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HomeMy WebLinkAbout12/06/2005, C7 - BIOSOLIDS REUSE CONTRACT council N.6 "I"Ga j acEnaa aEpont «®N c CITY OF SAN LU IS OB I S PO FROM: John Moss,Utilities Director Prepared By: David Hix,Wastewater Division Manager SUBJECT: BIOSOLIDS REUSE CONTRACT CAO RECOMMENDATION Approve sole source agreement with Engel and Gray Inc., for biosolids services in a base rate amount of$32.45 per ton and authorize Mayor to execute contract. DISCUSSION Background The City Water Reclamation Facility(WRF) annually generates approximately 2000 to 4000 tons of biosolids. Biosolids are the product of anaerobically digested solids removed from the treatment process at the WRF. Anaerobic digestion reduces the volume of the solids, destroys pathogens, and produces a stable soil like material. The City's solids are high quality, meeting two of the three highest state and federal standards. The City's biosolids meet the most stringent standards for regulated pollutants and vector attraction. The regulated pollutants include heavy metals, dioxin and PCB's and the vector attraction requirement ensures the reduction and stabilization of organic matter such that biosolids won't attract vectors such as flies and other pests that may spread disease. Currently the City uses anaerobic digestion that significantly reduces the pathogens in the biosolids and is a state and federally recognized method for pathogen reduction. The City fulfills two of the three requirements; pollutants and vector attraction, for the highest quality of biosolids called Exceptional Quality or EQ, but would need another pathogen destruction process to achieve the highest EQ standard. The City continues to study process upgrades to achieve EQ biolsolids, but additional capital and operation costs and the fact the biolsolids still need to be hauled off-site make this option more expensive for very little benefit at this time. During the last four years the City has been contracting with Engel and Grey to haul, compost and distribute the WRF's biosolids: Composting is an approved method that achieves the last level of pathogen destruction to achieve EQ status. Presently the City is paying $32.45 a ton. The City has previously extended its contract with Engel and Grey for two years because of the excellent service, outstanding environmental compliance and continuing competitive cost per ton. Regulatory History and Update There has been no significant change to San Luis Obispo County's biosolids regulations over the past two years. The County's interim biosolids ordinance that prohibits land application of biosolids expires in March of 2006 and the County is considering adoption of a permanent Council Agenda Report—Biosofids Reuse Contract Page 2 ordinance. The permanent ordinance, which requires all biosolids to meet EQ quality for San Luis Obispo County, has been drafted and comments were submitted to San Luis Obispo County Environmental Health in January of 2004. While City staff support a County ordinance regulating biosolids, staff have submitted comments that requests language that conforms to existing regulatory documents, streamlines and encourages the use of compost and removes onerous and unnecessary regulatory language. The County does not have a date for final adoption of the ordinance, but has indicated that adoption may occur sometime in 2006. Prior to contracting with Engel and Gray, the City had contracted with other haulers for land application of City biosolids in Kern County (our most viable alternative to the recommended action). While land application of biosolids continues to have a proven track record of safety and environmental protection, the County's interim and proposed permanent ordinance, recent state senate bills and pending prohibitions in Kern County make land application an uncertain long term option for beneficial reuse of the City's biosolids. Engel and Gray Composting Currently the City's biosolids are being composted at Engel and Grey's facility just West of Santa Maria. The facility mixes the City's biolsolids with green waste and methodically turns and analyzes the material until it meets EPA standards for EQ pathogen destruction and the company's criteria for a marketable and useful material. The material is then screened and marketed in bulk as "Harvest Blend" compost at garden centers and has been used in a wide variety of uses such as commercial landscaping, public parks, golf courses; and schools. Engel and Gray's facility is permitted with the Regional Water Quality Control Board (RWQCB) and County of Santa Barbara and has an outstanding environmental compliance record: In addition to the analysis performed by the Engle and Grey, the City forwards all of its sampling information to ensure state and federal compliance. Recently staff performed a site visit to the Engel and Grey facility in Santa Maria and was impressed by the company's investment, commitment and dedication to composting and environmental compliance. Engel and Gray was previously selected by Council through the competitive purchasing process in May of 2001. Engel and Gray is the only locally permitted facility that can offer the high level of service the City currently receives, is in the best position not to be disrupted by changing regulation and has a strong environmental compliance record. Based in Santa Maria, Engel and Gray offers the City operational flexibility with their frequent hauling and close proximity, significantly reduced road time for trucking and is our only local option. Due to the changing and uncertain regulatory climate in San Luis Obispo and surrounding counties and past excellent service with Engel and Gray, staff is requesting a contract that features: 1. Frequent hauling that frees up significant staff time and offers operational flexibility. 2. A reasonable base.rate of$32.45 that includes an annual Customer Price Index (CPI) increase. 