stage gate 2: approve business case knickerbocker...

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Stage Gate 2: Approve Business Case

Knickerbocker Floodplain Reconnection Project

Presented to the Asset Management Committee (AMC) 12/7/2011

Purpose of the Stage Gate 2 Form

Request approval of the 1) Business Case, 2) preferred Option, and 3) annual O&M during the life of the asset and capital funding for the total project cost through the Close-out phase (subject to verification at Stage Gates 3 and 4).

Contents Purpose of the Stage Gate 2 Form................................................................... 1 1. Review of the Business Case .................................................................... 2 2. Authorization to move forward to Stage Gate 3 ........................................... 3 3. Project Information................................................................................. 3 4. Business Case Decision History ................................................................. 3 5. Project Prioritization ............................................................................... 4 6. Business Case........................................................................................ 4 7. Recommendation ................................................................................. 20 8. Preliminary Project Management Plan ...................................................... 22 9. Portfolio Review ................................................................................... 23 10. Appendix ......................................................................................... 25


1. Review of the Business Case Name & Role of Reviewer Review /Comments

Specifier: Katherine Lynch Specifier approval indicates that the Business Case development process was inclusive and collaborative and the BC recommendation has value to ratepayers.

Review Complete Comments:

Executive Sponsor: Bruce Bachen Executive Sponsor (ES) approval represents quality contro l. An appropriate level of options analysis has been documented to allow an informed decision by the AMC or LOB AMC. The ES is not necessarily an advocate for the business case proposals.


Budget Manager: Matt Hennen Budget Manager approval means that CIP and O&M funding requested as part of the Business Case is already part of an approved budget or spending plan, or will be made available by making changes as described in the Portfolio Review section of this form.


Business Area Manager: Julie Crittenden Business Area Manager (BAM) approval means that the business case meets a core need of a delivery of services requirement in the BAMs business area.


Economist: Emiko Takahashi Economist approval indicates that analysis has been undertaken with tools and techniques that frame the problem or opportunity, identify costs and benefits, and verify accuracy of the Business Case calculations.


FO&M: Gary Lockwood Field Operations & Maintenance (FO&M) approval indicates that O&M life cycle impacts (costs and risks) have been adequately & appropriately characterized for all alternatives evaluated in the Business Case.


Project Delivery: Wan-Yee Kuo Project Delivery Branch (PDB) approval indicates that project options, scope, cost, and schedule have been appropriately characterized in the Business Case and preliminary engineering work has been performed by or reviewed by PDB.


Asset Management: Grace Harris Asset Management (AM) approval indicates that the investments proposed in the Business Case follows SPU’s AM principles of objectivity, transparency, and value to ratepayers.


Other Reviewers: Ticiang Diangson/Steve Hamai, EJSE Cheryl Eastberg, Parks

Review Complete TD Comments: [TD] I’m calling out an

ongoing ratepayer equity issue indicated in Section 5. Other Factors: the E-Team and AMC, using Equity Tools, need to look at the overall funding, including the past disbursements for creeks; for 2012-2014, the disparity between north and south end creeks is ~$2.5M.


2. Authorization to move forward to Stage Gate 3

Terry Martin Approved Not Approved Other (explain)

Director, Asset Management and Economic Services (AMES), “signing” on behalf of the AMC

Date: xx/xx/20xx (decision will be recorded at the AMC meeting)

3. Project Information

Project Name Knickerbocker Floodplain Reconnection Project

Activity Number C309014 Relevant SAMP other Plan or Study

Thornton Creek Watershed Action Plan

Fund & Business Area DWW, Beneficial Uses

Sub-Budget Control Level Protection of Beneficial Uses

Executive Sponsor Bruce Bachen

Specifier Katherine Lynch

Project Manager Julie Crittenden

Field Operations Liaison Gary Lockwood

Problem or Opportunity Statement

This project will continue SPU’s efforts to reduce stream-side flooding and improve habitat through floodplain reconnection on the south branch of Thornton Creek, similar to the Thornton Confluence Improvement project (AMC 10/20/2010). The project has been funded with time-sensitive grants to date, and it is expected that additional funding will be awarded from EPA for project implementation. Although the floodplain project by itself does not provide significant flood storage, when coupled with other floodplain projects, this systematic approach can help alleviate flooding of public and private properties downstream and add to the ecological health of Thornton Creek.

4. Business Case Decision History

Date

Business Case, Change Business Case,

Briefing

Approved by Decision

11/4/2011 Stage Gate 1 Nancy Ahern Approved for Options Analysis


5. Project Prioritization

Prioritization Criteria Rank/ Rating

Description

Priority Rank 3 OPPORTUNITY PROJECT

Regulatory Mandates, Legal Agreements

No regulatory drivers

External Drivers * There is strong community support for this project.

Infrastructure 0 No infrastructure is at risk

Level of Service ** This project provides additional flood storage, as well as improves habitat conditions

Other Factors ** Grant funds may be available for a portion of the project. However, there is concern about service equity since a significant amount of CIP funds are being spent in Thornton Creek. The 2012-2014 CIP for Thornton Creek includes: Meadowbrook Pond Dredging and Improvements plus the Confluence Culvert Replacement and Floodplain, cumulatively ~$7M. The 2012-2014 CIP for other creeks includes: Mapes Creek ~$1.5M, and Taylor is up to $3M, cumulatively ~$4.5M.

6. Business Case

6.1. Project Background

Project Need

Many areas along Thornton Creek experience flooding, contain little floodplain, and provide poor habitat. The Knickerbocker site, on the south branch of Thornton Creek, is one such area (Figure 1). Homes at this location frequently flooded during storm events, prompting SPU and the Parks department to acquire the land between 2001 and 2006, and Parks to remove the houses. While the flooding impacts, and public safety risk associated with that flooding, have been removed, the site still contains no floodplain storage and poor habitat.

