HomeMy WebLinkAboutIR 7823 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7823
pRTER April 19, 1994
To the Mayor and Members of the City Council
®moo. �$
cti� pi
";x PROPOSAL FROM BIO-GRO, INC. TO BUILD A 30 DRY TON
,BTU
Subject: PER DAY IPS COMPOSTING FACILITY
At the April 5, 1994 City Council meeting, the City Council approved an M&C (C-
14255)which awarded a contract to Oscar Renda Contracting, Inc. for dewatering
and beneficial re-use of sewer sludge generated at the Village Creek Wastewater
Treatment Plant. This action was based on the approved TNRCC permit and the
pre-approved facility concept plan.. It was also based on the previously
determined quantities of 100 dry tons of sewer sludge per day to be beneficially
re-used, the negotiated unit price for this de-watering-land application, a five year
term and a set price for a facility and equipment of$2.7 million. The total based
on these conditions was calculated to be $24,857,000.00 over this time period.
At the same time the City Council included in the motion, the direction to the
staff to negotiate a separate agreement with Bio-Gro for a composting element of
up to 30% of the sewer sludge and to bring this separate item to the City Council
for consideration on April 19, 1994.
The City staff has met with representatives of Bio-Gro on three occasions to
Y
discuss and develop a scope of work, terms, cost, etc. as directed by the City
Council.
The attached Bio-Gro proposal was submitted on April 15, 1994. Both Bio-Gro
and the staff agreed that 30 dry tons per day of composted product was a
reasonable and manageable amount for this type of initial operation.
r The following is a summary of the terms, issues and cost of the proposed Bio-Gro
facility:
Five year initial term with 3 five year extensions. Bio-Gro would be "held-
harmless" in the event contract extensions were not granted. This would
include unamortized capital expense and a reasonable foregone profit to be
negotiated prior to final contract execution.
Anticipated TNRCC permitting process will be completed within 24 months
of the execution of the contract. Failing to achieve this time frame will
result in Bio Gro abandoning this effort and releasing the City of Fort Worth
from any contractual obligation, unless the delays were caused by the City
of Fort Worth.. If the City causes delay to the permit, Bio-Gro will be
reimbursed for all development cost.
ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7823
GNpHTERFp APX11 19, 1994
!FOR
&1! To the Mayor and Members of the City Council Page 2 of 3
Subject:
1873 PROPOSAL FROM BIO-GRO, INC. TO BUILD A 30 DRY TON
PER DAY IPS COMPOSTING FACILITY
Bio-Gro Cost Matrix based on various moisture variables.
Moisture Compost Cost Per Ton Extended Cost
25% $180.13 $9,862, 118**
22% 194.82 10,666,395
20% 204.61 11,202,397
18%*** 1 214.39 11,737,852 11
*The higher the percentage the better the material is for composting.
"Not adjusted for CPI
***The existing product during the 2.5 year contract has averaged approximately
18% moisture content.
Additional terms to be considered:
1. Full CPI over the life of the contract is included.
2. Blo-Gro will provide a $5.00 per dry ton credit if the facility is expanded to
include other municipalities. This credit will apply to each dry ton of Fort
Worth sludge.
3. 100 cubic yards of compost per day is available to the City to be delivered
at a yet to be determined site on the east side of Fort Worth. Should the
City not have a use of the quantities for more than one week and a market
exist, Bio-Gro will be allowed to market this material.
4. A 50-50 sharing of "net" profit for the balance of the compost product is
included.
5. Bio-Gro proposes to back their performance under the contract with a
Parent Company Guarantee (Wheelabrator Technologies Co).
ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7823
&I,RTER('p April 19, 1994
f,w�1; To the Mayor and Members of the City Council Page 3 of 3
PROPOSAL FROM BIO-GRO INC TO BUILD A 30 DRY TON
rE� Subject: PER DAY IPS COMPOSTING FACILITY
Cost Analysis
The proposed cost of the Bio-Gro compost facility will vary based on the quality
of the sludge delivered to the facility. However for illustrative purposes only,
the following cost would be based on a 18% moisture content sludge delivered to
the compost facility for a ten year period.
YEAR RENDA CONTRACTING BIO-GRO
1 $4,971,400 -0-
2 4,971,400* -0-
3 4,971,400 $2,347,570
4 4,971,400 2,347,570**
5 4,971,400 2,347,570
6 Subject to negotiation; CPI as capped 2,347,570
7 Subject to negotiation; CPI as capped 2,347,570
8 Subject to negotiation; CPI as capped Subject to CPI changes in quantities and
other factors
9 Subject to negotiation; CPI as capped Subject to CPI changes in quantities and
other factors
10 Subject to negotiation; CPI as capped Subject to CPI changes in quantities and
other factors
* Renda contract cost set based on quantities;CPI annual capped at 3.5%;quantity offsets may
include drying bed material as part of the City's required closure plan.
