4 Cost Estimation Assumptions

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1 4 Cost Estimation Assumptions The Proposed Action would include the relocation of the existing commuter rail lines; construction of approximately four miles of new light rail track and systems; relocation of Lechmere Station; construction of six new stations, four new multi-span viaducts, and a storage and maintenance facility; installation of power, signals and communications systems; reconstruction of 11 brid ge structures; and acquisition of 24 new Green Line vehicles. Preliminary costs have been estimated for the major items based on the conceptual design completed to date. Minor items are accounted for in the contingency. Developing the preliminary cost estimates for the Green Line Extension project has been an iterative process. Prior to developing this New Starts Submittal package, preliminary cost estimates were submitted to the Federal Transit Administration (FTA)/ Project Management Oversight Consultant (PMOC) several times for review, while incorporating previously received comments. The materials provided in this submittal are the most up-to-date, and they address the FTA/ PMOC s latest comments received on August 1, 2011 in the draft results of the FTA/ PMOC Risk Assessment Workshop held in March Since September 2010, approximately $36 million in base costs were added in response to evolving project requirements and design development. Following the FTA/ PMOC s Risk Assessment Workshop held in March 2011 and project-level risk workshop in May 2011, the capital cost estimate increased further, adding an additional $72 million in costs not previously identified such as increasing the professional services allocation from 26% to 30%, extending the limits of the reconstruction of the Lechmere Viaduct to Land Boulevard, increasing the size of each of the stations and ad ding two buildings to the vehicle maintenance facility. These increases to the project base cost were, in part, offset by a 1% reduction in the overall project contingency and a reduction in the land acquisition costs. Also following these risk workshops, a new project schedule was established that provides a range of probable schedule outcomes (i.e. 10%, 50%, and 90% probability dates of not exceeding those dates). The capital cost estimate provided in this submittal uses the number identified as the 50 percent probability number in line with the 50 percent probability of not exceeding the revenue service start date of June Cost Estimation Assumptions /23/2011

2 2019. This is also consistent with the comments made in the PMOC s Risk Assessment report for the project. The upd ated capital cost estimate also utilizes the latest FTA s SCC Workbook obtained from the FTA s website in August It is anticipated that further refinements will continue to be made as the FTA/ PMOC coordination efforts continue throughout the New Starts application review process, and all upd ates will be documented accordingly. This chapter provides a summary of the general assumptions used to develop capital cost and operating and maintenance (O&M) cost estimates for the Proposed Action and, for comparison purposes, the Baseline Alternative. 4.1 Capital Cost The conceptual capital cost estimate includes all construction costs associated with the implementation of the project, including land acquisition and professional services. The professional services segment of the Green Line Extension project including elements such as project management, engineering, construction administration, insurance, inspections, fees/ permits, and start-up costs (covering project initiation work such as training, site access, and protection work performed by agency staff and outside contractors) are represented as a percentage of the construction cost. The cost estimate provided in this chapter was developed by calculating quantities for all proposed work and applying weighted average bid prices in 2010 published by MassDOT. The unit prices were refined based on estimates for other local transit projects in the Boston area, supplemental pricing research with the Massachusetts Bay Transportation Au thority (MBTA), coordination with contractors, and RS Means (an industry organization that publishes construction cost data). The 2010 base year costs for each line item were then escalated 3.5% to obtain 2011 base year dollars Contingency A 10 percent unallocated contingency was applied to the total base year dollars for Cost Categories to account for complexities in construction phasing for structures and off-site improvements that are not fully defined given the current level of design. The allocated contingency percentages were applied to each FTA cost category in accord ance with Table 4-1. Cost Estimation Assumptions /23/2011

3 Table 4-1 Capital Cost Contingency Percentage Allocation FTA Category No. Description 10 Guideway and Track Elements Allocated Contingency Percentage Guideway Elements At Grade or Above Grade Guideway Elements Aerial Structure 25 Track Elements 25 Stations, Stops, Terminals, Intermodal Lechmere Station 25 Other Stations Support Facilities: Yards, Shops, Admin Buildings Light Maintenance Facility 23 Yard and Yard Track Site Work & Special Conditions Demolition, Clearing, Earthwork 24 Haz. Materials, Cont. Soil Removal, Groundwater Treatments 24 Site Structures - Retaining Walls or Sound Walls 25 Pedestrian/ Bike Access 24 Temporary Facilities Systems Right-of-Way, Land, Existing Improvements Vehicles 5 The estimate includes a total contingency of $218.3 million, which is 29 percent (32 percent excluding vehicles) of the base year dollars for all categories (10-80) without contingency Professional Services The estimate for professional services was developed following standard MBTA practices and is consistent with recent MBTA submittals to FTA. The following percentages were applied to the total construction cost (base year d ollars and allocated contingency for Cost Categories 10-50) for each FTA professional service cost category in accord ance with Table 4-2. Cost Estimation Assumptions /23/2011

4 Table 4-2 Professional Service Percentage Allocation FTA Category No and Description Engineering Project Management Construction Administration Professional Liability Insurance Legal/Permits Surveys, Testing, Inspection Start-Up 0.2 Allocated Percentage In addition, an allocated contingency of 10 percent was added to each item in the professional service category. The result is a professional service estimate that is 30 percent of the construction estimate Baseline Cost The costs for the Baseline Alternative have been estimated using similar assumptions and contingencies as those for the capital cost estimate. The Baseline Alternative includes all measures required to expand bus service to cover the service area of the Proposed Action, including a new bus maintenance facility, 19 new buses, eight new Green Line vehicles, and expansion of the existing Lechmere Bus Terminal, including land acquisition Summary Capital costs for the Proposed Action and the Baseline Alternative are itemized in the New Starts Workbook Standardized Cost Categories (SCC) for Capital Projects 1 and are included in Attachment 4A. The standard inflation rate of 3.5 percent was provided in the latest FTA SCC sheet inflation worksheet on the FTA website (2011). The capital cost estimate for the Build Alternative is $1.2 billion in 2011 dollars, which results in an annualized cost of $72.0 million and a year of expend iture total cost of $1.3 billion. The capital cost estimate for the Build Alternative also includes finance charges totaling $ million in YOE dollars. The capital cost estimate for the Baseline Alternative is $168.2 million, which results in an annualized cost of $13.3 million. 1 Federal Transit Administration Standardized Cost Categories for Capital Projects Revision 14. August 5, Cost Estimation Assumptions /23/2011

5 4.2 Operating and Maintenance Cost The O&M costs for the Green Line Extension project are based on the fully allocated O&M cost model developed specifically for the Green Line Extension and are part of this submittal. The O&M cost model methodology and results as of 2011 can be found in the MBTA Operation and Maintenance Cost Mod el Method ology and Results Report, dated December 13, 2011 (Attachment 4B). This O&M cost model was developed consistent with FTA s draft guid ance for the estimation of operating and maintenance costs that is part of FTA s Procedures and Technical Methods for Transit Project Planning. As such, the cost model is based on a resource build -up approach that fully allocates each unit cost factor to a supply (Level of Service) variable for all MBTA mod es. Unit costs are further broken d own by object class (wages, salaries, healthcare, unleaded / diesel, CNG, propulsion utilities, other utilities, and other) so as to provide the flexibility to inflate each object class at a different escalation rate if needed. Each unit cost factor is multiplied by the appropriate Level of Service (LOS) variable and the financial model. The O&M cost model is based on the most recent available expense date from the MBTA s general ledger and the most recent actual level of service. As discussed in Chapter 3, the Central Transportation Planning Staff (CTPS) developed an annualization factor of 293 based on MBTA s recent operating statistics, such as service schedules for weekdays, weekends, and holid ays within a year. For both the Proposed Action and the Baseline Alternative, the annualization factor allowed various daily operating statistics (ridership, revenue vehicle hours, and revenue vehicle miles) to be converted to their respective annual values. The O&M costs were calculated using the fully allocated cost model. MassDOT believes that the model is a conservative approach for this project since it is an extension of an existing MBTA mature system. The annual O&M cost estimates are $24.8 million for the Proposed Action and $14.7 million for the Baseline Alternative in 2011 dollars. The detailed breakdown of the cost estimates are in Attachment 4C. Cost Estimation Assumptions /23/2011

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CHAPTER 6: COST ESTIMATES

CHAPTER 6: COST ESTIMATES 115 116 UNION STATION GEORGETOWN: ALTERNATIVES ANALYSIS for PREMIUM TRANSIT SERVICE The Recommended Alternative could be designed and constructed under a number of financing options.