The Knickerbocker project provides an opportunity to increase floodplain storage and habitat quality, providing benefits to downstream stream-side properties and to biological communities in the creek. History of Knickerbocker Site. In the recent past, the Knickerbocker site contained four homes (and associated structures) that occasionally flooded during storm events. Between 2001-2006 Parks and SPU were authorized by ordinance (120820 and 122096) to spend $2.9 million to acquire 6 parcels of land (SPU’s investment was $1.1M) and have shared jurisdiction, with the intent to manage the site as a natural area and provide for stormwater control and habitat restoration opportunities (as outlined in MOA DAX2009-46 between the two departments). Parks removed the homes and manages the site as a natural area. The site currently contains a channelized stream bordered by uplands with a mix of native and non-native plants and little shading.


Knickerbocker reach from road. Stream runs along the base of the slope in background.

Figure 1. Knickerbocker site location and aerial photograph.

Residents in the project area, members of the Thornton Creek Watershed Oversight Council, and advocates for Thornton Creek began to work with SPU and Parks on ways to get a floodplain reconnection project designed and built in 2009, as this type of project was identified in the Thornton Creek Watershed Action Plan. Project design was initiated in 2010 using a $100,000 King Conservation District grant to design the floodplain project. SPU led the design work using a consultant and has held about five community meetings to discuss the project and get input. Work through October of 2011 occurred outside of the Stage Gate process.

Why Do This Project Now? The Knickerbocker Floodplain Reconnection is valuable because of the flood storage, habitat and water quality benefits that will be added to earlier improvements of the Thornton Creek Watershed. Though floodplain reconnection is not driven by any regulatory drivers, there are a number of reasons to push this project forward now:


• Consistent with Long-Term Plans: SPU and the community have plans that address impacts from too much stormwater runoff reaching our streams and from having too little stream-side space to address that water. SPU has developed two green approaches to improving flooding and stream conditions: 1) better control stormwater runoff from the watershed, and 2) increase floodplain and stream storage capacity. The Knickerbocker project would re-create floodplain areas to increase storage of flood waters, slow stream flow, and provide improved habitat conditions. SPU has evaluated key locations where floodplain restoration would be most effective, given the natural topography and other physical conditions (see Appendix). The location of the Knickerbocker site ranked in top 3% of areas best suited for floodplain reconnection from among almost 140 areas analyzed in the five salmon-bearing watersheds in the City.

While each individual floodplain reconnection project produces only modest gains in flood flow storage, a number of similar projects collectively will lead to substantial reductions in flooding impacts over time, as well as improved aquatic habitats and reduced SPU operational costs. This project is consistent with a number of long-term plans (including the DWW Urban Watershed Strategy, 2004 Mayor’s Aquatic Ecology Strategy, and 1999 Thornton Creek Watershed Action Plan) and follows the path mapped out by the Thornton Creek Confluence project which also increases floodplain area to provide stream water storage. The project also connects and extends the Parks natural area corridor along the South Branch of Thornton Creek.

• Innovative Science: Floodplain restoration is an innovative approach to restoring urban streams. While there is a large body of scientific research to support the value of such a project, there is little information about the effective such projects in urban areas. The potential to add a hyporheic element also makes the project on the cutting edge of restoration science. The hyporheic zone is the saturated substrate beneath the stream channel where surface and subsurface flows interact. This zone provides three key benefits: (1) upwelling and downwelling within the streambed, which attracts fish spawning and rearing activity and affects incubating embryos, (2) buffering surface water temperature by cooling it during the summer, and warming it during the winter, and (3) providing instream water treatment through microbial activity on the surface of the hyporheic substrate, which breaks down contaminants and recycles nutrients (see Appendix). SPU, working with the USFWS and NOAA Fisheries, has been conducting pre-project monitoring at the site since 2005 and is uniquely poised to test the effectiveness of improvements to creek habitat and biological communities. This element of the project is especially attractive to granting agencies like the U.S. Environmental Protection Agency.

• Multiple Benefits: The Knickerbocker project provides improvements to three business areas of DWW: flooding, water quality, and habitat. It is one of the few projects within the DWW line of business that addresses multiple business areas.

• Strong Community Support: This project is part of the Thornton Creek Watershed Action Plan and has the full support of the Thornton Creek Watershed Oversight Council, Thornton Creek Alliance, and nearby residents. These groups have been involved in design of the project and are excited to play a role in stewardship of the site.

• Grant Opportunities: There are opportunities for grant funds to pay for a large portion of the project. These grant sources include King Conservation District, the U.S. Environmental Protection Agency (EPA), and Washington Department of Ecology.

• Momentum on the Project: SPU and Parks staff have been actively working on design of this project since 2010 and have been making great progress on


permitting needs and design elements. The path to a constructed project has been well scoped, resources are available, and staff is motivated. If the project is discontinued, it will require substantial staff work to re-start the work, get up to speed, and perhaps redesign to account for changing requirements.

• Long Way to Go. The poor condition of Seattle’s streams and floodplain loss occurred over more than a century. It will take decades to get back to better conditions and each project is a step to get us there. The rehabilitation of Seattle’s urban creeks is a multi-phased undertaking, which is being built on earlier projects (e.g. Urban Creek Legacy) and on the evolving science of stream restoration. The focus of the City’s stream restoration efforts has shifted from repair and replacement of instream structures toward the restoration of ecological processes that will help to create self-sustaining instream habitat. This project will augment gains from the Thornton Confluence project in adding floodplain storage, stream habitat, and hyporheic areas to benefit both human and biological communities.

6.2. Performance Requirements

The objectives of the recommended option for the Knickerbocker floodplain restoration project are to:

1. Create up to 1 acre of floodplain storage and augment overall Thornton watershed floodplain provided by projects like the Confluence site;

2. Reduce peak stream velocities and increase areas of slow water (refuge); 3. Improve instream and riparian habitat, and water quality; and 4. Serve as an urban floodplain reconnection demonstration project for other

jurisdictions and residents.

