The Public Works Nerds
St Paul Regional Water Service's Water Treatment Plant Overhaul Project Using Progressive Design Build - A Conversation with Pat Shea
Pat Shea, General Manager of the St Paul Regional Water Service spends time with us nerds to talk about their mammoth Water Treatment Plant project including the use of Progressive Design Build to deliver the project. Pat also touches on the issue of lead service line replacement and how SPRWS's surface water source is unique in the nation.
FURTHER RESOURCES
Project Presentation
https://drive.google.com/file/d/16udJIAX4DyptRJVqQD3Ntp0LC9bIa76n/view?usp=sharing
Design Build Institute of America - Primer on Progressive Design Build Process
https://dbia.org/wp-content/uploads/2018/05/Primer-Progressive-Design-Build.pdf
St Paul Regional Water Services website
https://www.stpaul.gov/departments/saint-paul-regional-water-services
Pat Shea, General Manager of the St Paul Regional Water Service spends time with us nerds to talk about their mammoth Water Treatment Plant project including the use of Progressive Design Build to deliver the project. Pat also touches on the issue of lead service line replacement and how SPRWS's surface water source is unique in the nation.
FURTHER RESOURCES
Project Presentation
https://drive.google.com/file/d/16udJIAX4DyptRJVqQD3Ntp0LC9bIa76n/view?usp=sharing
Design Build Institute of America - Primer on Progressive Design Build Process
https://dbia.org/wp-content/uploads/2018/05/Primer-Progressive-Design-Build.pdf
St Paul Regional Water Services website
https://www.stpaul.gov/departments/saint-paul-regional-water-services
Welcome to the Public Works Nerds podcast with Marc and Mike. Welcome to the Public Works Nerds podcast. I'm Mike Spack And I'm Marc Culver. We're your co-host today, coming to you from a new location, one of Bolden-Mink's conference rooms. We're giving a try. Today. We're talking about the uniqueness of a regional water supply system and updating a nearly 100-year-old water treatment plant with Pat Shea, who's been the general manager at the St Paul Regional Water Services since 2021. We're also going to chat a bit about the progressive design build process, which I'm excited to learn more about. Welcome.
Pat Shea:Pat. Well, thank you. Thank you both for having me. I appreciate the opportunity.
Mike Spack:Yeah. So, starting out, tell us a little bit about your career. I saw you have a chemistry degree and started out as a lab tech and have had quite the run up, including being in charge of public services for the city of St Cloud.
Pat Shea:Yeah Well, so started as you laid out. Really, my internship when I was going to college for my undergraduate degree was related to lead and copper rule for drinking water utilities. So I was going to school in St Cloud, minnesota. I'd get stationed there after I graduated and progressed through that organization from an intern to a lab tech to the director of public services, so overseeing really the public works department for the city of St Cloud. From there I was fortunate to have my kids graduate from high school and move away and go to college And there's just a good opportunity here in the metro area of the Twin Cities to take an opportunity to work for St Paul Regional Water Services, which is one of two board operated water utilities in the state of Minnesota. So it really gave a unique opportunity to be a leader in an organization that reports to a board that's specifically tasked with running a drinking water utility. So pre COVID 2019, fall of 2019, moved to St Paul Regional Water Services And from there, about a year into that tenure, i was appointed as the general manager.
Marc Culver:You know. I just wanted to quick ask a question on the board component. What is, what's, the makeup of the board.
Pat Shea:So the board is made up of representatives of our cities that we serve, so 70% of our customer bases within the city of St Paul. So the board is made up of two St Paul residents that are appointed by the mayor, three city council members for the city of St Paul and then two of our suburban customers on a rotating basis. So it's a seven member board. Two are appointed by the mayor and then generally five are an elected official from one of our service area customers.
Mike Spack:Okay, And that's the unique thing about the regional water services that there are 14 communities involved. Is it St Paul plus 14 communities?
Pat Shea:13 others and St Paul.
Marc Culver:Yeah, and just again, to kind of put that in perspective over 450,000 customers and you're cranking out 40 million gallons per day of water. Now, that's on an average. What's your peak So?
Pat Shea:the peak is generally about 70 million gallons a day and we'll hit that a few days in the summer.
Marc Culver:Yeah, But you know probably getting close to that right now.
Pat Shea:Yeah, it's been a good May and early June here for water sales, that's for sure.
Marc Culver:Yeah, and I think we'll touch on that a little bit because I know, having been one of your wholesale customers for a few years, so, as the city of Roseville, where I was a public works director, was a wholesale client of St Paul, water still is. I'm just not there And it was really interesting really a lot about your guys' process and the makeup of that and working with you. But a lot of that was learning about your guys' rate structure. And it's a good thing, with everything on water conservation, that water use is going down. But that's not really helpful when you're trying to generate revenue and predict how much water you're going to sell in a year. But again, we'll come back to that if we've got some time. But that's just kind of an interesting model You want to promote water conservation but you're still trying to bring in enough revenue to operate this huge operation that you have going on.
Mike Spack:Well, let's talk about that a little bit. I'm curious of what does that look like? of how you serve residents of St Paul. Do you serve them differently than residents of Roseville? the rates charged What is the business model?
