OCSD Pipe will supply water reclamation plant with secondary-treated flows.

Hard against the Santa Ana River's concrete channel and an ever moving wave of urban encroachment in southern California, contractors working the first stages of Orange County Sanitation District's $3-billion wastewater treatment buildout are fighting labor shortages and material price increases while dealing with finicky neighbors. The owner, an amalgam of 25 municipalities and utility districts representing about two-thirds of the county, is relying on a revamped public-private management team to meet engineering, construction and financial goals using a custom program management system. So far, the team is achieving new levels of efficiency in delivery.

Almost 35 years after the Clean Water Act mandated that municipalities treat their wastewater to uniform levels of cleanliness, the service and business of treating those flows has evolved into a complex process balancing technological advances with a limited supply of money. In Orange County, an ever growing population and a tourist-sensitive economy forced a complete review of the region's water needs to produce a construction program that synchronizes wastewater treatment obligations with drinking water needs.

Ludwin

When Orange County Sanitation District planners sat down to review the district's strategic plan in 1999, they held a coveted "301" waiver from the U.S. Environmental Protection Agency, allowing it to avoid full secondary treatment of its 233-million-gallon-per-day flows. Instead, it treated half of its wastewater to secondary standards and the other half to advanced primary levels, mixing it and disposing of it through a five-mile-long outfall into the Pacific Ocean. But a series of beach closures in 2000, while never tied to the district, forced its board of directors to act. "All of our investigations pointed to good operations, but you can't prove a negative," says David A. Ludwin, OCSD engineering director.

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The district voluntarily negotiated a consent decree with EPA, promising to treat all effluent to secondary standards by 2012. It then cut a landmark deal with the Orange County Water District to supply it with an initial 70 mgd that OCWD will treat to above drinking water standards and use to recharge its groundwater sources and build an underground barrier to halt saltwater intrusion into the aquifer. It is splitting half of the $384-million plant's cost with the water district. Located next to OCSD's Plant One, it will be a state-of-the-art plant using a combination of microfiltration, reverse-osmosis and ultraviolet disinfection to produce water cleaner than what the district draws from the ground. The project furthers the water district's aggressive reuse program.

OCSD Headworks site must be continually dewatered due to high groundwater levels near ocean.

"It was a highly divisive issue," says James M. Ferryman, chairman of OCSD's board of directors, a 25-member group comprised of government officials from a number of Orange County municipalities. The secondary upgrade project barely passed, 13-12, with opponents unconvinced of the need and wary of high costs. With the age of the original Clean Water Act's construction grants program long passed, district officials knew little federal or state money could be expected for construction. "We knew it was big money and we'd have to adjust rates," says Ferryman.

Faced with a skeptical board and a tight-fisted public, district engineering officials realized they would need help in keeping such a large program under control. The district's engineering staff had neither the numbers nor expertise to deal with such a large program, which will burn $1 million a day during peak construction in two years. "We were spending $50 million to $80 million per year in the early 2000s," says Ludwin.

The construction schedule projects cash expenditures jumping 375%, to about $300 million per year, over the next few years. To meet milestones, Ludwin and others knew they would need help in accelerating project delivery. "We made a commitment to differentiate project management and engineering," he says. "We reorganized with project management as a focal point."

Salgaonkar

The district sought management help, holding a competition and choosing in 2002 Integrated Program Management Consultants, a joint venture of Denver-based CH2M-Hill Cos., and Parsons, Pasadena, Calif., as program manager. Then, the district and its consultant began staffing the office up to its present number of 135, and integrating district and consulting management employees into one unit. Their first task was to bring a program of strict controls to the job, says Jag Salgaonkar, CH2M-Hill vice president who leads IPMG's efforts.

The size and complexities of the project dictated the approach, Salgaonkar says. The Capital Improvement Program consists of 147 projects to be completed over 16 years, each broken into seven phases and 43 separate work packages. At peak construction, about 1,500 workers will be swarming over existing treatment works, rehabilitating existing batteries and building an all encompassing range of new facilities, from headworks to secondary treatment tanks and trickling filters, and finally, upgraded biosolids facilities. New collector sewers also are being placed now to handle sewage and in some cases, stormwater runoff.