6.3. Options Options for the Knickerbocker Floodplain Reconnection project include:

1. Base Case: Discontinue all project work. 2. Option 1: Implement the project, based on current designs without a hyporheic

element. 3. Option 2: Implement the project, adding hyporheic elements. Project Work to Date SPU has spent $123,000 on this project to date to complete 90% design and partially prepare the SEPA checklist and JARPA application. The funds spent to date are not included in the options discussion or economic analysis, which focus on remaining expenditures needed under the various options. Grants. The King Conservation District (KCD) provided $100,000 of grant funds for the project. The KCD grant agreement scope of work specifies that SPU will complete design and environmental permitting. Pre-Project Monitoring. SPU, working in collaboration with the USFWS, has been conducting pre-project monitoring since 2005 to establish a baseline to measure changes resulting from the project. The study design is to compare physical and biological indicators in two ways: 1) at the Knickerbocker site before and after construction, and 2) comparing the Knickerbocker site to a control site located in the park immediately upstream. Approximately $200,000 of O&M funds have been spent


on pre-project monitoring since 2005 and we are well poised to conduct effective post-project monitoring once the project is constructed. Base Case: Discontinue project Under this option, SPU would discontinue all work on the project. The project would remain at the 90% design phase (not including project manual) and environmental permits would not be secured. It is uncertain that the project would be constructed in a reasonable time frame, if at all. It is likely that some amount of redesign would be needed once the project came off the shelf again, increasing overall project costs due to start/stop of the project. SPU would need to amend the grant scope with the KCD to remove the permitting and modify the design to a 90% milestone. It is likely SPU would have to return some grant funds since the entire grant scope as originally written was not completed. KCD would also question SPU’s ability to complete their grant agreements as specified, adding to a recent number of past KCD grant-funded projects have not been completed as planned. Seattle receives over $300,000 annually from the KCD for conservation and habitat projects and non-performance may damage our relationship with them. To wrap up the project and grant, SPU would need an additional $7,000. It is likely that we would only receive $90,000 of KCD funds since the grant scope would be reduced, meaning that SPU would have invested $40,000 in the project design. SPU’s $200,000 investment in pre-project monitoring would have reduced (if any) scientific value the longer the project is not constructed. Option 1: Implement the floodplain reconnection project as currently designed Under this option, the project would proceed with final design, permitting, project manual preparation, and construction, using the 90% designs we currently have that do not include a hyporheic element. The major project elements include:

• Replacing 6 ft wide rockery-lined straight stream channel with meandering channel 15 to 20 ft wide.

• Excavating a 30 to 100 ft wide floodplain. • Removing invasive plants. • Installing over 100 pieces of large wood, native riparian plantings, and stream

gravels. • Planting the riparian zone with native vegetation. • Replacing the pedestrian bridge in the 20th Ave NE right-of-way (the existing

bridge will not work with widening the stream channel from 6 feet up to 20 feet). • Monitoring the reach for physical and biological conditions and test project

effectiveness.


Table 1 shows the increase in channel and floodplain areas from the project, along with estimated increases in flood storage volume and peak flow delay. Table 1. Stream channel, floodplain, and flood storage enhancements under Options 1 and 2.

Description Existing Proposed

Active Channel Area 7,000 ft2 13,091 ft2

Floodplain Area 0 ft2 13,240 ft2

Increased Flood Storage Volume

69,700 ft3

Flood Peak Delay None 2 min (100-yr Storm)

6 Min (25-year Storm)

During development of 90% design, the project team conducted an informal value engineering to try and keep project construction costs low. This included the decision to simplify the riparian restoration component of the project to avoid the need for multiple planting events and complex planting plans (saving roughly $100,000). The team also designed only the abutments for a manufactured footbridge rather than designing a bridge custom to the site. Early in design, the team also decided to drop any hyporheic elements from the project despite the pre-project monitoring effort

Current stream channel and riparian zone.

Model for design - Just upstream from project site. Note gently sloping banks and area around stream to provide flood storage.


that occurred in the past 5 years. This decision was made mainly due to funding constraints, as SPU staff was working to complete a design using only the $100,000 in grant funds. Under Option 1, SPU would construct the project, and complete all steps needed to complete design and permitting, project bidding, and close out. In the design phase, SPU would need to complete the design of the bridge deck, which is the only outstanding design item. No hyporheic components would be designed or constructed. SPU will also complete the project manual for the construction bidding process. The Contractor will be responsible for one year of plant establishment period. SPU would take over maintenance of the stream after the project is complete, consistent with the SPU Creek and Riparian Restoration MOA between Parks and SPU. Parks will be responsible for maintaining the riparian and upland portions of the site following a 3-year plant establishment period managed by SPU. SDOT will retain the responsibility of the pedestrian bridge in the public right of way. This option would cost $1.25M to complete construction. This includes the $660,000 for construction and $298,000 in soft costs, plus contingencies and reserves (level 5 estimate). O&M costs after construction include roughly $200,000 for 3-4 years of post-project monitoring and $1,000 annually for each SPU and Parks to maintain. Plant establishment and annual maintenance could rely heavily on the use of forest stewards who are very engaged in this area. SPU has the potential to secure additional grant funds for the project. For this option, it is assumed that $200,000 is available from KCD (Table 2). Table 2. Option 1 Funding Sources

Total Project Cost

SPU Portion Grant Portion

$1.25M $1.05M $200,000 Option 2: Implement the project with hyporheic elements This Option includes all of the project elements under Option 1, but adds design and construction of the hyporheic zone to the project, providing increased stream and floodplain function and pollutant filtration. The original design did not include a hyporheic element as a way to save costs, although it meant sacrificing biological benefits. Since that design decision was made, pre-project monitoring at the Knickerbocker site provided evidence that the area is very well suited for hyporheic elements and could provide substantial benefits for localized water quality improvement and salmon spawning habitat. This option adds the hyporheic element into the project. This option would cost $1.45M (excluding the $123K spent to date). This includes the $770,000 for construction and $350,000 in soft costs, plus contingencies and reserves (level 5 estimate). O&M costs after construction include roughly $200,000 for 3-4 years of post-project monitoring and $1,000 annually for SPU and Parks to maintain. Plant establishment and annual maintenance could rely heavily on the use of forest stewards who are very engaged in this area. Similar to Option 1, SPU has the potential to secure additional grant funds for the project. By adding the hyporheic element to the project, the likelihood of securing grant funds is much greater due to the innovation of this restoration technique. For example, the EPA has been in discussions with SPU about providing a grant for up to


