Biosolids Planning – Core Team Meeting City of Bellingham July 18, 2017

Agenda Topic Description Leader Introduction (5 mins) Review agenda and meeting objectives Tadd Site Visit Debrief (15 mins) Discuss summary of takeaways and need for any additional visits TBL+ Scoring (90 minutes) Overview of TBL+ updates from last workshop Comparative Construction Costs Scoring of Financial Criteria Susanna Select Preferred Conceptual Alt (30 mins) Summary of scoring Project Phasing Class A vs. B Additional information/analysis needed? Project Cost Discussion (30 mins) Communication around the scale of the project Next Steps (20 mins) July 31 Public Workshop Council Briefing Phase 1 Tech Memo Brown and Caldwell

July 31 Brown and Caldwell

Site Visit Debrief Brown and Caldwell

Area Biosolids Programs Tacoma Treated as a business $$$ Rely on word of mouth (master gardeners) for marketing Sumner “Free” product No advertising Pierce County Class A high-quality product (pellet from dryer) currently being stored Alderwood Class A from belt dryer currently disposed at Boulder Park King County GroCo compost program (Class A) 95% Class B LOOP program Lynden/Arlington Class B with Compost for Class A use around town Brown and Caldwell

TBL+ Scoring Brown and Caldwell

Social, Environmental, and Technical Factor Scoring Changes Since last Core Team Meeting E1: Adjusted GHG reduction for all alternatives E3: Adjusted Alt 2 to 50% (2 of 4 resources recovered) E5: Adjusted Alt 4 to remove site remediation Social S3: Adjusted metric to public exposure of sensitive social areas (@ Post Point); comparison against current trips Technical T4: updated to include permitting quantity or duration, public acceptance, operations, biosolids market/distribution Brown and Caldwell

Review of Economic Factors in TBL+ F1: Optimizes system value. Provides balanced ROI using TBL+ criteria over 50 year life. F2: Affordability. Consistent with long-term financial, environmental, and social goals of wastewater utility F3: Minimizes risk of end use market sensitivity. Limits risk or maximizes benefits from commodity market changes of end use products. Brown and Caldwell

F1: Common Basis for Phase 1 Cost Estimating Comparative costs based planning level of design (1%-5%) AACE Cost Estimating Class 4 Typical range: -15% to +50% Construction costs include 40% contingency, escalation to mid-point (2023), 8.7% sales tax Project costs include 25% (eng/legal/admin) + land acquisition + 5% change order Common Elements Capital costs Standby generator/ATS Maintenance building Influent screening upgrades Digester gas flares Cake loadout hopper O&M costs + Minor biosolids end use coordination + Digester labor - Incin O&M Brown and Caldwell

F1: Alt 1 Specific Costs Capital Costs O&M Costs Mesophilic digester, storage tank, gas cleaning Cogeneration/boiler Site remediation Miscellaneous site, piping, EI&C, general conditions, Contractor OH&P $66/hr trucking/tipping fee to eastern WA Truck loading operator coordination (30 min per truck) Cogeneration maintenance Power generation credit Polymer usage Brown and Caldwell

F1: Alt 2 Specific Costs Capital Costs O&M Costs Mesophilic digester, storage tank, gas cleaning Dryer and 4 days storage Site remediation Miscellaneous site, piping, EI&C, general conditions, Contractor OH&P Dryer operations – 0.5 FTE $150/hr trucking/tipping fee within 100 miles to blending facility Dryer energy use Polymer usage 3 FTE for sale and admin Brown and Caldwell

F1: Alt 3 Specific Costs Capital Costs O&M Costs TPAD digesters and blending tanks, storage tank, gas cleaning Cogeneration/boiler Site remediation Miscellaneous site, piping, EI&C, general conditions, Contractor OH&P Land acquisition for blending facility Off-site blending facility with small admin bldg., maintenance shop, raw material storage, small rolling stock $150/hr trucking/tipping fee within 8 miles to City’s blending facility Labor hours for TPAD digestion Production labor and diesel Cogeneration maintenance Power generation credit Polymer usage 3 FTE for sale and admin Brown and Caldwell

F1: Alt 4 Specific Costs Capital Costs O&M Costs Pump stations - energy and labor Labor hours for TPAD digestion Production labor and diesel Cogeneration maintenance Power generation credit Polymer usage 3 FTE for sale and admin On-site pump station 8 mile sludge pump forcemain and 4 mile centrate return pipe Land acquisition for solids and blending facility Off-site facilities TPAD digesters and blending tanks, storage tank, gas cleaning Cogeneration/boiler Centrate return pump station Solids treatment building with relocated GBTs and centrifuges and odor control Off-site miscellaneous site, piping, EI&C, general conditions, Contractor OH&P Off-site blending facility with raw material storage, small rolling stock 2,500 sf admin building; 2,500 sf maintenance building Brown and Caldwell

