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CITY OF LA PORTE PUBLIC WORKS DEPARTMENT Memo To: La Porte Area Water Authority Board From:Steve Gillett, Director of Public Works ~ CC: John Joerns, Interim City Manager Michael Dolby, Finance Director Date: 10/12/2006 Re: LPAWA - Additional Capital Cost Update I have previously provided reports on the Progress of the expansion and upgrade of the Southeast Water Purification Plant, as well as the cost estimates for the Authority's share of the upgrade (the Authority is not participating in the expansion). I will summarize the history of the cost estimate to the Authority, and then report on the recent progress made by the Co-Participants in reducing the scope and cost of the Project. The City of Houston originally informed the Authority of its estimated cost totaling $669,059 in December 2002. This cost was upgraded to $742,003 in March 2003, $784,756 in October 2003 and $833,181 in January 2004. In March 2004 the Authority's cost estimated was $904,800, and was expected to increase to over $1,000,000 by the time design was complete and bids issued. Co-Participants began questioning Houston on individual cost elements of the Project, and after several months, Houston supplied information on major elements of the Project. It quickly became apparent that several components that were previously presented as regulatory requirements were in fact Houston's estimate of future regulatory requirements, some as far as 10 years in the future. Additionally, it appeared that some security improvements were excessive for threat levels, and the Co- Participants began to demand input into the process. At the February 10, 2005 Co-Participant's monthly meeting, two committees were formed. The Technical Review Committee would review the need for various design elements, and recommend changes and/or reductions in scope. The Financial . Page 1 -----~