$500,000 to construct the Knickerbocker project, citing the hyporheic zone and pre-project monitoring work as large areas of interest for them. In this option, we assumed a best case scenario that has $200,000 from KCD and $500,000 from EPA. A worst case scenario includes only $200,000 in grant funds from KCD (Table 3). Table 3. Option 2 Funding Sources Total Project

Cost SPU Portion KCD Portion EPA Portion

Best Case $1.45M $750,000 $200,000 $500,000 Worst Case $1.45M $1.25M $200,000 $0 Option Comparison Table 4 provides a summary comparison of the options, along with their major advantages and disadvantages. Table 4. Cost of each option, along with their advantages (+) and disadvantages (-). Option Future Capital

Expenditures Advantages/

Disadvantages Base Case: Do Nothing

Total: $7,000 (all SPU)

+ No city resource use - Project unlikely to get constructed - No downstream flooding benefits - Waste of grant funds, damaged KCD

relationship - Loss of $200k in pre-project monitoring

costs Option 1: Project without hyporheic

Total: $1,25M SPU: $1.05M

Grants: $200k

+ Downstream flooding benefits + Instream and riparian benefits + Utilize portion of pre-project monitoring + Fulfill existing KCD grant obligations - Use of SPU ‘s constrained resources

Option 2: Project with hyporheic

Total: $1.45M SPU: $0.745-1.25M Grants: $200k-700k

+ Flooding benefits + Instream and riparian benefits + Increased WQ benefits + Utilize all pre-project monitoring + Fulfill existing KCD grant obligations - Use of SPU’s constrained resources

6.4. Key Risks & Issues

# Description & Response Plan Probability Potential Impact

Cost Schedule Scope Quality

1 Description: SPU staff is unavailable to provide project and construction management or project manual/bid preparation.

M M L L M

Response: The specifier and project manager have been discussing staff availability in PDB for project management, design review, project


manual preparation, and resident engineering and PDB has confirm that staff is available for the work. A back-up approach that is possible would be to use Parks staff to take over project management and implementation of the project. Parks staff is interested in that possibility.

2 Description: Sediment deposition occurs within the stream channel after large storm events, with resulting impacts on flow capacity.

M M L L M

Response: We are learning from sediment transport research at the confluence site and from pre-project monitoring at the project site. This information is being used in project design.

3 Description: Requests by Muckleshoot Indian Tribe to incorporate greater wood volumes into the project area.

M L L L L

Response: MIT biologists have been on a site visit with SPU staff. Discuss project design objectives with Tribe during design. The project design does offer ample space for adding wood.

4 Description: Concerns of adjacent property owners due to grading and planting plans and construction activities.

L L L L L

Response: Nearby residents and community has been involved in the project development to date.

5 Description: Delay or re-design occurs as result of permit negotiations with state and federal agencies.

L M H M L

Response: SPU has been providing regulatory agencies with updates through the pre-application meetings held by SPU. We have had positive feedback from them to date.

6 Description: Inadequate watering and invasive control in years after project completed, resulting in a poor plant community at the site.

M M L L H


Response: Develop a plant establishment and maintenance plan, working with the local residents who have been very engaged to date.

7 Description: Project costs are higher than expected, primarily due to low estimates for landscape installation and maintenance during the 3 year establishment period and the pedestrian bridge fabrication and installation.

M H L L L

Response: A preliminary cost estimate conducted by Chris Woelfel using the PMP stage cost estimate process indicates that project costs could be up to $1.85M, roughly $400,000 more than expected through this stage gate process. The bulk of those increased costs are in the construction phase. We will review cost projections when developing the PMP and continue to look for ways to save money during final design and construction of the project.

8 Description: Hyporheic function declines as the streambed becomes clogged with fine sediment over time.

M M L L L

Response: There should be less deposition of fine sediment in the streambed after construction, because most of it will be deposited on the channel edges and on floodplain. We have evidence of this from previous urban creeks projects (Thornton Creek at 104th & 17th and Taylor Creek between 68th & Holyoke). In addition, hyporheic elements are being designed to reduce this impact (using instream structures to increase scour near hyporheic flow entry and exit points). Post-project monitoring will measure hyporheic function, and inform adaptive management.

9 Description: Grant funds do not materialize for the project.

L H L L L

Response: While we have an indication that $400-700k may be available for the project, no grant funds have been secured by a grant agreement. We will


6.5. Economic Analysis

The economic analysis is a cost benefit analysis since the project is not regulatory required and do nothing is an option (base case). The floodplain construction with hyporheic element is recommended since the economic analysis shows that Option 2 may have the highest NPV. The total project cost is estimated at $1.45 in capital costs to SPU with SPU and Parks maintaining the project jointly. The main and quantified benefit is the ecosystem services provided by the floodplain restoration. The benefits of the floodplain restoration were valued by the increase in ecosystem services. The potential benefit of reducing downstream flooding is expected to be equivalent to the risk reduction quantified in the Thornton Creek Confluence project. There is the potential for reduced O&M at Meadowbrook pond but this was not quantified nor included in the analysis since the Knickerbocker floodplain is located one mile upstream of Meadowbrook pond. Additional benefits, such as the increase in knowledge from the scientific studies and the maintenance of relationships with the King Conservation District, were not quantified and therefore not included in the cost benefit analysis. The net present value of the project may be positive or negative depending on the realization of the value of ecosystem services provided by the floodplain restoration and the awarding of the EPA grant. There is a high level of uncertainty and variation in the valuation of ecosystem services. In this analysis the benefits will be presented with low (worse case) and high (best case) expected values, shown in the separate bars in the figures. If the benefits turn out to be high, then the NPV of Options 1 and 2 could be positive. If the benefits turn out to be low, then the NPV of Options 1 and 2 could be negative. The economic analysis contains: 1. Cost; 2. Benefits; 3. Net Present Value and 4. Perspectives including King Conservation District and EPA. Costs The capital and O&M costs for the options are shown in Figure 2 and Table 5. The $1.25 million and $1.45 million for the two options include soft costs, and contingency and management reserves. Table 5. Estimated Total Project Cost of Options (in $ millions)