F1: Summary of Costs Comparative costs. Not for budgeting purposes. Alt 1 Alt 2 Alt 3 Alt 4 Capital (in 2023$) Construction Project $85 mil $111 mil $92 mil $119 mil $98 mil $129 mil $152 mil $198 mil Annual O&M $875k $1.4 mil $1.5 mil 20-year NPW of Project Costs (in 2017$) $72.5 mil $83.5 mil $79.3 mil $116.6 mil Project Cost relative to highest score 100% 85% 91% 39% Comparative costs. Not for budgeting purposes. Brown and Caldwell

F2: Affordability ROM impact range estimate $2/month/$10M in capital $0.25/month/$100k of on-going O&M Alt 1 Alt 2 Alt 3 Alt 4 Capital (in 2023$) Construction Project $85 mil $111 mil $92 mil $119 mil $98 mil $129 mil $152 mil $198 mil Annual O&M $875k $1.4 mil $1.5 mil Rate Range for Project Costs $24.40/mo $27.40/mo $29.50/mo $43.10/mo Project impact relative to highest score 100% 85% 91% 39% Comparative costs in $2023. Not for budgeting purposes. Brown and Caldwell

F3: Minimizes risk of end use market sensitivity Revision to sensitivity of O&M costs to energy purchase price Energy purchase price is approximately 30% of annual O&M costs Alt 1 Alt 2 Alt 3 Alt 4 Net energy credit is approximately 20% of annual O&M costs with cogeneration Energy purchase price is approximately 30% of annual O&M costs Risk impact relative to highest score 100% 75% Brown and Caldwell

Draft Scoring Summary with Financial criteria Alt 1 Alt 2 Alt 3 Alt 4 F1: Optimizes system value 100% 86% 89% 35% F2: Affordability 85% 91% 39% F3: Minimizes risk of end use market sensitivity 75% Brown and Caldwell

Select Preferred Conceptual Alternative Brown and Caldwell

In a nutshell… Alternative 1 Class B on-site, land app Alternative 2 Class B and Dryer on-site Alternative 3 Class A on-site, “Tagro” off-site Alternative 4 Class A and “Tagro” off-site Environmental 21.1 10.5 All recovered energy is being used by the dryer (high GHG emissions) 25.0 Lowest GHG emissions and energy usage 22.1 Social 21.9 21.7 20.9 21.5 Economic Least costly to only produce Class B 20.4 23.4 14.9 Significantly higher costs associated with a full solids plant off-site Technical/ Functional 20.8 No off-site implementation complexity 16.0 Uses the majority of the remaining footprint at Post Point 17.1 18.3 Saves space at Post Point for liquids upgrades/ Avoids potential future satellite WWTP Total 88.8 Lowest cost and least complex to implement (no Class A available locally) 68.9 Worst environmental, limits future expansion at Post Point 86.1 Best environmental and “competitive” in all other criteria. 76.2 Most expensive, but best option for “regional” and preserving space at Post Point Brown and Caldwell

If Class A desired by the community as a local option Alt 1A – Class B on-site, Compost off-site Class A (land application backup) Brown and Caldwell

Phasing in a Local Product Brown and Caldwell

Phasing in a Local Product Brown and Caldwell

Phasing in a Local Product Brown and Caldwell

Phasing in a Local Product Brown and Caldwell

Conceptual Alternatives Brown and Caldwell

Project Cost Discussion Brown and Caldwell

Scale of the Project – How to Manage Moving Ahead? For Talking Purposes… Overall Scale of the Project Construction Project Planning Level Cost Estimate $85-$150M $111-$198M Planning Level Rate Impact $15-$30/month $20-$38/month Potential implications and considerations… Phase 2 will develop a Project cost for the selected alternative Interest in alternative/really innovative technologies (i.e., revised pass/fail criteria) perceived to be less expensive New incineration would likely within these ranges based on 2012 study information (to be confirmed) “Do nothing” represents risk ($) and significant OM ($) (and major capital project in near future anyway) Peer review to validate direction Brown and Caldwell

Next Steps Brown and Caldwell

Next Steps July 31 – Public Workshop Council briefing Summarize public feedback and how it was used Summarize TBL+ results and selected alternative Next Steps (Phase 2) Council briefing Brown and Caldwell