3. A fuel surcharge that ensures a fair cost for both parties and reduces the risk of the contractor not being able to perform due to unforeseen increase in fuel costs. Council Agenda.Report—Biosolids Reuse Contract Page 3 4. A five year contract with an opportunity fora five year extension. This length offers the City and contactor long-term stability in costs and service. Because of Engel and Gray's expertise in composting biolsolids, compliance history, excellent service, and a lack of comparable local options, staff is recommending approving a sole source five year contract Engel and Gray rather than issuing a Request for Proposals (RFP) for these services. FISCAL IMPACT A total of $104,000 has been budgeted in the Water Reclamation Facility's 2005-06, operating budget for biosolids disposal and.is adequate for this fiscal year. Sufficient funds will be included in future budget recommendations to cover the contract costs. ALTERNATIVES Solicit new proposals. Staff does not recommend this alternative because of the uncertain nature of biosolids regulation and the fact Engel and Gray has provided excellent service, a reasonable price and have a superior compliance record. Attachinents Agreement Electronic File Path: Corp_Yardlsys\users'(H:)dhix\Biosolids\2005contractandupdate\2005biosolidscontract.car i.. Attachment 1 AGREEMENT ,I10 Is THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this day" of by and between the CITY OF SAN LUIS OBISPO, a municipal corporation,hereinafter referred to as City,and Engel and Gray, Inc.,hereinafter referred to as Contractor. WITNESSETH: WHEREAS,the City wants to management and beneficial reuse of biosolids. WHEREAS, Contractor is qualified to perform this type of service and has submitted a proposal to do so which has been accepted by City: NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained,the parties hereto agree as follows: 1. TERM. The term of this Agreement shall be from the date this Agreement is made and entered,as first written above;for a period of five years with a possibility of one five year extension as mutually agreed. 2. INCORPORATION BY REFERENCE. Contactor proposal dated November; 15; 2005, are hereby incorporatedin and part of this agreement. 3. CITY'S OBLIGATIONS. For providing services.as specified in this Agreement, City will pay and Contractor shall receive therefor compensation based upon actual quantities,hauled and disposed/beneficially reused as specified in the proposal. 4. CONTRACTOR'S OBLIGATIONS:-For and in consideration of the payments and agreements hereinbefore mentioned to be made and performed by City, Contractor agrees with City to provide services as set forth in Exhibit A attached hereto and incorporated into this,Agreement. Contractor further agrees to the contract performance terms as set forth in Exhibit B attached hereto and incorporated into this Agreement. 5. AMENDMENTS. Any amendment, modification or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the City Administrative Officer of the City. Attachment I Agreement Page 2 6. COMPLETE AGREEMENT. this written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement, understanding, or representation not reduced to,writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding, or representation be binding upon the parties hereto. 7. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City Utilities Director City of San Luis Obispo 879 Morro Street San Luis Obispo,CA 93401 Contractor Mr.Bob Engel Engel and Gray,Inc. P.O..Box 5020 Santa Maria,CA.93456-k20 8. AUTHORITY TO'EXECUTE AGREEMENT. Both City and Contractor do covenant that each individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. IN wmsmss wHtkEOF, the parties hereto have caused this instrument to be.executed the day.and year first above written. ATTEST: CITY OF SAN LUIS OBISPO,A Municipal Corporation By. City Clerk APPROVED AS TO FORM: -.CONTRACTOR ., By: CC orn- 7-5 - Engel & Gray, Inc. Regional Composting Facility & City of San Luis Obispo Public - Private Partnership ENGEL&GRAY, INC. 745 W. Betteravia Road P.O. Box 502.0. Santa Maria;CA 93456 Phone:(805)925-2771 Fax: (805)925423 www.ENGELandGRAY.com 6:1 ,4, Proposal for Public - Private Partnership with City_ of San Luis Obispo Engel & Gray, Inc. Regional Compost Facility Wh�Engel & Gray. Inc. ? ► Engel & Gray, Inc. has a proven track record.of providing quality service since its founding in 1946. ► Engel & Gray Inc. has been providing,composting services since 1993 and serving the City of San Luis Obispo since 2000 ► Engel & Gray, Inc. is the only permitted site on the Central Coast to compost biosolids which provides a local regional solution for biosolids. ► City of San Luis Obispo completes the cycle of recycling by not only generating but working to recycle their waste into a beneficial new product. Why This Public_Private.Partnersbb ► Composting of Biosolids is consistent with the highest and best use philosophy contained in the California Integrated Waste Management Act of 1989. ► The service of handling the Cities biosolids benefit from bringing the strengths of the private and public sectors together. ► With this partnership the City of San Luis Obispo realizes the benefit of a large composting facility by joining with other organic waste producers on the Central Coast. ► The benefits of site design, construction; financing, operations, management, maintenance, marketing of services and communications are all provided for with this regional facility. ► Conserving our resources means recycling. When it comes to.organic resources such as Biosolids, that means Composting, transforming the organics into premium soil and soil amendments..Compost plays an important part in keeping soil healthy.It replenishes nutrients in the soil, increases organic matter, improves water holding capacity, reduces erosion, kills pathogens, and reduces need for chemical fertilizers. ► City of San Luis Obispo through local control and composting would personify the spirit of Recycling by engaging in projects which are improving the environment, not only for themselves, but for the entire Central Coast. 