Figure 2. Present Value Cost of Options (in $ thousands)

have grant funds secured by the Stage Gate 3 decision of whether to advertise.


Operations and Maintenance The cost of plantings and plant establishment is included in the construction costs and after three years riparian and upland maintenance will be provided by Parks. The present value of O&M for the project life is $167,000. This includes $200,000 for monitoring in the first few years for Option 1 and 2, and $1,000/yr for landscape maintenance for all options. The present value of both capital and O&M for Options 1 and 2 are $1.41 and $1.62, respectively. Benefits Quantifiable Benefits Quantified benefits are an increase in ecosystem services from the habitat restoration and reduction in flooding risk. Since ecosystem services valuation and the reduction in flooding are relatively uncertain, low and high benefit estimates were developed. These estimates provide a range of potential benefit values used in the cost benefit analysis. (1) Flooding Risk Reduction The creation of a floodplain, the increase in active channel and floodplain areas, and increased flood storage volume will help to reduce flooding downstream by providing storage and flood peak delays. The Knickerbocker project is very similar in size to Option 1 of the Thornton Creek Confluence Floodplain restoration project and is expected to provide a similar level of flooding protection although no hydrologic modeling was completed. The present value of risk reduction of $48,000 from the Thornton Creek Confluence Project was used for Knickerbocker’s cost benefit analysis.


(2) Increase in Ecosystem Services1 By reverting almost two acres of urban grass to floodplain with native vegetation and wetland areas, and returning natural stream function, the floodplain site will be better able to provide ecosystem services. The methodology for valuing the ecosystem services, which is included in the cost benefit analysis, is presented in this section. Recent work by Earth Economics quantified ecosystem services in the Puget Sound Region. In their 2008 study “A New View of the Puget Sound Economy” the value of ecosystem services in $/year was estimated. Out of the twenty-three ecosystem service functions identified in the study, twelve were identified as potentially being improved by the Knickerbocker floodplain restoration. The twelve services and their high/low values are detailed in Table 6. Table 6. Five cover types and the value of their twelve ecosystem services ($ per acre per yr)

The planned changes from grass to stream channel, wetlands and forest which will increase the provision of ecosystem services can be summarized as:

• Improvement to the riparian corridor. • Increased and restored stream habitat. • Increased availability of vegetated shallow wetland and riparian habitats. • Increased floodplain area. • Improved flow conditions that allow various flow magnitudes to create instream

disturbance in a relatively unconstrained creek channel. These disturbances are critical for creating and maintaining instream habitats.

• Improved flow conditions that maintain adequate flows during low flow periods. • Improved sediment storage and transport processes that allow for more natural

gravel recruitment, retention and scour that produce a more diverse and less embedded substrate.

Based on the designs for the floodplain restoration, the change in five cover types by option: urban, stream channel, wetland, riparian forest and upland forest in acres was estimated (Table 7). The restoration of floodplain will change the 1.88 acres site from mostly urban grass to more stream channel, wetlands and forests. Table 7. Acreage and the valuation of ecosystem services per year by Option

1 Draft c alculations are transferred from David Batker of Earth Economics Thornton Creek Confluence Business Case of 2010.

Ecosystem Service

Low High Low High Low High Low High Low High

1 gas regulation 8$ 8$ 8$ 228$

2 climate regulation 4$ 4$ 29$ 268$ 44$ 842$ 32$ 919$

3 disturbance regulation 8$ 236$

4 water flow regulation 2$ 2$ 1,160$ 4,480$ 8,000$ 51,000$ 10$ 10$ 5,414$ 5,414$

5 water quality 48$ 48$ 59$ 834$ 199$ 31,405$ 2,105$ 13,015$ 665$ 843$

6 erosion control 16$ 16$ 10$ 10$ 10$ 10$

7 soil formation 1$ 1$ 8 waste treatment 263$ 5,626$ 263$ 5,626$ 87$ 87$

9 pollination 14$ 14$ 31$ 141$ 10 biological control 13$ 13$ 26$ 26$ 26$ 26$

11 refugium functions 17$ 1,480$ 59$ 12,537$ 1,140$ 2,158$ 1,140$ 2,533$

12 aesthetic value 2$ 19,699$ 3,942$ 9,347$ 1,043$ 10,624$ 5$ 638$

Total by Cover Type 96$ 96$ 1,238$ 26,493$ 10,850$ 65,540$ 4,656$ 32,554$ 2,014$ 10,839$

Riparian Forest Upland ForestGrass Stream Channel Wetlands


The existing 1.88 acre site currently contains 1.48 acres of urban grass, .18 acres of stream channel, .09 acres of wetland, and .13 acres of forest. Currently the value of ecosystem services may be as low as $1,868/yr or a high of $14,391/yr. Option 1 will contain 1.07 acres of forest, .35 acres of stream channel, .46 acres of wetland. Option 1 may increase ecosystem services to a low of $10,274/yr to a high of $74,253/yr. In Option 2 the hyporheic zone under and around the stream channel is expected to increase the production of ecosystem services so that .81 acres of Stream Channel with hyporheic zone is expected to be as productive as a wetland. Option 2’s ecosystem services are estimated to be a low of $13,638/yr to a high of $87,920/yr. Figure 3. Present Value of Benefits (in $ thousands)

The present value of the benefits – flooding reduction and increase in ecosystem services over 100 yrs at a 5% discount are shown in Figure 3 and Table 9.