Pat Shea:Yeah. So it's a little unique in that we have customers which are cities that we call retail customers. So St Paul is a retail customer of the utility. Maplewood is a retail customer. They get all the exact same services. We do everything from water main restoration, replacement, hydrant maintenance, billing and of course provide them drinking water as well. So if you're in Maplewood you get a utility bill from St Paul Regional Water Services, not from the city of Maplewood. Now, roseville is unique. They're what's called a wholesale customer. So there's connection points between the St Paul Regional Water System and Roseville System. There's a meter there. We provide them water at that point. From there they're essentially the water supplier. So they control their own distribution system, their own storage, their own billing, all those things. So the rates, of course, would then be a little bit different, because not as much of the long-term investment in the distribution system is on what I would call our ratepayers. So they're charged a different rate structure based upon, really, a five-year wholesale rate study that we complete, working in conjunction with those wholesale customers.
Mike Spack:So how large of a staff does so? put it in perspective. You're servicing about 450,000 residents. How much staff on your team to deliver the water?
Pat Shea:So we're about 280 full-time equipment employees. We do some layoffs in the fall, but we're also a utility that does our own water main projects. So and I think we'll talk about lead service line replacements We also do lead service line replacements in-house. So in comparison to maybe some other utilities that have an engineering staff and inspection staff but then contract out the infrastructure replacement renewal programs that they do, so we do some of that but a lot of that work is done in-house. So about 40% of our staff is in our distribution division which does those water main rehabilitation, water main breaks, hydrant maintenance, lead service line replacements, all those things that maybe a different model, a utility wouldn't do.
Marc Culver:And just kind of touching on that as an example just to complicate things even more, roosevelt also happened to be the city engineer for Falcon Heights, which is one of your retail clients, and so you own the infrastructure, you maintain it, and we were doing street rehabilitation projects in Falcon Heights And it was just a little interesting because instead of including the water main work as part of the contract for the general contractor, it was worked on by others, so St Paul water would come in and do the work, and so it takes a little bit of more of a coordination from the contract level who's doing this, who's doing that, and restoration to set the other. But I would imagine long-term it's saving you guys quite a bit of money because that same staff is also responding to water main breaks and this and the other. So you're kind of using that same staff for maintenance as well as infrastructure replacement.
Pat Shea:Yeah, and the institutional knowledge you gain on that too.
Pat Shea:If you get the opportunity to work with some of the best of the best in the distribution world, they can stand on an intersection and tell you what size the valve is in the street, when it was installed and who the manufacturer was, and at two o'clock in the morning on Christmas Eve.
Pat Shea:That's what you need. You need that kind of institutional knowledge to be able to say, yes, we have another one of these valves, it's on the third shelf on the left and they're able to do that work. But it's very similar to if a city is working with a county A county's going to do a mill and overlay and there's some utility work that needs to be done under there. So it kind of fits a model, but it is a little bit unique and it probably does at times make some projects a little bit more expensive. But I think overall the economy of scale and being able to do it in-house really has its benefits, and it's one of the things with lead service line replacements that we've found is our staff can do it much cheaper and kind of fit it into. The coordination of other projects has been very helpful.
Mike Spack:I assume you have your own engineering staff, and so then I assume they very much can standardize what you're doing across your whole infrastructure, which then, when that leads to maintenance that I assume leads to pretty significant savings.
Pat Shea:Yes, that's the thought and premise and, probably similar to your firms, hiring engineers has been a challenge really in the last five years. So I think we're all equal partners in trying to promote the profession in general, and why? utilities is a great profession to get into, and one of the things that we offer that's several other, maybe some external firms can't is generally you're going to be home at night with your family by the end of the day, and so work is pretty consistent, but you're not going to have to drive to Fargo or Cedar Rapids for a project all summer. You'll be able to not only have a project in your own community but actually see it all the way, from beginning to end, and then watch it be operated and maintained and used as an asset. Does that?
Mike Spack:lead to issues some summers if you find a bunch of your communities are doing their street reconstructs. All of a sudden there's a burst of them one summer and the next summer is quiet.
Pat Shea:It certainly does. We're doing our budgets right now for 2024 and we have a 10-year capital plan that we keep updated and really just making sure we have really good coordination and communication with their suburban and retail customers to make sure that we're planning our work. Generally, a strong percentage of the work is being done within the city of St Paul older city for one and, of course, a larger customer So it gives us a little bit of play. We can postpone some of those. If there's a significant project going on in Maplewood that we need to address, we can kind of flex and move back and forth.
Mike Spack:Yeah, So let's talk a little bit about the big treatment plant project that you've been going through in this underway. Why don't you set us up a little bit about it, give us the history, what that plant looked like in 2018, before he started the project, or?
Marc Culver:what it looked like in 1910?
Pat Shea:Yeah, Yeah, so again that 450,000 customers of SPRWS are served by a single facility located right on the border of Maplewood and St Paul, and that facility was constructed really cited back in the early 1910 and then was expanded several times over the last 100 years to better serve and provide a little bit more redundancy, and upgraded more modern equipment. So a lot of the facilities was at, or near, a 100-year life cycle already. So in 19, excuse me, in 2015, 2016,. As the planning efforts based on a facilities plan that was recently completed back in 2014, the decision was made we need to make some significance investments in this utility, in this facility itself, and the utility at the time decided to pursue an alternative delivery method called progressive design build, and it something that's relatively common in bridge construction and in some federal projects I believe the Met Council, on some of their larger interceptor projects, will do the same thing but not really common for municipalities like cities or SPRWS. So we've got legislative approval in 2018 to pursue a progressive design build, and what that allowed, what that allowed the organization to do, is really involve both professional engineers that build and design large water treatment plants, but also the contracting world to get contractors in to say you know this is a good idea. If you did this it would save money. If you try to schedule this work on the schedule that you're proposing right now, we would have to do a lot of this work in the winter and there's heating costs or bypass costs or those kind of things that would really escalate the cost of it.