2 of 10 �y .g r" ► City of San Luis Obispo would be demonstrating environmental stewardship, taking care of the land, being a good neighbor, this is something to take seriously. ► This project will demonstrate the practical, technical and financial feasibility of public-private partnerships.and the inherent strengths that the public and private sectors can utilize to compliment one another in a common effort to meet societal needs. ► Public-Private partnership with no long term fixed capital outlay. ► Engel & Gray, Inc. can utilize the economies of scale to increase the quality and level of service over that which a single waste water treatment plant could provide on its own. ► Engel & Gray Inc. provides stability by its partnership with the City of Santa.Maria who leases the land.for the regional facility to Engel& Gray, Inc. ► The cost of the service or project can be recovered through the existing rate fees ► This type of service provides an opportunity for innovation by the City through composting of their biosolids ► There is a track record of partnerships between Engel & Gray Inc. and other cities and districts Why Com ostiW ► Returning organic materials to the land can increase water quality and quantity, reduce nonpoint source pollution, and increase crop production. ► Composting biosolids can play an essential role in bringing many rivers, streams, and lakes up to environmental standards. Composting provides a viable and sustainable opportunity to move large volumes of organic material to areas that need organic soil amendments. ► Composting organic materials keeps them out of landfills and reduces the risk of leachate and methane production, both environmental threats. ► Soils amended with organic material require less irrigation as well as fewer fertilizers and pesticides than do depleted soils, in order to achieve optimum crop production. ► Application of compost enhances soil stability, reducing erosion and preventing the loss of nutrients into streams. Every year an average of five tons of soil is lost through erosion for every acre of cultivated crop land. Compost is a proven solution for erosion control. ► In urban areas, about.half of the municipal water supply is used for landscape and garden watering. Since composting improves soil texture and water retention, use of compost, together with water- conscious yard care, could reduce the need for watering by 30 to 60 percent, reducing the demands on groundwater and surface water resources, and preventing their pollution from the runoff of chemical fertilizers and pesticides. 3of10 TA Legal name of firm.submitting_proposal Engel & Gray Inc. P.O. Box 5020 Santa Maria, CA 93456-5020 (805) 925-2771 Name address and telephone number of the person to whom correspondence should be directed. Bob Engel Engel & Gray, Inc. P.O. Box 5020 Santa Maria, CA 93456-5020 Voice (805) 925-2771 FAX (805) 925 8023 Description of work. Engel & Gray Inc. proposes to provide the trucks, manpower, and loader equipment needed to load and transport the biosolids currently accumulating at the San Luis Obispo Waste.Treatment Facility. Based on the current projections of biosolids being generated, we propose to haul the material on a monthly basis or as needed. The material will be transported to our regional composting facility located in Santa Maria. Once the material is delivered to our facility it will be placed into windrows, blended with organic feedstock and begin the composting process. We utilize a mechanically aerated, open windrows system for composting biosolids, manures, and vegetative materials. In this type of system, mixed feedstock are placed in rows and tamed periodically, by specialized mechanical equipment.. Height, width, shape, and spacing of the windrows will vary depending on the nature of the feedstock and the type of equipment used for turning. Oxygen is supplied primarily by convective ventilation due to the buoyancy of hot gases produced in the windrow (resulting in a chimney-like effect) and, to a lesser extent, by gas exchange during turning. Water is applied as needed and mixed into the windrow to maintain the necessary moisture content in the composting matrix. All windrows are monitored for temperature and moisture daily to insure proper (effective) composting is being achieved. Finished product moisture is generally allowed to come down to the 25-35% range to facilitate handling; retard continued microbial action, and produce the most desirable end-product. A primary approach of Engel and Gray is to accomplish what we have done with other waste water treatment plants(wwtp) and the agricultural community. We have taken what once was a disposal issue for many wwtp's and turned it around and made a.beneficial custom compost product that the landscape industry uses as a beneficial soil.amendment. We have also accomplished this task in the winery and vineyard industry by taking the pomace generated by the wineries and converting that to a custom compost blend that is then taken back to the vineyards, thereby replacing the use of synthetic fertilizers. The vegetable industry has also utilized this practice in that they too bring us their culls and cuttings and we generate a compost to be applied on their farming fields as well. This type of recycling program has been strongly embraced by the landscape and agricultural communities, and we feel as though the City of San Luis Obispo can continue to benefit from this type of recycling program as well. Engel & Gray would propose to continue this type of approach for the City of San Luis Obispo. We would also propose to continue taking the Cities biosolids as we have-done since 2000, compost it, and then offer a portion of the finished product back to the City of San.Luis Obispo to utilize as amendment around the city. The cost of the composted product would be $19/ton plus delivery. This would illustrate to the community the full recycling program at work. 4 of 10 Engel & Gray has developed markets for different types of compost and has established working relationships with the agricultural, horticultural, and landscape communities. We believe that this too would be a mutually beneficial relationship and look forward to expanding on our experience of working with the City of San Luis Obispo Water Treatment Facility. Firm Experience Engel & Gray, Inc. operates a regional organic materials composting facility in a rural area of Northern Santa Barbara County. The facility