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space and isolation from nearby residential properties. The odor from such an operation has been known to be a concern in some communities, and while mitigating controls can be put in place, they can be costly and difficult to maintain. Opinion of Probable Cost Please refer to CDM Smith's section 7 of their report for an in depth analysis of how the costs were obtained for this project. While this is still a conceptual plan, rough numbers are needed to identify the investment required for such an ambitious project. Based on some of the assumptions identified in the due diligence and site conditions/ project requirements, Table 7-1 summarizes the conceptual capital costs Table 7-1 Summary of Conceptual Construction Costs. CDM Smith Demand from Pumpi ra Trea trate Total _. ` ($ Millions)- ww" 5.0 '(Deep Injection Well)- 3.7 0.70 1.3 48.3 0.76 3.8 58.5 Percent of.Total 6% 1% 2% 83% 1% 7% (Osprey Marsh 3 7 0.70 1.3 48.3 0.76 4.5 -Expansion) _ 59 -Percent of'Total 6% 1% 2% 82% 1% 7% Conceptual estimates of total capital cost, total operations and maintenance (O&M) cost, total equivalent annual cost and unit production cost is summarized in Table 7-2 for both concentrate disposal alternatives (deep injection well (DIW) or expansion of Osprey Marsh). For the DIW alternative, total capital cost for the reservoir system is estimated to be $95 million, while unit production cost was estimated at $5.94/1,000 gallons. For the Osprey Marsh expansion alternative, total capital cost for the reservoir system is estimated to be $96 million, while unit production cost was estimated at $5.97/1,000 gallons. Annual O&M costs for both alternatives is approximately $5.3 million/year. Table 7-2 Summary of Conceptual Capital, O&M and Unit Production Costs' CDM Smith Notes: 'Conceptual capital costs include pumping, transmission, reservoir, treatment, storage and concentrate disposal. Conceptual capital costs further include a 50 percent construction allowance (30 percent contingencies and 20 percent non -construction capital costs). zA service life of 25 years and an interest rate of 3.125 percent (Federal water resources planning discount rate for Fiscal Year 2016) was used in the analysis. 3 Conceptual O&M costs include equipment, staffing, power and chemical costs, where appropriate. 'Total equivalent annual costs include annualized capital costs plus O&M costs. 5 Unit production cost is equal to Total Equivalent Annual cost divided by demand from reservoir (average annual rate of delivery of water). 1:\Utilities\UTILITY - Engineering\WATER\Alternative Water Supply\Portofino Preserve aka Blackstone 83 acre site\Due Diligence Report for BCC 02_16_2016\Agenda - Due Diligence Report and OPC for 83 acre site for BCC meeting 02_16_2016 v2 cmc.docx Page 11 of 14 109