RATES

Based on the pre-design work completed by the City, total project costs for a filtration only plant were estimated at $156 million ($100 million for design and construction and $56 million for O&M over a 25 year period). All of the proposals substantially exceeded the 15 percent savings requirement. The City ultimately negotiated a contract for a filtration plus ozonation facility at a cost of $101 million ($56 million for design and construction and $36 million for 25 years of operations). Although the filtration plus ozonation option was not used to create the benchmark cost estimate of $156 million, SPU estimates this type of facility would cost $171 million using a conventional design-build-bid process. This estimate was produced by addition of the filtration only facility benchmark of $156 million with the average cost differential between filtration only and filtration plus ozonation facility received from the proposers.

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