Pat Shea:The other thing that the organization really didn't have a strong grasp on is really the organization has really really good records. It's impressive. But as you go further back in time you know back into 1930 and 1920 and 1910, the record quality goes down significantly. So really the ground that these facilities were on was kind of unknown at the time. So there was a lot of kind of apprehension on building a new plant connected to an old plant and how that would go. And you know you don't have the luxury. You have a single source of failure at this point. So a progressive design build because of the size, the complexity of the project that needs to be done, and then just doing work on an old facility next to a facility that are on a new facility next to an old facility. You know the demo work. What are you going to find on the ground. You know you can't cave in the existing facility. You have to use it as you're progressing.
Pat Shea:So in 2019, one of the first things that I got involved with when we started we did a market sounding exercise where you know, working with their owners, who have. So we hired an external engineering firm that specialized in design build projects And we invited you know, we created a sounding document. We sent that document out to both contractors and engineers to ask them, you know, if this project were to go forward, what would be your? would you consider? would you propose? And if you wouldn't, why not? And if you're on the fence either way, you know what things in here don't make sense. What do you need? more clarity on? How do we make our request for proposals the best document it can be?
Pat Shea:And following that, we continued to kind of go through the process and update that information. Then we held on site kind of tours for progressive design build firms and kind of walk them through and let them ask questions. We took every you know. After that we gave them some time to look at both the market sounding document and then the walkthroughs, tabulated all the common questions, sent that all back out, so people had the chance And then from there on we, you know, used to, you know, the design build documents from a design build association massage that fit our, you know, procurement requirements and the specificity of our project went up for bid.
Pat Shea:We got, you know, five proposals, essentially narrowed that down to three, and then COVID hit And right, as we were doing kind of the interview process for those design builders. We're, you know, right in the the era of masks and that kind of thing. So it was, it was interesting when it, when it came to that, because you know we generally, if you're doing a proposal for a multimillion dollar project, you know you might have eight, 10, 12 representatives of the firms you're interviewing in the room. And so we, you know, but we did in person, you know, in the larger room, and and went through that process And and you know we're very happy so far with the progress that we're making.
Mike Spack:Okay, what's the primary differences between? I mean, i think we all know design bid build and design build is pretty been common for more than a decade. I'm not familiar with progressive design build. What's the nuances there?
Pat Shea:So you know design. So design bid build has just as you mentioned. You hire an engineer or you do it in halls. You design a project, you put as much detail as you can possibly into that document. So you have all the all the questions and answered, you know, from the owner or the engineer kind of kind of hammered out. You go out, you, generally in Minnesota you take the lowest responsible bid from a contractor. Contractor comes in, does the work And your, your design engineers probably is very likely doing construction related services And what.
Pat Shea:What tends to happen is any mistake that comes up, any oversight that comes up. It becomes kind of a three way battle between the owner, the contractor and the design engineer. Who's responsible for that error? And sometimes you know if it's an omission or an unforeseen thing. It, you know, it generally clears itself pretty well. You have contingency and everybody you know it's unknown because it was unknown And so so you can make that work. But with a design build usually you have a design up to a certain percentage. So 30% or 60% design is done. Now you want to do design builds And now you bring in a design builder And at that point they can bring the contracting world in with them. They can. They can actually have their contractors scheduled. They might self perform. The engineer, the design builder we're working with in St Paul does some of the work themselves as well. So they have a construction arm So they can. But they'll bring in a variety of specialized contractors that they have experience working with And they're able to kind of hash things out and and and and, you know, hopefully make it a better project as a result of that. Because you know they have, you know they have the crane operator at the table saying you know the crane will not fit there If you design it this way, it will not work. So you kind of eliminate some of those, some of those errors, and then you do, you know you do take one of the one of the finger pointers out of the equation. Now it's just the design builder and the owner that will have to kind of negotiate and work through any, any oversights or mistakes that are made.
Pat Shea:Progressive design build goes back even further. So generally you have a project that you have very specific goals. It's very important that you kind of know like these are the things we want. You know you can't just be kind of loose with it, because a progressive design build. The cost can go crazy that way, but you have a very simplistic kind of rudimentary like okay, here's what we want, here's what the project will contain, here's what success looks like, so here's what you need to deliver.
Pat Shea:And then you design it through stages. So the owner, the contracting world and the design builder all work together and design this project to meet, you know, really, the requirements that are spelled out in advance. So it's just a. It's a. It's a different way. It saves quite a bit of time. So large projects, complex projects and then projects that you know you don't want to wait 10, 15 years to get off the ground, because we would literally be still designing our facility right now had we not gone with the progressive design build models From, from the from the perspective of costs project costs, ultimate project costs.
Marc Culver:On the progressive model, maybe kind of talk about how you manage that a little bit. Because even under the, you know the more traditional design build you're up to a 30% build. You know design or something like that. You have a pretty good idea what the cost is going to be. You usually have a budget of some sort. So in the progressive model it's a lot harder because you have a vision but you don't necessarily know how much it's going to cost to get there. And now you're bringing on a, an engineer, and a, an engineering firm, and a contractor at the beginning. So how do you kind of bid that out and how do you manage that? that cost?