is the result of successful composting and been in operation since July 1993. The facility is located approximately three miles west of the City of Santa Maria on a 40-acre portion of the City's Waste Water Treatment Plant. The proposed facility is designed to function in an environmentally sensitive manner. Native soils comprising the site's working surface are compacted to achieve very low permeability rates. The facility's design incorporates a perimeter berm, precluding storm water run on and .retention basins designed to contain the total site runoff from a 100-year/24-hour storm event.. Composting itself is a naturally occurring, environmentally friendly process. Engel & Gray has developed and refined the concept for this facility and its management during twelve years of on-going research, full- scale feasibility studies, and successful composting. This project is intended to work cooperatively with local governments to divert and/or recover residual organic resources from traditional waste streams, thereby minimizing potential groundwater impacts from disposal. The project is included as a biosolids disposal option in the City of Santa Maria's Wastewater Master Plan and will.be.supported by the City as a green material recycling facility. Current customers of the facility include the Cities of Lompoc, Buellton, Solvang, and Santa Barbara. We also service districts including South San Luis Obispo County, Montecito, and Laguna. The project also works extensively with the agricultural community to meet the demand for quality fertilizing materials and soil amendments. Marketing is directed at horticultural, landscaping, and other general wholesale and retail areas. E&G maintains incoming feedstock are clean, naturally occurring, organic (i.e., derived from living organisms), and readily decomposable materials. All compost products produced at the proposed facility are nuisance free, non-toxic, biodegradable materials with no restrictions as to where they can be applied. This facility has permitted annual capacity to convert over 400,000 cubic yards of organic residuals into beneficial marketable end-products. The site is permitted by the County of Santa Barbara, California.Integrated Waste Management Board, and the Central Coast Regional Water Quality Control Board. 5of10 I History Engel & Gray, has been in business on the Central Coast for fifty nine years and has a reputable performance record. Established in 1946 as a trucking and construction company services have grown over the years. Currently run as a family corporation with Carl W. Engel serving as president and Robert Engel as vice president. Engel & Gray will perform the work and meet the regulatory standards pursuant to Title 14 CCR, Division 7, Chapter3.1, Article 7, Sections 17850 - 17869. Services or data to be provided by the City.. Engel & Gray is a fully permitted composting facility and therefore has some requirements that.need to be met by the City of San Luis Obispo. The Federal Part 50.3 regulations require the biosolids generator to evaluate biosolids quality, maintain records and distribute biosolids quality information to subsequent processors and users needing the information and that we receive these analysis at least.once a year. Engel and Gray also has requirements from the Regional Water Board to obtain specified biosolids quality. information on an annual basis which the City will be required to furnish annually. Proposed coRgnsation on a cost ger ton-basis. Cost per ton $ 32.45/ton This cost will cover the loading, transportation, composting and testing of the material. Fuel Surcharge as described in the scope of work Annual Cost of living as described in the scope of work As was stated earlier in this proposal Engel& Gray will be taking the material and combining it with other organic feedstock and composting it. One of the obvious advantages to composting this material is the end product and all of its benefits. We would propose to offer a portion the finished product back-to the City of San Luis Obispo. The cost of the composted product would be $19/ton plus delivery. We feel this exemplifies the total recycling program and would further enhance a mutually beneficial relationship between The City of San Luis Obispo and Engel&Gray, Inc. 6 of 10 C' 1'7-11 C'xA t.� SCOPE OF.WORK Engel and Gray Inc., (E&G) shall provide all services related to transportation, Composting/beneficial reuse, permitting and monitoring of the City's biosolids in accordance with all applicable federal, state and local requirements. Engel and Gray Inc's., proposal includes a detailed description of the proposed method of biosolids reuse and shall include but not be limited to the following: 1. E&G Inc., shall provide all required regulatory permits for hauling and composting of the entire quantity of biosolids as specified herein. E&G shall be responsible for all fees associated with permitting. E&G shall also be responsible for meeting all monitoring and reporting requirements imposed by all regulatory agencies having jurisdiction over the E&G Composting operations; and shall provide all capital improvements, and shall pay all operating expenses, needed at.the composting site to protect surface and ground waters and the site resources per the requirements of the responsible regulatory agencies. Copies of all the regulatory permits shall be provided to the City upon request. Representatives of the City shall be permitted access to the composting site with reasonable notice. 2. E&G shall be responsible for hauling 100 percent of the biosolids being generated, approximately 2,000 to 4,000 tons/year for a period of five years.. E&G responsibilities shall include furnishing and.maintaining all biosolids trailers, including water tight and covered trailers as required; furnishing and maintaining all truck tractors required to transport the trailers; furnishing all drivers and operators; furnishing all vehicle fuel required to transport the biosolids from the City to the compost facility and return trip; provide and maintain full vehicle insurance, general liability insurance and worker's compensation insurance as required by law and identified in Exhibit B. E&G Inc., shall also be responsible for and pay all traffic violations incurred as a result of hauling operations. 