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AGENDA ITEM COVER SHEET
Meeting Date: November 1, 2011
Item # tjb.
Reviewed By:
Contact Name: Charles K. Smith, P.E. Department Director: Charles • i ;
Contact Number: 407-905-3159 City Manager: Robert Frank ,, AF /
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Subject: Letter Agreement for Private — Public Partnership for Biosolids Processing between
the City of Ocoee & MaxWest Environmental Systems, Inc.
Background Summary:
MaxWest Environmental Systems, Inc., partnered with the City of Sanford, has co- located a
biosolids (activated sludge) processing facility at Sanford's South Water Resource Center. The
facility provides disposal services to wastewater treatment facilities generally located in Seminole
County. The processing facility dries and gasifies sludge to a non - sludge ash and is capable of
processing 80 tons per day.
Staff recommends City Commission consider a similar partnership for Ocoee whereas MaxWest
would eventually co- locate a facility on the Ocoee Wastewater Treatment Facility campus. The
benefits of the City entering a Letter Agreement are as follows:
• MaxWest shall provide the City with a "first- right -of- refusal - service area" for a
west -of- Orlando service territory
• Secures an environmentally sound method of sludge disposal
• Will lead to decreased sludge disposal cost
• Will lead to revenue - sharing with MaxWest for outside sludge processing
For a more detailed discussion of the feasibility of a partnership with MaxWest, see "Attachment #1
— Feasibility Assessment of MaxWest Environmental Systems, Inc. Sludge Drying, Gasification and
Disposal System to the City of Ocoee ". Staff will make a short presentation and MaxWest
representatives will be available to answer Commissioners' questions.
As this is a related to the previously discussed Interlocal Agreement with the City of Sanford and
Biosolids Disposal Agreement with MaxWest, Staff recommends that Commission's decision reflects
their decision on the aforementioned agenda item.
Issue:
Should City Commission consider a Public — Private Partnership with MaxWest for Biosolids
Processing that grants the City of Ocoee a first - right -of- refusal for a west -of- Orlando territorial
service area from MaxWest Environmental Systems, Inc.?
Recommendations:
Motion for City Commission to accept the non - exclusive Letter Agreement; Private — Public
Partnership Biosolids Processing MaxWest Environmental Systems, Inc., and to authorize the Mayor
to execute the Letter Agreement.
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Attachments:
"Attachment #1 — Feasibility Assessment of MaxWest Environmental Systems, Inc. Sludge Drying,
Gasification and Disposal System to the City of Ocoee ", and "Letter Agreement; Private — Public
Partnership Biosolids Processing"
Financial Impact:
As the Letter Agreement is non - binding, with the exception that MaxWest is granting the City a first -
right-of- refusal for a service area, there is no financial impact by an affirmative action. The long -term
financial benefits would include a reduction in sludge disposal costs due to the elimination of the
need to haul, and also the partnership's revenue - sharing potential in the form of the reduction of on-
site sludge processing expenses.
Type of Item: (please mark with an "x")
Public Hearing For Clerk's Dept Use:
Ordinance First Reading Consent Agenda
Ordinance Second Reading Public Hearing
Resolution Regular Agenda
X Commission Approval
Discussion & Direction
Original Document/Contract Attached for Execution by City Clerk
Original Document/Contract Held by Department for Execution
Reviewed by City Attorney N/A
Reviewed by Finance Dept. N/A
Reviewed by ( ) N/A
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LETTER AGREEMENT
Private — Public Partnership
Biosolids Processing
PARTIES: City of Ocoee, Florida ( "Ocoee "); and
MaxWest Environmental Systems, Inc.( "MaxWest ")
DATE: October , 2011.
SUBJECT: Future Public/Private Partnerships
Ocoee and MaxWest have entered into this Letter Agreement as of the date and year set
forth above and agree as follows:
1. Ocoee and the City of Sanford ( "Sanford ") have entered into an Interlocal Agreement for
Long Term Treatment and Use of Biosolids (the "Interlocal Agreement ").