Total Ecosystem Value in $/year by type

Cover Type Acres Low High Acres Low High* Acres Low High*

Urban 1.48 $143 $143

Stream Channel 0.18 $223 $4,769 0.35 $433 $9,273

Wetland 0.09 $977 $5,899 0.46 $4,991 $30,149 0.81 $8,789 $53,088

Riparian forest 0.10 $466 $3,255 1.02 $4,749 $34,833 1.02 $4,749 $34,833

Upland Forest 0.03 $60 $325 0.05 $101 0.05 $101

Totals 1.88 $1,868 $14,391 1.88 $10,274 $74,254 1.88 $13,638 $87,920

* Uses Washington State classification which would include all forested area on the site as riparian forest.

BASE CASE Option 2Option 1

$0

$500

$1,000

$1,500

$2,000

$2,500

Basecase 1-Floodplain 2- Floodplain+Hyporheic

PV of Benefits - Ecosystem Services($Thousand over 100 yr at 5%)

Reduction in Flooding

Ecosystem Services


Table 9. The present value of the benefits over 100 years (in $1,000s)

Unquantifiable Benefits The bulleted items below are additional ecosystem benefits that were not included in the monetized list presented earlier. Their value is likely captured within the broad range of economic value. • Additional instream spawning and rearing habitat in an area potentially used by

threatened Chinook salmon. • New instream refuge habitat from peak flows, which is particularly lacking in

Thornton Creek. Increasing this refuge habitat should increase early life stage survival of salmonids (e.g., eggs, alevin, and juveniles). Species that would benefit include Chinook and coho salmon, and cutthroat trout.

• Reduced streambed scour during high-flow events. • Restoration of more normal streambed sediment recruitment and transport

processes which should produce more diverse and less embedded substrate conditions. These improved sediment conditions are beneficial for aquatic biological communities.

• Improved hyporheic (surface-subsurface) interchange, which provides better water quality through nutrient processing, breaking down contaminants and buffering water temperatures. These conditions benefit salmonids through improved egg incubation conditions and increased streambed prey production.

• Improved water quality by reducing temperatures and improving dissolved oxygen levels due to trees shading the creek corridor.

• Functional floodplains are limited in the Thornton Creek watershed, making this an ideal location for an outdoor classroom and passive recreation area for local residents and school students.

• The project serves as a demonstration and test case for the benefits of floodplain reconnection in urban streams, for both biological communities and for residential flooding attenuation. Pre-project monitoring of physical and biological habitat conditions is occurring to allow SPU to test the performance of this innovative floodplain project.

Net Present Value Figure 4 illustrates the net present value for the base case and two project options evaluated in preliminary engineering. Analysis reveals that with the low benefit scenario, the costs of the project under Options 1 and 2 outweigh the benefits and the project has a negative net present value. If benefit values are high, however, project benefits are roughly equivalent to project costs in both options and the project has only a slightly negative net present value.

Benefit - PV over 100 yrs in $1,000)Baseline Option 1 Option 2

Low $166 $233High $1,188 $1,460Low $48 $48High $48 $48

Ecosystem Services

Flooding Reduction


Figure 4. Net Present Value of the base case, and Options 1 and 2

NPV including Potential EPA Grant

There is uncertainty in whether or not EPA will grant up to $500,000 to SPU, but the grant is more likely under Option 2 since the agency is interested in the hyporehic element of the project. Figure 5 and Table 9 show how Option 2 has to potential to have a very positive NPV if benefits are high and if the grant is funded.

Figure 5. Net Present Value of the base case, and Options 1 and 2 with potential EPA grant of $500,000

Table 9. NPV with EPA Grant (over 100 yrs at 5% in $1,000)


Perspectives There are several perspectives in the economic analysis. The costs are paid and shared by SPU ratepayers, Federal (EPA) and local granting agencies (KC conservation district), and Parks. The beneficiaries of the project are the downstream residents who benefit from the flooding reduction and regional residents who benefit from the ecosystem services.

7. Recommendation

7.1. Recommended Option

The project team recommends proceeding with Option 2, which implements the project including the hyporheic zone. Overall, the project provides water quality treatment, instream and riparian habitat improvements (and associated ecosystem services) and flood reduction benefits. The option also keeps the momentum going on the project and continues SPU’s innovative work on environmental improvements. It is important to note that this project on its own will not substantially reduce flooding along Thornton Creek. However, it will substantially improve habitat and is part of SPU’s long-term strategy to reduce flooding along Thornton Creek through providing additional floodplain storage. The project requests $1,450,000 to complete implementation of the project. We anticipate that these costs will be partially offset by grant funds and at Stage Gate 3, we will have those grants secured and the exact amount of SPU investment will be identified. Project design and environmental permitting will be completed by 2Q 2012. Construction is planned for 2013.

7.2. Value Engineering

Yes = VE is required for the preferred option.

No VE is required.