3. E&G shall be responsible for furnishing and maintaining tractor/loaders required to load the stockpiled biosolids, and equipment operators for loading the stockpiled biosolids. 4. E&G shall provide sufficient facility capacity to accommodate 150 percent of the total anticipated amount of biosolids to compost during the contract period. 5. E&G shall be responsible for furnishing all equipment, labor and materials for the compost facility operations. 6. E&G and any associate consultant or sub contractor, must be legally qualified in the State of California to practice the work described in this scope of work and must hold all licenses and/or registration required by law. QUALIFICATIONS E&G has been providing compost services to the City of San Luis Obispo since 2,000 and has a proven track record of providing the services. Engel & Gray Inc. has previous operating experience with composting biosolids and is currently providing similar services for many Central Coast city's and agencies. E&G complies with all applicable regulatory requirements, and shall provide all permits required for this workscope. E&G shall be capable of hauling to the proposed composting facility within (30) days following notice to proceed. 7 of 10 CK� b TA ESTIMATED QUANTITIES Estimated annual biosolids production is 2,000 to 4,000 tons per year*. E&G shall base their cost on the following constraints; the E&G, shall be required to haul up to 100 percent of the biosolids being produced at the City's WWTP to the composting site and provide facilities (land) of sufficient area to accommodate 150 percent of the total estimated biosolids to be hauled. OPERATIONAL PROCEDURES AND HAULING SCHEDULES Operational procedures shall be mutually arranged between the City and E&G. E&G shall provide sufficient trailers, loaders and equipment to remove biosolids continuously generated from the Water Reclamation Facility site at a frequency of not less than bi-monthly (every two months). Actual details of scheduling shall directed by city personnel. The City may consider alternate hauling schedules as proposed if, in the opinion of the City, the proposed alternative schedule does not impede the operation of the City's Water Reclamation Facility. E&G shall not assume that the City can store more than 500 cubic yards of biosolids on site. Costs shall be based on a unit cost per ton. All. load weights shall be provided by certified scales and provided to the City with contract invoicing. BIOSOLIDS QUALITY The City shall be responsible for producing PC biosolids that that do not exceed Table 3 requirements for pollutants [40 CFR 503.131, meet alternative 1 [40 CFR 503.33(b)] for vector attraction using Volatile Solids Reduction(VSR) of 38% or greater and meet alternative 2 for Processes to Significantly Reduce Pathogens (PSRP) [40 CFR 503.32(b)(3)] using anaerobic digestion. The City will provide biosolids quality monitoring as required by the 40 CFR 503 regulations and Engel & Gray.Inc:, permits. The dewatered biosolids come from drying beds and from a belt filter press. The drying bed biosolids are a loose solids containing approximately 40 % solids and resembling soil. The belt press solids are approximately 15% to 20% solids and of moist cake consistency. E&G shall provide covered trailers to prevent any loss of biosolids while being transported from the Water Reclamation Facility to the compost facility. LOAD WEIGHT It shall be the responsibility of E&G to insure that each trailer is loaded to the proper weight. The City shall require the E&G to provide the certified load weight of each vehicle at no additional cost to the City. LICENSING All equipment utilized in connection with this contract shall be fully licensed to operate on the highways of the State of California. All public highway drivers and operators of such equipment shall be fully licensed by the State of California Department of Motor Vehicles. EQUIPMENT CLEANING E&G Inc., shall be responsible for keeping his/her equipment in neat and clean manner. Major cleaning and servicing of equipment shall not take place at the City's Water Reclamation Facility. 8 of 10 e�7 ,.13 t ;i RULES AND REGULATIONS E&G shall be aware of existing, revised, proposed and new Federal, State and Local and other rules and regulations covering her/his activities in connection with this work. Changes in regulations or practices,necessitated by any revision in rules and regulations shall be brought to the attention of the City sufficiently in advance of their implementation so as to permit adjustment of the schedule or method of operation of the proposer. CONTRACT TERMS Length of Aereement. This agreement shall continue in full force and effort for a period of Five Years(5) years commencing January 1, 2006 and ending December 31, 2010. With the ability of one five year(5) extension by mutual agreement. Cost of Living Adjustments. Twelve(12)months after the Commencement Date and every twelve(12) months thereafter,the Charges and Fees for the remaining lease term shall be adjusted to reflect an adjustment, compounded annually,of the change in the Consumer Price Index between the month which is Three(3)months prior to the month of the Commencement Date and the mouth which is Three (3) months prior to the adjustment date. The Consumer Priceindex to be used is the All Urban Consumers Los Angeles-Anaheim-Riverside Consumer Price Index all items, published monthly by the U.S. Department of Labor,Bureau of Labor Statistics. If said Consumer Price Index is discontinued,then the parties shall substitute therefor any successor index supplied by the U.S. Department of Labor which reflects consumer price levels for the area encompassing the District of Los Angeles, and if no such successor index exists, then the parties shall select another similar index which reflects consumer price levels. If the parties cannot agree on another index, it shall be determined by binding arbitration. Fuel-surcharge. A fuel surcharge will be applied to the fee of$ 32.45 per ton The base price for fuel is