Part 2: Ecological and Environmental Considerations for Cost Estimating Development Projects

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Part 2 Ecological and Environmental
Considerations for Cost Estimating Development
Projects
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Environmental Considerations in Property
Development

• Contamination What Is It?
• Identification of Contamination
• How and When is this Done?
• So I have a problem What Now?
• Nature and Extent of Contamination
• How much will it cost to fix it?

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Contamination 101

• A contaminant is a substance that negatively
  affects human health or the environment
• Contaminants are regulated by the Environmental
  Protection Agency (EPA) or Florida Department of
  Environmental Protection (FDEP)
• Cleanup levels are assigned to each contaminant
  based on their risk to receptors (e.g., humans,
  aquatic and terrestrial species)
• Cleanup levels are often in the part per million
  (ppm) or part per billion (ppb) range
• One ppm equals.
• One drop of gasoline in an auto gas tank
• One minute in 2 years
• One cent in 10,000
• One inch in 16 miles

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How Clean Is Clean?

• One part per billion equals
• one 4-inch hamburger in a chain of hamburgers
  circling the earth at the equator 2.5 times
• one silver dollar in a roll of silver dollars
  stretching from Detroit, Michigan to Salt Lake
  City, Utah
• one kernel of corn in a 45-foot high, 16-foot
  diameter silo
• one sheet in a roll of toilet paper stretching
  from New York to London
• one second of time in 32 years
• Some contaminants (e.g. benzene) have to be
  cleaned up to one ppb
• Its not easy, and its not cheap

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When and How Is Contamination Identified?

• Best Case Scenario Prior to Property Acquisition
• Phase I Environmental Assessment per ASTM
  E1593-00
• Chain of Title (prior ownership)
• Records Review (prior use)
• Interviews with Knowledgeable Person(s)
• Site Inspection
• Does not involve sampling
• Phase II Environmental Assessment
• Qualitative study (yes/no)
• Soil, sediment, groundwater sampling
• Samples taken in areas of potential impact

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Red Flag Sites

• Former shooting/bombing ranges
• Gas stations/fuel terminals
• Dry cleaners
• Manufacturing plants
• Heavy machinery
• Electronics manufacturing
• Nuclear missile manufacturing
• Military bases
• Airports
• Future Orlando Performing Arts Center
• Disposal sites
• Power Equipment
• Drum Disposal Areas

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More ampling

• Remedial Investigation define nature and extent
• Can range in cost from the thousands to millions
  of dollars
• Always better is someone else is paying for it

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Once Contamination is Defined

• Remedial Alternatives Analysis and Design
• Engineers design cleanup methods taking into
  account cost, schedule, ease of implementation,
  effectiveness
• Soil excavate, vapor extraction, bioremediation
• Groundwater air sparge, bioremediation, pump
  treat,

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Once a Remedy is Selected

• Remedial Action Implementation
• Operation and Maintenance (OM)

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Some War Stories Property Development

• A Phase I ESA (by others) gone bad
• redneck recycling
• Performed assessment and source removal of
  approximately 16,000 tons of soils impacted with
  Dioxin, PCBs, Lead, and Arsenic
• Activities included excavation, onsite soil
  treatment, loadout, and transportation disposal
• 1.8M Project

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Restoration of a 2,000-acre site - Orlando
Pershing
Launch Test Area
Landfill 1
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Another Phase I ESA gone badRemediation of
Former Trap and Skeet Range
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Estimating the Cost of Environmental Liabilities

• High-level (programmatic phase) RACER Overview
• Nature and extent must be defined
• Highly contingent upon defined nature and extent
  of contamination
• Great for budgeting not for bidding
• Detailed Cost Estimating supported by hard bid
• Excel
• Timberline
• Appropriate for hard bid projects
• Both methodologies can be used
• Vet cleanup technologies with RACER, prepare hard
  bid of selected remedy

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What is RACER?

• Remedial Action Cost Engineering and Requirements
  (RACER) a parametric and integrated cost
  estimating software developed specifically for
  environmental investigation and cleanup projects.
• A commercial, off-the-shelf, Windows-based system
  that is adaptable and scalable to any size
  project or portfolio.
• A validated and accredited system, RACER provides
  credible, auditable, and defensible budget-level
  estimates.

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What Media Does RACER Address?

• RACER addresses all media of concern
• Soil
• Sediment
• Groundwater
• Surface Water
• Sludge
• Building Materials
• Ambient/Indoor Air
• Free Product

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What Regulatory Programs Does RACER Cover?

• CERCLA/Superfund
• RCRA Corrective Action
• State Groundwater Protection Programs
• State Voluntary Cleanup Programs
• Underground Storage Tank Programs
• Radioactive/Nuclear Facility DD
• Abandoned Mine Lands Programs
• Military Munitions/Unexploded Ordnance Programs
• Non-U.S. Cleanup Programs

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What Lifecycle Stages Does RACER Address?

• RACER estimates costs for all lifecycle stages of
  contaminated site management.
• Pre-study
• Study
• Removal/Interim Actions
• Design
• Construction/Implementation
• Operation Maintenance
• Long-term Monitoring
• Site Closeout

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What Makes RACER Unique?

• RACER uses a parametric estimating methodology
• Input Parameters Logic Required Items
• Input Parameters Algorithms Quantities

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Who Uses RACER?

• AECOM
• Corporations
• Engineering/Consulting Firms
• State Environmental Regulators
• Law Firms
• Insurance Underwriters
• Government Agencies

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How Does RACER Organize Estimates?

• RACER has a 4-level hierarchy to organize
  estimates
• Estimator sets up folder, project, site, and
  phase levels in RACER hierarchy.

Hierarchy provides flexibility to organize
estimates as needed
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Are RACER Estimates Location Specific?

• RACER adjusts national-average prices for
  materials, labor, equipment, and subcontracted
  services based on the project sites
  state/country and city.

Location modifiers based on the project sites
state/country and city
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How Does RACER Estimate Costs?

• RACER uses high-level parameters about the site,
  scope of work, and execution methods to estimate
  costs.

Estimator enters parameters for each cost model
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How Does RACER Estimate Costs?

• RACER provides flexibility to adjust parameters
  to suit the needs of the project and/or client.

Default values can be changed as needed.
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How Does RACER Estimate Costs?
RACER identifies items required to conduct the
work.
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How Does RACER Estimate Costs?
RACER uses algorithms to calculate quantities.
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How Does RACER Estimate Costs?
RACER looks up prices and adjusts for location
and safety productivity.
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How Does RACER Estimate Costs?
RACER calculates total cost for each item.
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How Does RACER Estimate Costs?
RACER calculates total cost for the technology.
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What Documentation Does RACER Provide?

• RACER provides comprehensive documentation for
  project deliverables and audit trail.
• RACER includes reports designed specifically to
  provide a defensible record of all input
  parameters, assumptions, and notes used in
  building the estimate.

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Does RACER Support Cash Flow Analysis?

• RACER provides cost-over-time reports that can be
  used for cash flow modeling of environmental
  liabilities.

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How Often is RACER Updated?

• RACER is updated annually with new prices,
  location modifiers, escalation factors,
  templates, cost models, and other engineering
  enhancements.

Estimates from prior versions can be easily
upgraded to use the latest pricing data from RS
Means.
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One Thought to Remember

• Caveat EmptorLet the buyer beware
• A Phase I environmental assessment costs about
  5,000
• Cleaning up a property where you have assumed the
  liability can cost hundreds of millions
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