Severn trent/ Reynolds-LAYNE P3 Solutions: Isla Morada Design-Build-Operate Now Under Successful Long-term O&M 06/23/2017 Efrain Rodriguez (941) 893-7429 Efrain.Rodriguez@stservices.com

Severn Trent is a leading operator of U.S. water & wastewater assets 200+ clients in 18 states with a total combined flow of 900+ million gallons per day (MGD) 200+ wastewater facilities managed 7,800 miles of collection & distribution lines ~1,500 employees 160+ water facilities managed 4+ m population served

Design Build Operate: project delivery model Integrated cost-effective solution with balanced risk transfer Partnership approach for sustained long term success

Design Build Operate key components Public sector finances the construction and owns the assets Private sector responsible for effective coordination and implementation of design, construction and long term operation The design, construction and assets are required to meet specific minimum criteria (based on client/project needs) Partnership formed to leverage private sector expertise and deliver a cost-effective solution Typically includes design and construction contract plus long term O&M contract Operability integrated in the design process to address: life cycle costs, consistent and sustained performance, reliable and compliant operations, adequate asset management, redundancy, resilience, among others.

Project specific financing Total project cost of approximately $130 million: financed through a combination of conventional financing tools after considering various options including the following: Sewer Assessment: $22 million @ $4,000 per household (Higher charges for businesses based on usage) Low interest State Revolving Loans: $81 million Florida “Mayfield Grants”: $26 million

Isla morada Project description Multimillion dollar Partnering DBO wastewater project for the Village of Islamorada, FL (Owner) Goals of Owner: Restoring nearshore water quality Meet State of Florida mandate to have all wastewater collected and treated to required levels by December 31, 2015 Cost effective utility service Sound long term solution DBO method provided cost effective, sustainable solution through an integrated project delivery method

Project scope description Transmission System consisting of approximately 100,000 LF of 8” to 18” PVC and HDPE 500,000+ LF of Low Pressure and Vacuum Sewer Collection System Service to approximately 5,000 customers Installation of approximately 400 residential grinder pumps Complete maintenance and customer response responsibility for the 30 mile collection system for 20 years Robust Solution Balanced Approach Partnership Cost-effective Sustainable Compliant Resilient Risk Transfer Guaranteed

Dbo approach selected providing a single point of contact for owner Balanced risk transfer solution The partnership included the Village as Owner and national and local partners: design, subcontractors and suppliers and a national operations partner, as well as local stakeholders Public interaction and cooperation were key in successfully delivering a customized wastewater solutions to thousands of private properties

Key success factors Project Description Detailed Scope Definition Careful Partner Selection Qualification-based and best Fit for Purpose Holistic Approach Life-Cycle Cost Analysis, redundancy, resilience, reliability considerations Risk Transfer Considerations Balanced Approach to maximize risk transfer in a cost-effective manner Partnership Mindset Cohesive DBO partners with local and national resource integration

Partnership mindset: Integrating local players Local Integration of subcontractors and suppliers Prioritized hiring of local and regional subcontractor and vendors, with Client input 80% local and regional participation Layne self-performed 20% of construction project Integration of Subcontractors included: Putting all subs through Layne’s safety training and providing constant oversight Layne’s QA/QC oversight on all subs Coordination of Certified Payrolls, etc. to meet SRF obligations Assistance to subs with local hiring and job advertisements Managing subcontract sizes to drive effectiveness and quality

Long term Best-in-class operations Severn Trent worked closely with Layne during early project stages O&M for the entire collection system, including 24/7 field service response and transition/interim operation engagement. Ongoing review of system operations to drive operational improvements to the benefit of the Village and its residents: Process control measures to reduce chemical usage by 25%, while improving effluent quality (Process adjustment and enhanced monitoring/control) Significant reductions in power usage. (Sewage pits updated to AirVac and I&I reduction) Maintenance practices to drive long term collection system reliability, and decreased capital needs. CMMS implementation with project- specific approach and ongoing improvement.