1. Renegotiation of Blue Plains IMA Presentation to the Blue Plains Chief Administrative Officers Jim Caldwell, Negotiation Team Chairman August 1, 2006

2. Briefing to BPCAOs8/1/062 OVERVIEW Review: BPCAOs’ charge to Negotiation Team Negotiation Team process & accomplishments Proposed IMA: Structure, Elements & Rationale Remaining issues Recommendations & Next Steps Q&A

3. Briefing to BPCAOs8/1/063 NEGOTIATION TEAM District of Columbia – Dana Bryson / Len Benson DC-WASA – John Dunn / Walt Bailey Fairfax – Jimmie Jenkins / Shahram Mohsenin Prince George’s – Donna Wilson / Bev Warfield Montgomery – Jim Caldwell / Dave Lake WSSC – Joe Zorica / Craig Fricke With the support & assistance of COG staff

4. Briefing to BPCAOs8/1/064 BPCAOs’ CHARGE Per November 8, 2005 meeting: Negotiate terms consistent with approved Key Principles Address issues identified in Annotated IMA Build upon results of BPSA Study’s flow projections Prepare ‘new’ IMA draft by July 1, 2006 Finalize ‘new’ IMA so Signatories can sign document by September 2006

5. Briefing to BPCAOs8/1/065 BPCAOs’ CHARGE Negotiation Team has: Prepared a draft document to meet schedule Developed text consistent w/ Key Principles Addressed issues identified in Annotated IMA & several ‘new’ issues A proposed schedule to address several ‘new’ issues/assumptions District of Columbia flow projection assumptions Characterization of Suburban peak flows

6. Briefing to BPCAOs8/1/066 INITIAL FOCUS January 31, 2006 Negotiation Team Kick-off Meeting: Confirmed protocols, BPCAOs’ charge & schedule Identified need for additional resources Facilitator Multi-day/off-site retreats & various meetings (2 two-three day retreats, 6 meetings, & 5 work sessions) Study to update Blue Plains cost figures Identified issues to address ‘New’ issues versus BPSA Study’s planning assumptions Technical, policy & procedural issues not noted in Annotated IMA or prior discussions Implementation details associated w/ Key Principles

7. Briefing to BPCAOs8/1/067 NEGOTIATION PROCESS Issues discussed/resolved by full Negotiation Team e.g., reconciled use of District of Columbia population projections w/ DC-WASA flow analysis, Governance issues Technical issues delegated to Work Groups to analyze/develop options for full Team consideration e.g., flow/capacity allocation issues via Utilities Work Group New IMA text & proposed structure/elements agreed to by full Negotiation Team During negotiations, Negotiation Team began to: Address many open/unresolved issues Developed many procedures proposed for new IMA

8. Briefing to BPCAOs8/1/068 CURRENT IMA Lacked references/links to DC-WASA ~40% of text was out-of-date or no longer applicable 5 of 5 core sections needed updating to reflect new information/regulations/planning assumptions Lacked linkages to several existing/parallel MOUs – both content & protocols Uneven mix of elements that ‘Engineers’ vs. ‘Blue Plains Users’ could/could not modify vs. amending core agreement Lacked clear process for updating elements (i.e., not a ‘living document’)

9. Briefing to BPCAOs8/1/069 OBJECTIVES FOR ‘NEW’ IMA Differentiate between Fundamental Key Principles Technical details that routinely change over time Incorporate new information/planning assumptions Retain flexibility to address future changes Ensure document does not quickly become outdated Include amendment process/ability to change select elements Create a ‘living document’ Address roles & responsibilities Streamline Blue Plains Committee structure Clarify links to DC-WASA Allow flexibility to delegate to technical groups, yet ensure BPRC accountability Include formal dispute resolution process

10. Briefing to BPCAOs8/1/0610 ‘NEW’ IMA STRUCTURE & RATIONALE Core Agreement Defines fundamental agreements between the Signatories Consistent with current IMA To be signed by IMA Signatories Operating Agreements (OAs) Defined/linked to core agreement Addresses operational details that change over time Allows flexibility to make appropriate changes w/out modifying core agreement Better linked to IMA than current method of stand-alone & out-of-date MOUs, etc. To be signed by Leadership Committee (i.e., BPCAOs)

11. Briefing to BPCAOs8/1/0611 ‘NEW’ IMA STRUCTURE Preamble & Signatures Table of Contents Sections 1 – 10 Appendix (to include Glossary & all adopted Operating Agreements)

12. Briefing to BPCAOs8/1/0612 ‘NEW’ IMA STRUCTURE 1. Key Principles 2. Governance* 3. Permit Responsibilities* 4. Capacity Allocations, Rates & Peak Limitations* 5. Financial Responsibilities* 6. Flow Measurement & Management* 7. Pretreatment & Operational Requirements* 8. Biosolids Management Commitments* 9. Environmental Stewardship Responsibilities* 10. Procedures * Details (vs. key concepts) to be codified via Operating Agreements (OAs)