7.3. Financial Summary and Cost Estimate Detail

Option 1 Option 2 Option 3 Option 4 Base Case Option 1 Option 2# Cost Item Description Unit Unit Price Quantity Quantity Quantity Quantity Estimated Cost Estimated Cost Estimated Cost1 Flood Plain Reconnection Unit 530,520$ - 1 1 - -$ 530,520$ 530,520$ 2 Hyporeic elements Unit 100,000$ - - 1 - -$ -$ 100,000$ 3 Bridge Unit 50,000$ - 1 1 - -$ 50,000$ 50,000$ 4 Enter Item Description Unit -$ - - - - -$ -$ -$ 5 Enter Item Description Unit -$ - - - - -$ -$ -$

Construction Line Item Pricing -$ 580,520$ 680,520$ Adjustment for Market Conditions 0% 0%

Construction Bid Amount -$ 580,520$ 680,520$ Sales Tax % 9.50% 9.50%

Construction Contract Amount -$ 635,669$ 745,169$ Crew Construction Costs -$ -$ -$

Miscellaneous Hard Costs -$ 25,000$ 25,000$ Construction Cost Total -$ 660,669$ 770,169$

Soft Cost % 45% 45%Soft Cost 7,000$ 297,301$ 346,576$

Property Acquisition Costs -$ -$ -$ Base Cost Total 7,000$ 957,971$ 1,116,746$

Contingency Reserve % 20% 20%Contingency Reserve -$ 191,594$ 223,349$

Management Reserve % 10% 10%Management Reserve -$ 95,797$ 111,675$

Project Reserves -$ 287,391$ 335,024$

Total Cost 7,000$ 1,245,362$ 1,451,769$

Total Cost Projection 130,000$ 1,287,284$ 1,501,402$


8. Preliminary Project Management Plan

8.1. Design Tasks

The project is at 90% design for Option 1. The following design stage tasks will need to be completed. 1. Complete PMP. 2. Amend existing consultant design contract. 3. Review design decisions, particularly with respect to the hyporheic zone and pedestrian bridge. 4. Updated 90% design set, adding prefabricated bridge deck and hyporheic elements. 5. Complete permitting, particularly SEPA and JARPA processes. 6. Complete 100% design. 7. Complete Plans, Specifications, and Estimates (project manual, etc).

Life to Date Actuals Remaining in 2011 2012 2013 2014 TotalBase Case% costs to be spent by year NA 100% 0% 0% 0% 100%Sub Total 123,000$ 7,000$ -$ -$ -$ 130,000$ Cost Projection 123,000$ 7,000$ -$ -$ -$ 130,000$ Option 1% costs to be spent by year NA 1% 15% 82% 2% 100%Sub Total 123,000$ 11,224$ 168,354$ 920,337$ 22,447$ 1,245,362$ Cost Projection 123,000$ 11,224$ 171,721$ 957,518$ 23,821$ 1,287,284$ Option 2% costs to be spent by year NA 1% 15% 82% 2% 100%Sub Total 123,000$ 13,288$ 199,315$ 1,089,591$ 26,575$ 1,451,769$ Cost Projection 123,000$ 13,288$ 203,302$ 1,133,610$ 28,202$ 1,501,402$


8.2. Measurement of Project Outcomes

Project Outcomes will be: • 15,100 square feet of additional flood storage/restored floodplain. • 830 feet of restored stream channel (existing is 750 feet of degraded channel). • Minimum of 9,500 square feet of hyporheic zone. • Reduced peak flow velocities and increased flow diversity. • Increased streambed substrate sediment diversity. • Improved water quality within the project. • Improved health of aquatic communities, including benthic insects and fish.

8.3. Approximate Schedule

Milestone

Estimated Completion

SG-1 Estimate SG-2 Estimate

Project Management Plan Complete None None

Stage Gate 3: Advertise Complete 3Q 2012 3Q 2012 Stage Gate 4: Award Contract – Design Complete

4Q 2012 4Q 2012

Substantial Completion 3Q 2013 3Q 2013 Stage Gate 5: Project Close-out 3Q 2014 3Q 2014

Schedule-related Comments & Assumptions: Assumes that SPU staff is able to provide project management, support development of bids and specifications, and be resident engineer on-site. Assumes that CIP funding is available for the project. At this time, no funding is programmed in the CIP for this project.

9. Portfolio Review

9.1. CIP Cost Estimate of Preferred Option

Option Name 2011 2012 2013 2014 2015 2016 Total

Option #2* Project with Hyporheic

$13k $200k 1.09M $23k 0 0 $1.45M

Adopted Budget

0 0 0 0 0

* See Cash Flow Table in Section 7.3 for more details.

9.2. Funding Availability/Impact on Portfolio

The Knickerbocker project currently has no CIP allocation in the 2012-2017 DWW portfolio. This project would be part of the “Protection of Beneficial Use” Budget Control Level, which currently has an allocation of $23.8M in the 2012-2017 CIP, equating to roughly 4% of the $575.5M CIP (Figure 6).


Beneficial Uses4%

Sediments2%

CSOs36%

Rehabilitation15%

Flooding, Sewer Back-

ups, Landslides

23%

Shared Projects

14%

Technology6%

Figure 6: The DWW CIP portfolio allocations among BCLs. The Beneficial Uses BCL has roughly 4% of the funding allocated for 2012-2017.

Within the Beneficial Uses BCL, three projects will be underway in the same time frame as the Knickerbocker project: Venema Natural Drainage System project ($4.8M, 2012-2014), Capital Hill Water Quality Channel ($8.3M, 2012-2017), and the Taylor Creek Culvert Replacement ($2.0M, 2012-2015). The Mapes Creek restoration project will also occur during the 2012-2015 time frame, although it is not reflected in the current CIP (the Mapes project is occurring in conjunction with the S Henderson Basin 171/47B project). There are other large projects within the DWW CIP that will also occur at the same time as Knickerbocker: the 3 big CSO projects along with CSO GSI and retrofits ($204M, 2012-2017), localized flooding program ($36.9M, 2012-2017), South Park Pump Station ($13.7M; 2012-2014), South Park 14th and Concord ($5-8 M; 2013-2014), Confluence Improvement ($4.8M, 2012-2013), and Broadview Improvements ($22M; 2012-2017). All of the projects above are a higher priority than the Knickerbocker project, however, the grant funding that is currently available is not likely to be available in the future, prompting a business case at this time. For comparison with the DWW portfolio, the Knickerbocker project would occur in the 2012-2014 time frame, with construction in 2013. The total project budget from 2012 through project completion is $1.45M, or roughly 0.48% of the 2012-2015 DWW CIP budget (assuming no grant funding is available). Spending capacity for this project in 2012 will be sought through the upcoming CIP Spending Plan process, and the out years will be included in the 2013-2018 DWF 6-Year CIP. Funding for this project could also be included in the 2012 rate proposal.