** Bio-Gro proposed no CPI cap
Representatives from Bio-Gro will be.present to respond to any questions or to
offer any clarification of this information. In an attempt to meet the direction of
the City Council, the staff prepared a draft of the Bio-Gro proposal in an I.R. form,
Bio-Gro raised questions regarding the presentation of the information(attached)
and subsequently, this final Informal Report was prepared for the City Council's
review.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS-
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7823
peTr p� April 19, 1994
To the Mayor and Members of the City Council Page 4 of 4
r 8
73 3 Subject: PROPOSAL FROM BIO-GRO, INC. TO BUILD A 30 DRY TON
1873
PER DAY IPS COMPOSTING FACILITY
Should the City Council desire to proceed with entering into negotiation with Bio-
Gro many of these issues will require final closure between the City, Bio-Gro and
Renda Contracting.
This report is submitted as directed by the City Council.
Bob Terrell
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
April 15, 1994 Sludge Management•Specializing in Bcnepcial Use
Mr. Robert T. McMillon
City of Fort Worth Water Department
1000 Throckmorton Street
Fort Worth, Texas 76102
RE: Final Proposal for a 30 Dry Ton Per Day IPS Compost Facility
Dear Mr. McMillon:
As directed by the City Council, Bio Gro has worked with staff to develop the following
proposal for the City to'diversify their biosolids management practices with the Council
selected Bio Gro/IPS compost facility. Bio Gro will provide for the City of Fort Worth an
IPS composting facility designed to process seven days per week 30 dry tons per day of the
contemporary biosolids produced at the City's Village Creek Wastewater Treatment Plant.
The plant will be designed to process biosolids dewatered to guaranteed minimum daily
average percent solids by ORC/AMG as outlined in Attachment 1. Guarantee and testing of
the percent solids to be provided by the City. The biosolids will be delivered to the compost
facility by ORC/AMG on a daily basis, seven days per week, as per an agreed upon
schedule.
The following assumptions are used in the attached pricing.
► Bio Gro will provide to the City a rebate of$5.00 per dry ton processed of biosolids
from neighboring municipalities if and when Bio Gro expands the facility. This rebate
will be given for each dry ton of Ft. Worth biosolids being processed.
► The contract term will be 5 years with 3 five year extensions. If contract extensions
are not granted a buyout of the unamortized capital and a reasonable foregone profit
will be negotiated prior to contract execution. The buyout will not be required if we
are successful in obtaining replacement tonnage from another municipality for the
duration of the contract.
► One hundred cubic yards per day will be made available to the City at a City owned
site located on the east side of the City. If the City declines to accept the material for
more than a week and Bio Gro has a market for the compost Bio Gro has the option to
a
market the material.
► A 50-50 sharing of the net profits from the marketing of the balance of the finished
compost product made from Fort Worth biosolids is proposed.
Bio Gro Systems,Inc. • 100 Corporate Parkway • Birmingham,Alabama 35242• (205) 995-3026 • Fax (205) 995-3369
Mr. Robert McMillon
P
April 15, 1994
Page 2
► Bio Gro anticipates the permitting process through TNRCC will not exceed 12 months.
If the process extends to 24 months Bio Gro will cease permitting efforts and release
the City from any obligation unless the permitting delay was caused by the City. If
the permitting delays are caused by the City, Bio Gro will be reimbursed for all
development costs.
► Bio Gro will back the facility with a Parent Company Guarantee.
► Full annual CPI adjustment, up or down, will be in effect.
Please see Attachment I for a complete pricing matrix.
As a final solution if negotiations between the City, Renda and Bio Gro prove to be
inconclusive, Bio Gro offers this option, to help Fort Worth have a My diversified and
successful program. Bio Gro will own and operate for the City a complete dewatering
facility, designed to meet the performance specifications, with 70% BIO*FIX land application
and 30% IPS composting. The price will be $123.23 per dry ton for BIO*FLX and land
application and $205.03 per dry ton for composting. This equates to a 5 year price of
$15,742,632.50 for land application and $11,225,392.50 for composting. This does not
include the $2.7 million capital reimbursement by the City.
Thank you for the opportunity to present our proposal. Please contact Vince Spoltore at
(817) 233-8356 if you have any questions.
• Sincerely,
A
Robert J. arrett
Vice President - Finance
Attachment 1
BIO GRO SYSTEMS, INC.
