Energy/Compost Facility
Action Plan
City Council Meeting
July 2, 2012
1
Overview
Background
 Proposed Action Plan/Timeline
 Request for Proposal (RFP) Process
 Recommendations:

–
–
–

Accept Action Plan/Timeline
Approve a contract amendment with ARI
Initiate an Organics Resource Recovery Strategy
City Council Decision Points
2
Background
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Staff directed by Council to
conduct Energy/Compost
Feasibility Study
Preliminary Feasibility Study
Completed
Palo Alto Landfill closes
Measure E passed by voters
Staff directed by Council to
develop Action Plan
April 2010
January 2011
(Finalized September 2012)
July 2011
November 2011
February 2012
3
Byxbee Park and Water Quality
Control Plant
4
Measure E: Potential Site of
Energy/Compost Facility
5
Long-Term Footprint
6
Coordinated Activities
in Action Plan
1. Preparation of Action Plan
2. Long Range Facilities Plan (LRFP) for Water
Quality Control Plant (RWQCP)
3. Organics Resource Recovery Strategy
4. Landfill Closure
5. RFP Process: Energy/Compost Facility or
Export
6. Implementation of Selected Strategy
7
Action Plan Timeline
2012
2013
Organics
Strategy
2014
2015 ~ 2018
Energy Compost Facility Option
Landfill
Capping
Request for
Proposal
Contracting
Process
Complete
2018
Design &
Construction
OR
Export Option
Contracting
Process
Complete
Late 2014
8
Action Plan Timeline
1. Develop Action Plan
2. LRFP-RWQCP
3. Organics Strategy


Draft
Final
Completed
July 2012
January 2013
April 2013
4. Landfill Capping

Decision on Capping
January 2013
9
Action Plan Timeline
(continued)
5. RFP Process: E/C Facility
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Finalize Performance Standards
Prepare/Release RFP
Companies Prepare Proposals
Proposal Evaluation/Financial Analysis
Council Consideration
Council CEQA Approval
Council Contract Approval
January 2013
January 2013
July 2013
January 2014
February 2014
May 2015
May 2015
10
Action Plan Timeline
(continued)
6. Biosolids Facility Planning

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Consultant Procurement
Additional Options Development
Preparation of Biosolids Plan
February 2013
February 2014
July 2014
7. Implementation: Service Commences
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If E/C Facility
If Export
 Food Scraps/Yard Trimmings
 Biosolids
April 2018
August 2014
February 2015
11
E/C Facility Action Plan
Recommendations
1. Accept Action Plan/Timeline (initiating an
RFP process)
2. Approve $290,224 Contract Amendment
with Alternative Resources Incorporated
3. Approve Related Budget Amendment
Ordinance
4. Direct Staff to prepare an Organics Resource
Recovery Strategy
12
Wastewater LRFP
Recommendations
1. Accept Long Range Facilities Plan (LRFP )
2. Direct staff to prepare a Biosolids Facilities
Plan and retire the Plant incinerators as soon
as practical.
3. Direct staff to evaluate biosolids treatment
options including those from the
Energy/Compost Facility evaluation.
4. Direct staff to initiate a Financing Plan for the
LRFP.
13
City Council Decision Points
Acceptance of Action Plan
Acceptance of LRFP-RWQCP
Council Study Session
Decision Landfill Capping
Approval Final RFP for Release
Approval Organics Strategy
Selection of E/C Facility or Export
CEQA Approval – E/C Facility
Contract Approval – E/C Facility
or
Contract Approval – Export
July 2012
July 2012
November 2012
January 2013
January 2013
April 2013
February 2014
May 2015
May 2015
August 2014
14
Summary
Energy/Compost Facility
• Timeline
• ARI Contract & BAO
(RFP process)
• Organics Resource
Recovery Plan
Wastewater Plant
• Long Range Facilities
Plan
• Biosolids Facilities Plan
• Financing Plan
15
Energy/Compost Facility
Action Plan
City Council Meeting
July 2, 2012
FINAL SLIDE
16
Energy/Compost Facility
Action Plan
BEGIN BACK-UP SLIDES
17
10 Acre Development Area
18
3.8 Acre Development Area
19
Action Plan Timeline (detail)
20
RFP Considerations (Process)
1. Obtain Firm Technical and Price Proposals for
Consideration
2. Combined Procurement for Food Scraps, Yard
Trimmings and Biosolids
3. Land Requirements
4. Performance Based
5. Performance Guarantees During Facility
Development/Construction