based on a January 5,2004 pump price for Diesel of$1.674. For every$ 0.07 increase above this results in a one percent surcharge (1%)to the fee. The surcharge is calculated on monthly basis for that month based on the posted price of the first Monday of that month. The posted price is taken from Web URL: http://tonto.eia.doe.gov/oop/info/wohdp/diesel.asp This is the Energy Information Administration(EIA) web page,created by Congress in 1977. The EIA is a statistical agency of the U.S. Department of Energy: They calculate the On-highway diesel prices, by week and PADD (Self Service Cash Price in Dollars per Gallon, Including Taxes) For example if the price of Diesel on March 1, 2004 rises to $1.939, $1.939 minus $ 1.674 equals$0.265. $0.265 divided by $ 0.07 equals 3.78 or 4 percent surcharge. Cost per ton $ 32.45/ton Firm: Engel &Gray, Inc Contact; Robert Engel P.O. Box 5020 Phone (805) 925-2771 Santa Maria,Ca.,93456-5020 Fax (805) 925-8023 Signature of Authorized Representative Date 11/15/2005 9 of 10 e �� e _ BIOSOLIDS RECYCLING CHARGE DIESEL PRICE ADJUSTMENT WORKSHEET Month Current Biosolids Recycling Charge (a) 32.45 Diesel Price Adjustment Diesel Base Period.Price (b) 1.674 Current month first week EIA price (c) Difference take c-b (d) $0.07 increments/ divide into difference (e) Diesel Surcharge Multiplier ((e/100)+1) (f) Current Months Hauling Price (g) Steps: 1: You take the price of diesel for the first Monday of the.current month. (c) 2. You subtract the base period from the current months price. 3. This gives you the difference from the base to the current price (d) 4. Divide the difference by .07 or 7c (e) 5. Then you take this value (e) and divide by 100 and add one for multiplier (f) 6. Which give you the current months hauling price (g) 10 of 10 X/l b:r.n Engel & Gray, Inc. Regional Composting Facility FUELSURCHARGE EXAMPLE Fuel surcharge. A fuel surcharge will be applied to the fee of$ 32A5 per ton. The base price for fuel is based on a January 5,2004 pump price for Diesel of$1.674.. For every$ 0.07 increase above this results in a one percent surcharge(10/6)to the fee. The surcharge is calculated on monthly basis for that month based on the posted price of the first Monday"of that month. The posted price is taken from Web URL: httu'//tonto.eia.doe.gov/ooemfo/iyohdp/diesel.asi) This is the Energy Information Administration(EIA)web page,created by Congress in 1977. The EIA is a statistical.agency of the U.S. Department of Energy. They calculate the On-highway diesel prices,by week and PADD (Self Service Cash Price in Dollam per Gallon, Including Taxes) For example if the price of Diesel on.March 1,2004 rises to $1.939, $1.939 minus $ 1.674 equals $0265. $0.265 divided by$ 0.07 equals 3.78 or 4 percent surcharge.. i xh;h; i -a BIOSOLIDS RECYCLING CHARGE DIESEL PRICE ADJUSTMENT WORKSHEET Month Current Biosolids Recycling Charge (a) 32.45 Diesel Price Adjustment Diesel Base Period Price (b) 1.674 Current month first we EIA price (c) Difference take c=b (d) $0.07 increments/divide into difference (e) Diesel Surcharge Multiplier((e/100)+1) (f) Current Months Hauling Price (g) Steps: 1. You.take the price of diesel for the first Monday of the current month. (c) 2, You subtract the base period from the current months price. 3. This gives you the difference from the base to the current price (d) 4. Divide the difference by.07 or 70 (e) 5. Then you take this value(e) and divide by 100 and add one for multiplier (f) 6. Which give you the current months hauling price (g) �7 Example BIOSOLIDS RECYCLING CHARGE DIESEL PRICE ADJUSTMENT WORKSHEET Month November 2005 Current Biosolids Recycling Charge (a) 32.45 Diesel Price Adjustment Diesel Base Period Price (b) 1.674 Current month first week EIA price (c) 2.797 Difference take c-b (d) 1..120 $0.07 increments/divide into difference (e) 16 Diesel Surcharge Multiplier 1+(e/100 1.16 Current Months Hauling Price __(g) 37.64 Example: 1. You take the price of diesel for the first Monday of the current month. (c) 2. You subtract the base period from the current months price. 3. This gives you the difference from the base to the current price (d) 4. Divide the difference by.07 or.7¢ (e) 5. Then you take this value (e) and divide by 100 and add one for multiplier (f) 6. Which, give you the current months hauling price (g) Attached is table from the EIA web page showing the Diesel price for the first Monday of November 2005 for California. the graph below shows the large increases.in diesel prices since 2003. Engel &Gray Inc. feels the fairest way to deal with the large fluctuations in diesel over the last two years is through a.diesel surcharge. This way if prices return to the historical averages the prices of the services will also decline: For each months billing we printout the EIA price from their email subscription service and fill out the table above and include with the billing. http://tonto.eia.doe.go v/oog/info/wohdp/diesel.asp#graph-buttons a.Weekly Retail On-Highway Diesel Prices Dollars per gallon, including all taxes Change from Change from 10/31/2005 11/7/2005 11/14/2005 week ago year ago U.S. 2.876 2.698 2.602 -0.096 0.470 East Coast 2.784 2.657 2.565 -0.092 0.406 New England 2.834 2.744 2.699 -0.045 0.431 Central Atlantic 2.848 2.755 2.689 -0.066 0.427 Lower Atlantic 2.753 2.608 2.500 -0.108 0.395 Midwest 2.907 2.671 2.575 -0.096 0.479 Gulf Coast 2.846 2.679 2.585 -0.094 0.529 Rocky Mountain 3.079 2.907 2.766 -0.141 0.551 West Coast 2.951 2.821 2.738 -0.083 0.464 California 2.936 2.797 2.717 -0.080 0.381 Weekly California Retail On-Highway Diesel Prices -US -California 3.30 3.20 3.10 3.00 1 11 2.90 hl 11 2.80 IV IN 2.70 C 2.60 0 2.50 2.40 - Cb 230 2'20 aseprice 2.10 0 2.00 1.90 1.80 1.70 1.60 1.50 1.40 1.30 (h O O R V C V N N N N N g C@D o CoM N n m T T Source: Energy Information Administration Exhibit B CONTRACT PERFORMANCE TERMS 1. Business Tax. Contractor must have a valid City of San Luis Obispo business tax certificate prior to execution of the contract. Additional information regarding the City's business tax program may be obtained by calling(805)781-7134. 