Staff Resource Availability/Impact on Other Projects

Yes Principle service providers believe they can deliver this project after Gate 2 approval.

Yes

A PMP, including specifics on resource needs, will be developed after Gate 2 approval.

Yes

An FOM Liaison will be assigned after Gate 2 approval and prior to starting the PMP process.

Comment: Gary Lockwood is the Field Ops liaison working on the project.


10. Appendix

Seattle Public Utilities Floodplain Analysis SPU has evaluated key locations where floodplain restoration would be most effective, given the natural topography and other physical conditions. Figure 1 illustrates the results of this evaluation for Thornton Creek. The Thornton Confluence Project site ranked in the top 3% of areas best suited for floodplain reconnection from almost 140 areas analyzed in the five salmon-bearing watersheds in the City. Floodplain restoration, coupled with other tools to decrease stormwater runoff and increase stream and floodplain capacity, can produce lower flooding risks for public infrastructure and private property and significantly improve stream conditions for Seattle’s aquatic communities.

Figure 1: Key Floodplain Restoration Sites in Thornton Creek

Confluence

Matthews

Knickerbocker

Jackson

Park

125th


Floodplain and Hyporheic Function

Urban streams are integral elements of the SPU drainage system. Thornton Creek is largest of our urban streams, with a drainage area of over 11 square miles. While SPU does not “own” the creek, SPU does operate and maintain miles of ditches, culverts and storm drains that discharge into Thornton Creek. In urban areas, runoff from impervious surfaces is significantly greater than in undeveloped areas. During storms, the volume of stormwater runoff flowing into urban creeks can be orders of magnitude greater than that of undeveloped watersheds. Flooding is a natural process and the primary disturbance within larger stream systems like Thornton Creek. Hydro-geomorphic processes of erosion and sediment transport are the major elements in the formation and maintenance of floodplains. Floodplains are formed over time by the lateral migration of the stream channel. Periodic flooding results in erosion, sediment transport, and sediment deposition, which also contribute to floodplain characteristics.

Floodplain functions include the following: 1. Flood flow energy dissipation 2. Flood water storage (short-term) 3. Peak flow delay (lag time) 4. Sediment deposition and storage (long-term) 5. Organic debris capture and soil development 6. Water quality filtering 7. Groundwater recharge and hyporheic flows 8. Aquatic and riparian habitat Floodplains can provide excellent flood mitigation for urban stream systems. Spreading flows across the rough surface of the floodplain and through multiple side-channel flow paths slows peak flow velocity, delays the peak flow to downstream channel segments, and reduces the erosive power of the flood flows. In addition, the storage volume provided in a floodplain can significantly reduce the impacts of flood flows, especially for small-medium sized storms. In addition to the flood-mitigation benefits of floodplains, these areas are important for sediment and organic debris processing. Floodplains provide long-term sediment storage and naturally meter out sediment in pulses during storm events. This differs significantly from the engineered sediment trapping facilities common in urban watersheds in that those facilities generally require frequent sediment removal (dredging) to maintain their operational effectiveness. Floodplains, by their nature, sort sediment by particle size and store sediment over a broad area. This allows for natural processing of the sediment and organic debris by floodplain vegetation and biota, as well as allowing for “pulsed” release of sediment downstream during more


frequent non-flood storm events. This supports natural replenishment of downstream channels with spawning gravels and substrate upon which native aquatic communities depend. Floodplains also improve downstream water quality. Filtering of surface flows through floodplain vegetation is a natural water-quality enhancement process. In addition, subsurface or hyporheic flows (see diagram below) provide significant filtering and nutrient processing. Hyporheic flows also improve dissolved oxygen levels necessary for a healthy benthic environment, including salmon redds and developing salmon embryos (alevins). Floodplains also provide refuge habitat from high flows, reducing the wash-out of juvenile fish common in urban creeks. Floodplains also support groundwater recharge. Because of this hyporheic and groundwater connection, floodplains are often “hot-spots” of bio-chemical activity that is critical to a healthy aquatic ecosystem. The riparian component of floodplains is also extremely diverse and dynamic, providing excellent habitat for birds and terrestrial animals.

Watershed development can have a significant impact on the structure and functional integrity of floodplains. Development can encroach into riparian areas and floodplains, risking flood damage to homes and businesses. Filling of floodplain areas and off-channel wetlands can result in a significant loss of floodplain and stream channel flow capacity and storage. The loss of floodplain and stream corridor capacity can increase the severity of downstream flooding and compromise the resiliency of the stream ecosystem to absorb flood impacts. Reduced stream and floodplain capacity in developed watersheds is often coupled with watershed changes that significantly increase stormwater runoff. The removal of native vegetation and soils, combined with the construction of roads, structures, and other impervious surfaces, leads to an increase in peak stream flows during storm events and more frequent flooding events. Managing high flows in urban streams is difficult, especially during major storm events when over bank flows occur. Repeated flooding of roads, businesses, and


residences often leads property owners to undertake structural alterations of the stream corridor in hopes of reducing the incidence and severity of flooding. In an effort to make streams convey water efficiently, urban streams have been straightened and channelized, their floodplain and riparian areas have been filled, their stream banks are armored or levied, and woody debris jams are removed. These attempts to enhance stream flow efficiency frequently do not work, and more often than not, have unintended consequences on downstream flows, flooding, and habitat quality.

Whenever possible, the restoration of natural floodplain areas, off-channel wetlands, and riparian corridors offers the opportunity to reclaim stream flow capacity and flood storage in areas where these functions would naturally occur. This is generally more effective than trying to provide detention storage in upland areas or other engineered solutions. In addition to the flood-control benefits of this approach, there are ecological factors that make floodplain restoration attractive.

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