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<br />Metropolitan Water Supply Investigation Proposal <br />Hydrosphere, Inc. <br /> <br />Septmber 17, 1993 <br />Page 57 <br /> <br />Facilities/Financial Analyses <br /> <br />Purpose <br /> <br />The purpose of this task is to identify the facilities required for each of the three selected <br />water supply options, to estimate the size and cost of principal components, and to conduct <br />financial analyses for each option. <br /> <br />Methodology and Evaluation Techniques <br /> <br />This task will entail" the reconnaissance level sizing, location and costing of required <br />facilities, estimates of any likely purchases of water rights or facilities, and present value <br />financial analysis of the capital and operating costs of identified alternatives. As part of the <br />financial analysis, sensitivity analyses will be performed by varying interest rates, and both <br />capital and operating costs. The purpose of these sensitivity analyses is to assure adequate <br />comparison of capital-intensive versus operating-cost-intensive alternatives. Dollar costs will <br />not be identified for environmental and institutional aspects of these projects. <br /> <br />Prior to the initiation of the analyses for this task, the criteria to be used in sizing <br />facilities, estimating costs, and preparation of the financial analysis will be documented for <br />review and discussion with the TSC. This documentation will include the simplifying <br />assumptions to be used (eg. regarding facility locations and alignments), constraints identified <br />by the Contractor, and standard planning criteria to be used for the required engineering <br />anal yses. <br /> <br />This task will include TSC meetings as necessary. <br /> <br />Linkages With Other Tasks <br /> <br />This task will begin after Task II is underway and will focus on the most promising <br />alternatives identified in terms of yield. <br /> <br />Likely Sources of Information To Be Used <br /> <br />Data from Tasks 5,6,7,8 and I I will be used as one source of input. Unit cost data will <br />be obtained from recent cost determinations which have been made by the Contractor, or by <br />others, for similar components on other projects. <br /> <br />This task will be conducted interactively with the other tasks within the Opponunities <br />Evaluation focus area in order to address all major aspect of opponunities evaluation. <br /> <br />Anticipated Problems <br /> <br />At a reconnaissance level of study numerous simplifying assumptions are made regarding <br />alignments of facilities, the trade-{)ffs between capital costs versus operation and maintenance <br />costs, and the selection of appropriate unit costs from a sometimes wide range of source data. <br />Assumptions will be well documented to assure a clear understanding of the basis of costs for <br />selected facilities. <br /> <br />Deliverables <br /> <br />For each of the selected opponunities, a technical memorandum will be developed which <br />summarizes the facilities investigations, cost estimates, and financial analyses. The <br />