PRICING MATRIX FOR
BIOSOLIDS MANAGEMENT OPTIONS
30 dt/d IPS Composting Bio Gro 30 dt/d land
10,950 dt/y application during
composter construction
25% input solids
Dry Ton Cost $180.13 $91.25
5 Year Cost $9,862,118
22% input solids
Dry Ton Cost $194.82/dt $91.25
5 Year Cost $10,666,395
20% input solids
Dry Ton Cost $204.61 $91.25
5 Year Cost $11,202,397
1$% input solids
Dry Ton Cost $214.39 $91.25
5 Year Cost $11,737,852
Bio Gro Systems is open to discussion with the City concerning any aspect of the above
pricing, such as Bio Gro hauling the biosolids.
P
INFORMAL REPORT TO CITY COUNCIL MEMBERS `. ; No. 7523
April 19, 1994
G�p,RTEq� a
� w To the Mayor and Members of the City Council
op
.
ex 6 Subject: STAFF REPORT ON PROPOSAL OF BIO-GRO, INC. TO
i87 BUILD A 30 DRY TON PER DAY IPS COMPOSTING FACILITY
On Tuesday, April 5, 1994, the City Council amended Item No. 4 of M&C C-14255,
Award of Contract for Village Creek Wastewater Treatment Plant, Long-Term Solids .
Dewatering, Processing and Disposal, "to authorize the City Manager to execute a
contract with Oscar Renda Contracting, Inc. for the long-term dewatering and
disposal at the Village Creek Wastewater Treatment Plant in the amount of
$24,857,000 based on a five year commitment calculated on the total projected
quantities, with annual funding of which 2.7 million is available and the current
TNRCC permit requirements and the pre-approved conceptual plan, and further to
direct the staff to negotiate with Bio-Gro for the construction of a permitted
composting facility with capabilities of processing up to 30% of the contemporary
sludge. This should include terms, projected operational expenses, and projected
start up dates. This negotiation should be completed by April 19 and presented to
the City Council for consideration." Item number 5 of the M&C was deleted.
City staff met with representatives of Bio-Gro Systems on three separate occasions
and discussed their proposal to construct and operate a 30 dry ton per day IPS
composting facility. They responded with the attached proposal.
Depending on the average daily percent solids agreed to by the City, Oscar Renda
Contracting and Bio-Gro Systems, the 30 dry ton per day IPS system would cost
between $9.8 to $11.7 million dollars over a 5 year contract period.
In addition, several issues would have to be resolved between the contracting parties,
and the City prior to the start-up of the composting facility that could substantially
alter the cost of both projects.
In summary, the attached proposal complies with the City Council directive providing
terms, projected operational expenses and projected start-up dates for a 30 dry ton
per day IPS composting facility.
Bob Terrell
City Manager .� r
Attachment
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
C;
A
,J
\71
TO
ED C,
cl TU
iA t Ac 6 �
F 4, 75
31.
Lfv\�) D
F) K-
u
IJ
(.. . -...... 1 -�...�... .
ik s-A
..........
1
al g- (-,5 -D—,
-7 Z- q z ma ci
--7 Z- 6
A) C--L-) -12 �lj (-z.,f-
12- A
c) C A
4el
-73
070
7 0
04-18-94 11 : 36AM M10 8718195 Pool
April 19, 1994
Mr. Robert T. McMillon
Water Department
City of Fort Worth Municipal Building
1000 Throckmorton Street
Fort Worth, Texas 76102
RE: Suggested Wording for Informal Report No. 7823
Dear Mr. McMillon:
Thank you for taking a few minutes out of you busy schedule to discoss this all important
issue. Bio Gro appreciates the opportunity to offer input to lhk� ;:hovf mentioned TR.
Our recommendation is to change paragraph 3, "Depending on ". 1,) the following:
Bio Gro's EPS composting proposal pricing was presenteA in a matrix depending upon
the percent solids range of the biosolids, 18-25%.. ente6ng th.! facility. The size and
unit cost of the compost facility is totally dependent upon this input solids range. For
land application a lower percent solids is acceptable due I ecat se the I i me addition
increases the solids content. However, the compost facility prefers a higher percent
solids in order to reduce the facility size (ie. lower initial capital costs), decreased
trucking costs and better process control. 'Rese items r•oinbire to lower the operating
costs saving the City money in the pursuit of a diversifier program.
Bio Gro's per year price to operate the composter range,, frorr $1.97-2.35 million.
This is offset by a reduction of approximately $1 .38 million p-,r year for a 70% land
application program. This makes the net increase of$59'!,72%.004967,870.00 per
year for a diversified program. It must be stated that the above pricing does not
include dewatering and transportation of the hiosolid% for the i!omposi facility. These
prices will be negotiated between all parties to a Putimlh ag-r-.,eable settlement.
Bio Gro also included an interim price to land apply the 10% of the biosol-ids intended
for the composter. This is so that the City will not have to hear the additional costs
of Renda gearing up to land apply 100%, then reduce �o 705 .
Delete paragraph 4 in its entirety.
Should you have any questions regarding our comments please contact me at 233-8356.
Sincerely,/
ince Stpoltore
RAM