Pat Shea:That's an excellent question. That's one of the things that really kind of the COVID and supply chain kind of it was kind of a double whammy and it kind of hit us hit us in ways that we hadn't really anticipated. And then the fact that you know you're you're borrowing money almost for free when the project started And now you know, of course, interest rates are not at that level. So back to kind of your original question. So you know, you, we have a design build firm as kind of our own owner's agent that is looking, looking at different things, and the one process that we implemented, you know, as part of our spec document, was we want this to be an open book process. So the contractor actually has to, you know, the design builder has to open their books and say this is how much we paid our workers to do this, this is how much you know. Here's the invoice for that material that we ordered. Here's, you know. So it's an open book process and and a, you know, a $235 million project. He can't look at every nut and bolt, but you can verify and you can check things and you and you can kind of commit to those sorts of things. So so just kind of controlling costs. But the, the, the beauty is right now and we're, we're very fortunate, we're having a very good relationship with the design builder right now And we have since the beginning they, they actually help you cut costs in a lot of different ways. So so we're, we're, you know, we're reconstructing two thirds of a facility that can treat, you know, 112 million gallons a day.
Pat Shea:So that's a big hole and there's a lot of soils, right, those soils have to come out of the hole and then they have to go back in the hole at some point. So where do you put those soils? So if even a design build or a design bit build project, we would have to specify where those soils go. So, so we would have to pick a spot. They would put it in their proposal and that's the end of the discussion. And if it costs them more or costs them less, we don't benefit, we don't pay. So, working with the contractor, working with the contractor and working with the design builder, working with our own staff, we could take some of that soil and move it over here, for it's only going to be there for three months. Yeah, we can take that for three months. And now the trucking costs and you imagine just how much soil staging and soil transport costs. You know it saved you a couple million dollars right there just on being able to be flexible in the process as it moves forward. So there's been a lot of interesting opportunities like that where we've been able to save money just by everyone communicating and everybody kind of being open, because again, there's a trusting relationship there. They don't.
Pat Shea:You know the probably my favorite example of this is we're building four salt contact clarifiers, which are big circular tanks that about 120 feet across and they're pre-stressed panels, so there's 132 panels that they needed to not only pour, pre-pour and then cure and then get them in during our construction season. All these kind of things, all these little nuances. Well, you know the. Typically they would fabricate them offsite somewhere and then transport them in. Well, the beauty of this is you know like. Well, you can do that at our site over here and sit it over the winter. It's controlled area, you know, it's secure location. Now they don't have to mobilize twice to do that kind of work, and there's just all those things that your design engineer would probably have missed it. We would have missed it. It would have been a cost, unnecessary cost. That wasn't really anyone's fault. They just used the best information you have to get things done.
Marc Culver:And different contractors have different abilities and capabilities, and that's, you know, the one thing that I always appreciated about the design build process and I was involved with a couple of those during my tenure at Maple Grove is the value that the contractors could add during that design phase. Right, you know, we've gotten better with best value practices for contractors, adding value into things and being awarded for that. even if it costs a little bit more, there's value to it. But having that expertise and that input from day one, yeah, i can see where that is just really really valuable and really save you money and time. sometimes time is more important than money. Yeah, it's things like that. So, yeah, that's interesting.
Mike Spack:So, with the open book accounting, what does their profit structure look like?
Pat Shea:So it's part of the initial kind of proposal aspect. Through our procurement process we had to have cost be part of the scoring or the matrix that we use to rate the proposals and in that we put a fixed profit as a number. And then during the negotiations, if there was an issue with that percentage of profit on different work packages, then what was the justification? you know, if they thought risk is the biggest cost driver, unknown cost driver is like what is the risk? So there are some things that percentage of profit is a little bit more and some it's a little bit less, based upon what the risk assessment is for that particular work package.
Pat Shea:I mentioned work packages Initially, the whole board or maybe the dream was that we would just have one guaranteed maximum price, one work package. Here's the project and move forward. Because of the realities of the project scope and then supply chain and COVID issues, we broke it out into what right now looks like. We have four work packages approved. We have a fifth one kind of looking towards the end of construction, which will be some people spaces, office spaces, lab space and then final site restoration, which will be that final work package. So negotiated work packages and figuring in profit as each one moved forward.
Mike Spack:Is there any ability? it's like you talk about saving a few million dollars and handling the soils. Do they get to share in that good idea?
Pat Shea:Yes.
Pat Shea:So we on several items.
Pat Shea:So there's about 20 different elements that we call kind of the high risk factors, that we as the owner have taken the risk on those and the design builder has taken the other ones And now we can certainly require they take the risk on all of those, but then that the cost goes up for us as the owner.
Pat Shea:So we kind of shared the risk a little bit and the structure is any of that saving 75% goes to the owner and 25% goes to the design builder. So they are motivated and that goes above what their profit would have been. So it's just a matter of because if you're going to be working in someone's house for four days and you don't have anything to do on Friday, it might just take you an extra day. So it kind of eliminates the motivation on that sort of element. And schedule is a huge thing. So they're scheduled to be substantially complete or at least up in operation at the end of 2025, final site restoration in 2026. We really don't want that to go into 2027 because that means there's another winter of them being mobilized and not opportunity costs to go do other projects.