13. Briefing to BPCAOs8/1/0613 ‘NEW’ IMA (Resolved) Section 2: Governance Clarifies/confirms roles & responsibilities Includes District of Columbia & DC-WASA in all committee structures (i.e., Negotiation Team is effectively the new BPRC) Defines BPCAOs as ‘Leadership Committee’ Defines coordination with DC-WASA Board Streamlines BPC structure BPTC merged into BPRC Improves internal BPRC/work group accountability

14. Briefing to BPCAOs8/1/0614 ‘NEW’ IMA (Resolved *) Section 10: Procedures Defines process to address details/procedures that become out-of-date Addresses how to integrate new/future permit requirements Includes clear amendment process Defines protocols for dispute resolution* * (Some additional details need to be addressed)

15. Briefing to BPCAOs8/1/0615 ‘NEW’ IMA (Conceptual Agreement*) Section 3 – Permit Responsibilities Section 7 – Pretreatment & Operational Requirements Section 8 – Biosolids Management Commitments Section 9 – Environmental Stewardship Responsibilities All sections differentiate between essential IMA text vs. implementation details for proposed OAs Sections define new understandings & new protocols OAs will reconcile several existing MOUs w/ new IMA & OAs * Details (vs. core concepts) to be addressed via Operating Agreements

16. Briefing to BPCAOs8/1/0616 ‘NEW’ IMA (‘Open Issues’*) Section 4 – Capacity Allocations, Rates & Peak Limitations Section 5 – Financial Responsibilities Section 6 – Flow Measurement & Management All inter-related issues New IMA resolves/clarifies several protocols (i.e., flow projection methodology) Need flexibility to address implementation details via OAs though * (Issues to be addressed via proposed schedule & incorporated into new OAs)

17. Briefing to BPCAOs8/1/0617 ‘NEW’ IMA – APPENDIX Glossary List of Historical Agreements Operating Agreements: (current proposal) 1. BPRC Coordination w/ DC-WASA 2. Wastewater Capacity Allocations & Limitations 3. Financial Responsibilities 4. Wastewater Flow Management 5. Pretreatment & Operational Requirements 6. Biosolids Management Commitments 7. Regional Water Quality & Environmental Support, and Support to the Blue Plains Users

18. Briefing to BPCAOs8/1/0618 ‘OPEN ISSUES’ Conduct further analysis/review to address: Suburban vs. District of Columbia peak/excess flow contributions to CSO LTCP Under analysis/review – Agreed to 1-year timeline to make final determinations (i.e., by July 2007) District of Columbia ‘Lost Opportunity’ Costs District of Columbia to provide formal proposal for review/consideration – Will likely require policy-level input/decision Updating Blue Plains cost estimates Complete Valuation Study & develop cost estimates (est. next 6 months) Billing & financial protocols Build upon DC-WASA & WSSC’s recent efforts Address/resolve these issues utilizing ‘new’ IMA protocols Proposed OAs to incorporate current IMA text (i.e., status quo) until new text/details agreed to

19. Briefing to BPCAOs8/1/0619 ‘NEW’ IMA BENEFITS Resolves many key issues (e.g. Governance) New structure (e.g., use of OAs): Provides flexibility to address Open Issues & future changes Allows implementation details to be modified – but within context of Key Principles Is a ‘living’ document Defines processes & protocols to address: New issues Amendments Dispute resolution – critical to address many upcoming issues

20. Briefing to BPCAOs8/1/0620 ‘NEW’ IMA SCHEDULE* By mid-August - Negotiation Team to have met & resolved remaining text issues 3 rd week August - Distribute final IMA for joint legal review & begin internal reviews by jurisdictions/agencies Early September – Finalize IMA document Mid-/end September – Signatories sign new IMA document October – Issue new IMA * (i.e., to meet original September 2006 deadline)

21. Briefing to BPCAOs8/1/0621 RECOMMENDATIONS BPCAOs Support for: Proposed structure for new IMA Use of Operating Agreements Proposed schedule (for ‘new’ IMA & addressing ‘open issues’ Direct a joint legal review of draft IMA (w/in proposed schedule)

22. Briefing to BPCAOs8/1/0622 NEXT STEPS Continued work by Negotiation Team (i.e., reconstituted as new BPRC) to: Address remaining issues (i.e. pretreatment, flow capacity/allocation & financial/billing details) Prepare various Operating Agreements for review/approval by Leadership Committee Additional reviews/briefings/finalizing new IMA for signature

23. Briefing to BPCAOs8/1/0623 WRAP-UP Negotiation Team Members Perspectives/Comments Questions & Answers