Construction and Maintenance Cost of Turning Capitol Lake into Tidal Mud Flats

In 2009, the Capitol Lake Adaptive Management Program (CLAMP) steering committee recommended the removal of the 5th Avenue Dam and returning to estuarial tidal mud flats. One of the major justifications was its contention that this would be the far less costly alternative. The principle reason for the cost disparity was that the committee’s “Managed Lake” alternative called for dredging the entire lake to a depth of 13 feet.

This amount of dredging was not only unnecessary but raised significant issues of dredge spoil disposal at significant cost. The way the alternative was designed made it almost a surety that it would cost more than dam removal. In view of the subsequent controversy surrounding the recommendation, CLAMP’s estimates of construction and maintenance costs require close examination.

The CLAMP cost estimates for dam removal were based on a 2007 analysis conducted by the engineering firm of Moffatt & Nichol of Seattle. Their estimates were stated in terms of 2006 dollars and are set forth in DEFS Engineering Design and Cost Estimates – Final Report, 2/9/2007. The comparisons used in this analysis reflect M&Ns Alternative B which increased the width of the BNSF railroad crossing to improve tidal circulation and reduce hydraulic stress.

M&N’s estimate called for a total project cost of $90.3 million. The underlying construction cost that would need to be appropriated following permitting was estimated to be $63.3 million. The estimates assumed approval of dam removal in 2007 and a five year period of environmental review and permitting. This longer than normal period of time was felt necessary due to the significant environmental issues involved. M&N assumed project start-up in 2012 and inflated their estimates by 3.5% per year. This resulted in an adjusted project cost of $112.9 million.

A subsequent analysis conducted by C. Stewart Gloyd, P.E. raised questions with both the estimates for the Fifth Avenue Bridge and the railroad bridge components. In his opinion the 2006 costs for these elements were $10.3 million too low. A major reason was the suggested freeway style design of the Fifth Avenue Bridge.

Mr. Gloyd suggests a more likely (and more aesthetic) approach would be to design the bridge to be similar to the new Fourth Avenue bridge. When adjusted to 2012 using M&N’s inflation rate, the project cost would be increased by $12.7 million to a total of $125.6 million if Mr. Gloyd’s bridge recommendations were incorporated.

Reference Estuary Infrastructure Costs Review by C. Stewart Gloyd

A major factor influencing costs is project timing. M&N’s estimates were based on a project start date of 2012 (this year). As of now, no decision has been made on the fate of the lake. Setting aside the strong public sentiment for retaining Capitol Lake, the earliest time a decision could be made to remove the dam would be in 2013. This would require an appropriation of at least $6 million (half of the M&N adjusted cost estimate) to fund the first two years of permitting.

Assuming this actually took place at a time of limited state funds and that the process could be completed in five years, the absolute earliest time the actual project could begin would be July, 2019 since it would require an appropriation by the Legislature of approximately $145 million. When added to the earlier cost of $12 million (M&N’s estimate) for permitting, the total cost of eliminating Capitol Lake to create tidal mud flats would have come to 157 million dollars.

In addition to the actual project cost, there would be a need to periodically dredge Lower Budd Inlet. According to state estimates, 6 feet of sediment will accumulate in Budd Inlet every ten years. This would add approximately $87.2 million* to long term costs for an estimated 50 year total of at least 244 million dollars.

Keep in mind, these are conservative estimates based on M&N’s inflation assumption of 3.5%. Between 2006 and 2010, the R.S. Means construction cost index for the Tacoma area increased at an annual average rate of 3.8%. Since all future estimates of cost increases are conjectural, this analysis chose to use the M&N assumptions.

*The additional $87.2 million figure is the midpoint of the Herrera Environmental Consultants estimates in Capitol Lake Alternatives Analysis (101 pg PDF at Wa State DES) – Public Review Draft and are not adjusted for inflation.

Cost impacts that should be of concern to local government include the potential shifting of responsibility to the local level. It is quite possible that the State could consider the round-about linkage to Deschutes Parkway and a new Fifth Avenue bridge to be the City of Olympia’s responsibility. Also, if the dam was removed it is unlikely that the State would consider dredging Budd Inlet to be their responsibility.

The added sediment would greatly affect the working waterfront with severe economic consequences for the City, the County and the Port of Olympia. The estimated economic benefit to the community of the working waterfront is nearly $24 million annually and the Marine Terminal operations of the Port were responsible for over $225 million in benefits in 2009. Sediment buildup could also affect LOTT’s ability to treat wastewater, potentially resulting in higher costs passed on to ratepayers.

All of these factors would put pressure on Thurston County to assume responsibility for dredging. In short, a decision to remove the dam could have a substantial financial impact at the local level.

A far more fiscally responsible approach has been offered by the Capitol Lake Improvement and Protection Association (CLIPA) in its 2010 White Paper. This approach recommends initiating the permitting process as soon as possible and estimates a ten year cost to maintain the lake of $23.5 million.

Following up on the $200,000 appropriated by the Legislature in 2011, the permitting process would proceed far more rapidly than that estimated for dam removal. The total 50 year cost (in current dollars) would be less than $50 million. Longer term costs would need to be adjusted to reflect inflation.

It is clear from this analysis that CLAMPs contention that removal of the dam is less costly than maintaining the lake is severely flawed. Not only are the ten year costs of dam removal far higher than maintaining the lake ($157 million versus $23.5 million) the long term costs of maintaining and improving the lake are also far less.