Mike Spack:So, going back to the sounding process, did you hire a consultant with design build experience to help guide you through that? And I assume then, if you did, they wouldn't be able to bid on a project.
Pat Shea:We did a similar request for proposals for that kind of owner's agent process And as part of that the people that bid did know the firms that bid did know that you're not going to get the big piece if you take the small piece. So that was kind of spelled out in advance And it was really interesting in a lot of the negotiations and stuff because the design build world is a pretty small world. They all know each other by first name and had experience working with one another And that was extremely helpful as a utility manager like never done a design build process before. So just kind of understanding and having someone on staff that can kind of represent you and make sure that the process goes through thoroughly was very helpful.
Mike Spack:What surprised you in the sounding process?
Pat Shea:Something come up Is from the sounding process, i think. Just overall I think just how useful it was. It kind of felt like it was a formality and that I really thought the design builders would maybe hold their questions close to the best, and they really didn't. They really said, yes, this is a good project, yes, we would bid, submit a bid on this, but these are the things that would cause us some concern And we were able to hash some of that out in advance.
Pat Shea:And from the contracting world, a lot of that. It was the same message that we got from almost every contractor, but a lot of concrete work And so we got a lot of comments from the concrete world on scheduling. It's just it's hard to do concrete very well in the winter here. So just making sure that we spelled out project schedule a little bit better was one of the kind of the main takeaways. And as we, i hope in Minnesota as we look at more CMAR construction manager at risk projects, i hope the sounding process kind of plays into that a little bit as well, because getting the contractors to tell you what they're looking for before you put it on the street really helps the overall public that we serve Well, particularly on uncommon projects.
Marc Culver:It's not every day you're rebuilding an entire huge water treatment plant of this scale, and so there are just a lot of unknowns and everything. So I mean I want to give you kudos. Just the process that you and your staff went through This sounds really very planned out, deliberative or deliberate, and just really, yeah, just well thought out, and I think it's led to clearly led to a really great construction process for you, i hope. I imagine I was just jotting down a couple of notes here And I think you mentioned that in order to do in order for the city of St Paul and you are an arm of the city of St Paul ultimately you are managed under the umbrella of the city of St Paul, right? So everything you do is as the city of St Paul, legally anyway. So I think you mentioned that you had to get special legislation in order to do this process Right, correct. I'll just go through that briefly a little bit about how you figured that out and what process you had to do to get that approval.
Pat Shea:So it was a little bit before my time so I'll do my best to kind of walk through it. So every year or every legislative session working with the city of St Paul, we have a lobbying arm within the city And then we also from time to time will hire an outside lobbyist to represent us on issues. Lead service lines would be an example of that. So in this case, the construction law of Minnesota was something that fell outside of the time commitments that our city staff would have to do. So we hired an outside consultant that had the connections within the specific bills that things like this would need to go through. So what we were asking for was very similar to a similar process to a community that's asking for maybe sales tax exemption on a large project or even some appropriations for bonding knowledge for things. So it's just kind of making that connection and then getting special exemptions for alternate delivery methods. And the current the now past session construction manager at risk was put in there for one city and the House and Senate actually opened it up to everyone. So it's a very similar process to that And, from my understanding, from some of the documents and talking to people that were involved with it.
Pat Shea:There was several members of the particular kind of committees that had a lot of concerns with price escalation and is the public best served for this. So once it got drafted into bill language there really wasn't a lot of apprehension and it kind of skated through at that point And I think one of the things that we approached it was we can be a model for our friends in Minneapolis as well, and then, just as another alternative for kind of this infrastructure challenge that I think everyone recognizes that we're in right now. I don't know what the latest number of overall infrastructure needs $100 billion or something similar in Minnesota, right, so that's a huge number. So anything we can do to try to get some of these projects moving forward in a cost competitive, cost effective ways is something that is easy to support. Yeah Well, thank you, yeah.
Marc Culver:Hey everyone, I just want to take a quick moment to thank our sponsor, Bolton Mink, who is producing and editing our podcast.
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Mike Spack:So at the beginning of the process you had to come up with the vision, kind of the guiding documents, and I read there were kind of four project drivers in there. Were you part of that process of coming up with the four The quality, flexibility, reliability, trust? If you want to talk about those and maybe things that you thought about but didn't make the cut, yeah, Yes, it was.
Pat Shea:It was kind of great when I started and if you've been in some strategic planning meetings or community planning kind of your planning divisions of jurisdictions, where I call them the dot exercise, where you put dots on things that you like and take dots away from things that you don't like, but from my experience up in central Minnesota on doing projects, really just all trying to get everyone on the same page, one of the things that I suggested because it was ongoing when I arrived in St Paul was let's hand out forms to our maintenance staff and our operations staff, like what things do you like, what things do you don't like, and that we use that as kind of a template, kind of the flexibility issues. Quality waters is first and foremost. You can't get around that. But then what are the things that will impede that?
Pat Shea:That's the top of your pyramid, then the things underneath that. You need to have a strong foundation. So just looking at it from a Marvin operations level, like who isn't at the table, whether it's because they're working afternoons and nights or because they don't want to sit in a meeting, they don't want to play the dot exercise, that kind of thing. So just kind of pulling the best ideas out of the people that are currently operating in a 100-year-old facility, because obviously they know what they're doing and they have a good basis of it, basis of what we need to move forward.
