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HomeMy WebLinkAbout1995-12-11 96-56 ORDERCOUNCIL AC'T'ION Date: 13-11-95 Item No.: 96-56 BemBubject: DIItF.CTN'G TB}: CITY MANAGER TO ENTER MM CONTRACT NEGOTLI'I10Ns WITS PORWNG TERM BIOSOI.IOS DISPOSAL. SERNICm Responsible Department: Engineering Consummatory: As the Council is aware, proposals have been received for connected disposal) services for sewage sludge and other biosolfds. It is estimated that a long term contract for biosolids disposal will save approximately $50,00s) per year in WWTP operating expense. City staff has reviewed proposals in detail said presented a financial analysis and recmunevda[iovs at Council workshops beld on l l21/95 and 12/04/95. A copy of the City Engineer's manna milining the findings and recommendations is attached. A final Conrad decision has not yet been made regarding wbich of the two lowest cost proposals (submitted by BPI and Sawyer) is mast advantageous to the City. It is amicipa ed that a dedsim will be made at next Monday's Council mating. The attached Council Order would direst the City Manger to enter into negotiations with the Wassail Sim to develop a long teen disposal contact. The name of the firm selected will need to be asserted in the appropriate slaves in the Order prior no its passage. After a suitable Contract Agreement has been developed, a subsequent Comcil Order will be presented fm an ' ion to execute the Contract Agreement. naronentXwd MmegU'B COnlmtlit8: / a M Associated IM Imadinvo . / (ul 42,,;6;7 Budget Approval: Usif / C finance Director Legal Approval: y. City Sotiairw qRPassage Fast Reading ❑ Referral Page m Aeaignedtofmmegor Tyler December 11, 1115 CITY OF BANGOR (rinE,) VYrber, DHtWMG THE CITY MANAGER_ TO ENTER INTO CONTRACT e NEGOTIATIONS WITH---------------------- _.. ... FOA LANG TERM BIOSOLIDS DISPOSAL SERVICES By she qW CoawB of Bs City of 86nyer. ORDERED, THAT WHEREAS, the City ofBangor is exploring options to redwe the war of disposal for sewage sludge and other biosohds generated at the Wastewater Treatment Plant; and WBEgBAS, proposals have been received for private disposal services of these materials; and WIMtEAS, City smffhas reviewed the proposals and recommended that long term contracted disposal ofbiosohds is the most economical alternative; NOW, THEREFORE, BE IT ORDERED BY TFiE (TrY CO[JNCU, OF THE CITY OF BANGORTHAT: The City Manger is hereby directed to corer negotiations with to develop a contract for long terns biosotids disposal. IN. CITY COUNCIL ?p December 11 1995 ¢6_586-56 p Jones Ecker, BPI & Tom 12pRDER P Sawyer, Sawyer Environmental, represented their companies,1 detailing their respective- - ..Title, Directing the City Manager to proposals for BSodolid Disposal, enter into Contract Negotiations with Motion to Amend, by adding BRI ----------------- for long Term in the blank space(s) Bio3olids Baappsal Services ••• •• • Provided Mbtion doubted vote: ]no. lyes ••--•-• •�^^^////^//�`^��,^/�^�j^fit^)////^..... Councilors voting no: c'-,""•,"�Ullh""--or Blanchette, Frankel, Leen, Anlgr:ed to Popper, Saucy, Sullivan,& Woodcock Councilors voting res: .....a ue�a... .en.. Baldacci & Tyler CounciLn Mori Amend b ddi d y a ug Sawyer Suuiroamental in to - the blank space(s) provided Vote: 9 yea Councilors voting yea: Baldacci, Blanchette, Frankel, Leen, Popper, Soucy, Sullivan, Tyler 6 Woodcock Motion for Passage as Amended vote: 9yes Councilors voting yes: Baldacci, Blanchette, Frankel, teen, Popper. Scuty, Sullivan, Tyler.6 49odceck Passed As Amended ' Amended by Adding Sawyer Environmental in the Blanak Space(s) Pr¢vlded -" CITY CLERK 1 96-56 MEMORANDUM November 17, 1995 TO: CityCouncil Members FR: James D. Ring, City Engineer SUBJECT: Lang Term Bicsohds Disposal As you know, a Federal Gone has become available that would fund 55°0/0 ofthe cost of a new, City facility and equipment for disposing of sewage sludge and other bimolids generated by the Wastewater Treatment Plant This would involve commingling a new composting fodlity at a cost of several million dollars. Before proceeding with such a facility, it wes deemed prudent to explore private contracted disposal options. - Accordingly, an RFP was issued and proposals received for long tam (20 year) biosofids disposal. The 20 year term was requested an the we could compare contacted disposal costs over the estimated useful fife of anew City owned facility. A council workshop was conducted to consider the proposals that were received from 3 private firms. Staff analysis indicated that commuted disposal for 20 years would be slightly less expensive than constructing and operating a new facility with grant assistance. There was also interest in pursuing additional proposals from each of the 3 fines for shorter command periods in hopes of achieving further economies. City Staff subsequently and with each of the 3 firms on an equal basis to discuss pros and cons of shorter tam contracts, methods of disposal, ways in which the City might take advantage of grant funding to purchase necessary equipmen5 and any other options which could potentially save the City money. fill firms were then asked to submit supplemental disposal proposals including the following: • Pricing for 5, 10, and 15 year terms, • Separate carts for disposal, transportation, and my other fees. • Costs subject to C.P.I. adjustment. • Description of disposal methods. • Desmipfioru, costs, and projected useful life of any equipment to be provided by the City. • Identification of any conditions differing from original 20 year proposals. • Multiple options if available.' . Any other information necessary to wflu ate the proposal. 96-56 ANALYSIS OF PROPOSALS Staff has evaluated aV of the proposals and projected the total disposal costs to the City for 5, 10, and 15 yearte ms. This involved detailed analysis which included the following considerations and methodologies: Computation and cumulative summary oftotal annual costs. • CPI adjustment based on costs stated to be subject to such adjustment in each proposal. • CPI adjdent computed using 4%, 5%, and 6% annual Tam. Ranking order of total proposal costs do not change using different rates. Figures presented are based on 4% inflation rate because that is docent to the average rate for the had few years. • Capital cogs for equipment to be provided by the City are included in total costs. • Capital costs computed using equipment purchase and installation costs provided by each than, with an annual interest rate of 8% applied over the amortization period. • Amortization period is equal to contract term for 5 and 10 year options. 15 Yen options assume equipment replacement at and term Initial capital expenses assume 55% good found. Replacement coal assume no grant funding. • Biosohds volume of7000 tmolyear. Spreadsheets were generated showing all amoral torts and cumulative totals for each of the various proposal options and durations. I have not included copies of all these (24 sheets) but can provide them If you wish. Attached, however are summaries of total projected costs for all of the proposal options. RECOMW"ATIONS As can be seen by the summary sheets, there are several proposal options which are quite close in total projected costs. There are also some issues outer tban wst that need to be considered in the selection process. Accordingly, several recommendations are presented for your consideration: 1) cantractPk -Recommend contracting forfive war period with o nto ready for additional 5 veers • This approach would result in the lowest disposal costs for the fust 5 to 10 years. 96-56 Other disposal options and technologies may become available in the future. It is difficult to predict such changes more than 10 years from now. 2) Seled BE Ovjjgns 2B as lowest cost proposal Issues., This option would uWlee landspreading as a disposal method for much of the year. • Permits for landspreading sites would be issued to the City rather than BFI. There maybe some liability to the City because of this. Thiscptionisomyrecommended if BFI agrees to indemnify the City from my claims arising from landspreading disposal. • Landspreading can be a politically sensitive issue • City has used BFI for contract disposal for the past year. Although service has generally been acceptable, there have been some problems with scheduling of trucks, condition aad cleanliness of containers, and billing. Some improvement has occurred in these areas. Possible revenue generation fiom compost rales (discussed further below). If BFI Option 2B is not favored, due to concerns over landspreading disposal or other reasons, come the following recommendation is made: 3) Select Option 2 as next lowest cost proposal. Issues: • This option utilizes landfilling as a disposal method. There may be some concerns about landfilling not being a beneficial reuse of biosofids, and potential "image" problems associated with land filling. • Close proximity of the Sawyer lavdfifi allows option of transportation by City personnel as cost saving measne. Prior experience (1994) with Sawyer for contracted biocefids disposal was excellent in all respects. • This option provides the most flexibility for the W in scheduling sludge (� pressing and disposal operations. 96-56 • Sawyer proposals include a prow.sion wherein the City may terminate the contract (with I year entice) f another disposal option becomes available which is at least 25% cheaper If Sawyer Option 2 is not favored due to concerns about landfill disposal, eta, than the following recommendation is made: 4) Scott BIT Option 1B M thirdl sal • More ezpensivethanophonsoutlined above, at leaslfoffiratfeWyem9. • Composting disposal is beneficial reuse. • Some problems with BFI service as outlined above • Potential revenue generation from compost sales (described below). Additional considerations far HFI options: A) BFI has proposed to sell up to 10,000 c.y. of finished comport to the City for the price of $300/0,y. This margin is worth about $10.W/c.y. Because of material now being generated by the City's leaf composting operntion, minimal need to purchase additional compost for public works projects is expected. Sales of this material to the public could generate some menus, but the City would incur costs of handling, paperwork eta Since the amount of revenue which would be generated by compost sales is difficult to predict, it has not been factored into the cost analysis at this point. B) If either BFI proposal is selected, I would urge that contract provisions be included to address the types of service problems we have experienced to daze. This could be in the form ofa schedule ofmonetary penalties per occurrence, etc. A council workshop has been scheduled for next Tuesday, 11/21/95 at 6:W PM to discuss bioaohds disposal proposals. City staff will present the recommendations and provide additional irfbrmation. Each of the Tums submitting proposals has been invited to attend, to the meentinne, ifyou have any questions or would like additional information, plerse let me know. LDA C e nm SUMMARY OFTOTALPRO.1FCTFD COS'T'S CONTRACTED SLUDGE DISPOSAL OPTIONS CONTRACTOR DISPOSAL MAJOR PROVISIONS COST SYR OOSTIOYR COST16YR METHOD BFI OPTION to COMPOSTING Load leveling equip. by City. BFI provides trans. 4% Inflation Capitol Card$8,10060 1,057.023 3,929,481 6.733,885 OPTIONIB COMPOSTING Load leveling equip. by City. - City provides trans. equip. BFI operates trans. equip. 4% Inflation Capital Cast$71.435.Oo 1]71 627 3,573,939 6,515.437 OPTION 2A L4NDSPREADfl Load leveling equip. by City. COMPOSTING Lime Stabilization equip. by City BFI Provides trans. 4% Inflation Capital Cos] $120,600 00 1,70,695 3,640,440 7,179,650 OPTION 2B IANDSPREAD 8 Load leveling equip. by City. COMPOSTING Lime Stabilization equip. by City. City provides trans. equip. BFI operates trans. equip. 4% Inflation Capital Cost $183,935.00 1,683,399 3,428 037 6,908,546 ASSUMPTIONS SLUDGE VOLUME CONSTANT AT 7000 TONS PER YEAR INFLATION RATE AS SHOWN INTEREST RATE AT 6% PER YEAR WHERE CAPITAL PURCHASES BY CITY ARE REQUIRED INITIAL CAPITAL PURCHASES BY CITY UTILIZES EPA GRAM FOR 55% OF COST, INCLUDED IN ABOVE ANALYSIS. SAWYER SUMMARY OR TOTAL YRO,IODCTED COSTS CONTRACTED SLUDGE DISPOSAL OPTIONS CONTRACTOR DISPOSAL MAJOR PROVISIONS COST SYR COSTIO YR COSTISYR METHOD SAWYER OPTIONI LANDFILL Sawyer Provide; trans. & equip. 4% Inflation Capital Cost MOD 1,738,170 3,759,650 6,112,610 OPTION LANDFILL CRY provides turns.&equip. 4% Inflation Capital Cost $31.500,C) 1720,637 3,883,234 6,067.502 SLUDGE VOLUME CONSTANT AT 7000 TONS PER YEAR ASSUMPTIONS INFLATION RATE AS SHOWN INTEREST RATE AT 8% PER YEAR WHERE CAPITAL PURCHASES BY CITY ARE REQUIRED INITIAL CAPITAL PURCHASES BY CITY UTILIZES EPA GRANT FOR 55% OF COST, INCLUDED IN ABOVE ANALYSIS. r� WI3EELARRATOR SUMMARY OF TOTAL PROJECTED COSTS CONTRACTED SLUDGE DISPOSAL OPTIONS CONTRACTOR DISPOSAL MAJOR PROVISIONS COST SYR COST 10 YR COST15YR METHOD WHEELASRATOR OPTIONI L4NDSPREAD Truck loading facility&Ume CLEAN WATER Stabilization equip. by City. Trans. SYSTEMS equip. by City. Oper.by WCWG. 4% Inflation Capital Cost$148,05000 2062,590 4,169,890 _ 7,069.121 OPTION2 LAND6PREAD Track loading facility&Lime Stabllizaiton equip. by City. Trans, and land spread equip. by City Oper. W WCWS, 4% Inflation Carlel Cost $208,350,00 1,880.640 3,785,309 7,127.906 ASSUMPTIONS SLUDGE VOLUME CONSTANT AT 7000 TONS PER YEAR INFLATION RATE AS SHOWN INTEREST RATE AT e% PER YEAR WHERE CAPITAL PURCHASES BY CITY ARE REQUIRED INITIAL CAPITAL PURCHASES BY CITY UTILIZES EPA GRANT FOR 55% OF COST, INCLUDED IN ABOVE ANALYSIS.