Solid Waste Management Project

WeCare Organics SummaryPresented to

Solid Waste Committee of City CouncilTaunton, Massachusetts

April 10, 2012Prepared by

James J. Binder, P.E.Alternative Resources, Inc.

andRodney G. Hoffman, Esq.

Deutsch Williams Brooks DeRensis & Holland, P.C.

1,000 TPD truck/rail haul transfer station for MSW; waste to landfill in Upstate New York outside of Syracuse

115 WTPD (20% solids) Max West gasification facility for WWTP sludge (36,000 TPY)

100-300 TPD regional single-stream MRF, also accept comingled recyclables

100 TPD Resident Drop Off for separated organic waste (e.g., food waste, yard waste)

WeCare OrganicsProject Description

2

Project Description (continued)

Operate Residents Drop-Off Facility, Saturdays, 7 AM-3 PM

Begin Service no later than December 31, 2015

3

Sludge Management Single Gasification Unit

Materials Feed and Gasifier Thermal Oxidizer and Heat Exchanger

Modular System (Growth Potential)

4

Contractor: WeCare Organics, LLC Project Guarantors: WeCare Organics, LLC Transfer Station Technology Provider: WeCare

Organics, LLC MRF Provider: To be determined Organics Drop-Off Facility: WeCare Organics,

LLC Gasification Technology Provider: MaxWest

Environmental Systems

Contractor Team

5

Design Engineer: GHD, Inc. Construction Contractor: Blue Heron

Construction, LLC Environmental Permitting: GHD, Inc. Facility Operator: WeCare Organics, LLC  Arrange Project Debt: JP Morgan Chase;

MaxWest Environmental Systems, Inc.

Contractor Team (cont.)

6

Location Transfer Station – Myles Standish Industrial Park, 745 John Hancock Road

Characteristics◦ Approximately 36 acres; City estimated 10-20 useable

acres considering wetlands, 500 ft site assignment setback (WeCare proposing to use 18 acres)

◦ Zoned industrial◦ Access from major highway (I-495) without passing through

residential neighborhoods◦ Rail served

Location Gasification Facility – at WWTP – site size (18,000 sq. ft.); one of three locations to be defined.

Site for Transfer Station/Gasification Project

7

8

9

10

Project Benefits Environmental Benefits from Closure of Existing

Landfill, e.g., Truck Traffic, Odor, Noise, Greenhouse Gas Emissions (However, transport to and disposal at Upstate New York landfill)

Enhanced Recycling – Single-Stream Recycling Facility; Organics Drop-Off Facility

Economic Benefits◦ Construction Jobs◦ 30-50 Long-Term O&M Jobs◦ Host Benefits to Taunton◦ Economic Stimulus to City and Region

Landfill Benchmark: Free Waste Disposal (~$1.5–2.0 Million) and ~$1 Million Host Fee Outside Waste ($883,073 in FY11)

Project: at Financing◦ Project Development Fund: $0.5 Million ($100,000/year, starting 1/15/13)◦ Environmental Fund: $0◦ Transfer Station Site Lease Payment: 100% City Debt Service (no back payment)◦ Site Lease Payment at WWTP: $1/year proposed

Project: During Facility Operation (Annual Benefit)◦ Discounted Waste Disposal Costs: $55-60/Ton (Contract Date); Estimated Cost Year 1 is

approximately $1,384,000◦ Host Fee for Outside Waste (MSW, sludge, organics): (Year 1) $4/Ton; Estimated

Benefit Year 1 is approximately $919,000.◦ NAC: $20,000 (Year 1)◦ Contract Monitoring Payment: $115,000 (Year 1)◦ Profit Share: 30% of MRF Gross Profits – Estimate $90,000 (Year 1)

Term Extension Benefit – 30% Savings Haul Road Payment (if not extended): $100,000/Year (Years 5-9)

Key Costs/Financial Benefits to City

11

Key Design Features for Environmental Mitigation

Facilities design to meet or exceed Federal, State and City design, construction, operation and environmental requirements. Buildings to meet LEED standards.