Marc Culver:I think as an offshoot of that, maybe you have these really strong project drivers and just listening to you talk about that, i was wondering, with the new plant, what you're designing, i mean, besides increasing capacity and just having a more modern and reliable system long term what have you added to the plant as far as processes or technologies, or what have you that are really modernizing this system compared to what you have?
Pat Shea:That's a great question. When I left St Cloud, one of the things I think our maintenance staff in the drinking water side would say was one of the best projects that I was ever part of was switching really in the weeds, switching to a batch lime system. We are feeding a flow-paste lime system lime softening plant, so you add pebble lime as a softening agent to your water for treatment And if tried and true technology it worked. It just took a lot of staff time to monitor and keep it running And it was messy. It's not the worst chemical that people have to work with in the water treatment world, but it is pretty persistent and it can be pretty nasty from time to time. Long and short of it you get the powder on your skin. It's exothermic, so you get a little bit of water there and it'll actually kind of cause burns on your skin. So I had experience with that. So when I came to St Paul Regional Water Services, the lime system wasn't really on the docket to be improved, to be replaced, and that's kind of working with the operation staff and just saying have you gone to some of these facilities that have a batch lime system as opposed to a flow-paste and just talk to them and see what kind of issues that they're having. Go dead, bad right. So I think in three years you grab our maintenance staff and you ask them what their favorite part of this project. It's going to be the lime system.
Pat Shea:Second, we're rebuilding essentially two-thirds of the facility So the filtration system stays where it is and it'll continue to function as it has. The two-thirds up front we're adding ozone, which will allow us to do a little bit better job in unforeseen contaminant control Your pharmaceuticals, your pesticides, those sorts of things that can get into your source water And then you can actually convert that to an advanced oxidation process, which is even better with dealing with those pharmaceutical projects. So that would be kind of the. We're modernizing the softening system. We're compressing the size so our footprint will actually be a little bit smaller, which will allow for future kind of unforeseen challenges that we might have to implement in this location. Again, our forefathers back in the early 1900 bought this property. Of course there were snow houses there and that has of course changed. So we're surrounded by very tolerant neighbors during this plant project. But downsizing the facility was one of the important project drivers as well, just to make room for PFAS or some other contaminant that we're not quite aware of yet.
Marc Culver:Yeah, I mean that's. The thing is you have to look forward to next 50 years. You don't know what's going to be required of you for water treatment or what have you.
Pat Shea:So Hydraulics is one of those things that you really quite appreciate until you start doing large projects and figuring out just how expensive it is to re-pump water over and over and over again. So kudos to the forefathers back in the 1900s just figuring out what the elevations will be from our intake and Fridley to out to Maplewood. Just figuring that all out And we don't re-pump. Pump it once at Fridley and flows by gravity all the way to our fish water reservoirs.
Marc Culver:You know, and you just kind of like touched on something here But one of the things that I was always impressed to me about St Paul Waters system and maybe you can compare it to Minneapolis, how they get their water and such But you have this. I mean you are pumping water out of the Mississippi River And I remember when I was at Roseville two years ago we had that really bad drought and I was giving weekly updates to my department and our department heads about the elevation in the Mississippi River, because if it got below a certain point we were going to be doing things a lot differently. But you're pumping water out of the Mississippi River, which is generally very you have a lot of water there generally, and then you're pumping it into these chain of lakes. So maybe you know just kind of talk about that setup and how that works and maybe how that was developed a little bit but and how unique that is.
Pat Shea:It is probably my favorite aspect of the St Paul Regional Water system itself.
Pat Shea:So as public work nerds, right, we have things that we have things that keep us up at night right, and I sleep pretty well, but there are still. You know, if you had to list things that would cause you concern, supplies, surface water supplier, which St Cloud is and which Minneapolis is and which we are, is alwaysa concern because you have really one source of water that you're dealing with, but St Paul Regional Water Services actually again back to our predecessors and some of the genius that was there. So we have an intake station on the Mississippi. We pump it about 300 feet, you know, from the Mississippi, kind of up the hill, and then it flows from by gravity from there through a series of three lakes. So we get two thirds of our water from the Mississippi, one third from the water shed within those chain of lakes.
Pat Shea:So it goes through Sucker Lake, then to Pleasant Lake and then to Badness Lake and then from Badness two large conduits that convey the water out to Maplewood. So over Badness Heights, over to Maplewood, and we have full, redundant backup ground water that actually we can pump into those same conduits that the Badness chain discharges to. So if for some reason we were need to weather drought or contamination or requested the DNR to switch to a groundwater source we could provide. You know we can't hit the peaks in the summer, so we'd you know watering restrictions would be a big thing, but we really have three sources of water all kind of within the same conveying system, from our supply, our supply system. So it's really you know. So it's one of those things you can kind of take that off the table as a concern.
Marc Culver:Yeah, are there any advantages to having that surface water? I mean, basically there's a retention period for all that water between those three bodies of water. Is there any benefit to that? Are there any additional challenges that from a treatment perspective? So challenges.
Pat Shea:Yes, so you know, when water is moving it stays, in quotes, fresher. You get kind of natural aeration And so the water quality not only stays a little bit more consistent but it stays kind of fresher. Right, you're not getting some of the side effects of biological activity that will happen. So as we've hump it from the Mississippi into the Channel Lakes, it slows it down And the lakes will form algae. And you know, if there's a lot of nitrogen or phosphorus fertilizer that enters, you can get some algal blooms and stuff. And so if you're familiar with St Paul's water story back in the early the 1990s, early 2000s, we would have really bad taste in older issues in the spring and in the fall, and that was primarily because of the Channel Lakes that we're using having algal blooms. So we're doing some zebra muscle control as a preventative And then we actually aerate some of the lakes as well.