2. Pursuant to the Interlocal Agreement, Ocoee and MaxWest- Sanford, LLC have entered into a
Biosolids Disposal Agreement (the "MaxWest- Sanford Agreement ").
3. MaxWest is the Manager of MaxWest- Sanford, LLC.
4. The execution of the MaxWest- Sanford Agreement constitutes the consideration for the
parties to enter into this Letter Agreement.
5. Ocoee and MaxWest desire to explore the possibility of entering into a public - private
partnership under which Ocoee would allow MaxWest to provide liquid sludge services for
other municipalities west of the City of Orlando and utilize Ocoee's sludge digester and
dewatering equipment. If such a public - private partnership is determined to be mutually
beneficial, then Ocoee and MaxWest agree to negotiate an agreement similar in nature to
agreements entered into by MaxWest and other governmental entities. MaxWest agrees that
it will not enter into an agreement with another entity to provide liquid sludge services for
other municipalities west of the City of Orlando unless it first gives Ocoee the opportunity to
enter into a public private partnership as set forth in this paragraph. If Ocoee is offered such
opportunity by MaxWest and Ocoee declines (or if the Ocoee and MaxWest are unable to
reach an agreement on mutually acceptable terms), then MaxWest will thereafter be free to
explore public - private partnerships with other entities to provide liquid sludge services for
other municipalities west of the City of Orlando.
6. Ocoee and MaxWest desire to explore the possibility of entering into a public - private
partnership under which Ocoee would provide a site at its wastewater facility for a future
Regional MaxWest Gasification System to serve the area west of the City of Orlando and
MaxWest would build a facility on the Ocoee site at its expense. A Feasibility Assessment
prepared by CPH with respect to such a facility is attached hereto as Attachment 1. If such a
public - private partnership is determined to be mutually beneficial, then Ocoee and MaxWest
4853 - 0882 - 8427.1
agree to negotiate an agreement similar in nature to agreements entered into by MaxWest and
other governmental entities. MaxWest agrees that it will not enter into an agreement with
another entity to construct a Regional MaxWest Gasification System (or the functional
equivalent thereof) to serve the area west of the City of Orlando unless it first gives Ocoee
the opportunity to enter into a public private partnership as set forth in this paragraph. If
Ocoee is offered such opportunity by MaxWest and Ocoee declines (or if the Ocoee and
MaxWest are unable to reach an agreement on mutually acceptable terms), then MaxWest
will thereafter be free to explore public - private partnerships with other entities for such
purpose.
7. MaxWest is entering into this agreement on its on behalf and on behalf of any subsidiaries,
affiliates and related entities which may now or hereafter be formed to provide some or all of
the services referenced in Paragraphs 5 and 6 above.
8. Nothing contained herein shall be construed to in anyway obligate or require that Ocoee enter
into a public - private partnership or other arrangement with Max West in furtherance of the
provisions of Paragraphs 5 and /or 6 above. Unless and until a definitive formal contract is
entered into by the parties with respect to said matters, no party will have any obligation or
incur any liability hereunder. No definitive formal contract will be entered into unless it is
satisfactory to both parties, in their discretion. The expenditure of funds by either party, or
reliance on this Letter Agreement, or part performance of any provision of this Letter
Agreement by either party shall not alter the foregoing provisions of this paragraph.
9. Nothing contained herein shall be construed to in anyway obligate or require that MaxWest
pursue a public - private partnership in furtherance of the provisions of Paragraphs 4 and 5
above unless MaxWest determines that such a public - private partnership is in its best
interests and determines to proceed with a public - private partnership.
Ocoee and MaxWest acknowledge their agreement to and acceptance of the provisions of this
Letter Agreement by their execution below
CITY: MAXWEST
CITY OF OCOEE, FLORIDA MAXWEST ENVIRONMENTAL
SYSTEMS, INC.