Transfer Station, MRF, Organics Drop-Off Site located in Myles Standish Industrial Park, landscaped/buffer from industrial neighbors to be defined

Gasification Facility at WWTP Facility aesthetics-architectural treatment to fit with

neighboring buildings in industrial park All processes, materials storage enclosed in buildings,

structures, except storage baled waste and recycled products Access: Waste delivery to Transfer Station, MRF, Organic Drop

Off limited to 7 AM-3 PM Monday-Saturday , viaI-495 to Bay Street to Myles Standish Industrial Park – No use of Fremont Street

Access to Gasification Facility by City Approved Routes

12

Key Design Features for Environmental Mitigation (cont.) Odor Control

◦ Covered delivery trucks◦ Transfer Station-Enclosed, waste delivery/storage in buildings

with ventilation and aspiration of baling area, odor control◦ Gasification Facility-Enclosed, waste delivery/storage in

buildings/silos, negative air pressure, odor control◦ MRF-Enclosed, materials delivery/storage in buildings◦ Organics Drop Off-Covered containers

Noise attenuation: noise controls, equipment in enclosed structures, buildings

Shields on outdoor lighting to minimize off-site impacts Rail and truck shipment of transferred waste ; waste

moved off site daily if by truck, if by rail, movement is every 2 or 3 days

13

Minimum process wastewater discharge (to be defined)

Reuse of process water to minimize consumptive water use, as reasonably possible (to be defined)

Stormwater drainage system to be designed with on-site retention ponds, as reasonably possible (to be defined)

Safety and security to meet codes

Key Design Features for Environmental Mitigation (cont.)

14

Risk-Performance of New Technology – Sludge Gasifier

Challenges◦ Waste Acquisition – Long Term◦ Sale of Recycled Products◦ Permitting◦ Financing◦ Facility Performance

City Challenges-Provide Timely Oversight, Review

Project Risks/Challenges

15

Company Guarantee Construction and Operation Payment and

Performance Bonds (Operational Performance Bonds Limited to $2 Million)

Insurance coverage meets City requirements

Financial Security

16

Other Key Contract Provisions

17

Section 2 – Premises – Alec Rich Site, WWTP Site Section 3 – Term

◦ 3.1 Initial Term – 20 years◦ 3.2 Extension – Three 10-year extensions – mutual consent◦ 3.3 Early Termination – for failure of financing

Section 6 – Surrender on Termination◦ 6.1 Removal of commercially unusable improvements◦ 6.2 City option to purchase of facilities

Section 20 – Hazardous Materials◦ City responsible for existing conditions of Alec Rich Site and

existing conditions at WWTP Site◦ WeCare responsible for any new contamination at either site

Key Ground Lease Provisions

18

Section 9.1 – Review of Plans – review but not approval

Section 9.4 – Evidence of Construction Funding Section 9.5 – Conditions Precedent to Design;

Construction; and Operation Section 9.9 – Acceptance Test & Startup –

Appendix 7 Section 9.10 – Performance Guarantee –

Appendix 8

Key Oversight of Construction Provisions

19

Section 8 – Duty Operate, Maintain and Provide Services◦ Triple-net concept

Section 8.6 – Provision of Services◦ City may delay sending its Acceptable Solid Waste

if landfill capacity remains

Key Operations Agreement Provisions

20

Section 16 – Defaults and Remedies◦ For the Agreement to be “financeable”, lenders will

have right to receive notice of default and right to sure on behalf of WeCare

Section 16.7 – Relief for Uncontrollable Circumstances◦ Extension of time to perform◦ WeCare responsible for three years of any increase

in City disposal costs Section 20 – Hazardous Materials

◦ City responsible for cost of any existing contamination of Alec Rich Site and WWTP Site

Key General Provisions

21

Negotiations/Contract Award

By July1, 2012

Permitting/Design/Construction

By December 2015

Operation

By December 31, 2015

Next Steps/ScheduleTransfer Station/Gasification Project

22