Pat Shea:So we have, you know, aeration systems in those lakes And that kind of does the same thing that flowing water will do, right, it just keeps it fresh, keeps it the algal blooms from occurring. So it it just. You know, the Mississippi is great in that it's there's a lot of water, it's reliable, it's relatively consistent. You're not going to have those kind of those algal blooms that you're going to have to deal with. Channel Lakes provide us a little bit more certainty, a little bit more storage. So, if you know, if there was an issue, we could rely on that lake water. For you know, i think 45 days is our count right now. We could shut the Mississippi out for 45 days and have water. But you know, there are some challenges in operating a lake system.
Marc Culver:That's great, That's great. I think one of the more interesting components of that is that reservoir. They're like just big giant reservoirs for you too, But that's that's interesting to to hear.
Mike Spack:One thing I was reading about the water treatment plant project and going through the progressive design build is just how do you handle issues and the escalation that's involved, because, as I understand, it's a little bit different with the progressive design build.
Pat Shea:That's a great question. The escalation is certainly, is certainly possible in really any project, as you're as the owners, working with the engineering firm, the design firm, to to build a project, right, so our, our wants are always bigger than our wallets, right, right? So it is a challenge. And so the, you know the, a single guaranteed maximum price wouldn't work. Probably more more specifically for that reason, because because you didn't get to vet out any of those cost choices that you make. So what we did with our project and it's you know, of course it's the first one that I've been party to is just, through every work package, you look at it and you look at the whole, like, okay, what's the, what's the current estimate cost for this project, what is this, this work package, going to cost And what are the opportunities to reduce cost as you go. So you really know, you know we, you know we added the Lyme system And that that was a significant cost, but we knew what the value was to do that. And then, working with our board on that specific work package, then you're able to get kind of the, the permission to do that, the authorization to do that. The other thing that you know we did is.
Pat Shea:It's part of the the process for gaining approval is we put it in terms that our customers could understand and our board could understand, and that this, almost this, is going to cost, you know, three cents per per thousand gallons of water And this work package is going to add that to our rates. So, putting it in in the terms of the pros and cons of opera, operability, reliability, you know, total life cycle costs, all those kinds of things. You know we like that, people, you know some of our board members like that, but everybody likes to know. Okay, i'm, if I'm going to approve this, we're going to move forward with this.
Pat Shea:What is? how am I going to explain this to my neighbor? You know, what is it going to cost in the pocketbook sense? So, kind of equating all those things together and being able to to make prudent decisions on is this really worth? you know how it's escalating Because, yeah, our project certainly did. It did. The scope of the project did increase, but I wouldn't say there was anything that was overly more expensive than we thought it would be once.
Mike Spack:You know once the board approved it Okay And breaking it up into the work packages and really helped control that Correct.
Marc Culver:You know as a St Paul resident, as one of your retail customers, just, curious as you're, as you're calculating those costs like you know, three cents per thousand gallons or whatever, or cubic, hundred cubic feet, like how many years have you did you lay that out Like as a St Paul resident? how many years am I paying for this capital project?
Pat Shea:So the longest debt instrument we took was a $95 million dollar water revenue bond and that's 25 years, okay. So, like our 2023 rate increase that we went forward with, which was about 30 cents per 748 gallons, so 100 cubic feet, i think it was about 30 cents per that unit And that none of that rate increase actually went to OM increases or any of our distribution work increases or capital projects. So that was, you know, solely kind of tailored to that And we're going to have several years of that that type of rate increase. So what we're trying to do is is flatten that that increase out as long as we can, and that that's the other thing that's really nice about kind of Minnesota water financing is that we're able to work with the state and our partners at the public facilities authority to not take all the debt on at once, like, okay, we need $250 million dollars. We can. We can take the last loan out in 2026. And that way, the that debt load doesn't hit like a hammer to our repair. Yeah, that's good.
Marc Culver:You know, as we, as we get into, finally, the hour of this episode, i did want to talk about lead services, but we've had such a great conversation about your plant and everything. I'm going to ask that you come back and and do an episode with us on on lead services, cause you guys have a huge challenge in front of you right now as far as and maybe just touch on that you know a 30 second primer on a tease, let's say for for our listeners on. you know lead service and the magnitude of the issue for you guys.
Pat Shea:Well, thank you for that. Yes, we have about 95,000 service connections, so from the water main into the house of the business, 25% of those are comprised of some portion of lead And, as the Flint Michigan story everyone I think listening to this will be The public works in nerds are aware of that And that is one of the high priorities that our board is, as task, the organization to address. So for about 25 years, we were spending $2 to $3 million a year of our revenue on replacing our portion, the public portion of lead, and in 2022, march of 2022, the board tasked us to move all the lead from our service area within the next 10 years. So 2023 is our first year doing it and it's formidable, but it's been fun. We actually laugh and maybe my predecessor will listen to this. We can't figure out what they were doing before this The McCarrons project and then the lead service line. So it's $600 million worth of work And so we can't figure out what they were doing before, or you guys busy with.
Pat Shea:Yeah, right, so I think 2022 was. I bet I spent half my time just on helping a great group of people kind of develop our lead service line replacement project.
