1 The Tampa Bay Water Surface Water DBO Joe Ortiz U.S. Conference of Mayors November 19, 2008

2 Veolia Water North America No. 1 market leader with ~38% share in U.S., Canada and Caribbean* Approximately 600 communities served in 38 states; 300 municipal facilities Manage largest U.S. water public-private partnership (Indianapolis) Manage largest U.S. wastewater partnership (Milwaukee) Manage largest U.S. DBO (Tampa Bay) Provide industrial/commercial water partnerships and operating services at 100+ facilities Largest number of U.S. industrial projects (customer base includes many Fortune 500 companies) *Source: Public Works Financing, April 2008 Tampa Bay Water Significant DBO project Milwaukee – largest U.S. wastewater agreement Indianapolis – nation’s largest, most innovative partnership

3 Municipal Projects +180 partnerships serving 600 communities NORTHEAST Plymouth, MA Woonsocket, RI Cranston, RI Leominster, MA Wilmington, DE Danbury, CT SOUTH Tampa Bay, FL New Orleans, LA Atlanta-Fulton County, GA CENTRAL Indianapolis, IN Chicago, IL Milwaukee, WI Springboro, OH WEST Richmond, Palm Springs, and Burlingame, CA Vancouver, WA Gresham, OR Great Falls, MT Honolulu, HI CANADA Moncton, New Brunswick Toronto, Ontario Brockton, Ontario CARIBBEAN St. Thomas, St. Croix, VI Antigua developments

4 Public control and ownership is supported by private-sector expertise and experience Performance-based contracts deliver: ► Exceptional water quality ► Environmental compliance ► Customer service metrics ► Operations metrics ► Capital asset management ► Community involvement Lower costs and rate stabilization Added Value to Citizens Improved customer services, operating metrics and compliance while stabilizing rates, lowering costs Partnerships deliver value to citizens

5 We’ve proven the PPP model. Oldest Partnership ► Burlingame, Calif. (35 years) Largest Partnership ► Indianapolis All types of communities, large and small, benefit from partnerships. Operations and maintenance agreements and design-build- operate agreements have been applied to all facets of assets – from biosolids to drinking water. New photo/s

6 We believe in public control Water is a local issue. You continue to own and control assets. Your community continues to exercise control over rates. We support you as the technical operator and customer service provider. A San Francisco suburb, Burlingame, California, was the nation’s first community to take advantage of a partnership, beginning in We’ve served ever since!

7 Design-Build-Operate: Track Record in Tampa Leads to Largest U.S. Project Tampa Bay team delivers on DBO, builds relationship  Difficult-to-treat variable water quality addressed with Actiflo technology  DBO solution delivers 66-MGD facility and helps save $80 million  Proven technology, established proven working relationship and intimate knowledge of operation  Keller Degasification Plant (33 MGD)  Reservoir (15 billion gallon capacity) TBW member governments Hillsborough, Pinellas, and Pasco Counties, St. Petersburg, Tampa, and New Port Ritchey TBW currently provides 189 mgd of drinking water to over 2 million citizens Expertise, experience to provide innovative solutions and benefits. Industry leader in municipal DBO projects for water and wastewater treatment Completed hundreds of capital projects, providing design, construction and O&M services Single point of responsibility and accountability Less expensive and faster project delivery method

8 Existing Regional Surface Water Treatment Plant

9 2.5 Million Residents Served 230 mgd total public supply average daily flow Tampa Bay Water- Where we are

10 Objectives for Agency Dual commitments to the Tampa Bay Community: ► Reduce production at existing well fields ► Meet growth in demand Configuration I program ► Develop new surface water and desalinated seawater supplies

11 Why Plunge into Public-Private Partnerships? Tampa Bay Water operated a groundwater-only system up to 1998 ► No O&M experience with surface water or desalination water supply ► Tampa Bay Water Board’s desire to shift O&M risk to private operator ► Potential long-term savings if private sector stakeholders involved in project development from the outset

12 Surface Water Treatment Plant DBO Summary Original project ► 66-mgd capacity ► $85 million capital cost ► 15 year O/M agreement Expansion project ► 120-mgd capacity ► $127 million capital cost ► 5 year O/M extension

13 SWTP Expansion: Putting the Lessons Learned into Action October Negotiate with existing contract developer, Veolia Water NA ► Confidence in partnership based on performance ► Maximize previously negotiated terms and conditions ► Keep risk with existing contract operator ► Apply lessons learned in original project procurement

14 Tampa Bay: Partnership Scope Expansion to 120 MGD Tampa Bay builds on success of DBO  Achieves 72-MGD rating and has 19 employees  Expansion of Surface Water Plant to 99 MGD with 120 MGD capacity and 27 employees  $126.7 M Capital Expansion  Veolia equipment sourced  42-month construction schedule  Cost plus structure with incentives  Approximately $32M increased O&M revenue  5-year contract extension Negotiated Procurement TBW Board ratification April 16, 2007

15 Open-Book, Design-Build Project Delivery Competitive bidding of 48 sub-contracts and purchase orders greater than 0.1% of GMP ensures market competitive pricing Exceptions: ► 7 sole source purchases ► Negotiated engineering and construction management fees Bid packages and award recommendations approved by Tampa Bay Water

16 Private Partnership Summary They work! ► Allocate risks appropriately and take the time to develop a full understanding between partners ► Select partners carefully, the relationship needs to endure

17 TBW Surface Water Treatment Plant