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OCSD Tight sites, close neighbors leave little room for staging.

Contractors must coordinate work to keep the plants operating, and deal with limited staging space and residential neighbors whose homes abut the treatment plants' boundaries. Orange County continues to grow, and its metamorphis from citrus groves and agriculture to urban and suburban development is nearly complete. Open space and buffer zones with OCSD's boundaries are scarce.

Managing Risk

Planners are banking on IPMG's customized, Web-based program control system to keep the jobs moving and cash flowing. Keeping with its commitment to management efficiency, IPMG required all the program's 17 project managers be certified by the Project Management Institute. System development was then based on PMI's Body of Knowledge principles, requiring all project managers to develop a detailed work breakdown structure for their package, from which schedules are plotted and costs estimated. "This is a $1-million system unique to the way OCSD does business," says Salgaonkar.

With so many moving parts, "the idea was to manage the program as a portfolio," says Salgaonkar. The program's original cost, estimated through traditional methods, was $2.371 billion for 147 projects. But Salgaonkar and other planners believed it was unrealistic to expect that cost figure to hold over a 16-year program. OCSD's board sets usage rates based on the cost estimate and did not want any surprises. Costs had been estimated in 2002 dollars, but "over the past couple of years, escalation got out of hand and we had to do a better job," says Ludwin.

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OCSD

To do that, estimators last year performed a Monte Carlo risk analysis, a statistical tool borrowed from the gaming industry, based on input from project managers. Each provided estimators with standardized optimistic, pessimistic and most likely cost estimates at completion for each of their 43 work packages, projecting out in current dollars.

Senior level managers reviewed the information, now broken down in concisely summarized project descriptions. The program ran over 10,000 iterations of possible events, and produced a probable estimate of $2.58 billion, a 3% cost increase tied directly to potential overall risk. Its predicted worst-case scenario added $333 million to the budget, and best case reduced the budget by $9 million. The board agreed to the $66-million increase, which was incorporated into the scheduling tool, adjusting cash flow over the course of the program.

The control system is accessible by all program employees, and contains the work breakdown structure, schedules, cost and other tracking and forecasting items. Costs and schedules are updated monthly. So far, the system seems to working. Salgaonkar reports that cash flow efficiency has increased from 82% in FY 02-03 to 108% last year.

In the Ground

Construction now is ramping up. Already, there are 85 active projects at the two treatment plants. Besides the water district's treatment plant, Walnut Creek, Calif.-based J.F. Shea Co. won a $182-million contract to build new headworks at the district's second plant, near the Pacific Ocean in Huntington Beach. The project illustrates some of the overall project's idiosycncracies. Shea first had to excavate to 45-ft depths, a task hampered by the site's high water table of 5 to 6 ft below grade. The contractor is pumping about 1.5 million gallons of water per day to keep the site dry, discharging flows into the adjacent Santa Ana River channel. Some 77,000 cu yd of soil has been excavated. At this early stage of the program, the district is allowing Shea to store the material on site, an option that saved the contractor about $5 million.

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OCSD

For efficiency, Shea erected a tower crane between the headworks and what will become the grit removal chamber, laying an 18-ft-thick slab for its base that will be incorporated into the final structure. It now is pumping between 500 and 600 yd of concrete per day. Sandy soils and the area's high seismic rating also require all new structures be founded on piles, driven to depths of 55 ft.

But Shea is having trouble finding enough craft workers, primarily carpenters and ironworkers. And electricians are in short supply for the groundwater replenishment project's treatment plant.

District and project officials believe the issue is symptomatic of the industry's overall problem of worker shortages. But district officials also are concerned about a scarcity of qualified contractors bidding on their projects. They recently pushed through one small package that only drew one bidder, opting to pay higher than the engineer's estimate rather than delay the job.

OCSD's situation mirrors that of other public agencies in California and officials are taking steps to attract other contractors. A late summer open house attracted scores of subcontractors and union representatives, as well as general contractors, reports Ludwin. Its results will be better known next month when the district opens bids on an estimated $200-million package to build secondary treatment trickling filters, aeration basins and clarifiers.