2. Ability to Perform. Contractor warrants that it possesses,or has arranged through subcontracts,all capital and other equipment, labor, materials,and licenses necessary to carry out and complete the work hereunder in compliance with any and all federal, state, county, city, and special district laws, ordinances, and regulations. 3. Laws to be Observed. Contractor shall keep itself fully informed of and shall observe and comply with all applicable state and federal laws.and county and City of San Luis Obispo ordinances,.regulations and adopted codes during its performance of the work. 4. Payment of Taxes. The contract prices shall include full compensation for all taxes that Contractor is required to pay. 5. Permits and Licenses. Contractor shall procure all permits and licenses,pay all charges and fees,and give all notices necessary. 6. Safety Provisions. Contractor shall conform to the rules.and regulations pertaining to safety established by OSHA and the California.Division of Industrial Safety. 7. Public and Employee Safety. Whenever Contractor's operations create a condition hazardous to the public or City employees, it shall, at its expense and without cost to the City, furnish, erect_and maintain such fences, temporary railings, barricades, lights, signs and other devices and take such other protective measures as are necessary to prevent accidents or damage or injury to the public and employees. 8. Preservation of City Property. Contractor shall provide and install suitable safeguards, approved by the City,to protect City property from injury or damage. If City property is injured or damaged as a result of Contractor's operations, it shall be replaced or restored at Contractor's expense.. The facilities shall be replaced or restored to a condition as good as when the Contractor began work. 9. Immigration Act of 1986. Contractor warrants on behalf of itself and all sub-contractors engaged for the performance of this work that only persons authorized to work in the United States pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder. 10. Contractor Non-Discrimination. In the performance of this work, Contractor agrees that it will not engage in,nor permit such sub-contractors as it may employ,to engage in discrimination in employment of persons because of age,-race,color, sex, national origin or ancestry, sexual orientation, or religion of such persons. 11. Work Delays. Should Contractor be obstructed or delayed in the work required to be done hereunder by changes in the work or by any default, act, of omission of the City, or by strikes, fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or labor due to federal government restrictions arising out of defense or war programs, then the time of completion may, at the City's sole option,be extended for such periods as may be agreed upon by the City and the Contractor. 12. Payment Terms. The City's payment terms are 30 days from the receipt of an original invoice and acceptance by the City of the services provided by Contractor(Net 30). 13. Inspection. Contractor shall furnish City with every reasonable opportunity for City to ascertain that the services of Contractor are being performed in accordance with the requirements and intentions of this contract. All work done and all materials furnished, if any, shall be subject to the City's inspection and C_ . —4,2v - Exhih� � approval. The inspection of such work shall not relieve Contractor of any of its obligations to fulfill its contract requirements. 14. Audit. The City shall have the option of inspecting and/or auditing all records and other written materials used by Contractor in preparing its invoices to City as a condition precedent to any payment to Contractor. 15. Interests of Contractor. Contractor covenants that it presently has no interest, and shall not acquire any interest direct or indirect or otherwise; which would conflict in any manner or degree with the performance of the work hereunder. Contractor further covenants that, in the performance of this work, no sub- contractor or person having such an interest shall be employed. Contractor certifies that no one who has or will have any financial interest in performing this work is an officer or employee of the City. It is hereby expressly agreed that; in the performance of the work hereunder,Contractor shall at all times be deemed an independent contractor and not an agent or employee of the City. 16. Hold Harmless and Indemnification- The Contractor agrees to defend, indemnify; protect, and hold the City and its agents, officers and employees harmless from and against any and all claims asserted or liability established for damages or injuries to any person or property, including injury to Contractor's employees, agents or officers that arae from or are connected with or are caused or claimed to be caused by the acts or omissions of the Contractor and its agents, officers or employees, in performing the work or services herein, and all expenses of investigating and defending against same;provided, however, that the Contractor's duty to indemnify and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City,its agents, officers or employees. 17. Contract Assignment: Contractor shall not assign, transfer, convey or otherwise dispose of the contract,. or its right, title or interest, or its power to execute such a contract to any individual or business entity of any kind without the previous written consent of the City. 18. Termination. If, during the term of the contract, the City determines that Contractor is not faithfully abiding by any term or condition contained herein,the City may notify Contractor in writing of such defect or failure to perform; which notice must give Contractor a 10(ten)calendar day notice of time thereafter in which to perform said work or cure the deficiency. If Contractor has not performed the work or cured the deficiency within the ten days specified in the notice, such shall constitute a breach of the contract and the City may terminate the contract immediately by written notice to Contractor to said effect. Thereafter, neither party shall have any further duties, obligations,responsibilities or rights under the contract. In said event, Contractor shall be entitled to the reasonable value of its services performed from the beginning date in which the breach occurs up to the day it received the City's Notice of Termination,minus any offset from such payment representing the.City's damages from such breach. 