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Schedule
Performance Guarantees for Acceptance
Cost (Depending on Type of Project Delivery)
21
RFP Considerations (Process)
6. Performance Guarantees During Facility
Operation
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Throughput
Environment Compliance
Energy/Product Output and Quality
Residuals Quantity
Other
7. Price Guarantees
22
RFP Considerations (Process)
8. Proposal Evaluation
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Key Evaluation Criteria
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—
—
—
—
—
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Company and Staff Qualifications
Demonstrated Use of Technology
Viability of Technical Approach
Environmental Mitigation
Conformance to City Business and Contract Terms
Price
Process allows choice of other than Lowest Priced
Proposal (Value Analysis)
Process does not commit the City to any action.
23
RFP Considerations: Project
Concept (Process)
1. Energy/Compost Facility

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Type/Quantity of Feedstock
Type of Technology Acceptable by Feedstock
Site for Food Scraps/Yard Trimmings
Site for Biosolids
2. Export

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Type/Quantity of Feedstock
Collection and Direct Haul (Food Scraps and Yard
Trimmings)
Storage Loading Area for Dewatered Biosolids
24
RFP Considerations
(Technical & Environmental)

Scope of Service:
–
–
–
Permitting (CEQA by City; Other permits by the
Company or City)
Company to Design/Build/Operate and Market
Products or Design/Build only if Facility at RWQCP.
City to Buy Power
Facility Sized for Palo Alto (only) or regionally
Preference for Energy Production (Electricity,
Gas, Fuel)
 Use of Energy (City or export)
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25
RFP Considerations
(Technical and Environmental)
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Use of Landfill Gas (if beneficial)
Compost Digestate On-Site, Off-Site, or Flexible
Preferences for Compost Quality and Use
Environmental Controls
–
–
–
–
–
–
Enclosed Operations
Noise
Odor
Process Water
Stormwater
Air
26
RFP Considerations
(Technical and Environmental)
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Land Requirements
Aesthetic Preference
–
–
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Building Design
Buffer Zones
Performance Guarantees during Facility Operation
— Throughout
— Environmental Compliance
— Energy/Product Output, Quality
— Residuals Quantity
— Other
27
RFP Considerations
(Business and Risk Allocation)

Preferences for Business Arrangements/Risk
Allocation
— Facility Ownership/Financing (Public or Private)
— Term of Contract Operations (20 years, Options for
Renewal)
— Market Risk for Projects (Energy, Compost; Profit
Share)
— Contractor Compensation Basis (Unit Pricing;
Annual Service Fee; City Put-or-Pay Obligation)
— “Local Content” Purchasing (Construction and
Long-Term Operations)
28
RFP Considerations
(Business and Risk Allocation)

Preferences for Contract Principles/Risk Allocation
— Single Point of Responsibility by Company
— Permitting (Permitability, Schedule)
— Development Schedule (Pre-Financing, Post-Financing)
— Site Conditions (Surface, Subsurface)
— Construction–Related Contractor Guarantees
• Cost
• Schedule
•
•
•
Design Standards/Quality
Acceptance
Guarantee Enforcement
29
RFP Considerations
(Business and Risk Allocation)

Preferences for Contract Principles/Risk Allocation
— Operations-Related Contractor Guarantees
•
•
•
•
Cost/ Service Fees
Performance Standards
Asset Management
Guarantee Enforcement
— Alternative Disposal Sites and Arrangements, if Facility
not operating
— Capital Improvements over time
•
•
•
Implementation
Cost Increases
Cost Savings
30
RFP Considerations
(Business and Risk Allocation)

Preferences for Contract Principles/Risk Allocation
— Project Security
• Insurance
• Bonds
• Company Guarantee
• Letter of Credit (LOC)
• Maintenance of Financial Capability
— Uncontrollable Circumstances/Changes-in-Law
Affecting Costs and Performance
— Convenience Termination and Default Termination
(Pre- and Post-Financing)
— Financial Penalties for Non-Performance
31
RFP Considerations
(Business and Risk Allocation)

Preferences for Contract Principles/Risk Allocation
— City Step-in Rights (including Access to Technology
Licenses)
— Dispute Resolution
— Facility Removal/Site Restoration
32
Action Plan Council Decision
2012
2013
2014
2015 ~ 2018
Organics
Strategy
Landfill
Capping
Request for
Proposal
Energy Compost Facility Option
Contracting
Process/EIR
Complete
2018
Design
Construction
Field Testing
OR
Export Option
Contracting
Process
Complete
Late 2014
33
Action Plan Public Participation
Review
Draft
Organics
Strategy
Feb 13
Draft
Action
Plan
Apr 12
Review
Draft
RFP
Nov12
Review
Proposal
Evaluation,
Financial
Dec 13
34
Public Participation
Public Participation is scheduled throughout the
process to include review of the:
Draft Action Plan
Draft Performance Specifications
Draft RFP
Draft Organics Strategy
April 2012
September 2012
November 2012
February 2013
Proposal Evaluations & Financial Analysis December 2013
35
Next Steps
Develop Performance Specifications
 Develop Request for Proposals (RFP)
 Issue RFP and Evaluate Responses
 Decision

36
Energy/Compost Facility
Action Plan
END BACK-UP SLIDES
37