Marc Culver:So over the next 10 years, how many services do you have to replace every year?
Pat Shea:At its peak our schedule would be 3,000. We did about 400 last year and we tried to do 1,000 this year. Okay, and the challenges are interesting, dealing with our counterparts in different areas of the country. Eight to 10 feet in the ground comes up through the floor of the basement. Construction seasons April through November, so it's just work that is really compressed. And again, it's widespread. In our service area A majority is in St Paul itself, but it's widespread, so it's not We can't tear up every street Right.
Mike Spack:Right, and just That's a good teaser, though I feel like we're going to have more than an hour to talk about.
Marc Culver:Yeah, i know, i just want to like just the magnitude of the problem, though just 20 seconds. Like I live in St Paul, i have a lead service to my home. I know I do And I raised two children in that home and we're fine and everything's fine and I think we're okay anyway. But, like you were talking about, there are 30 steps from my front door down to street level And my water service line runs from down through that elevation and I have three tiers of retaining wall in my front yard. So that is the magnitude of the problem. You're talking about just the uniqueness of almost every situation, sometimes through 3000 a year.
Mike Spack:Yeah.
Pat Shea:Right, yeah, and that's. We have everything from one that you can get done in three, four hours to the one that'll take three, four days, and you don't know, until you bust up the floor, what you're really going to get into.
Pat Shea:So it is a great opportunity for a water utility to get up close and personal with their residents with their customers and really established that you used to be out of sight, out of mind, and you didn't want your customers to know who you were, because if they did, it's because they're yelling at you. So we're trying to approach it as a real opportunity to say you're paying your water bill, we appreciate your paying your water bill. These are the people that you're helping support and to do the critical work that is, you know, providing drinking water.
Marc Culver:All right, i'm done Okay.
Mike Spack:So let's move over to kind of our standard ending questions. Yeah, if you want to jump in.
Marc Culver:Yeah, you know, i guess you know I am a technology guy. My role here at Polk Bank is focus a lot around technology, And so we just kind of want to ask our guests you know where have you seen technology really make some, you know huge strides in your industry? or you know where have you seen it implemented? you know, in your, your agencies, and make a big change?
Pat Shea:That's a great question. I one of the things that I was in the working world when it started to kind of evolve is GIS and being able to watch that, you know, evolve from kind of a two dimensional bot to layers of data piled on top of each other that you can kind of learn a lot from, and our lead service line inventory and the ability of our, of our resident, to go on and figure out where things are. It just it's amazing. I feel like a lot of times you know, time has passed me by a little bit because every time I get in a room with some really good GIS people and they show me what the power is, you just want it right. You can just see, like, well, this is really where things are going.
Pat Shea:So, as we're working on upgrading our asset management system and our system of record being GIS, everything that we don't currently have in GIS will have to, you know, be transferred and then converted to a GIS format. just because of that And it's a, it's a, it's a great tool And we would, you know, with our lead program as a resident you know stpaulgov, backslashwater click on the lead link you can. you can figure out what, you can learn almost anything you want about your service line, and that's something that was just a very small part of our lead program. you know it, it it took. I under-appreciated the amount of time it took our GIS professionals to put it together, but they, they did it And it's you know, it's something that I think will be a model for other utilities in Minnesota has the requirements to get that work done, moves forward. So, yeah, i think, if, if it'll be interesting to see what AI and GIS do together.
Marc Culver:Yeah, yeah, absolutely, absolutely.
Mike Spack:Any lessons learned with technology, good or bad experiences. Obviously the good of GIS, but we all love good war stories.
Pat Shea:You know, i think the a couple of things. One, i think the from a leadership perspective, i think we can't be afraid to to fail right. So we have you have to try new things. So I think the longer you're you're in this profession and you're able to make decisions, you will purchase things that won't work And you know, kind of the white elephant is kind of the description where you'll invest in in in some technology that doesn't quite hit. Hopefully those are a few and far between and that you learned from that and you're able to move forward.
Pat Shea:The one thing I always really appreciate the concept of tool seduction. You can, you can measure and you can have analytical results and you can, you can invest in in the latest and greatest widget. But if you're, if you're totally looking at a screen and not looking at the water bubbling out of the ground because we don't have pressure loss, so obviously everything's fine, the tool can tell you something that you know isn't true to life. So avoiding that tool seduction the latest and greatest is is something that I I think it's very important. You know we want to, we want to try new things, but you have to. You have to make sure you have the, the resources and the evaluation process to know why you're doing it, and then you know when it's time to cut loose on it or cut bait and move on to something else.
Marc Culver:I love that tool seduction. Yeah, i think that that says a lot about why you're implementing technology, how you're implementing and, more importantly, how you're using it. So that's great.
Mike Spack:I think that's a great point to end on. Thanks Pat, Thanks Mark, Yeah.
Marc Culver:We look forward to not only an upcoming podcast on lead service sign, but love to maybe in a year and a half, as you start wrapping up your treatment plan project, bring you back and talk to you. Just get an update on on all the projects going.
Pat Shea:It would be my pleasure, Thank you. So thanks again, Pat. Yeah, you're welcome. Thanks Mike, Thanks Mark.
Mike Spack:One last thing before you go. although we don't charge for the PTH, as you just received by listening to the podcast, the public works nerds is not free. If you've listened to more than one episode now, the cost is that you tell one colleague about the podcast to help us grow our audience. Thanks,