By: By:
S. Scott Vandergrift, Mayor Name:
Title:
ATTEST:
Executed on:
Beth Eikenberry, City Clerk
2
4853 - 0882 - 8427.1
(SEAL)
FOR USE AND RELIANCE ONLY BY
THE CITY OF OCOEE, FLORIDA; APPROVED BY THE OCOEE CITY
APPROVED AS TO FORM AND COMMISSION AT A MEETING
LEGALITY this day of HELD ON , 2011
, 2011. UNDER AGENDA ITEM NO.
FOLEY & LARDNER LLP
By:
City Attorney
J: \M13302.001 \Contract \Ocoee \Letter Agreement Private _Partnership with Ocoee and MaxWest.doc
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4853 - 0882 - 8427.1
Attachment 1
Feasibility Assessment of MaxWest Environmental Systems, Inc. Sludge Drying,
Gasification and Disposal System to the City of Ocoee
This is a feasibility assessment of MaxWest Environmental Systems, Inc. to build, own and
operate an integrated gasification system to convert biosolids at the City of Ocoee's Wastewater
Facility to thermal energy. The thermal energy will be used to dry the biosolids and the dried
biosolids will be gasified in the gasification system which will convert the biosolids into thermal
energy and finally, an inert ash for disposal. This ash can be used as a soil amendment product
or disposed of at any landfill safely. The volume of ash to be disposed would be less than five
percent of the current dewatered biosolids volume being transported from the wastewater facility
at the current time.
1. Background. MaxWest Environmental Systems, Inc. has introduced a technology into the
municipal biosolids handling process that has been in use in the lumber industry for over 100
years.
In recent years, municipalities have been faced with the growing concerns related to the
increasing costs and difficulties of managing biosolids (sludge) in an acceptable manner. It is
currently forecast that major changes in regulations governing biosolids management and
disposal will occur and the trend, in Florida and elsewhere, is to limit and then curtail land
spreading and land filling.
In 2007, on behalf of the City of Sanford, Florida, CPH worked with the City of Sanford to add a
biosolids dryer to its newest wastewater treatment plant to provide treatment of sludge to Class
A status. This would allow the processed sludge to be used as a fertilizer in public areas
instead of being applied to dedicated land application areas away from public access. After
selecting and committing to an indirect biosolids dryer system, CPH began to investigate ways
to reduce and stabilize the cost of natural gas to the wastewater treatment market. On behalf of
its client, CPH began an investigation of the MaxWest integrated gasification system as a
solution to the energy cost issues. In January, 2008, CPH representatives traveled with the
Sanford Utility Director to Kamloops, British Columbia to meet with the developers of the
MaxWest system, to review the design and manufacturing process, to inspect the components
of a typical system, and to view an operating gasification facility. CPH met with the
management and technical staff of MaxWest. At the conclusion of its due diligence
investigation, CPH recommended that the City of Sanford enter into a long term contract to
purchase energy from a MaxWest Facility.
Also as a result of its due diligence investigations and the decision of the City of Sanford to
commit to a MaxWest System, CPH has agreed to support MaxWest on a state -wide basis in
Florida, Puerto Rico and elsewhere as called upon. CPH is providing multi -level engineering
support for the design, installation, commissioning, operation and maintenance for MaxWest
projects.
CPH and MaxWest have reviewed the option of placing a MaxWest gasification facility at the
City of Ocoee's wastewater facility to convert biosolids to renewable energy. CPH
representatives have inspected the proposed site and studied the existing wastewater treatment
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facilities to determine the optimum location of the MaxWest facility and potential for utilization of
waste thermal energy. CPH has met with the operating staff and reviewed the proposal with
MaxWest's staff as part of its project review. CPH will participate in site specific design aspects
of the Ocoee facility and integration and interconnection with existing wastewater treatment
facilities.
CPH believes that the integration of the MaxWest components described below will result in a
system that will produce the expected results of converting biosolids to thermal energy and
residual ash.
