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Home My WebLink AboutIR 7849 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7849 I t—% July 5, 1994, . To the Mayor and Members of the City Council Page I of 4 Subject: BIOSOLIDS COMPOSTING On April 19, 1994 (M&C C-14255) the City Council approved a contract with Oscar Renda Contracting Inc. (ORC) for the construction and operation of a biosolids (sludge) dewatering facility and the land application of all the biosolids produced at the Village Creek Wastewater Treatment Plant. The City Council approval included directions to the staff to begin negotiations with another company, Bio-Gro a subsidiary of Wheelabrator Technologies, Inc. , for the development of a composting facility to process 30% of the biosolids produced at the Village Creek Plant. Since the April 19 City Council meeting the staff has worked with representatives of ORC and Wheelabrator Clean Water Systems (WCWS) (another subsidiary of Wheelabrator Technologies, Inc., like Bio-Gro), to define an acceptable relationship between the three parties which would meet the Council's directive. Various operational and pricing options have been discussed to develop a proposal for City Council consideration. The first practical hurdle to overcome was to define a quantity of biosolids to be directed to composting in more precise terms than 30% of the total Village Creek production. Inasmuch as the Village Creek plant produces approximately 100 dry tons of biosolids per day all parties accepted a quantity of 30 dry tons per day, 210 tons per week, or 10,920 tons per year, as meeting the spirit and intent of the Council's instruction. Recognizing that daily dewatering operations for biosolids destined for land application may be different in terms of processing techniques needed for composting biosolids, the staff sought to negotiate a schedule and operation -satisfactory to both contractors. The draft composting agreement is based upon a 6 day work week dewatering and land application program with-35-- dry- --- - --- tons per work day directed to the coifip66ting--fiicilitk-.--The two-contractors would mutually agree upon the hours for the delivery of biosolids for composting. The composting facility would continually process materials in the production of compost. WCWS will be responsible for securing all the necessary governmental permits for the construction and operation of a composting facility. If the permits are not secured within 24 months, either party, the City or WCWS, may cancel the agreement. Inasmuch as ORC must procure trucks and trailers to transport the entire biosolids production prior to the completion of the composting facility, the most advantageous transportation arrangement appears to be to allow ORC to divert these trucks to haul the biosolids to the proposed composting facility. The travel distance to the proposed composting facility site is approximately the same as the average haul distance to the land application sites, 43 miles. The proposed site consists of approximately 240 acres in Johnson County located off State Highway 67 on County Road 213. ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7849 July 5, 1994 To the Mayor and Members of the City Council Page 2 of 4 =w Subject: �m BIOSOLIDS COMPOSTING The proposed composting facility to be constructed by WCWS is estimated to cost $8.7 million. In the draft agreement, the City of Fort Worth would cazmi.t to pay WCWS for the processing of 210 dry tons of biosolids per week over the 10 year contract temp with the City having the option to exercise two 5-year options to extend the agreement. The City would pay WCWS $91.24 per dry ton of biosolids, processed which represents the capital cost, plus an operation and maintenance cost based upon the percentage of solids as follows: % OLIPS COST am TM 175 $ 128.04 18% $ 123.15 19% $ 118.26 20% $ 113.37 21% $ 108.475 22% $ 103.58 23% $ 98.80 24% $ 93.91 25% $ 89.02 The above table of operations and maintenance costs would be adjusted annually following the coupletion of the first fiscal year of operations based upon the consumers Price Index for all items for the Dallas-Fort Worth area (CPI-U) up to a mauimm of 6% in any one 12 month period. The OCR dewatering and land application contract has a modified CPI adjustment factor capped at a maa�iun of 3.5 % in any year. The draft agreement contains two articles that may result in monetary credits back to the City. - The first such provision would be triggered if WCWS receives biosolids from any additional municipal or 4overn6ental agency. Under this scenario the City would receive a rebate of $5 per dry ton for each tan received from another biosolids generator. This credit allowance could not exceed $5,000 per month. The second credit provision is related to the marketing of the compost product. WOWS has proposed that the Ci.y receive a rebate of 10% of the gross revenues FOB the facility. It is estimated that the facility will ]produce 300 to 400 cubic yards of compost per day when the biosolids are combined with yard waste amendment. Based upon national survey figures, it is estimated that the bulk finished compost could sell for $5 to $8 per cubic yard. In other words if WCWS produced 400 cubic yards per day and successfully marketed 100% of the compost at $8 per cubic yard the City would receive an allowance of $320 for each such day. Also, WCWS will provide at no additional expense up to 100 cubic yards per day of ccupost to a site designated by the City for City purposes. The draft agreement provides that the City has no other obligation to provide yard waste other than that contained within the composting arrangement. _The draft agreement would, however, give preference to the City and its -rate paying customers in the receipt of ya dwastes when received at fair market value. ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. -7849 July 5, 1994 To the Mayor and Members of the City Council Page 3 of 4 Subject: BIOSOLIDS COMPOSTING Based upon a historical average of 18% solids far sludge produced at the Village Creek Plant this composting proposal would add $2.3 million annually to the cost of sludge processing and disposal. Digester improvements currently underway at the Village Creek Plant may result in higher sludge solids content in future years reducing the unit prices according to the table of prices provided. If OCR, upon completion of the new sludge dewatering facility, is able to consistently produce a higher solids content sludge without the addition of lime, the City would also receive a $5 per dry ton credit. This lime deletion credit could amount to $54,750 per year. Assuming a most favorable scenario, that through the City's efforts, and with the OCR new dewatering facilities, sludge containing 22% solids on an annual basis can be achieved without the addition of lime, and further assuming that other cities divert biosolids to the composting facility to its maximum capacity and 100% of the finished product is sold at the prevailing national average of $8 per cubic yard, the maximum credits to the City could lower the annual composting cost to $1.9 million. See attached example. IrIF7V� City Manager I rr/ 1 ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7849 T July 5, 1994 To the Mayor and Members of the City Council Page 4 of 4 R� Subject: '•" BIOSOLIDS GHOSTING ANNUAL COMPOSTING EXPENSE EXAMPLES EXAMPLE 1. 18% Solids on annual average Total Payments to 10920 dry tons x ($91.24 + $123.15) _ WCwS $2,341,140 Less Credits: • Lime deletion (OCR) $5/ton x 10,920 tons = $54,600 • Sale of compost, 100% $8/cy x 400 cy/day x 365 days x 105 = $116,800 • Biosolids contributed by other parties $5,000/mo x 12 mos. = $60,000 Credit Sub-Total $231,400 Net Expense $2,109,740 EXAMPLE 2. 22% Solids Total Payment 10,920 tons x ($91.24_ $103.58) to WCwS $1,127,430 Less Credits • Lime deletion (OCR) $5/ton x 10,920 tons = $54,600 • Sale of Compost, 100% $8/cy x 400 cy/day x 365 days x 10% _ $116,800 • Biosolids contributed by other parties $5,000/mo x 12 mos. _ $60,000 Credit Sub-Total $231,400 Net Expense $1,896,030- ,,,. ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS