Each option has its advantages and disadvantages, including significant cost variations, according to information presented by Black & Veatch, which had been working to come up with treatment options since May.
As the Hannibal Board of Public Works Board (HBPW) and staff weigh the potential pros and cons of new water filtration system options, any number of factors are being taken into consideration. Possibly the most important consideration in the minds of rate-payers is the cost.
There are three options on the table from which to choose, any one of which could do an adequate job, according to the engineering firm Black & Veatch, which presented its draft report during the HBPW Board’s Dec. 19 meeting. Proposed are granular activated carbon (GAC), reverse osmosis (RO) and a hybrid system consisting of three elements – preozone, enhanced coagulation and aeration (PECA). Each option has its advantages and disadvantages, including significant cost variations, according to information presented by Black & Veatch, which had been working to come up with treatment options since May.
The least expensive option is PECA with an estimated project total of $13,204,000. A relatively close second is GAC at $14,346,000. Third on the price chart at $22,197,000 is RO. Each of the estimates includes an owner’s 10 percent contingency that is based on the anticipated project’s base cost.
Another major consideration is each system’s annual operation and maintenance costs. The least expensive option in this category is RO at $355,000. PECA is in the middle at $413,000. The costliest system to operate is GAC at $691,000.
“The hybrid system has the lowest capital cost and is almost tied for the lowest annual operating cost, so if it was just money we were looking at we would use this combination approach,” said Bob Stevenson, general manager of the HBPW, during the Dec. 19 meeting of the city council. “However, I think everyone (at the HBPW) is pretty much agreeing that the combination approach using enhanced coagulation, aeration and ozone is way too complicated, so it’s going to be a toss-up between activated carbon and reverse osmosis.”
Another cost variable for a GAC system is how much water capacity should it be built to deliver. Currently the city’s per day water capacity rating is 7.5 million gallons (MG). However, Hannibal’s peak water demand, which is rarely seen, is slightly below 5 MG. On average the community’s daily demand is 2.9 MG.
“There was some suggestion about downsizing the plant to save money,” said Stevenson.
According to data compiled by Black & Veatch, a smaller (2.9 MG capacity) GAC plant would actually be more expensive to operate ($795,000) annually than a larger (7.5 MG capacity) carbon-based filtration facility ($620,000).
“It has to do with the fact that a bigger plant has some operating margin built in so that the flow rates are lower which extends the life of the carbon. In a smaller plant the filters are working harder so you are exhausting the carbon faster,” said Stevenson. “The smaller plant has an operating cost that is about 25 percent higher on an annual basis than the larger plant, which costs more to build so there is a tradeoff between the two.”
Another cost associated with the project is the method through which the new filtration system is paid for, according to Stevenson.
“There are some serious pros and cons about how we’re going to finance it,” he said. “We essentially have two choices, one is a bond sale which includes approval of a referendum to borrow money. It takes some time.
“The other process is a lease-purchase agreement. The lease-purchase arrangement will come with the lower interest rate we think, but it will also come with a shorter time to pay back the money — about 10 years. The bond option will probably charge 4 percent with a 30-year payback period. The result of that is bonds are like half price on what we have to pay back every month. That’s a big deal.”
With a March 2020 deadline looming for completion of the water project (due to voter approval of an April 2017 initiative banning ammonia as a disinfectant in the city’s drinking water supply), a bond issuance request would need to appear on the April 2018 ballot to help keep the project on or ahead of schedule. During the Dec. 19 HBPW Board meeting, Stevenson suggested there just wasn’t enough time to do everything necessary to get an item on the spring ballot.
City Council member Mike Dobson asked what would happen if the HBPW was able to get the bond issuance request on the ballot in April and voters didn’t approve the measure.
His question went unanswered.
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