2. Material Handling. MaxWest will design a custom material intake facility that will (i) receive
delivery of biosolids via conveyor from the City's facility at a designated delivery point, (ii)
receive liquid sludge via truck delivery to the City's existing digesters, (iii) deliver the biosolids to
the intake hopper of the thermal dryer, (iv) deliver the dried biosolids to the feed system of the
Gasifier and (iv) extract residual ash via conveyor to an ash holding container for disposal. All
elements of the Material Handling component will be designed for durability and ease of
maintenance. In addition to the new intake facility, MaxWest can also resume responsibility for
the operation of the City's existing belt press operations.
3. Proposed Site. CPH has examined the proposed site on the Northeast side of the City's
facility, adjacent to the City's sludge press building. A graphic site plan has been prepared and
is included as part of this document to show the location and footprint of the proposed
gasification facility. A determination has been made that the site is appropriate and adequate
for the intended purposes and the MaxWest gasification system would not interfere with the
operation of any aspect of the treatment plant.
4. Dryer. MaxWest proposes to include an indirect dryer manufactured by Therma -Flite in its
facility to dry biosolids to the optimum moisture content prior to insertion in the Gasifier
chamber. Thermal energy for the drying process will come from a portion of the thermal energy
produced by the thermal oxidizer. CPH has researched a wide variety of dryers and concluded
that those manufactured by Therma -Flite are superior for the intended purpose. The Therma-
Flite dryer is a continuous feed dryer which allows for uninterrupted use of the continuous
thermal energy produced from the MaxWest gasification system. This dryer is currently being
used at the MaxWest's Sanford facility at the City of Sanford South Water Reclamation Facility.
5. Gasifier /Thermal Oxidizer. The purpose of this component is to receive the dried biosolids
and convert the material first to Syngas in the primary gasification chamber, then to oxidize the
gases in the thermal oxidizer. From its review of plans, completed units and operating units,
CPH has concluded that the gasifier /thermal oxidizer components are durable, safe and
designed for long -term continuous operation. From testing data and its investigations, CPH
believes that these components will perform as intended to convert the City of Ocoee's biosolids
to inert ash and thermal energy.
6. Air to Liquid Heat Exchanger. The exhaust gas from the thermal oxidizer is processed in a
Air to Liquid Heat Exchanger. The steam or hot oil generated in the Air to Liquid Heat
Exchanger will be utilized to provide the thermal energy required in the sludge dryer. The hot oil
system is a system manufactured by Fulton Thermal Fluid Systems and is same system being
used at the MaxWest Sanford project.
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7. Auxiliary Systems. The MaxWest system includes all necessary auxiliary systems, safety
devices, instrumentation and controls to operate a reliable and safe waste disposal and thermal
energy generation system. The monitoring and reporting systems are integrated as necessary
to provide critical real time information to the wastewater operators.
8. Potential Customers. Numerous utilities on the west side of Orlando could benefit from a
MaxWest Facility located at the Ocoee Plant. Ocoee would share in the revenue generated by
these customers resulting in further savings to the City while providing long term, reliable, cost
effective, environmentally friendly biosolids disposal for the City. Potential customers include the
City of Leesburg, City of Eustis, City of Mount Dora, City of Clermont, City of Tavares, City of
Minneola, City of Lake Alfred, City of Haines City, City of Wildwood, and Sumter Utilities (The
Villages).
From its investigation and analysis of all aspects of the MaxWest System, from its review of the
system with the Florida Department of Environmental Protection, CPH Engineers, Inc. believes
that the MaxWest System is suitable for converting sludge to thermal energy and residual ash.
CPH is further of the opinion that all necessary permits for installation and operation will be
obtained in due course upon completion of front end engineering design. CPH has reviewed
each item of the system proposed for the City of Ocoee by MaxWest Environmental Systems
and believes that when installed and commissioned, the system will perform as proposed.
J: \M13302.001 \Contract \Ocoee\Attachment 1 to Biosolids Disposal Agmt.doc
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