'Reasonable value" includes fees or charges for goods or services as of the last milestone or task satisfactorily delivered or completed by Contractor as may be set forth in the Agreement payment schedule; compensation for any other work, services or goods performed or provided by Contractor shall be based solely on the City's assessment of the value of the work-in-progress in completing the overall workscope. The City reserves the right to delay any such payment until completion or confirmed abandonment of the project,as may be determined in the City's sole discretion,so as to permit a full and complete accounting of costs. In no event,however,shall Contractor be entitled to receive in excess of the compensation quoted in its proposal. 19. Ownership of Materials All original drawings, plan documents and other materials prepared by or in possession of Contractor as part of the work or services under these specifications shall become the permanent property of the City, and shall be delivered to the City upon demand. The Contractor is permitted to retain copies of all materials generated as part of the work or services performed under this agreement. e ,57— - 1 Ekhhtd 20. Release of Reports and Information. Any reports, information,data;or other material given to,prepared by or assembled by Contractor as part of the work or services under these specifications shall be the property of City, and shall not be made available to any individual or organization by Contractor without the prior written approval of the City. 21. Copies of Reports and Information.. If the City requests additional copies of reports, drawings, specifications, or any other material in addition to what Contractor is required to furnish in limited quantities as part of the work or services under these specifications, Contractor shall provide such additional copies as are requested,and City shall compensate Contractor for the costs of duplicating of such copies at the Contractor's direct expense. 22. Required Deliverable Products. Contractor will provide:. a. One copy of the final report that addresses all elements of the workscope. Any documents or materials provided by Contractor will be reviewed by City staff and, where necessary,Contractor Will respond to staff comments and make such changes as deemed appropriate. b. When computers have been used to produce materials submitted to the City as a part of the workscope,Contractor must provide the corresponding computer files to the City,compatible with the following programs whenever possible: Word Processing Word • Spreadsheets Excel • Desktop Publishing Coreldraw,Pagemaker • Computer Aided Drafting(CAD) AutoCad Computer files must be on 3.1/2",high-density, write-protected diskettes or CD,formatted for use on IBM-compatible systems. Each diskette or CD must be clearly labeled and have a printed copy of the directory. 23.. Attendance at Meetings and Hearings. Contractor shall attend as many "working" meetings with staff as necessary in performing workscope tasks. 24. Insurance. Contractor shall procure and.maintain for the duration of the contract insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by Contractor,its agents,representatives,employees or sub-contractors. a. Minimum scope of insurance. Coverage shall be at least as broad as: • Insurance_ Services Office Commercial General Liability coverage (occurrence form CG 0001). • Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability,code 1 (any auto). • Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. • Errors and Omissions Liability insurance as appropriate to Contractor's profession. b. Minimum limits of insurance. Contractor shall maintain limits no less than: • General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. • Automobile Liability: $1,000,000 per accident for bodily injury and property damage. • Employer's Liability: $1;000,000 per accident for bodily injury or disease. o Errors and Omissions Liability: $1,000,000 per occurrence. 10 it �J c. Deductibles and self-insured retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City,either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials,. employees and volunteers;or Contractor shall procure a bond guaranteeing payment of losses and related investigations,claim administration and defense expenses. d. Other insurance provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain,the following provisions: • The City, its officers, officials, employees, agents and volunteers are to be covered as. insureds as respects: liability arising out of activities performed by or on behalf of Contractor; products and completed operations of Contractor;premises owned,occupied or used by Contractor; or automobiles owned, leased, hired or borrowed by Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the City,its officers,official,employees,agents or volunteers. • For any claims related to this project, Contractor's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or-self-insurance maintained by the City, its officers,officials,employees, agents or volunteers shall be excess of Contractor's insurance and shall not contribute with it. • Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials,employees,agents or volunteers. • Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought,except with respect to the.limits of the insurer's liability. • Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended,voided,canceled by either party,reduced in coverage or in limits except after thirty (30) days' prior- written notice by certified mail, return receipt requested,has been given to the City. e. Acceptability of insurers. Insurance is to be placed with insurers with a current A.M.Best's rating of no less than ANN. f: Verification of coverage. Contractor shall furnish the City with a certificate of insurance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided.. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences.