TECHNICAL ASSISTANCE TO
WATERVILLE/WINSLOW, MAINE
IN RESOURCE RECOVERY PROCUREMENT
PLANNING
FINAL REPORT
Work Assignment No. 8
Contract No. 68-01-4940
Prepared for:
U.SC EnvitoYiaental Protection Agency
Region I
John Fo Kennedy Building
Boston, Massachusetts 02203
by:
G011DIAN ASSOCIATES INCORPORATED
1919 Pennsylvania Avenue, N.W.
Suite 405
Washington,, J>CC. 20006
(202) 828-7300
and
SCS Engineers
11800 Sunrise VeJ.ley Drive
Restcn, Virginia 22091
November 19, 1980
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Public Law 94—580 — October 21, 1976
RESOURCE RECOVERY AND CONSERVATION PANELS
SEC. 2003. The Administrator shall provide teams of personnel,
including Federal, State, and local employees or contractors (herein-
after referred to as “Resource Conservation and Recovery Panels”) to
provide Federal, State and local governments upon request with
technical assistance on solid waste management, resource recovery, and
resource conservation. Such teams shall include technical, marketing,
financial, and institutional specialists, and the services of such
teams shall be provided without charge to States or local governments.
This report has been reviewed by the Region I EPA
Technical Assistance Project Officer, and approved
for publication. Approval does not signify that the
contents necessarily reflect the views and policies
of the Environmental Protection Agency, nor does men—
tion of trade names or co=ercial products constitute
endorsement or recommendation for use.
EPA Region I Project Manager: Susan Santos
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ACKNOWLEDGEMENTS
This report has been prepared by Bill Ranney and Dick Richards of
Gordian Associates and by Mike McLaughlin and Tom Conrad of SCS En-
gineers. We would like to acknowledge the valuable assistance provided
by the EPA project manager, Susan Santos, Elery Keene and the staff of
the North Kennebec Regional Planning Commission, representatives of
Keyes Fibre, and the other people who gave their time and energy to
this project.
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TABLE OF CONTENTS
I • INTRODUCTION . . • . . . . . . . . . .
. . . . . S •
1
II. PRELIMINARY STEAM PURCHASE AGREEMENT . . . . . . . . . .
III. RISKS AND STRATEGIES . . . . . . . . . . . . . . . . .
• . S • S • •
• S S • S S S
• S • S S S S
• . S S • • •
IV. ECONOMIC ANALYSIS. . . . . . . . . • . . . . . . . . . •
5
26
26
30
32
33
35
Explanation of Systems and Assumptions
Capital Costs. . . . • . . . . . . . .
OperatLng Costs. . . . . . . . . . . .
SensltLvlty Analyses . . . . . . .
S S S S S S S S S
S • S S S • S S •
S S S S S S S S •
S S • S • S S S S
V. STRATEGIES FOR SYSTEM PROCUREMENT. . . . . . . . . .
54
Financing. . . . • . . . . . . . .
Procurement. . . . . • . . . . . .
Recoended Procurement Approach •
. S S S S
. S S S
. S • S S S
VI. CONCLUSIONS. . . . . . . . . . . . . . . . . . . . . . .
88
APPENDIX 1:
APPENDIX 2:
APPENDIX 3:
APPENDIX 4:
Waterville—Winslow Interlocal Solid Waste Agree-
ment and Waterville—Winslow Joint Solid Waste
Disposal Facility Corporation Certificate of
Organization of a Corporation and By—Laws
Major Resource Recovery Risk Areas and General
Examples
Price Support Loans for Municipal Waste Energy
Projects
90
124
133
Preliminary Evaluations for Three Potential Sites 139
The Pricing Formula. • . . . . . . . . .
The Contract Term. . . . . . . . . . • . .
Operation, Steam Quality and Steam Quantity.
Other Comments . . . . . . . . . . . . .
35
40
40
48
56
65
79
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I. INTRODUCTION
Anticipating that the landfill would soon reach capacity, the City
of Waterville and the Town of Winslow began investigating solid waste
disposal alternatives available to them. In 1977, Edward C. Jordan
Co., Inc. was retained to evaluate these regional solid waste manage-
ment alternatives and its recoimnendation was that energy recovery by
means of a starved—air modular combustion system be pursued.
To assist them in the procurement of such a system,
Waterville/Winslow contacted U.S. EPA Region I to request assistance
under the Technical Assistance Panels Program. After meeting with
local elected and appointed affiliates from the Waterville/Winelow area
on February 20, 1980, EPA Region I and Gordian jointly determined that
continued support through the Panels Program was justified.
A scope of work consisting of the following tasks was developed:
Task 1 — Market Analysis . The contractor shall interview
management and staff level personnel associated with the
identified market to determine technical and contractual
specifications in sufficient detail to support the economic
analysis in Task 2. The information will be used by the
Waterville/Winslow Corporation (W/W Corp.) in preparing a final
contract with the market and for use in any procurement
documents.
The contractor shall prepare a sample contract between the
W/W Corp. and and the market which shall contain all provisions
typically found in community—market agreements. The W/W Corp.
will be responsible for finalizing and negotiating the contract
with the irket. The contractor shall advise the W/W Corp. as
to the pros and cons of positions taken on key contractual
points.
The contractor shall prepare a working paper describing the
information prepared and the sample contract.
Task 2 — Economic Analysis . The contractor shall perform a
detailed analysis of the costs for a modular combustion unit
facility with energy recovery at a size to be decided on by the
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WIW Corp. and the maximum amount of energy the market can use.
Information from Task 1 shall be used to determine energy
revenues. The contractor shall break Out all distinguishable
costs for capital and operating. The contractor shall state all
assumptions made in developing the costs and the reasoning for
their use. Financing Costs and reserve funds shall also be
included in the cost estimate.
The contractor shall prepare a working paper presenting the
system costs and the assumptions made.
Task 3 — Develop Strategy for Procurement . The contractor
shall analyze institutional issues relevant to the procurement of
a resource recovery facility and appropriate for the by—laws and
philosophy established by the W/W Corp. The contractor shall
evaluate alternative procurement strategies and develop the most
apropriate approach based on risk, institutional, and financial
issues.
The contractor shall map out the steps in the procurement
process and include a cost estimate and schedule for a typical
procurement using the above appropriate approach. The cost
estimate shall include estimate for engineering, management, legal
and financial consultants.
The contractor shall meet with the W/W Corp. to present the
results of this and previous tasks. The contractor shall prepare
handout materials to be used for discussion purposes.
Task 4 — Final Report . After receiving coiiments from the W/W
Corp., North Kennebec RPC, State of Maine—DEP, and EPA Region I,
the contractor shall finalize the working papers from the previous
tasks and the presentation of Task 3 into a comprehensive summary
report.
It was decided to have Gordian’s subcontractor, SCS Engineers,
perform Task 1 through its office in Augusta, Maine while the remaining
tasks were to be performed by Gordian.
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Several of the tasks had to be expanded to address the comments
resulting from the presentation of the draft report. The new work
focuses on the following issues:
• revision of the steam agreement;
• discussion of the specific risks associated with the project
and possible negotiating strategies for the Corporation;
• alteration of the economic—analysis to consider seven day
per week operation at the original tonnage level and at a
higher tonnage;
• expansion of the sensitivity analysis to cover the potential
use of wood chips as a fuel by Keyes Fibre;
• evaluation of potential siting considerations at both Keyes
and the Mid Maine Medical Center;
• examination of the Btu content assumptions for the refuse
and the potential need for sophisticated air pollution
control equipment.
• discussion of the viability of the Mid Maine Medical Center
as an alternative energy market.
With the exception of the last task, these issues are addressed in
this report.
A preliminary investigation of the Thayer Unit of the Medical
Center by SCS Engineerings provided conflicting estimates of the steam
demand, ranging from 3000 lb/hr to 15,000 lb/hr. It is generally
agreed that demand is lower in the suer, which is when refuse
generation is at its peak. By most estimates the steam demand would
not be sufficient to use all the steam generated by a modular
incinerator facility. The Medical Center has promised to provide
detailed and accurate information on their energy requirements.
Cogeneration of steam and electricity is a possibility to match
steam production and consumption. Electrical power would serve the
refuse—steam plant and the excess sold to Mid—Maine as well. However,
based upon the relatively small quantity of electricity which would be
generated, it is unlikely that even cogeneration would render the
Mid—Maine alternative feasible.
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A more intensive investigation of the Medical Center is beyond the
scope of this study. Based on the available information, every effort
should be made to finalize an agreement with Keyes Fibre for the sale
of steam. However, if these negotiations drag on, it may be worthwhile
to look more closely at the Medical Center or other potential market.
It should be stressed that significant delays will force people to find
other energy sources and the present markets will disappear.
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II • PRELIMINARY STEAM PURCHASE AGREEMENT
As subcontractor to Gordian Associates, SCS Engineers has
developed a preliminary steam purchase agreement which would control
the sale of steam by the Waterville—Winslow non—profit corporation to
Keyes Fibre Co. The draft contract incorporates information gained
through nt erous conversations with representatives of Keyes, including
one face—to—face meeting held at Keyes in May 1980. Consequently, SCS
feels that this agreement accurately reflects the conditions which
Keyes will agree to at this preliminary point in time. However, it
should be noted that the specific provisions which both parties may
insist upon will undoubtedly change somewhat in the course of final
negotiations. This document provides a comprehensive framework for
opening discussions. In structure and wording, this agreement
resembles the steam contract employed in Auburn, Maine, but there are
some important differences reflecting the specific situations of the
parties involved.
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STEAN PURCHASE AGREEMENT
This Agreement is made this _________ day of _________, 19_,
by and between the Waterville—Winslow Joint Solid Waste Disposal
Facility Corporation, a quasi—municipal corporation organized un-
der the laws of Maine (hereinafter referred to as “Corporation”)
and Keyes Fibre, An Arcata Company (hereinafter referred to as
“Keyes”)
WITNES SETH
Whereas, the Corporation is in the process of constructing a
waste disposal system capable of disposing by incineration typical
municipal waste (residential, commercial and industrial), and
Whereas, the system to be constructed will be capable of sup-
plying certain steam energy requirements for Keyes’ manufacturing
facilities located near, Waterville, Maine; and
Whereas, the Corporation has expressed an interest in selling
and Keyes has expressed an interest in purchasing from the Corpor-
ation, all steam produced by the refuse—steam plant up to Keyes’
steam requirements at its existing and future manufacturing fa-
cilities located at College Avenue, Waterville, Maine;
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Now therefore, in consideration of the mutual convenants and
conditions hereinafter set forth, and intending to be legally
bound, Corporation and Keyes agree as follows:
Section 1. Definitions . As used in this Agreement:
1.1 Steam . The word “steam” shall mean steam energy meet-
ing the quality requirements specified in Paragraph 3.2 of this
Agreement.
1.2 Pound of Steam . The words “pound of steam” shall mean
steam weighing one pound at saturated conditions at a pressure
base of 125 psig.
1.3 The term “psig” shall mean pounds per square
inch gauge.
1.4 Refuse—Steam Plant . The words “refuse—steam plant”
shall mean the facilities to be constructed and operated by the
City pursuant to Section 2 of this Agreement.
1.5 Point of Connnection . The words “point of connection”
shall mean a single interface between the Corporation’s steam pip-
ing and condensate return make—up water system and Keyes’ steam
piping and condensate return system, which interface shall be lo-
cated at a point on Keyes’ property line nearest the energy con-
version equipment and shown in Exhibit A attached hereto.
1.6 Boiler Efficiency . The words “boiler efficiency” shall
mean the percentage of gross BTU input that is realized as useful
BTU output; E = BTU output/BTU input.
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Section 2. Site and System Construction
2.1 Location of Plant . The Corporation will locate the
refuse—steam plant adjacent to the existing Keyes manufacturing
facility in Waterville, Maine as indicated on the plan attached to
this Agreement as Exhibit A, and as more particularly bounded and
described on Exhibit B to this Agreement (the “site”). Keyes will
lease the site to the Corporation in accordance with the terms set
forth in Exhibit C attached hereto.
2.2 Construction of Plant .
• A. The Corporation agrees at its sole cost and ex-
pense to purchase, construct, install, operate and maintain build-
ings, waste disposal equipment, energy conversion equipment and
associated facilities necessary to produce steam through incinera-
tion of combustible waste, and to deliver such steam to the point
of connection.
B. Keyes will receive and transport steam from the
point of connection into its manufacturing facility for use by
Keyes. Keyes will furnish a steam line and condensate line prop-
erly supported and insulated as required for transportation of
steam and condensate from the point of connection to Keyes’ manu—
facturi.ng facilities and return. Transmission losses between the
steam generation equipment and the point of connection shall be
borne by the Corporation; transmission losses between the point of
connection and Keyes’ plant shall be borne by Keyes. Ownership of
the Keyes—furnished steam and condensate lines shall remain
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with Keyes even after termination of this Agreement and regardless
whether such lines are connected to the Corporation’s facilities.
C. The Corporation may enter into contracts or sub—
contracts with third parties or with Keyes for the construction
and operation of the refuse—steam plant. If contracts or subcon—
tracts are entered into with third parties, Keyes will continue to
look to the Corporation for performance of the Corporation’s obli-
gations pursuant to this Agreement, and the Corporation will guar-
antee performance of this Agreement by such contractors or subcon-
tractors.
2.3 Measurement of Steam and Condensate .
A. The Corporation agrees to provide and maintain at
its expense a recording steam flow meter which makes a continuous
record of steam pressure and temperature.
B. Keyes may install, maintain and operate at its own
expense such check measuring equipment as it shall desire, provid-
ed that such equipment shall be so installed so as not to inter-
fere with the Corporation’s measuring equipment. The accuracy of
Keyes’ cheek measuring equipment shall be verified by Keyes at
reasonable intervals and, if so requested, in the presence of rep-
resentatives of the Corporation.
C. The accuracy of the Corporation’s measuring equip-
ment shall be verified by the Corporation at reasonable intervals,
and if so requested, in the presence of representatives of Keyes,
but the Corporation shall not be required to verify the accuracy
of such equipment more frequently than once in any thirty (30) day
period. Keyes may at any time notify the Corporation that Keyes
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desires that the Corporation undertake a special test of any mea-
suring equipment. The expense of any such special test, if re-
quested, shall be borne by Keyes if the measuring equipment tested
is found to be in error by not more than two percent (2%), either
fast or slow. Following such test, previous recordings of such
equipment shall be considered accurate in computing deliveries of
steam; but such equipment shall be adjusted at once to record ac-
curately. If upon test, any measuring equipment shall be found to
be inaccurate by an amount exceeding two percent (2%), either fast
or slow, then the expense of such test shall be borne by the Cor-
poration and any previous recordings of such equipment shall be
corrected to a zero error for any period which is known definite-
ly; but in case the period is not known or agreed upon, such cor-
rection shall be for a period extending over one—half of the time
elapsed since the date of last test.
D. In the event a meter is out of service or is known
to be registering inaccurately, the volume of steam delivered
shall be determined as follows:
(1) by using the registration of any check meter
or meters, if installed and accurately registering, or
in the absence of such check meters,
(2) by correcting the error if the percentage of
error is ascertainable by calibration, tests or mathe-
matical calculation, or, if both Subparagraphs (1) and
(2) are inapplicable, then,
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1.3.
(3) by estimating on the basis of deliveries dur-
ing period. under similar conditions when the meter was
registering accurately.
If the meters are located on Keyes’ property, Keyes will provide
access to the Corporation at any time. Keyes may inspect the
steam meter charts and condensate meter charts at any time upon
reasonable notice to the Corporation, and will be entitled to have
its representative present and observe the steam and/or condensate
meter each month at the time the flows are read for billing pur-
poses.
2.4 Due Diligence in Construction of the Plant . The Cor-
poration will complete the purchase, construction, and installa-
tion of the refuse—steam plant and place the same in operation
with due diligence.
Section 3. Terms of General Agreement, Purchase and Sale
3.1 Terms of Agreement .
A. Keyes agrees to purchase from the Corporation all
steam generated by the Corporation at its refuse—steam plant up to
Keyes’ maximum low—pressure steam requirements at its Waterville,
Maine, manufacturing facility. The steam so generated by the Cor-
poration and delivered to the point of connection will be for the
use of Keyes, and, so long as Keyes remains in business at its Wa—
terville, Maine facility, may not be resold by Keyes without the
express prior written consent of the Corporation.
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B. Subject to the provisions of Sections 7 and 10,
the term of this Agreement shall be ten (10) years, commencing on
the date of the Corporation’s first delivery of steam to Keyes 1
with an automatic renewal period of ten (10) years upon the terms
contained herein.
3.2 Quantity and Quality of Steam . The Corporation will
make available to Keyes at the point of connection in accordance
with the operating schedule set forth in Paragraph 5.1, at least
11,000 pounds per hour average of low—pressure saturated steam at
125 psig minimum. Subject to the provisions of Section 5.3, deli-
very shall be, as a minimum, a total of 264,000 pounds of steam
iithin each 24—hour period.
3.3 Keyes Boilers to Supplement Corporation Steam . Keyes
will have the right to maintain, replace, enlarge and continuously
operate at its plant its own boiler system to produce that portion
of Keyes’ steam requirements which the Corporation does not pro-
duce through the refuse—steam plant, and Keyes shalt have no obli-
gation to pay the Corporation for the use of such Keyes—produced
steam.
3.4 Excess Steam or Other Energy . In the event that the
Corporation acquires the capacity to generate steam in excess of
Keyes’ maximum low—pressure steam requirements or to generate
electricity or other forms of energy at the refuse—steam plant,
the Corporation shall have the right to sell such steam, electri-
city or other forms of energy to third parties.
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Section 4. Payment Rates and Terms
4.1 Computation of Steam Rates . Steam will be sold by the
Corporation to Keyes on the basis of a commodity charge only for
each thousand pounds (“M ib”) of steam delivered to Keyes. The
rate to be paid for such steam by Keyes to the Corporation will be
adjusted quarterly. Keyes will provide the Corporation a State-
ment of Rate Computation ‘which contains the following information,
on or before the last working day of January, April, July, and Oc-
tober each year:
(1) average unit price for fuel consumed by Keyes to
produce steam of a comparable type and function as that sup-
plied by the Corporation during preceding calendar quarter
ending March 31, June 30, September 30 and December 31
($/unit).
(2) description and average heating value of fuel con-
sumed by Keyes to produce steam of a comparable type and
function as that supplied by the Corporation during preceding
calendar quarter (BUTa/unit).
(3) Keyes’ boiler efficiency, computed in accordance
with American Society of Mechanical Engineers Power Test
Code.
(4) Keyes’ thermal conversion constant, to equal ener-
gy which must be added to Keyes’ average 125 psig steam con-
densate return to produce steam of a comparable type and
function as that supplied by the Corporation (BTUs/l,000 lbs
ste am)
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Upon request of the Corporation, Keyes shall substantiate the
information provided. The Corporation shall use the most recent
Statement for Rate Computation to determine the price to be paid
for steam delivered during each billing period. The intent of the
parties with respect to rate computation is to reflects Keyes’
costs for producing comparable steam, less the value of services
rendered by Keyes (such as supplying make—up water and condensate
return).
The price to be paid for such steam by Keyes to the Corpora-
tion will be computed as follows:
(P x C)
R K ______
(H x E)
where
R — commodity rate of payment for steam ($/1,000 lbs
steam)
P — average unit price of fuel consumed by Keyes during
preceding calendar quarter ($/unit)
C thermal conversion constant (BTUs/1,000 lbs steam)
H = average heating value of fuel consumed by Keyes
during preceding calendar quarter (BTUs/unit)
E = Keyes’ boiler efficiency, computed in accordance
with American Society of Mechanical Engineers Power
Test Code
K — discount value, computed as follows:
Steam Quantity 1st and 2nd yr. Subsequent
Delivered years
Preceding Quarter
(N ib)
0 — 45,900 0.900 0.950
more than 45,900 0.882 0.931
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4.2 Billing Procedure . Except as provided in Paragraph 5.3
in connection with interruption of service, Keyes agrees to pay
the Corporation for a minimum of 91,800,000 pounds of steam each
year during the term of this Agreement, or for such lesser amount
which the Corporation may deliver in accordance with Paragraph
3.2. The minimum annual charge shall be prorated in the event
that initial deliveries and final deliveries occur on dates other
than the first and last days of a calendar year, as the number of
days of actual deliveries bears to the total number of days in
such year. On or before the 15th day of each month following de-
livery of steam, the Corporation shall bill Keyes for steam deli-
vered to it during the preceding month. Any balance due the Cor—
.poration as a result of Keyes’ failure to utilize the guaranteed
minimum quantities (i.e., 91,800,000 pounds per year before prora-
tion) will be billed annually.
4.3 Payment of Bill . All bills will be due from Keyes to
the Corporation upon receipt. A service charge of 2 percent (2%)
per month may be added to any balance outstanding thirty (30) days
after invoice date. The Corporation may discontinue steam service
for nonpayment of its bill upon not less than thirty (30) days
written notice to Keyes. Suspension under this paragraph shall
not affect the minimum purchase amount to be paid under Paragraph
4.2 above.
Section 5. Operation of the Heat Recovery System
5.1 Minimum Weekly Operating Schedule . The Corporation
agrees to operate the steam generation system at least five
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24—hour periods per week, 51 weeks per year. In addition, the
Corporation further agrees to consider, without liability, operat-
ing the system for additional periods of time, if suitable combus-
tible waste is available to the Corporation and Keyes has a need
for the steam produced.
5.2 Water Supply and Treatment . Keyes agrees to supply at
its expense all make—up water which may be required by the refuse—
steam plant in addition to condensate return for boiler use. All
boiler feed water will be properly deaerated and chemically treat-
ed so as to provide a non—corrosive, non—scaling steam.
.5.3 Notice Requirements for Steam Service Interruption .
he Corporation will make reasonable effort to give Keyes notice
by the quickest means possible of any unplanned interruption of
the steam supply and to give reasonable advance notice of all
planned interruptions of the steam supply. The Corporation will
make reasonable efforts to coordinate any planned, interruption of
steam supply with Keyes so as to enable Keyes to take’appropriate
protective measures. In the event of any such interruption of
service resulting in supply of steam by the Corporation of the
quality and quantity specified in Paragraph 3.2 on less than 255
days per year, the annual minimum payment required of Keyes under
Paragraph 4.2 will be reduced by a fraction, the numerator of
which shall be 255 less the actual number of operating days on
which steam of the quality and quantity specified in Paragraph 3.2
is supplied, and the denominator of which shall be 255. No ha—
bihity shall attach to the Corporation or its agents, servants,
delegates, or other representatives for failure to deliver steam.
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5.4 Steam Plant Inspection . In the event that Keyes de-
sires to obtain additional business interruption insurance for its
manufacturing facilities, the Corporation agrees, upon reasonable
notice from Keyes, to permit an initial inspection of its refuse—
steam plant by representatives of the insurance company. The Cor-
poration will not be liable to undertake any action which may be
reco=ended as a consequence of said insurance company’s inspec-
tion.
5.5 Steam Plant Operation and Maintenance . The Corporation
will operate or cause to be operated the refuse—steam plant in a
manner consistent with good plant management practice. Without
limiting the generality of the foregoing, the Corporation will:
A. Provide preventative maintenance, institute proper
operating procedures, make all required repairs and replacements,
and take other precautions to prevent interruptions and provide
reliability of the steam supply.
B. Operate the refuse—steam plant in compliance with
all applicable local, state and Federal laws and regulations, and
regularly remove and dispose of ash and any other waste products
in accordance with all such laws and regulations.
C. Store solid waste materials in a properly designed
silo, building or pit while awaiting incineration.
D. Maintain the buildings and land site consistently
with good industrially zoned real property management practice,
which shall include landscaping the site to make it attractive and
compatible with Keyes’ property as a well—maintained industrial
property.
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5.6 Responsibility . Nothing herein contained shall create
or imply a relationship of principal and agent, or employer and
employee, or any relationship other than independent seller and
purchaser, as between the parties. Responsibility for complying
with all regulatory and permit requirements of the refuse—steam
operation shall be solely that of the Corporation.
Section 6. Termination
6.1 Termination with Cause . Keyes may terminate this
Agreement without any further liability under this Agreement:
A. by giving written notice to the Corporation on or
before ________________, in the event that the refuse—steam plant
is not constructed; or
B. by giving written notice to the Corporation on or
before ________________, in the event that by ________________, the
refuse—steam plant has not generated steam meeting the quantity
and quality requirements of Paragraph 3.2 for at least five (5)
consecutive business days.
6.2 Termination without Cause . Keyes may unilaterally ter-
minate this Agreement upon not less than ninety (90) calendar
days’ prior written notice to the Corporation. In the event of
such termination, Keyes liability shall be as follows:
(1) For the balance of the term of this Agreement, or
any renewal thereof, Keyes shall compensate the Corporation
for 91,800,000 pounds of steam per year, with price based
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upon the latest commodity rate billed to Keyes by the Corpor-
ation before termination. In the event Keyes terminates
without cause prior to the first bill having been issued by
the Corporation, the coodity rate shall be $3/1,000 lbs.
The price under this paragraph shall increase by 8 percent
(8%) per year for the balance of the term of this Agreement,
or any renewal thereof.
(2) In the event that at any time following termina-
tion of this Agreement, the Corporation commences the deli-
very or distribution from the refuse—steam plant of steam ag-
gregating 15,000 lbs or more per hour to one or more recipi-
ents, then Keyes’ liability under this Paragraph 6.2 shall
unconditionally terminate.
Section 7. Amendments to Agreement
This Agreement and its Exhibits supersede all prior negotia-
tions and oral understandings, if any, and may not be amended or
supplemented except in writing signed by both parties.
Section 8. Notices
Notices required under Paragraph 5.3 will be given to and by
the respective local operating personnel of the Corporation and
Keyes. Notices other than those required under Paragraph 5.3 will
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be deemed properly given when in writing Bent by certified mail,
postage prepaid and addressed:
if to Corporation
if to Keyes
Keyes Fibre
Manager, Manufacturing Eastern Division
College Avenue
Waterville, Maine 04901;
or to such other person as the respective parties may from time to
time designate in a written notice to the other.
Section 9. Renewal
Upon the expiration of the initial ten (10) year term, this
Agreement shall be automatically renewed upon the terms contained
herein unless either party gives notice as provided below. The
term of said renewal shall be ten (10) years. If either party
wishes to renegotiate the Agreement terms, or if either party
wishes to terminate this Agreement without a renewal, then the
party shall give notice of its desire to renegotiate or terminate
to the other party at least one (1) year prior to the expiration
of the initial ten (10) year term. Upon receipt of such notice,
the parties will negotiate in good faith to reach agreemen t on the
terms and conditions of the renewal agreement, if any.
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Section 10. Force Majeure
10.1 Liability . Except as otherwise provided in this Agree-
ment, neither party nor its agents and employees shall be liable
in damages to the other party for any act, omission or circum-
stance occasioned by or in consequence of any acts of God,
strikes, lockouts, acts of the public enemy, wars, blockades, in-
surrections, riots, epidemics, landslides, lightning, earthquakes,
fires, storms, floods, washouts, arrests and restraints of rulers
and peoples, civil, disturbances, explosions, breakage or accident
to machinery or lines of pipe, the binding order of any court or
overnmental authority which has been resisted in good faith by
all reasonable legal means, and any other similar cause not rea-
sonably within the control of the party claiming suspension and
which by the exercise of due diligence such party is unable to
prevent or overcome.
10.2 Suspension of Obligations . All obligations pursuant to
this Agreement (other than the obligation to pay sums then ac-
crued, due and payable) of the party claiming suspension pursuant
to Paragraph 10.1 shall be suspended until the cause for such sus-
pension has been removed, and both Keyes and the Corporation agree
to use due diligence to remove or overcome the cause for such sus-
pension.
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Section 11. Interpretation
The paragraph captions are for convenience only and shall not
affect the interpretation of this Agreement. This Agreement shall
be construed and enforced in accordance with the laws of the State
of Maine.
Section 12. Assignment
This Agreement may not be assigned by either party without
the prior written consent of the other party; provided, however,
.that Arcata may, without the consent of the Corporation, consoli-
date with or merge into another corporation or permit one or more
other corporations to consolidate with or merge into it, or trans-
fer all or substantially all its assets to another corporation and
thereafter dissolve, or sell, or transfer the Waterville, Maine fa-
cilities to another corporation, and may, in connection with any
such consolidation, merger, sale or transfer assign this Agreement
to the surviving, resulting or transferee corporation without the
consent of the Corporation, but only on the following conditions:
A. that such surviving, successor or transferee corporation
is a corporation organized and existing under the laws of the
State of Maine or is duly qualified to do business in that State;
B. that in connection with any such merger or consolidation
in which Axcata is not the corporation resulting from or surviving
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such merger, the corporation resulting from or surviving such mer-
ger shall (1) expressly assume and agree to perform all of Keyes’
obligations under this Agreement and (ii) shall file with the Cor-
poration a letter by a firm of nationally known certified public
accountants stating that after consummation of such consolidation
or merger the corporation resulting from or surviving such merge
will have an excess of consolidated assets over consolidated lia-
bilities of at least $20,000,000; and
C. that in connection with any such sale or transfer, the
corporation to which such transfer is made shall (i) expressly as-
sume and agree to perform all Keyes’ obligations under this Agree—
inent and (ii) shall file with the Corporation a letter by a firm
of nationally known certified public accountants stating that af-
ter consun ation of such transfer the corporation to which such
transfer is made has an excess of consolidated assets over con-
solidated liabilities of at least $20,000,000.
Section 13. Authority
13.1 Corporation’s Authority . The Corporation represents
and warrants to Keyes that this Agreement and the transactions
contemplated by this Agreement have been duly authorized by the
Board of Directors of the Corporation and that no further action
or authorization is necessary to make this Agreement a binding
commitment of the Corporation.
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13.2 Keyes’ Authority . Keyes represents and warrants to the
Corporation that this Agreement and the transactions contemplated
by this Agreement have been duly authorized by the Board of Direc-
tor of the Arcata Company, Inc. and that no further action or au-
thorization is necessary to make this Agreement a binding commit-
ment of Keyes.
IN WITNESS WHEREOF, the parties hereto have caused this in—
str ent to be signed and sealed by their duly authorized officers
on the date first written above.
WITNESS: WATERVILLE-WINSLOW JOINT SOLID
WASTE DISPOSAL FACILITY CORPORATION:
________________________ By ( seal )
Name and title: _____________________
WITNESS: ARCATA COMPANY
_______ By _______________ (seal)
Name and title: —
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EXHIBITS
Exhibit “A” — a preliminary master plan of the refuse—steam facil-
ity, including potential expansion
Exhibit “B” — a metes and bounds description of the ground lease
site, including the right of way beneath railroad
tracks
Exhibit “C” — a ground lease for the site, containing provisions
typical of ground leases
1) 20 year term
2) nominalrent
3) payment of taxes
4) ownership of fixtures
5) approval of improvements
6) reference to and approval of master plan
7) reference to metes and bounds description
8) right of way
9) utility easements
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III. RISKS AND STRATEGIES
A number of comments were received concerning the Steam Pur-
chase Agreement as originally proposed. Most have been incorpor-
ated in the final version appearing in Section II. This section
discusses specific risks associated with alternative positions on
key contractural provisions, as well as negotiating strategies for
each. Finally, a discussion of comments not incorported is
provided.
TRE PRICING FORNTJLA
Most of the comments received on the draft Steam Purchase
Agreement dealt with the proposed pricing mechanism. Basically,
the formula involves computing Keyes actual cost for the genera-
tion of its own steam, and applying a discount factor for steam
purchased from the Corporation. Discount factors vary depending
upon the quantity of steam consumed by Keyes (a 2 percent (2Z)
volume discount is given for an average consumption of more than
30,000 lbs/hour) and the age of the refuse—steam plant. A larger
discount is given Keyes during the first and second years of the
Agreement to defray Keyes’ expense incurred to install steam sup-
ply/condensate return piping to the point of connection. All of
the figures used in Paragraph 4.1 of the Agreement are arbitrary,
and are shown for illustration purposes only.
The principal advantage of the pricing mechanism is its sim-
plicity. In relatively straightforward fashion, the formula
provides a realistic measure of steam value under changing condi-
tions. As a profit—making corporation, Keyes is free to select
the most economical fuel alternative for use in its boilers. The
price for refuse—steam will always be lower than Keyes actual cost
to generate its own steam. From the Waterville—Winslow stand—
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point, adjusting the formula on a quarterly basis based upon cur-
rent energy cost will help assure that refuse—steam plant income
does not decrease in real terms.
The risks inherent in this approach are of net benefit to
WatervilleWins low. Looking over the mid—term future (10—20
years) it is unlikely that energy costs for manufacturers such as
Keyes will be reduced significantly. Although the formula shown
puts the risks of lowered energy costs on Waterville—Winslow, the
risk is comparatively remote.
Some hard thinking will be necessary to determine the precise
discount factors to be used in the pricing formula. Keyes only
true saving will be in terms of fuel used; overhead, labor and ad-
ministrative expenses will be unaffected by a refuse—steam meeting
a small part of its steam requirements. Keyes savings in fuel
costs (and perhaps boiler equipment depreciation) must be balanced
against those services Keyes will provide the refuse—steam plant,
including supply of make—up and boiler feedwater, nominal ground
lease rent, and the supply/condensate return lines.
Before suggesting a strategy for negotiating discount fac-
tors, it would be helpful to review the price formula again:
(P x C)
RK _____
(H x E)
where
H commodity rate of payment for steam ($/1,000 lbs
steam)
P average unit price of fuel consumed by Keyes during
preceding calendar quarter ($/unit)
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C — thermal conversion constant (BTUs/l,000 lbs steam)
H — average heating value of fuel consumed by Keyes
during preceding calendar quarter (BTU8/unit)
E — Keyes’ boiler efficiency (dimensionless)
K discount factor (dimensionless)
For example, if during the preceding quarter Keyes used fuel
oil to generate its low pressure steam, the computation might look
like this:
• average unit price — $26 per barrel
• average heating value: 9.2 million BTU/barre].
• boiler efficiency 82 percent (82%)
• thermal conversion contant assumes steam of 1,193,000 BTU/
1,000 lbs and condensate return of 289,000 BTU/l,000 lbs):
904,000 BTU/l,000 lbs.
Substituting,
(26 x 904,000
R K __________
(9,200,000 x 0.82)
R K ($3.11)
If K, the discount factor, were 0.90, Keyes would pay Water—
yule—Winslow $2.80 per 1,000 lbs steam.
The first step in the negotiation process should be to esti-
mate the value of the services rendered to Waterville—Wina low by
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Keyes. These services include (1) nominal ground rent, (2) boiler
make—up water, and (3) some length of steam supply and condensate
return lines. After these numbers have been estimated, the magni-
tude of reduced maintenance and capital depreciation to Keyes
should be estimated.
Keyes’ inclination will naturally be to overstate the value
of the ground lease, make—up water, and steam/condensate lines.
Waterville—Winslow’s goal should be to equate ground lease and
make—up water with reduced maintenance and reduce capital depreci-
ation. A nominal discount (say 5 percent (5%)) should therefore
be sufficient to serve as Keyes’ incentive. The final question
would then be to determine any additional discount required to
jnake the steam/condensate lines economically viable for Keyes. If
necessary, Waterville—Winslow might even suggest its willingness
to install the steam/condensate lines at its expense (with a cor-
responding decrease in the discount given Keyes).
A major financial consideration is the guaranteed minimum
quantity of steam to be purchased by Keyes under Paragraph 4.2.
The figure given (91,800,000 lbs steam/year) assumes the minimum
operating schedule of Paragraph 5.1 (24 hours day, 5 days/week, 51
weeks/year) and a steam quantity of 15,000 lbs/hour at 125 psig.
Keyes will pay for at least this minimum quantity, as adjusted by
interuptions in service (Paragraph 5.3). The minimum given com-
pares with the 94,248,000 lbs steam/year which would be delivered
assuming a 24 hours/day, 7 days/week, 51 weeks/year and steam
quantity of 11,000 lbs/hour at 125 psig. A guaranteed minimum
quantity of steam to be purchased assures some stability of
revenue over the term of the Agreement. A disadvantage to the
minimum quantity language proposed is that an early termination by
Keyes could result in a long—term, low cash price of the steam to
be purchased. Language adding an 8 percent (8%) per year escala-
tion has therefore been included.
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Other financial considerations shown by the sample Agreement
include the actual billing mechanism and service charge for late
payment. The language used is typical, but need not take precise-
ly this form for the Steam Purchase Agreement.
THE CONTRACT TERM
A long—term commitment on the part of the purchaser to buy
refuse—steam is an acknowledged requirement of every Steam Pur-
chase Agreement. The difficulty in the present case is what con-
stitutes “long—term”. Keyes has expressed resistance to any con-
tract term longer than 10 years, with a 10 year renewal. Economic
viability of the project probably requires a 15—20 year term. The
sample contract establishes a 10 year initial term.
As several coimnenters noted, amortization of Waterville—
Winslow’s capital investment over a 10—year term will be diff 1—
cult. In fact, a 10—year term may present an insurmountable ob-
stacle to construction of the refuse—steam plant. Keyes should be
advised of this fact at an early point in negotiations with two
goals in mind. First, Keyes may agree to lengthen the contract
term. More likely, however, is that Keyes will concede somewhat
in negotiating other contract terms (for example the pricing dis-
count factors) because Waterville—Winslow has “given up the store”
on the critical question of contract length.
As previously noted, amortizing the refuse—steam equipment
over a 10 year period will be difficult. If Keyes is not willing
to lengthen the term, perhaps it can otherwise assume some of this
capital burden. Keyes may, of course, be making capital improve-
ments in contemplation of receiving refuse—steam (e.g. steam sup-
ply and condensate return lines). Keyes expressed tentative dis-
approval of assuming a greater capital investment role in the pro-
ject directly, but there may be other alternatives. One such al—
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ternative would be for Keyes to purchase revenue or general obli-
gation bonds used to finance the refuse—steam plant. Other ar-
rangements, such as limited suretyship, should be explored with
Keyes to determine their acceptability.
Given that the sample contract has only a 10—year basic term,
there is nevertheless language included which provides for simple
renewal for a similar 10 year period. The renewal is not certain,
however. The renegotiation provisions can work to the benefit of
either party; the refuse—steam will probably change in value to
Keyes or to Waterville—Winslow or both after 10 years of opera-
tion. The renegotiation feature makes it likely that the Agree-
ment terms will be adjusted accordingly.
A 20 year ground lease term has been suggested for Exhibit
“C”. Such a provision would permit Waterville—Winslow to continue
to incinerate solid waste for that period and seek other potential
markets.
Grounds for termination are clearly set Out jfl Paragraph 6.1.
Keyes may terminate without liability should the refuse—steam fail
to achieve satisfactory operation on or before a date certain.
Keyes may unilaterally terminate the Agreement upon 90 days no-
tice, but will remain liable for the guaranteed minimum quantity
of steam as required under Paragraph 4.2 and 6.2. Keyes liability
would end upon resumption of steam delivery to a third party.
A question related to that of termination is a successor—in—
interest to Keyes Fibre or Arcata Company. Waterville—Winslow’s
concern in this regard is that Keyes’ obligations under the Agree-
ment are assumed. The sample contract forbids assignment without
the permission of Waterville—Winslow, unless assignment is made to
a responsible firm which expressly assumes Keyes’ obligations un-
der the Agreement.
The Agreement is thought to give Waterville—Winslow suffi-
cient protection from premature termination in all circumstances
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except bankruptcy. A bonding provision could be sought to provide
even greater protection; the cost to Keyes of procurring such a
bond would be reflected in the discount factor used to determine
refuse—steam price.
OPERATION, STEAM QUALITY AND STEAM QUANTITY
Operations and interruptions to operations are often major
points of contention during negotiation of Steam Purchase Agree-
ments. In the present case, Keyes will be unable to reduce labor,
overhead or administrative expenses of its own boiler operation
because the refuse—steam plant will meet only a small portion of
.Keyes low pressure steam needs. Since Keyes will maintain full
steam generation capability on a full time basis, assurance of a
constant steam supply from the refuse—steam plant is not as criti-
cal to Keyes as might otherwise be the case.
The Steam Purchase Agreement provides that the refuse—steam
plant shall operate at least five 24—hour periods each week, 51
weeks per year. The language used is very flexible, and would
allow the system to make up for working day interruptions by oper-
ating on weekends. The language would also permit expansion to a
7—day—a—week operating schedule should sufficient combustible
waste be available and should Keyes have a need for such addition-
al steam.
No liability would be imposed on Waterville—Winslow for fail-
ure to maintain the minim*nn operating schedule; however, the mini—
mum annual payment by Keyes will be adjusted if steam delivery is
made on fewer than 255 days a year.
Interruptions in Keyes’ ability to use refuse—steam will not
result in an adjustment to the minimum annual payment, unless such
interruptions are beyond the control of Keyes. Instead, the
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Agreement will stand suspended until the cause of the interruption
has been removed.
OTHER COMMENTS
Some coimnents received were not incorporated in the “final”
version of the Steam Purchase Agreement. The following discussion
is intended to respond to the more significant of the coents not
incorporated.
Acceptable Waste
Waterville—Winslow should probably not seek to limit the
kinds of wastes to be burned at the site. Incineration of some
kinds of hazardous wastes may prove to be economically attractive
at some future date. In any case, there is no reason to unneces-
sarily limit combustible -waste alternatives; any hazardous wastes
disposed would be disposed of in accordance with applicable laws
and regulations (Sections 5.5 and 5.6).
Pricing Formula
Several suggestions were made as to specific factors which
should be included or changed within the formula. The earlier
discussion of the pricing formula clarified most of these points;
in spite of its apparent complexity, the formula is technically
straightforward. Keyes will provide new values for all the varia-
bles on a quarterly basis. Unit price and heat content for fuels
will depend on the fuels used; boiler efficiency will depend on
the fuel used and the capital equipment installed; and the thermal
conversion constant will depend on the nature of condensate return
and technology utilized. All of these values can change, depend-
ing on the steam—generating technology which Keyes elects to in—
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stall. It would be inappropriate to establish constant values for
any of these.
One cominenter suggested including a capital investment factor
in the formula. Such a change would be difficult to quantify, be-
cause Keyes will not purchase any less capital equipment with the
refuse—steam plant than without. Keyes capital investment will
reflect the amount necessary to generate 100 percent (1002) of its
steam requirements independent of the refuse—steam plant. A fac-
tor which could be included is the capital depreciation and main-
tenance factor, since Keyes will presumably operate its equipment
less if the refuse—steam plant meets part of Keyes steam demand.
Rather than include this factor in the formula, Waterville—
Winslow should seek to equate this factor with the make—up water
and nominal rent factors in determining Keyes’ discount.
Guaranteed Minimum Payment
The Steam Purchase Agreement requires Keyes to purchase a
minimum quantity of steam, but is silent as to a minimum price.
Technology changes at Keyes could affect annual revenues dramati-
cally, as is shown in the economic analysis section of this re-
port. With this in mind, several commenters suggested including a
floor price for steam delivered. Such a floor price should be
sought in negotiation, but realistically speaking, there is almost
no chance Keyes would accept any floor price high enough to make a
difference. The only value in seeking such a floor price is in
concessions elsewhere during negotiations.
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IV. ECONOMIC ANALYSIS
This section presents a brief but detailed discussion of the
projected economics involved with building and operating a resource
recovery system such as is being considered in Waterville/Winslow. The
discussion is presented in four subsections: First, the system
frameworks and basic assumptions required for the analysis are set
forth; second, the capital costs are shown; third, the operating costs
are projected; and finally, several sensitivity analyses are developed.
In each of these subsections, material is presented in tabular or
graphic form whenever possible in an effort to provide easy reference
and to clarify the potentially confusing information.
It is important to bear in mind that this data should still be
considered preliminary at this point. The information is detailed and
based upon reasonable assumptions. Nevertheless there are certain
variables which cannot be determined with complete accuracy until final
contracts are signed. Perhaps the most speculative element of a
preliminary analysis of this kind is the projected revenues from sale
of recovered energy. As noted in the previous section, the proposed
steam contract provides for a great deal of uncertainty in that area.
Cordian has attempted to present a feel for the range of uncertainty in
the sensitivity analyses subsection. The point is that the numbers
developed here are as realistic as is possible at this preliminary
juncture but that a reasonable margin of variance should still be
anticipated when final system bids are received from equipment vendors.
If the Corporation proceeds to implement the system within the time
frame assumed here, then this economic analysis should provide a
reliable tool for decision making.
EXPLANATION OF SYSTEMS AND ASSUMPTIONS
The economic discussion presented in this section applies to
several variations of the same basic system design. That design is
based upon the following assumptions:
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• Technical Process: Modular incineration (based on Consumat
type technology)* using the following combinations of
combustion/boiler units:
OPTION A: 4 units @ 25 TPD
with 2 boilers
OPTION 8: 3 units @ 25 TPD
with 3 boilers
OPTION C: 3 units @ 50 TPD
with 2 boilers
These units are assumed to operate continuously 24 hours a
day, 7 days a week. The seven day/week operating schedule
requires that these options contain a certain amount of
spare capacity. Systems which operate five days per week can
make up for downtime by running on weekends. However, with a
continously operating facility this is not possible.
Therefore, these alternative systems are sized to keep one
unit in reserve to allow for continued operation during
scheduled maintenance as well as during unscheduled
downtime. Also, the addition of an extra incinerator
increases the reliability of the system and allows the
facility the option of accepting additional waste. This
would be an especially advantageous arrangement if, in the
future, the quantity of refuse from the member communities
increases. All systems are assumed to be equipped with
baghouse type air pollution control (APC) devices. This is
the same technology implemented at the Auburn facility.
The use of baghouses will assure compliance with Maine’s air
pollution regulations.
• Waste Quantities: Table 4.1 shows the waste tonnage
assumptions that were included in the calculations for each
system. These tonnages were derived from the December 1977
E.C. Jordan Study and the Waterville landfill survey
conducted in June 1980. More reliance was placed on the
* The use of Consumat’ s design is meant to be representative of
modular incinerator systems and is not an endorsement of any
particular system or manufacturer.
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TABLE 4.1
Waste Processing Data for Alternative Systems
1 — Based on 90% system availability
2 — Accounts for possible system downtime when onsite waste storage is infeasible and for a
one-week period when Keyes Fibre has no steam demand.
3 — 40% of the processed waste by weight plus unprocessed waste
SYSTEM
DESIGN
CAPACITY
(TPD)
YEARLY
SYSTEM
DESIGN 1
CAPACITY
(TPY)
Y
Days of
Operation
E
A
R
I
Available
Waste (TPD)
1980
otal Waste
Per Year
rotal Waste
Proce 9 ed/
Year
Residue
Disposal 3
Per Year
A
100.8
$33,113
7 days/wk.
operation
63 for
42 weeks
70 fr. summe
23,380
22,211
10,053
B
75.6
24,835
7 days/vk.
operation
52 for
42 weeks
59 fr.summer
19,470
18,302
8,489
C
147.6
48,487
7 days/wk.
operation
88 for
42 weeks
98 fr.summer
32,730
31,094
14,074
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latter data since it is so current and was obtained directly
through sampling. That survey indicated that during the week
of sampling Waterville/Winslow generated 345.6 tone of
landfillable waste plus 212 tons of waste that was not
landfilled. Since the sampling took place in early June it is
difficult to estimate how much of the non—landfillable waste
would be generated annually. Gordian reviewed the composition
of the non—landfillable waste sample and determined that the
proceseible (i.e. combustible in a modular incinerator) portion
of these wastes would amount to approximately 2,360 tons
annually with most of this waste accumulated over ten weeks
during the ser. This figure, coupled with the 17,113 tons
of landfillable waste that the survey projected annually,
totals to approximately 19,470 tons per year for
Waterville/Winslow alone. As shown in Table 4.1, that quantity
was applied to the calculations for System B. System B
therefore represents a minimum sized facility with capacity for
the wastes from Waterville and Winslow only. System A is
sized to include the waste streams from the towns of
Clinton—Benton and Fairfield in addition to Waterfield/Winslow.
The waste quantities for these communities were taken from the
estimates presented in the E.C. Jordan report. However, those
quantities have been adjusted downward by 9% to account for
reduced amounts of glass caused by the introduction of the
“bottle bill.” The resulting annual total waste tonnage is
23,380 as shown in Table 4.1. The tonnage estimate shown for
System C in Table 4.1 is based on the assumption that
additional waste will be available to maintain operation at
close to 100 TPD on a seven day/week basis • In view of the
approximate nature of these waste estimates and in the absence
of reliable populat-ion projections, the waste quantities
developed here were assumed to be constant throughout the 20
year life span used in the economic analyses.
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• System Operation: The following assumptions were employed to
calculate system operating costs. Since the economics are
projected over the life of the systems, various escalation
rates were aes ed as indicated. Baseline data were developed
for 1983 as the initial year of system operation. Whenever
possible, costs were based on actual figures quoted by Keyes.
MSW heating value (HHV): 4,500 Btu/lb*
Incinerator/boiler efficiency: 60%
Steam generation: 5,800 lb steam/ton of MSW
125 PSIG SAT and condensate return of 300°F
In plant energy usage:
Electricity — at 5$/kwh for 1980 escalated @
9% annually
25 kwh/ton of waste processed
Air pollution equipment O6M — 10% of initial APC
capital cost in 1983 escalated at 10%/year
Auxiliary fuel — $3.75/MMBtu in 1980 escalated
@ 12%
250,000 Stu/ton processed waste
Rolling stock: $.99/gal (diesel) in 1980
escalated at 12%, 0.3 gallons/ton waste input
Maintenance, parts and supplies:
$1.75/ton processed waste
Residue characteristics:
weight: 40% of incoming plant waste
(includes water)
water: 35% of total residue weight
Equipment replacement: 1% of base capital
(for Last 15 years)
* This figure is based upon national averages of municipal refuse.
In the judgment of Gordian Associates it represents a safe and
reliable estimate. To arrive at a more exact figure the
communities should undertake an analysis of their refuse to
determine its actual Btu content.
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Insurance: @ 0.5% of base capital
Downtime assumptions: one week for Keyes downtime
Energy prices for revenue calculations —
No. 6 Fuel Oil (high sulfur): $38/Bbl in 1983
escalated at 12% year
Wood chips: $20/ton delivered in 1980
4500 Btu/lb for wood chips
Discount factor: 302
Other escalation factors:
Labor — @ 8%
Materials — @ 10%
Maintenance — @ 102
Residue Disposal — @ 10%
CAPITAL COSTS
Estimated capital costs for each of the three systems are presented
in Table 4.2. These costs are based on a start—construction date of
August 1981. The data used was derived from conversations with numerous
system vendors and review of cost information for similar existing or
planned facilities.
OPERATING COSTS
Tables 4.3, 4.4, and 4.5 present annual operating budgets for each
system for 1983, 1993, and 2003 respectively. The system life span is
here considered to be 20 years, although the fact that potential investors
might be reluctant to purchase bonds for more than a 15 year period is
recognized in the Debt Service line item. Thus, in Table 4.5 (2003) the
Debt Service is zero although the Equipment Replacement line item is
increased significantly to account for accelerated machinery breakdown.
Labor costs are developed from the detailed labor requirements for each
system presented in Tables 4.6 through 4.8. The Outside Services line
item includes such necessary costs as telephones, periodic vector control,
laundry, janitorial, and other miscellaneous professional and upkeep
services. Residue Disposal is assumed to be handled by contract rather
than by in—house equipment. The baseline costs used for this item are
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System
TABLE 4.2
CAPITAL COSTS
Potential Modular Incinerator System
Waterville /Wins low
Installed Capacity
1. Land
4xZ5TPD
2 Boilers
0
3x25TPD
3 Boilers
0
3 SOTPD
2 Boilers
0
2. General construction
(a) Site Preparation
(b) Incinerator Facility
$ 130,000
650,000
$ 110,000
540,000
$ 150,000
840,000
3. Refuse Processing
(a) Incinerator Modules
(b) Air Pollution Control
Cc) Piping (stea m and
condensate return)
2,000,000
360,000
60,000
1,600,000
340,000
50,000
2,300,000
390,000
60,000
4. Other Equipment
(a) Weigh Scale
(b) Front—end Loader
(c) Fuel tank
(d) Spare Parts, Tools, etc.
PROJECT SUBTOTAL
5. Relief Factors
(a) Omissions &
Contingency (10%)
(b) Escalate to 8/81 (10%)
PROJECT SUBTOTAL
$3,290,000
329,000
329,000
$3,948,000
$2,730,000
273, 000
273, 000
$3,276,000
$3,830,000
383,000
383,000
$4,596,000
6. Fees and Construction
Costs
(a) Engineering and Con-
struction Mgmt (10%)
(b) Organization, Mgmt,
Legal (52)
(c) Finance costs and
interest during const.(lO%)
(d) Start—up Costs(3%)
TOTAL CAPITAL COSTS
A B C
50,000
50,000
50,000
20,000
20,000
20,000
10,000
10,000
10,000
10,000
10,000
10,000
395,000
328,000
460,000
198,000
164,000
230,000
395,000
328,000
460,000
118,000
98,000
138,000
$5,054,000
$4,194,000
$5,884,000
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TABLE 4.3
ANNUAL COSTS (1983 DOLLARS)
Modular Incineration System Options
Waterville /Winslow
4x25TPD
2 Boilers
lOO.8TPD
3x25TPD
3 Boilers
75.6TPD
3x5OTPD
2 Boilers
147. 6TPD
1. Debt Service
(15 years @ 7%)
2. Labor
3. Air pollution equipment O&M
4. Utilities
(a) Electricity*
(b) Fuel
(c) Water/sewer
$ 555,000
451,000
36,000
34,000
37,000
13,000
$ 460,000
395,000
34,000
28,000
30,000
13,000
$ 646,000
480,000
39,000
47,000
51,000
13,000
5. Maintenance, parts and
supplies
6. Outside Services
7. Equipment Replacement
8. Insurance
9. Disposal of Residue
Contract Hauling
TOTAL COST
Energy Revenues
Net Cost
Net Cost Per Ton
$1,299,000
686,000
$ 613.000
$ 27.60
$1,105,000
566,000
$ 539,000
$ 29.45
$1,493,000
891,000
$ 602,000
$ 19.36
* Does not include electricity for APC devices
System
Installed Capacity
Daily Tonnage Capacity
A
B
C
49,000
41,000
69,000
15,000
15,000
15,000
51,000
42,000
59,000
27,000
21,000
30,000
31,000
26,000
44,000
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TABLE 4.4
ANNUAL COSTS (1993 DOLLARS)
Modular Incinerator System Options
Watervi lle/ Winslow
4x25TPD
2 Boilers
100.8TPD
3x25TPD
3 Boilers
75. 6TPD
3x5OTPD
2 Boilers
147.6TPD
1. Debt Service
(15 years @ 7%)
2. Labor
3. Air pollution equipment O&M
4. Utilities
(a) Electricity
(b) Fuel
(c) Water/Sewer
5. Maintenance, parts and
supplies
6. Outside Services
7. Equipment Replacement
8. Insurance
9. Disposal of Residue
Contract Hauling
TOTAL COST
Energy Revenues
Net Cost
Net Cost Per Ton
$ 555,000
974,000
93,000
80,000
115,000
34,000
127,000
32,000
132,000
27,000
80,000
$2,249,000
2,131,000
$ 118,000
$ 5.31
$ 460,000
853,000
88,000
66,000
93,000
34,000
106,000
32,000
109,000
21,000
67,000
$1,929,000
1,758,000
$ 171,000
$ 9.34
$ 646,000
1,036.000
101,000
111,000
158,000
34,000
179,000
32,000
153,000
30,000
114,000
$2,594,000
2,767,000
—$ 173,000
—$ 5.56
System
Installed Capacity
Daily Tonnage Capacity
A B C
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TABLE 4.5
ANNUAL COSTS (2003 DOLLARS)
Modular Incinerator System Options
Waterville/Wins low
System A B C
Installed Capacity 4x25TPD 3x25TPD 3x5OTPD
2 Boilers 3 Boilers 2 Boilers
Daily Tonnage Capacity l O O.8TPD 75.6TPD l47.6TPD
1. Debt Service*
(15 years @ 7%) 0 0 0
2. Labor $2,103,000 $1,842,000 $2,237,000
3. Air pollution equipment O&M 241,000 228,000 262,000
4. Utilities
(a) Electricity 189,000 156,000 263,000
(b) Fuel 357,000 289,000 314,000
(c) Water/Sewer 88,000 88,000 88,000
5. Maintenance, parts and
supplies 329,000 275,000 464,000
6. Outside Services 69,000 69,000 69,000
7. Equipment Replacement 555,000 460,000 646,000
8. Insurance 27,000 21,000 30,000
9. Disposal of Residue
Contract Hauling 208,000 174,000 296,000
TOTAL COST $4,166,000 $3,602,000 $4,669,000
Energy Revenues $6,619,000 $5,460,000 $8,594,000
Net Cost —$2,453,000 —$1,858,000 —$3,925,000
Net Cost Per Ton —$ 110.44 —$ 101.52 —$ 126.23
* Debt is retired after 15 years. For the remainder of the project
life equipment replacement costs are increased to assure continuous
facility operation.
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TABLE 4.6
LABOR COST ESTIMATES
100 TPD Modular System —— 4 Units
(Candidate System A)
Job Title No. of Workers Pay Rate Annual Cost
Plant Manager 1 $25,000/yr $ 25,000
Weigh Clerk/Clerical 1 $5.00/hr 10,400
Shift Foreman 4 $11.00/hr 91,520
Front—end Loader
Operator 5 $9.00/hr 93,600
Mechanic, Maintenance 1 $8.00/hr 16,640
Laborer 2 $7.00/hr 29,120
SUBTOTAL 14 $266,280
Forced Overtime 10% 26,600
Fringe Benefits 30% 78,900
TOTAL ESTIMATED ANNUAL PAYROLL $371,780
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TABLE 4.7
LABOR COST ESTIMATES
- 75TPD Modular System — 3 Units
(Candidate System B)
Job Title No. of Workers Pay Rate Annual Cost
Plant Manager 1 $25,000/yr $ 25,000
Weigh Clerk/Clerical 1 $5.00/hr 10,400
Shift Foreman 4 $11.00/hr 91,520
Front—end Loader
Operator 4 $9.00/hr 74,880
Mechanic, Maintenance 1 $8.00/hr 16,640
Laborer 1 $7.00/hr 14,560
SUBTOTAL 12 $233,000
Forced Overtime 10% 23,300
Fringe Benefits @ 30% 69,900
TOTAL ESTIMATED ANNUAL PAYROLL $326,200
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TABLE 4.8
LABOR COST ESTIMATES
15OTPD Modular System — 3 Units
(Candidate System C)
Job Title No. of Workers Pay Rate Annual Cost
Plant Manager 1 $25,000/yr $25,000
Weigh Clerk/Clerical 1 $5.00/hr $10,400
Shift Foreman 4 $11.00/hr $91,520
Front—end Loader
Operator 5 $9.00/hr $93,600
Mechanic, Maintenance 2 $8.00/hr $33,280
Laborer 2 $7.00/hr $29,120
SUBTOTAL 15 $282,920
Forced Overtime 10% 28,292
Fringe Benefits 30% 84,876
TOTAL ESTIMATED ANNUAL PAYROLL $396,088
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derived from conversations with the Central Maine Disposal Company which
identified a 1980 cost of $45 per 18 ton truckload. Energy revenues for
all systems are based on oil as Keyes’ alternative fuel, escalated at 12%
and discounted 302. This yields a 1983 baseline steam price of
$5.33/1,000 lbs. Net cost per ton figures are based on total waste
processed (see Table 4.1) for each system.
SENSITIVITY ANALYSES
Because of the inherent uncertainty involved with projecting into the
future and the relatively large number of unresolved elements related to
this project, Gordian has developed a series of curves to show the
sensitivity of net system* costs to changes in several of the more
sigzi ificant variables.
The first analysis, shown in Figure 4.1, develops the effects of
varying the length of the bonding period from 10 to 15 years. This
variance is important because investors may not be willing to purchase
bonds for periods longer than 10 years if the steam purchase agreement
with Keyes is only for an initial 10 year commitment. Even if Keyes would
agree to commit to a longer than 15 year steam contract it is unlikely
that investors would purchase bonds with longer than 15 year paybacks
given the relatively unproven track records of modular incinerators. The
different bond payback periods would affect the debt service and net
system costs as shown in Figure 4.1. Initially, there is approximately a
$7/ton difference between the two scenarios, which jumps to $24/ton when
the 10 year bond is repaid. Between 1993 and 1998 the 10 year bond option
is less expensive because there is no debt service. However, after 1998
the debts for both alternatives are paid, so the savings are equal. The
advantages of the 10 year debt are that the bond issue may be easier to
sell and that between 1993 and 1998 it will produce a greater saving.
However, during the early years of the project the 15 year debt option is
less expensive. Since the project is likely to experience high front end
costs, the 15 year debt service option is probably more attractive.
* All sensitivity curves in this subsection are based on system option A
as described earlier.
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FIGURE 41
SENSITIVITY ANALYSIS ON DEBT SERVICE LENGTH
1 — (baseline case) 15 year debt service with 7% intereat rate and given
assumptions
2 — 10 year debt service with 7% interest rate and given assumptions
$27.60
$35.03
I
1
2
1
2
1
2
$5.31 [
1 $19.67
1983
1993
2003
Key:
$110.44
$110.44
Cost
Tipping Fee
($/ton MSW)
Profit
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The second Ben8itiVity analysis presented here involves the effect
upon steam revenues of varying energy price escalation rates which
directly affect net system costs. In Figure 4.2, the net per ton costs of
System A over 20 years are compared for energy prices escalated at 9%, 12%
and 15%. Recall that a 12% escalation rate was used for the baseline
system costs presented earlier. Additionally, the effect of ending
revenues completely as a result of Keyes’ failing to renew its steam
contract is dramatically demonstrated. From this graphic representation,
it can be seen that even if energy prices escalate at only 9% the net
system costs will decline after ten years. The 12% scenario, which
currently looks very reasonable for oil related revenues, begins to
realize a profit per ton around 1995. Note that if profits begin to climb
too rapidly, Keyes would probably demand some form of revenue sharing or
additional steam price discount, so the net profits shown for later years
are probably unrealistic. Bear in mind also that the costs/profits shown
are not in constant dollars, consequently dollars in the future are worth
considerably less than current dollars. Nevertheless, profits and/or
lowered costs remain relative.
The final sensitivity curve (Figure 4.3) is similar to Figure 4.2
except that in this scenario, Keyes converts to a wood fired system which
considerably reduces steam revenues. As noted earlier, in conversations
with Keyes, they expressed a desire to implement a wood fired system as
soon as possible. This system would consist of one or two 60,000 lb/hr
boilers burning wood chips. The wood chips would be burned as is (roughly
50 — 60% moisture). These boilers operate at efficiencies of 65 — 70%,
and the two boiler system would cost $3,600,000 to $4,000,000 to install.
Gordian assumes that Keyes could not implement such a system prior to
1985, therefore the wood based revenues do not coence until that year.
Wood chip prices are currently far below oil prices.
The current price is approximately $20/ton delivered. The revenues
are based on a 30% discount of this price. While it would be attractive
for the Corporation to receive credit for a portion of Keyes’ capital
investment, Keyes is unlikely to agree to this, as discussed in Section 3.
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1983
1993
2003
Key:
FIGUR.E 4.2
SENSITIVITY ANALYSIS ON OIL BASED ENERGY REVENUES
1
2
3
4
1
2
3
4
1
2
3
4
1 — 9% escalation of energy revenues, steam sales agreement not renewed
after 10 years, and given assumptions
2 — 9% annual escalation of revenues, steam agreement extended for 20
years, and given assumptions
3 — (baseline case) 12% annual escalation of revenues, renewed agreement,
and given assumptions
4 — 15% annual escalation of revenues, renewed agreement, and given
assumptions
$29.62
$29.62
$27.60
$25.48
$32.96
$5.31
$32.24
$25.89
Cost
Tipping Fee
($/ton 14 5W)
Profit
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FIGURE 4.3
SENSITIVITY ANALYSIS ON WOOD BASED ENERGY REVENUES
1983 1 _____
2 ______
3 _____
4 _____
1993 1 ____________
2 _________
3 ______
4
2003
1 — 9% annual escalation of steam revenues, aeam sales agreement not
renewed after 10 years, and given assumptions
2 — 9% annual escalation of revenues, steam agreement extended for
20 years, and given assumptions
3 — 12% annual escalation of revenues, renewed agreement, and given
assumptions
4 — 15% annual escalation of rev’dnues, renewed agreement and given
assumptions
$41.24 _____
$41.24 _____
$40.07 ____
$38.81 ____
I $101.26
1560.42
$44.08 I
$21.66 L
$187.56
I $90.90
$10.00 I
S134.48 I
Cost
Key:
•• Profit
Tipping Fee
(S/ton MSW)
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The effects of a switch to wood could actually cause net system costs
to increase if wood chip prices only escalate at 92. At a 12% rate system
costs hold relatively steady until the debt service ends at which time
costs decline.
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V • STRATEGIES FOR SYSTEM PROCUREMENT
The Waterville—Winslow Joint Solid Waste Disposal Facility
Corporation (hereafter referred to as the Corporation) has several
critical steps to complete before a resource recovery system can be
constructed. Among these steps are:
• negotiation of waste supply contracts;
• negotiation of steam sale contract with Keyes Fiber Co. or
another market;
• selection of procurement approach;
• selection of financing approach; and
• the sale of bonds.
This chapter will discuss the issues that must be addressed in
completing these steps and will outline alternative implementation
strategies for Waterville—Winslow.
First, the Corporation must gain control of the quantity of waste
for which the facility is to be designed through the negotiation of
waste supply contracts with surrounding communities. The economic
evaluation in Chapter III will assist the Corporation in developing a
price structure for tipping fees (user charges) to be assessed these
communities for using the proposed facility.
A steam contract with the Keyes Fiber Corporation must be negoti-
ated and signed before design or construction begins. In Chapter II,
Gordian has discussed the terms of the steam agreement being considered
by the Corporation and Keyes Fiber Company and recommendations are made
for adjustments along with possible negotiating strategies.
The Corporation must also select procurement and financing ap-
proaches consistent with its goals as stated in the “Waterville—Winslow
Interlocal Solid Waste Agreement and Waterville—Winslow Joint Disposal
Facility Corporation Certificate of Organization of a Corporation and
By—Laws.” This document is included in Appendix 1.
There is an element of risk involved in any resource recovery pro-
ject and a general discussion of this issue is included in Section 3
and in Appendix 2. It is important, when considering the procurement
strategy for a resource recovery project, to allocate the risks among
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the project participants in a fair and equitable manner. Those en-
tities that accept these risks should also share the benefits that
result from the project.
The project proposed by Waterville—Winslow has two major areas of
risk associated with the contracts for waste supply and the energy
market. These risks have been discussed in previous Sections and will
not be addressed further here, except to emphasize that the Corporation
must be aware of them and the contracts negotiated (and the project
management framework adopted) must take into account these and other
risks.
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FINANCING
Resource recovery aye tern development involves many complex de-
cisions regarding appropriate financing mechanisms. One of the biggest
problems in financing capital intensive resource recovery systems is
that resource recovery systems cannot yet be generally sold as “of f—the—
shelf” facilities; they involve certain risks. Thus, regardless of the
financing mechanism(s), investor concerns associated with the risks must
be minimized. The major concerns in the financial community center on
whether the municipal and private sectors can be brought together in
workable contracts; whether the processes selected are technically feas-
ible and reliable and the participating parties in the project under-
stand the risks and have divided the risks according to which ones they
are best able to manage; whether the waste stream(s) intended for the
projeTct(s) can be committed and controlled over a Long term period; and
whether there are reliable long term markets for recovered products,
particularly energy, since bondholders tend to dieregard the reliability
of other product markets.
Obviously, there are other concerns such as credit backing and in-
surance, contractor expertise in design, construction and operation,
emergency alternatives for waste disposal, and adequate “coverage”
ratios in the project revenue structure.
While there are several public and private financing arrangements
available for resource recovery system development, most projects being
developed today involve some combination of the two and the application,
at least in—part, of tax—exempt debt instruments. Straight private
equity financing of a total project is unlikely. A private company
expects a return on its investment which is consistent with the risks
(and at least equal to the return) from a similar investment of capital.
Too, most companies want to keep the financing of resource recovery
projects “off—the—balance—sheet” since the debt would be too large for
them to absorb. Most resource recovery projects could not withstand the
profit payout required from a total private financing nor could most
private companies secure the amount of funds needed for a large scale
facility.
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Private equity can, however, be successfully combined with public
financing (i.e., revenue bonds) in the development of such projects.
Such financing still involves risks but it can reduce total project
capital costs since the private investor(s) may be able to take advan-
tage of the Federal tax benefits such as accelerated depreciation, in-
vestment tax credits, and interest deductions. These benefits can
afford substantial cash flow advantages to the private sector partici-
pant(s) in the early years of the project and such savings can be passed
on to the participating municipalities in the form of lower tipping fees.
It is important to briefly examine the relative benefits of public
ownership and operation versus private ownership and operation when dis-
cussing financing alternatives. Most advocates of public ownership and
operation point to the lower costs of capital and the retention of muni-
cipal control over the facility. Too, the profit factor is obviated and
the public body retains ownership after the debt is paid back. Public
bodies may also believe they have greater leverage to negotiate with the
proposed energy customer(s) in their jurisdictions.
On the other hand; private industry may be better equipped to oper-
ate and manage a technically complex facility and market the products
successfully. It also has the profit motive as an incentive for eff 1—
cient operation and can usually offer higher salaries to attract the
necessary skills to operate the facilities. While the cost of capital to
a private developer may be higher than for a public entity, a properly
structured financing could afford the private firm Federal tax benefits —
otherwise lost to a public body — that could enhance the overall eco-
nomics of a project.
Regardless of the financing arrangements, a private system company
that would design and/or build a plant should have a major stake, if not
through ownership and/or operation, at least through strong performance
guarantees to the owner/operator. The choice of public versus private
facility ownership should be made by the local public officials based on
local conditions and objectives.
The following review of financing alternatives is provided as a
guide to the current status of financing for resource recovery projects.
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Although some of the more intricate financing approaches, such as lever-
aged leasing, are perhaps more appropriate where large—scale facilities
are concerned, Waterville—Winslow should be aware of the full—range of
financing alternatives available before final decision financing is made.
• Public Financing
Local governments typically purchase equipment and facilities from
current revenues or borrowings. It is common to find municipalities
financing solid waste collection equipment, landfills and landfill equip-
ment, and certain other facilities through current revenues (i.e., “pay
as you go”). For more capital intensive projects, municipalities must
often obtain bank loans, lease the facilities or else pursue long—term
financing alternatives involving issuance of bonds. The bonds may in-
clude general obligation issues or municipal revenue bonds, and they are
usually exempt from Federal income tax, which makes them attractive to
investors.
Section 103(a) of the Internal Revenue Code of 1954 provides that
gross income does not include interest on obligations of a state or
political subdivision of a state. This same tax exempt treatment is
extended to interest on industrial development bonds used to finance
solid waste disposal facilities under section 103(b) of the code. Pollu—
tion control revenue bonds, which are issued by a public entity on behalf
of a private enterprise to enable it to obtain low cost financing for
pollution control, are also covered under the code. They carry tax ex-
empt status and are similar in form to municipal revenue bonds; however,
the credit rating of the corporation and its guarantee of revenues are
key to the marketability of such bonds.
The major approaches to long—term financing for capital intensive
facilities and/or equipment are presented as follows:
General Obligation Bonds
Usually the easiest financing approach in resource recovery develop-
ment involves the issuance of general obligation bonds. Such bonds are
backed by the full faith and credit of the municipality (could be more
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than one municipality) issuing them. In other words, the municipality
pledges its taxing power without limit as to rate or amount to ensure
payment of the debt rather than relying only on project revenues. For a
community with a very good bond rating, the financial community does not
examine G.O. bonds as closely as other financing instruments and thus,
some projects could be developed without certain key project elements in
place, i.e., lack of long—term market agreements.
In general obligation bond financing the municipality is normally
required by law to secure voter approval for the bond issuance. Thus,
the project may come under close public scrutiny if not close examination
from the investors. There are some recent examples of resource recovery
facilities being financed with G.O. bonds. Among these are an RDF pro-
ject in Ames, Iowa, the Crawford RDF plant in Chicago, and RDF/dedicated
boiler projects in Dade County Florida and Columbus, Ohio. Most of these
projects involve a strong public works department and/or a municipal
utility as the energy market.
It is important to note that many municipalities may be near their
legal debt limit or have poor credit ratings and thus, not find general
obligation bond issuance a viable option for resource recovery project
financing.
Revenue Bonds
Revenue bond financing typically involves the issuance of municipal
bonds or industrial development authority bonds secured by the revenues
of the project and not the taxing authority of the issuing entity. The
revenues include the “tipping fees” or payments for service made by the
users of the project facilities, and, in a resource recovery project,
would also include revenues received from the sale of products such as
steam, electricity, ferrous metals, or other energy and materials.
These bonds usually require an interest rate ranging .5% — 1.5%
higher than for general obligation bond financing. Further, they will
come under very close scrutiny by the investment community since they are
not secured by “full faith and credit” of a municipality. For such bonds
to be marketable in financing a resource recovery project, there typi-
cally have to be several security features in the project. The issuing
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agency must be able to set rates and charges sufficient to cover debt
service and all operation and maintenance on the project over its life.
Bond underwriters will typically look for contractually coiitted fees
and revenues minus operating and maintenance costs sufficient to provide
“coverage” of 1.25 — 2 times the capital charges. Additional require-
ments in the bond resolution may include the establishment of various
reserve and contingency funds.
The issuing entity, whether a municipality or municipal authority or
other authority arrangement, must have the ability to “control” the waste
stream and to control private collectors to ensure sufficient waste
quantities and, thus, revenues to the project. In addition, firm, long—
term contracts of a “put or pay” nature whereby one or more energy mar-
kets agree to purchase a minimum quantity of energy and pay a minimum
amount for it whether they use it or not must be secured before the
financing can be completed.
Revenue bond financed projects need not be strictly municipal. They
may include private operation and, in certain cases, private ownership
where the tax benefits to a private entity or the lower “effective” cost
of capital would be attractive to a private company capable of owning and
operating a facility. While the interest rate on a revenue bond may ex-
ceed that of a general obligation bond by as much as 1.5% the tax bene-
fits of ownership that would accrue to a private entity could total 2 or
3%. In this manner, some of those savings could then be passed on to the
communities in the form of lower tipping fees.
It is important in structuring any resource recovery project financ-
ing that the goal of municipal control in protecting the public interest
while still providing for the opportunity for private operation (and
possibly ownership to the extent it would qualify the private firm(s) for
tax benefits) is fully considered. The participating communities must
have strong guarantees from an experienced company with a proven track
record and an incentive to make the project work in conformance with
local conditions. Yet, both public and private groups must be willing to
assume certain risks they can best assume and share others that they can-
not fully absorb.
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A more complex method of financing involving a mix of public and
private investment is discussed in the next section.
Leveraged Leasing
This form of financing involves the participation of a private
entity investor(s) in 20% — 40% of the project costs and the leveraging
of that investor’s funds with the tax—exempt financing of the remainder
of the project costs and the benefits of tax ownership the private
investor can claim. The private investor becomes the owner/lessor of the
project and would in turn, lease the facilities to another private
entity termed the user/lessee. En the case where the user/lessee is able
to take full advantage of the tax benefits of ownership, it may not be
economically viable to pursue leveraged leasing.
The equity investor must finance at least 20% of the cost of the
project and maintain that throughout the lease term. The remainder could
be financed with industrial development bonds or the long—term obliga-
tions (GOB or revenue bond) of a municipality or trust. The equity in-
vestors, typically one or more individuals in a very high tax bracket,
are able to shelter part of their other income through the tax benefits
of ownership. In this manner and along with the cash flow from lease
rental and the residual value of the project, the investors earn a suffi-
cient return on investment and the community is able to reduce its amount
of capital required as well as the effective interest cost of the capital
for a resource recovery project (although leveraged leasing is not re-
stricted to resource recovery projects).
It is appropriate to obtain an IRS advance ruling on a leveraged
lease financing to ensure that the arrangement is, in fact, a true lease
and the equity investors qualify as the project owners for Federal income
tax purposes. In addition, the IRS has set forth several rules and con-
ditions relative to this type of financing which may make it difficult
for certain contemplated arrangements to qualify and which must be care-
fully evaluated in structuring this rather complicated form of financing.
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Recently, leveraged lease financing for resource recovery projects
has received interest from commercial banks and at least one is pursuing
this approach rather aggressively. Under this approach, the bank would
become the paper owner of the project and arrange a lease with a silent
partner who would put up 25% — 40% of the equity and accrue the ownership
tax benefits.
The lessee, either a private operator or a municipality, enters into
a construction contract with a builder who would construct, test, and
deliver a project meeting required specifications. It would also enter
into waste disposal contract(s), energy sales contract(s), and perhaps
materials sales contract(s). Payments received under these contracts are
designed to cover lease rental and operator fees. At the end of the
lease, the lessee would typically have the option to purchase the project
at fair market value.
In the optimum case when 40% private equity is provided, the differ—
ence in effective interest rates on total capital requirements between
this financing approach and other forms of debt could be as much as five
percentage points.
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Other Financing Programs and Incentives for Resource Recovery
Projects
There are several Federal grants, loan and loan guarantee programs
that afford assistance to resource recovery project financing and serve
as incentives to develop projects that might not otherwise be finance—
able. This is not to say that if a project is not economically sound it
should be pursued using one or more forms of Federal financial assistance.
Included in recently developed financing incentives are several
modifications of current law and addition of new programs for resource
recovery, primarily energy recovery projects, under the Crude Oil Wind-
fall Profits Tax Act signed into law in April 1980. Other programs are
described below.
Current Federal Programs for Capital Funding of Resource Recovery
Projects
(1) Co—Disposal of Sewage Sludge and Solid Waste
Resource recovery projects that include the co—disposal of sewage
sludge and municipal solid waste may qualify for direct grants under
Section 201 of the Clean Water Act.
This program has been used to fund other co—disposal projects to
date and may be used to fund part of the costs of the equipment to pro-
cess and combust sewage sludge.
(2) Department of Energy Programs
The U.S. Department of Energy provides several programs for re-
source recovery financing assistance. Among these programs are a $15
million demonstration grant program for new technology, a recently
announced program for alternative fuel production projects which is not
yet defined for municipal waste resource recovery type projects, a loan
guarantee program to provide Federal guarantees to finance was te—to—
energy projects that may not otherwise be financeable such as in com-
munities with low credit ratings, and a limited price support program
which provides cash subsidies to energy recovery projects during the
first several years of operation (usually when cash flows are lower),
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which are repaid during the later years of a project when cash flows are
greater. This program is described in more detail in Appendix 3.
The Department of Energy also has an “entitlements” program which
provides direct s Ibsidies to municipal solid waste—to—energy produced;
however, this program expires in 1981, well before any facilities could
be implemented in Waterville/Winslow.
SBA Loans
The Small Business Administration maintains an Energy Loan program
and a Pollution Loan program, which provide lower interest loans to
qualifying small businesses for the development of various energy sav-
ings and pollution control projects or the purchase of related equipment.
These loans are limited to a maximum of $5 million each at present.
Recoended Financing Approach
Gordian recommends that the City of Waterville and the Town of
Winslow each fund its respective share of the initial capital costs
through the issuance of general obligation (G.o.) bonds, provided that:
• its bond rating is sufficient to ensure an attractive interest
rate; and
• its debt ceiling will not be surpassed.
Under optimal circumstances, G.O. bonds provide the lowest interest
rate and ensure the ownership of the facility by the Corporation.
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i1tU .ULtLLILL’ L
Alternative Procurement Approaches*
There exist several methods for procuring resource recovery facil-
ities and for their operation. These methods have been discussed in
detail in a report previously issued to the City.
Resource recovery procurement is a process by which decisions made
in the selection phase regarding syst type are systematically trans-
lated into an operational facility. This process involves contractor
selection, contract negotiation, facility construction, and operational
testing. Because the process tends to be both legally and administra-
tively complex, a carefully considered procurement strategy is essential
for successful implementation.
There are three basic strategies, or procurement options, that can
be followed, as shown in Figure 5.1. The first is the traditional
architect—engineer approach (ME); the second is the turnkey approach
and the third is a full service approach. There are, however, potential
modification to each approach. The choice of one strategy over the
other depends largely upon the issues of ultimate facility ownership,
the allocation of risks between the City and private contractors, legal
restrictions, and the availability of financing.
A&E Approach
The A&E approach is the strategy cities have traditionally used to
procure sewer systems, roads, schools, land other public works. It nor-
mally involves two separate procurements — one for engineering services
and another for facility construction. Initially, an ME firm is se-
lected on the basis of its past experience and present capabilities in
the general type of resource recovery system desired by the City. The
firm draws up the final enginering designs and helps the City to prepare
an invitation for bids (IFB). The City then reviews the bids submitted
by contractors and awards a contract for the construction of the facil-
ity on the basis of lowest cost. In the A&E approach, the consulting
* This discussion was derived mainly from “Procurement Strategies,
Choices, and Contractual Methods Explored” by P. Aarne Vesilind and
Dennis Warner, Solid Waste Management , April 1978.
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FIGURE 5.1
RESOURCE RECOVERY PROCUREMENT RESPONSIBILITIES
UNDER THREE DIFFERENT ACQUISITION STRATEGIES
ME Turnkey Full service
Procurement Steps Option Option Option
1. Review City City City
Qualifications
4 4
2. Design ME
Facility Firm
3. Review Bids City
4. Construct Facility Contractor
5. Supervise ME Facility
Construction Firm Contractor
System
6. Equipment Vendors Contractor
and Materials
7. Start Up Plant Operator —-
Operator Operator
8. Operation and
- Maintenance System Contractor
or City
9. Facility
Ovnership City City
Source: Ibid,A. Vesilind 1 D. Warmer
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engineers often provide continuing services to the City in the form of
construction supervision and monitoring of final plant shakedown.
Turnkey Approach
An alternative procurement option is the turnkey approach, in which
he City contracts with a single contractor for a complete package of
facility design, construction equipment supply, and start—up. The con-
tractor is required to satisfy various acceptance criteria in turning
over to the City a fully operating facility. A modification of this
option is to have the contractor also operate the facility for the City.
Turnkey contracts usually are awarded on the basis of a request for pro-
posals (RIP) issued by the City. An RIP states in general terms the
type of system wanted by the City and allows interested contractors the
opportunity to propose comprehensive, and possibly unique, solutions for
which they have special capabilities.
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Full—Service Approach
The third option is the full service approach involving total im—
plementation, operation, and possible ownership by a private firm. As
in the case of the turnkey option, the City issues an RIP, but the
contract is for a resource recovery service instead of a plant. The
selected contractor is responsible for project financing, design, con-
struction, equipment supply, start—up, and subsequent operation of the
facility. The full—service contractor may own the facility and be
solely responsible to the bondholders for repayment of the financing
loan. The owner in this case would seek to back up his responsibility
to the bondholders with long term contracts for assured waste supply
and tipping fees from municipalities and for sale of by—products, energy
and materials. In this case the owner would receive all tax benefits.
tf the municipality or solid waste authority owns the facility, the
operator may lease the plant and repay the bondholders via the plant
owner in equal payments for the term of the lease. Under this arrange—
inent the plant operator may be entitled to all profits or may be re-
quired to share revenues in excess of a predetermined return on in-
vestment with the plant owner. Under such a financing mechanism the
lessee (plant operator) is, for tax purposes, considered owner of the
plant, although title still resides with the municipality or authority.
As such, the lessee (operator) of the plant is entitled to the full
investment tax credit of between 20 to 30% and the accelerated tax de—
prec iat ion.
Alternatively, the contractor or operator may act solely as the
plant operator without leasing under contract to the owner (municipal-
ity).
Successful cases of all three types of contracting strategies can
be found. One of the first to use the A&E approach was Ames, Iowa,
which since 1975 has had a fully operational 200 TPD system producing
refuse derived fuel, baled paper, and metals. On the other hand,
Auburn, Maine adopted the modified turnkey approach and expects to have
a 200 TPD plant producing steam in 1980. The full service approach is
well illustrated in Bridgeport, where an 1800 TPD plant producing refuse
derived fuel, metals, and glass expects to be operational in 1981.
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Within the context of the three procurement options, there are two
basic methods for reaching contractual agreements between the City and
the suppliers of services, facilities, and equipment. The first method
can be termed competitive procurement, because it utilizes formal ad-
vertising and the selection of the lowest responsive bid according to
well—defined specifications. Since it is the traditional method used in
the A&E approach, competitive procurement is a widely used procedure in
public works implementation and is well understood by city personnel.
The competitive procurement method begins with an examination of
the qualifications of ME consulting firma by the city. The selected
firm normally is chosen on the basis of its relevant resource recovery
experience, the type of recovery system desired by the City, and the
results of negotiations between the City and the firm. This portion of
the cbmpetitive procurement method is not price competitive, although
the remainder of the process is. The consultant then carries Out final
system designs and helps to prepare an IPB containing detailed speci-
fications of the type of system desired. The resulting bids from poten-
tial contractors are price competitive, since they are evaluated on the
basis of both technical merits and cost.
The second method for arriving at contracts is termed negotiated
procurement, and it applies primarily to the turnkey and full service
procurement approaches. Negotiated procurement has not been widely used
in the acquisition of public works, and it occasionally runs into
restrictions from state laws requiring competitive bidding on the basis
of price. Although competitive procurement is well suited to systems
which can be clearly specified in advance, a growing number of state and
local governments are coming to realize that negotiated procurement is
far more effective in the acquisition of systems whose technology,
markets and operations contain many uncertainties at the time of con-
tract negotiations.
The heart of the negotiated procurement method is the R7P, which
generally solicits bids on the basis of specifications more broadly
drawn than those in an IFB. In general, an RPP for a turnkey approach
will contain more technical detail than one for a full service option.
Nevertheless, the use of an R!P shifts much of the design responsibility
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to the contractor and, hopefully, provides the city with a wide range of
proposed technical solutions. Following proposal evaluation, a winning
contractor (or set of finalists) is selected and the City then enters
into contract negotiations with this firm. Any necessary deviations
from the iF? must be considered at this point. Furthermore, the con-
tract should contain sufficient flexibility to allow the contractor to
adjust to unanticipated technical and financial changes in the systems.
Without this flexibility, the increased risks borne by the contractor
will be reflected in higher contract costs to the city.
Implementing Agency’ s Philosophical Posture
The implementing agency’s philosophical posture is very important
to consider in determining which procurement approach will be under-
taken. Remembering that the primary purpose for undertaking a resource
recovery project is to provide for the sound disposal of solid waste
without creating a public health hazard or an environmental pollution
problem, municipal officials are faced with deciding between traditional
and nontraditional approaches.
Resource recovery companies exist which are willing to provide
equipment and/or services to address municipal needs under any conceiv-
able project structure that can be effectively applied. Various pro-
jects have been implemented under very different structures reflecting
the posture of the local officials as well as the availability of alter-
natives that are believed to exist.
Municipal officials will need to decide what degree of control they
wish to have in maintaining the public health aspects of solid waste
disposal, either directly or through contracts for service. Similar
decisions will need to be made regarding which capital financing vehi-
cle can be used. The availability of financing approaches and mecha—
nieme does affect the procurement decision. Siinilarily, decisions must
be made with regard to the degree of support it will commit over the
life of the project for the operations — either through commitment of
certain minimum quantities of solid waste or through a guaranteed pay-
ment for receiving the service of disposal through recovery.
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Basic to these decisions is the degree of control that the City of
Waterville and the Town of Winslow would like to maintain over the facil-
ities’ operations. For greatest control, the municipalities should main-
tain ownership through the Waterville—Winslow Joint Solid Water Disposal
Facility. The control is lees direct if ownership does not lie with an
entity which is accountable to the participating municipalities. If ade-
quate capacity for sanitary landfill exists in the future and at a rea-
sonable cost — less than projected at this time for resource recovery —
then it may be advisable to allow others to own the facilities. If prob-
lems arise, disposal could be provided by sanitary landfilling directly.
As discussed earlier, even if publicly owned, the facility can be
privately operated as well as designed and constructed by the same en-
tity. As public agencies usually have less flexibility to hire/fire
staffresources, consideration of this posture may become a necessity for
the operation of resource recovery equipment.
Small System Procurement Experience
A growing number of small resource recovery systems are being
planned and implemented. The experiences of the projects that have moved
forward into construction and operation phases are reviewed briefly here
to provide perspective. Presented in Table 5.1 is a listing of twelve
localities that are either operating or constructing small modular units.
The procurement methods followed by these localities are summarized as
follows:
As can be seen, the A&E approach has most often been used in the
procurement of small systems. However, two recent procurements — Auburn,
Maine and Pittsfield, Massachusetts — and North Little Rock’s recent
award of the operating contract to Consumat Systems Inc. indicate a new
trend in municipal procurement of small systems as well.
A review of the decision—making process in these locations is pre-
sented here for background purposes.
North Little Rock
In 1971, North Little Rock purchased two small incinerators (12.5
tons per day per uu t) without energy recovery capability to handle
their growing volume of solid waste. However, the units were never
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TABLE 5.1
MODULAR COMBUSTION PROJECTS
Th• following localities ar• either operating or constructing small modular combustion units to pro-
duce sf.am horn mass combustion of municipal solid waste:
SEPOITED CRP*CITT WIT*L 00STS
(EPO) lLU0MSW 8)
£* iI . UI. 3.2 Dingil inairaU . leaded by DOt Bibri Iii ,
aigned enrgp sin slid .ws’w Pubic W
inntrscts sqn.d inledluCtisli 90buTh Cdt Mall
began Aug 1971. davtup lsnned 45 Srung St
1w No. 1930 *ubuin, Maine 04210
76 N/A Ts,nwardy SMut d n 1w uastillatea Tam Ldtle Mayw
be Mt med S I addstam& unitS Cdv Mall
IlfiIeadle. Ark 72315
60 3 11 be SMMJama . uadw sing Nelson C Malir
I .it i s st i sn$ Gin Mg
tawinnsontul3am i nCam
P.O Boa 765
Ciaseall Tens 33555
_____ 100 2 Under amnd,udwn. Alderman Bob mrs
Ma’tup idheduled is swIg 1980 CIornal Rubbr
Dysvsbw( Tim. 33024
300 2.0 Begin speisthens in feb 3980 Ninumsiltkaqa Mann. P1
Tsu,nsti’D Engines’
7244 North
Rd
Canine . Nd 41437
NiL £ _ bel 24 N/A Opratioal ames 1976 Rd Caudle
Cs.ssl P,ud ts Crinetan Pasv Mill.
Inc
Gmueton.RN 03512
93 N/A Under amedvuctisil: be be is sperabun *1Mm 0 Iambert
beisly 3930 DtyManagr
105 EIbngton P 5 w 7..
R I!
Ln.iburg Teas 37091
1.45 Operational 19761979. , inU , uk Botasi
sndsigsing modifications. Cdy Pruidenl
anarded be Consumat U.S. Iu Je CIP
Systems Inc.. 1w nmdilicatisns and P .O Boa 7561
Iu ng4evm operation. inisduled be lithe Rack. *,k 72217
NipetaMsIob 1980
SO 1.3 Iqan operations us Mn. 1980 U Preudi. Mayer
City Mall
Bocusfe . *15.72370
240 12 slobs ul . ,1V.d i o mob i Bomas. Jr.
k 1180 P emodenl
VmanRacmert c
P.O Boa 100
S I . Censu
Butler, NJ 07405
t —t 1.1 Operational. 1979 Wdham P a. Jr.
Coy Mgr
P.O. B. 069
S.lsm.Ya.2*153
36 A Ope r etaia lsina ss,t lm *1 Vrw . Our.
inenUp bmnj used as Ssmtatusn Bopt
moly) 430 North
$ilsom Spus k
72763
Source: NCRR Bulletin, Voluwe 10, Number 1, Xarch 1980
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installed because of political problems relating to siting. In 1974,
U.S. Recycle Corporation, a franchised dealer of Consumat Systems, Inc.
proposed that the City operate a modular incineration system with energy
recovery and that it sell the steam produced from the system to a poten-
tial market — Koppers Company. After favorably receiving a U.S. Recycle
study which included a discussion of potential project economics, along
with positive discussions with Koppers regarding the apparent feasibil-
ity of a Consumat System meeting steam requirements, the City decided in
1975 to pursue the energy recovery system. From 1976 to mid—1977 con-
tracts were negotiated and the facility was constructed. In September
1977, the City began operating its own modular incineration system that
was contractor-designed and constructed. The turnkey approach was not
operating to the City’s satisfaction, however, and in March of 1980, the
City turned over the operations of the facility to Consumat (Figure 5.2).
The City had determined that it would own and operate the facility
from its start. However, Consumat assumed responsibility for the daily
operation of the facility when it was determined that City personnel were
not properly carrying out required tasks. Under the new arrangement, the
City receives all revenue from steam sales and pays Consumat a flat fee
for facility operation. Consumat assumes all risk for the quantity of
materials required for daily operations. The operating contract is
limited to one year due to state law, but it appears that Consumat’s
direction of operations will continue at least until the steam contract
with Koppers terminates.
In selecting the contractor, the City was required by state law to
carry out competitive bid processes except in “exceptional situations
where such procedure is deemed not feasible or practicable.” The RIP was
very detailed in that it included proposer qualifications criteria in the
bid package for the design, construction, and equipping of the facility.
Proposers had to have had at least two years of demonstrated experience
providing similar systems for processing municipal refuse and with at
least two projects involving municipal solid waste processing and in pro-
viding steam to a user which required a uniform and uninterrupted supply
of steam. The RIP was released in November 1975 and contract negotia-
tions were culminated in April 1976. U.S. Recycle/Consumat, the selected
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FIGURE 5.2
NORTH LITTLE ROCK CONTRACTS
ModificatiOfl8
Steast Purchaser
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contractor proposed a fixed price for the equipment, supervision of in-
stallation, training of City employees during the first year of opera-
tion, and equipment testing at the end of one year to determine perfor-
mance quantities. Project costs were financed from a special revenue
bond issue and from available city funds.
- The City retained a local engineering firm to prepare plans and
specifications for plant building construction and equipment installa-
tion. U.S. Recycle also provided assistance in the preparation of spec-
ifications and offered to meet with each prospective bidder to describe
the Conaumat equipment installation requirements in order to aid in the
bidder’s cost estimates and guarantee proper installation. Bids were
opened in early June 1976 and a contract was awarded to the lowest bidder
two weeks later.
ln June 1976, the City and Koppers signed contracts for the purchase
of steam, including a provision for the project to utilize Koppers’ wood
wastes, and for a site lease. The steam purchase agreement provides that
Koppers will purchase steam requirements of Koppers’ Forest Products
plant. The price of steam was pegged to the lowest cost fuel available
to the Forest Products plant. Koppers must approve the City’s plans and
specifications for the modular incineration units. The steam purchase
contract did not include a guarantee by Koppers to purchase a specific
amount of steam, only that it purchase the amount required for current
operations. The wood waste agreement is for one year with an annual
renewal option. It was felt that woodwaste would serve as an auxiliary
fuel source for weekend operations, if operations were expanded, but
nothing has happened to date. Koppers will provide voodwaste to the City
at no cost. The site lease contract covers a 20—year period, where the
City is obligated to pay a rental of $1 per year and all property tax
assessments and improvement charges.
Pittsfield, Massachusetts
The Pittsfield plant will be designed, constructed and operated by
Vicon Recovery Associates, a subsidiary of Vicon Construction Co. The
steam will be sold to a nearby paper company, Crane & Co. Project shake-
down is expected to begin in November 1980 and last for four to six
months.
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The financing for the project was provided through tax—exempt p0 l—
lution control revenue bonds sponsored by a local industrial development
authority.* The bonds are guaranteed directly by Vicon Construction and
indirectly by Pittsfield’s guarantee to deliver waste or pay tipping
fees. The initial tipping fee is set at $11.59 per ton. However, pro-
jections indicate profits to the operation which are to be shared 50/50
between Vicon and Pittsfield, thus reducing Pittsfield’s upfront tipping
fee.
The RFP was prepared by the City engineering and investment con-
sultants. It stated that the City was willing to enter into a put—or—
pay contract for delivery of solid waste, to provide a site for the
facility as well as a residue and emergency landfill site, and to aid
the contractor in obtaining tax—exempt financing. The RFP also identi-
fied Crane & Co. as the steam customer. The RFP was advertised in March
1978 and two months later Vicon Recovery Associates was selected.
The steam purchase contract becomes effective in December 1981, or
at an earlier date agreed upon by the company and Crane. The project
has been set up for a 15 year period. The company must construct the
facility and ass e all costs relating to steam producing facilities as
well as lines and equipment for steam delivery. The company is required
to sell and deliver, and Crane to accept and purchase, at least 700,000
lb of steam per day at a rate of at least 20,000 lb per hour for 240
Crane work—days. Steam prices will be based on Crane’s cost for No. 6
fuel oil discounted by a negotiated rate.
Pittsfield has shifted the project’s technical and performance risk
to a private company which guarantees the design and its ability to
process waste and generate steam. In return, Pittsfield accepted the
responsibility to assure waste stream supply quantity and quality and to
pay tipping fees if waste is not available for some reason.
* Robert H. Aldrich, “Small Resource Recovery Project Gets Disposal
Revenue Bond Pinancing,” in Solid Waste Management , January 1980.
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Auburn, Maine
Recognizing a disposal problem in 1974, a planning process was
initiated to identify alternatives. In 1975, an energy recovery
scenario was identified. Efforts began to crystallize in 1977 when the
City prepared an implementation report which highlighted the problem and
provided direction. Between 1977 and 1979, the City went through a
decision—making process that led to a City—owned, contractor—designed,
constructed and operated (over an initial 3 year basis) project. See
Appendix C for more detail on the project.
The contract arrangements are depicted in Figure 5.3. The City
decided early on to own the facility and eventually to operate it as
well. However, current operating experience in other municipally-owned
and operated systems convinced Auburn officials to modify their approach.
They decided to give responsibility of design, construction and opera-
tion to one contractor. The initial operating phase was set at three
years and allows for two five—year extensions.
The City guarantees waste quantity and quality and, in the event of
waste shortfall, an operating fee to the operation. Provisions for
processing additional waste and sludge are provided. The City maintains
control over additional waste through contractual arrangements with other
municipalities and with the sewer authority for sludge supply.
In selecting the contractor, the City solicited a very detailed Re-
quest for Proposals describing the project and the contractual terms it
was interested in offering. The RFP was released in December 1977, a
contractor was selected in July 1978, and contract negotiations with the
contractor and steam customer were concluded in October 1979.
The project is backed substantially by the steam sales contract.
The revenue generation will be substantial. More importantly, the steam
purchaser — a major U.S. corporation — guarantees to “take or pay” for
steam. In the event that the steam user closes its facility in Auburn,
the agreement also provides for continued payments equivalent to the
principal and interest on the City’s long—term debt for the project.
The project technology and performance risks are completely shifted
to the contractor as long as it remains the operator of the facility.
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FIGURE 5.3
MDE
ConstEti S fl
Obligat
L1ie t
r t bn
F —E 1 ill Sa1e
Su 1y Division
of
cons t t Libby O.mxi
FwxI
Operate
T si I
r i t
Irac./Global
ve1u 1 ut II
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Performance incentive and penalty provisions are included in the opera-
ting specifications. The City has the right to take over the facility in
the case of non—performance by the contractor over an extended period of
t line.
The Auburn project is an example of strong desire to both own and
operate a resource recovery facility being tempered by recent experience
elsewhere and recognition of the fact that the project has to be run as a
business — the need to overcome City constraints in personnel and mainte-
nance. It is also worth noting that the influence and participation of
the energy user throughout the planning and contractor selection process
was important to the project’s success and significantly influenced pro-
ject structure.
RECOMMENDED PROCUREMENT APPROACH
The by—laws of the Waterville—WinslOw Joint Solid Waste Disposal
Facility Corporation (hereafter referred to as the Corporation) permit it
considerable latitude in the procurement which it may adopt. Article
3.3a would even allow the ownership of the facility to be assigned to a
full—service contractor, provided the unanimous consent of the Joint
Board was obtained.
Gordian recommends that the advantages of the full—service procure-
ment approach should be examined carefully by the Joint Board. The oper-
ation and maintenance of a modular combustion facility require skills
which a public corporation may find difficult to attract (as was shown by
the experience of North Little Rock). In addition, the contractor is
responsible for the construction and the performance of the system pro-
cured, and thus, shares some of the technical risks associated with
implementing the project. (This latter advantage is also shared by the
turnkey approach.) The ultimate control of operations would be retained
by the Corporation through its ownership of the facility and its role in
approving the annual operating budget for the facility.
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Alternative Procurement Strategies
Overview of Strategies
The alternative procurement strategies available to the Corpora-
tion are displayed in Figure 5.4. The first priorities of any strategy
are to secure contracts for waste supply and the energy market and to
select the financing and procurement approaches to be taken (Step 1).
The A&E approach would then require that the Corporation advertise
for and select an ME firm to design the proposed facility (Step 2).
This would include the development of specifications for the facility
which would be used by the construction contractor.
Depending on the requirement of the Maine Department of Environ-
mental Protection, an environmental assessment of the proposed project
may be required at this stage (Step 3). Also in Step 3 (Preconstruc—
tion Planning) the financing and any required preconstruction permits
should be secured. The sale of G.O. bonds may require voter approval
and preparation for a referendum should be started well in advance.
Once the financing is secured, an invitation to bid (In) is
issued for a contractor to construct the facility (Step 4). (Ill’s for
hardware vendors may also be issued.) Following selection of the con-
struction contractor, construction can proceed.
Although the services being procured under the turnkey and full—
service approaches are different, the procurement strategies used are
essentially the same. As with the ME approach, the Corporation must
secure contracts for waste supply and the energy market as well as
select the financing approach (Step 1). Following this in Step 2, an
RIP for the turnkey or full-service contractor/system vendor is pre-
pared and issued. The proposals submitted are evaluated and a con-
tractor selected. A contract with the vendor must be negotiated and
finalized. It is important that this agreement clearly define the
roles and responsibilities of the contractor and the Corporation.
Generally, the contractor will prepare a preliminary design to
facilitate the financing process and obtaining preconstruction permits
in Step 3. This source will be provided one of the contractor’s fee
and this will be included as a capital cost. As with the A&E approach,
some kind of environmental assessment of the project may be required.
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FIGURE 5.4: ALTERNATIVE PROCUREMENT STRATEGIES
STEP 1.. ProcureLlent P1anni g SECURE WASTE
and Contracts SUPPLY CONTRACTS
SECUR MARXET
CONTRACT
SELECT NAZ1CINC
APPROACH
SELECT P CUREMENT
APPROACH
1,JRNUY/FULL-SERVICE
STEP 2. ContractOr
SelectiO
PREPARE AND ISSUE
RFP
(Advertise for and
Select ME Contractor)
EVALUATE PROPOSALS
AND sELECT 1 coNTRAcToR
NEGOTiATE AND
FINALIZE CONTRACT
WITH SELECTED VENDOR
__ ‘I ,
STEP 3. PreconStrUCt1 9 PERFORM ENVIRORMENTAL PERFORM ENVIRONNENTAL
__________________ £SSESS IT (as Required)
- - ASSESSMENT (as Required)
SECURE NANCINC SECURE FINANCING
SECURE PiNSTRUCTION
PER 1 ITS CONS
TRUCTION
STEP 4. ConatTUCtiOR ISSU , ivs
Contractor
Selection
___________ SELECT CONSTIUJCTION
co CTOR
(CON CTION) (CONSTRUCTION)
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Gordian strongly recoends that the Corporation employ a third—
party engineering firm in Step 4 to supervise the contractor’s planning,
design and construction of the facility to ensure that the contractor
meets the terms of the contract.
Procurement Schedule
An approximate schedule for procurement under the alternative
strategies is shown in Figure 5.5. Gordian estimates that all alterna-
tive procurement strategies can result in ground—breaking within twelve
months. This could be achieved over a shorter period for the turnkey/
full—service approach depending on the time that elapses between issuing
the RFP and finalization of the contract with the syst vendor. The
ME approach will probably require the full twelve months since the
design and preparation of specifications for the IFB by the A&E firm
will be time consuming. In contrast, the full—service turnkey contrac-
tor will have this design information on hand.
However, it should be emphasized that unforeseen difficulties 1
such as the inability to finalize contracts, could delay project imple-
mentation considerably.
Procurement Costs
Estimates for the cost to complete the alternative procurement
strategies, including both the cost of consulting and in kind services,
are shown in Table 5.2. Gordian estimates that full—service/turnkey
approach would cost $120,000 compared to $90,000 for the A&E appraoch.
Although the estimated cost for the ME approach is less than for the
turnkey/full—service approaches, the overall cost may be greater due to
a higher engineering fee which will result from the greater role the ME
firm takes in overseeing construction.
Project Management
The interlocal agreement that created the Corporation specifies the
management structure to be adopted for the proposed facility. The only
major option available to the Corporation is whether to operate the
facility itself or hire a contractor. Project management for the former
Gordian Associates Incorporated
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FIGURE 5.5
Approximate Schedule for Alternative
Procurement Strategiea
A6 E
Step 1
Turnkey!
Full—Service
1 1
1 1
[ I
—. 1
—. —. — — J
2
3
4
Step 1
2
3
4
I
I — —
I
1
I
0 1 2 3 4
5 6 7 8 9 10 11 12
N
-------
Step 2
Contractor
Selection
Step 4
Construction
Contractor
Selection
TABLE 5.2
Cost Esti.atss for Alternative Procure.snt Strategies
84
Step I
Procureweot
Planning and
Contracts
Tasks
a. Scure
b. Secure
c. Select
d. Select
Cost
Estinete
Is bOO)
waits supply contracts
arket contract
finsnc ing
procurewent approach
Step Total
-g
Step 3
Reconstruct son
Planning
A & E PROCURLI r
Tasks
Cost
Sst i ste
$ z 1OO0
Tasks
Cost
Situate
(5 z 1000)
a. Advertise for AU fire
b. Evaluate qualuficalions and
select firn
Step Total
T5
a. Prepare and issue UP
b. Evaluate proposals and aslect
contractor
c. Negotiate end finalize con-
tract with selected vendor
Step Total
a. Perfor. enviroewental
aesesent (as required)
b. Sscure financing
c. Secure prsconstruction
per. its
Step Total
40
a. P.rfor. enviroewsatal assess—
ewnt (as required)
b. Secure financing
Step Total
s. Issue I FIs
b. Select construction contrector
(and hardware vendors)
Step Total
TOTALS
16
90
a. Construction .anagewent
Step Total
120
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85
case is illustrated in Figure 5.6 by means of a cash flow diagram. The
system operating costs will be paid by the Corporation from revenues
from tipping fees, and energy revenues. Excess revenues would be re-
turned to the participants (Waterville and Winslow) according to their
share of the operating costs (levied on the basis of MSW processed by a
tipping fee). The excess revenues would be used by the participants
for debt retirement.
The project management would be only slightly altered if the
facility operation were to be contracted privately, as is illustrated
by a cash flow diagram in Figure 5.7. En this case, the system oper-
ating costs would be paid though by the operator who would receive an
operating fee from the Corporation which would include a profit for the
operator. The operator would also receive a percentage of the energy
revenues. This would provide an incentive for the operator to maximize
energy production and thus increase its profit.
Gordian Associates Incorporated
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86
FIGURE 5.6:
CASH FLOW FOR FACILITY OPERATED
BY THE CORPORATION
Service
FEES
Service
Tipping
Fees
Energy Revenues
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87
FIGURE 5.7: CASH FLOW FOR FACILITY OPERATED
BY A PRIVATE CONTRACTOR
Debt
Service
FEES
Tipping
Fees
Service
I
a — — J
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88
VI. CONCLUSION
This study is designed to move Waterville/Winslow closer to actual
implementation of a resource recovery facility. However, completion of
-this report is only part of the resource recovery planning and
procurement process.
That process is generally divided into three phases:
• Phase I — Feasibility Analysis;
• Phase II — Procurement Planning; and
• Phase III — System Procurement.
The report by E.C. Jordan essentially completed Phase I,
establishing the feasibility of energy recovery with Keyes Fibre Co. as
the market for steam. The purpose in providing assistance through the
Panels Program was to assist Waterville/Winslow in completing or making
progress on the tasks in Phase II which include:
• define project;
• update project economics;
• secure waste supply;
• allocate risks;
• select procurement approach; and
• select financing approach.
This report has provided Waterville/Winslow with more detailed
analysis of three important areas of the proposed project: the energy
market and steam agreement, project economics and alternative procurement
strategies. From these analyses, Cordian can make the following
observations:
• the project under consideration is basically sound;
• the creation of the Corporation provides a vehicle for
procurement and project management;
• an interested market for energy has been identified although
there is considerable interest in seeking a new, possibly
more secure, market; and
Gordian Associates Incorporated
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89
• the economics of the proposed project are promising — although
the present landfill is inexpensive, it will reach capacity in
the near future and means of developing a new landfill are
foreseen — thus, resource recovery must be considered a viable
alternative.
However, despite these promising factors, Gordian must caution
Waterville/Winslow that some important elements of the project need to be
addressed. These are:
• finalizing a contract for an energy market;
• securing contracts for waste supply; and
• a commitment from the community to raise the money for
procurement.
In conclusion, Gordian recommends that Waterville/Winslow proceed
with the steps outlined above and in Section V as quickly as possible.
Any delay will result in increased costs for the system due to inflation
as well as the loss of the momentum and commitments already gained.
Gordian Associates Incorporated
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90
APPENDIX 1
WATERVILLE-WIN SLOW INTERLOCAL SOLID WASTE AGREEMENT
WATERVILLE-WINSLOW JOINT SOLID WASTE DISPOSAL FACILITY CORPORATION
CERTIFICATE OF ORGANIZATION OF A CORPORATION AND BY-LAWS
Gordian Associates Incorporated
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91
WATERV I LLE-WINSLOW INT):RLOCAL, SOLI r) W1’! TE 1 GREENflNT
ANI)
WATERVILLE—WINSLOt ’ JOINT SOLID WAST1 flTSPOs1 T, r, CILITY COPPOPJ TIOI 1
CERTIFICATE OF ORGANTZ?TION OF A CORPORATION A! D BY-LAWS
This AGREEMENT, mac ic this clay of
1980, by and between the City oC Watorvillo and the Town
of Winslow, the participatinq niunicipctlities hereinafter
referred to as the “Parties,” all bcinq bodies politic and
corporate located in the Couriy of Konnebec, and State of
Maine.
WHEREAS th Partj s to this Agr cment hiwo the duty to
provide solid waste disposal fncilities for domosLic and
commercial, solid wastes qc’ner. r’cI within thcir respective
territorics,pursuant to Tit l 3K M.fl.S.i ., ncction 1305(1);
an ci
WHEREAS the Parties are authorized to contract pursuant
to the Maine Interloca]. Cooperation Act, pursuant to Title
30, Chapter 203. M.R.S.A.; and
WHEREAS the Parties arc d s;irnus t
other throucjh an intcrlocal atlrcc’ment. to
such powers, privilenes, or authority as
by law to exercise individually in order
a cooperative program for the manaqement
generated within their boundaries and to
in an Energy Recovery Facility; anti
cooporato with each
exercise jointly
they are permitted
to participate in
o ’f solid waste
thereby participate
WHEREAS
that it will
their mutual
the Parties to this Agreement have determined
be a more effici nt use of their powers and to
advantage to entc•r into this Agreement; and
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92
WIIEREAS the Parties to this Ac1rc meni are further
desirous of setting forth herein the terms and conditions of
their Agreement to cooperate in a program for the management
of solid waste qencrated within their boundaries and an
Energy Recovery Facility, and an addition to orqanize the
Waterville—Winslow Joint Solid waste Disposal Facility
Corporation, hereinafter referred to as thc “Corporation,”
to carry out such management dulics and responsibilitics
and to set forth herein the Certificate of Orqanizat o and
By—Laws of such Corporation; anti
WHEREJ S this Corporation shall be a quasi—municipal
corporation, jointly owned by the City of Watcrville and
the Town of Winslow, and sup!)ortod by public funds of the
municipal Parties and by revenues produced and/or received
from other users by contract with the Corporation.
NOW, THEREFORE, the municipalities of Watervil].e and
Winslow, for and in consjdcration of the mutual promises
and agreements hereinafter stated and the performance
thereof do hereby promise anti aqrec as follows:
PART 1. PURI’OSF.
1. 1 That the purpose of this / qrcemenL and the Cor-
poration is to include but not be limited to providincy for
the disposal of solid wastes cwric ratec1 within the territor-
ies of the Parties, or within I.hi territoric of other
individuals, corporations, or municipalities which may in
the future become parties to this Agreement or which may
contract with these Parties to this Aqrecmont for the use
of such participating municipal Parties’ Solid Waste
Disposal Facilities; and to orq.intze, operate, and maintain
thereby a joint Energy Pecovcry Facility; and for all
purposes permitted under Title 13, Chzwter 81,M.R.S.A..
Corporations Without Capital Stock.
1.2 That the purpose of this Agreement is to provide
for the acquisition bf real anti personal property necessary
to the management of solid astc and to establish and carry
out a program of solid waste manoqemont and an Energy
Recovery Facility for solid w;iste:
2
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93
a. ‘Fhe managemcnl oC 5weh solid wzistc as may
be generated within the boundaries of the
Parties at rate schedules and proportions
established pursuint to this Acyrecmnent; or
b. As may be generatci elsewhere when the
management of such solid wast’ is accepted
by a majority vote of the Waterville-wins]ow
Joint Solid Waste L ispos 1 r cility Corpora-
tion, hereinafter ‘fc rrcd to as the
“Coiporation,” at T Lc’S established by the
Board of Directovra ci thc’ Corporation, here-
inafter rcfcrrc’d to 1 ,s tho “.!ajnt. T oarc1,”
PART 2. 1 Fl’INTT1ON
2.1 Definitions as usedl in this Agreement:
a. “Solid Waste” mc nns solid materials with
insufficient lic uid content to be free
flowing, jflCludlnci without limitation
rubbish, gnrhagc’, scr.,p materials, junk,
refuse, inert material and landscape
refuse,
b. “Solid Waste Disposal Facility” means any
land area or structure or combination of
land ar”a and st ruc urc s, iuc d for storing,
salvaijinq, proccs i;icj, reducing, incinerat-
inq, or disposiiic of solid w 1 ist-es, including
an Fnergy Rc ciwry F ici I i y for thr incin-
eration of solid waste and gc’neration of
steam for sale and rc venue.
PART 3. APMJN1STRATION
3.1 Joint Board. The Certificate of Organization and
By—Laws of the Waterville—Ijinslow Joint Solid Waste Disposal
Facility Corporation, attached to this Aqrocment as Appendix
A and Appendix B respectively, arc hereby incorporated into
and made a part of this Aqrec’mi’nt. The Joint Board of the
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94
Corporation shall be two (2) iiiembers of each of the -Parties’
respective City and Town Councils duly appointed pursuant to
each of the Parties’ municipal charter5 and Maine law regard-
inq appointments, plus each of thc Pi rties’ City Administrator
and Town Manager, plus one (1) citizen—at-large for each ten
thousand (10,000) in population for cach of the respective
Parties. Therefore, at. thc com uenccmcnt of this Agreement
and of this Corporation, and ai. according to each of the
respective Parties’ populations, the Municipality of Waterville
shall have four (4) Joint Boar l members, and the Municipality
of Winslow shall have three (3) mint Board members. All terms
of Joint Board members who are City or Town Council members and
the City Administrator and Town Manager shall be co-terrninous
with municipal office and shall hold such position as a Joint
Board member only durinq each of their present terms of office.
Each and every iLizcn—at—]arqi duly. appoinLeci by each of the
respective City or Town Counci I ; of each of th• Parties to this
Agreement, shall be so appointci.] for alternating staggered three
(3) year and two (2) year tc rm .
Upon the effective dat of this Agreement and of the
Corporation, or as soon thcrc’aiter as possible, the Joint Board
shall hold an orcjanization;iI r u I.inq tn c lcct. Officers of th
Joint Board including a Chairman and Vice-Chairman, who shall
perform the duties of the Ch. i rintn in his nb.sonc , along with
such other Officers as may h d cmcc1 necessary or convenient,
including but not limited ti a ftcrctary and a Treasurer, and
perform all actions necessary t inenrporation Pursuant to
Title 13, Chautor 81, M.R.S.A., including the adoption of ruics
for the conduct of its meotinq €and its affairs. Officers of
the Joint Board shall serve for a term of one (1) year.
The Joint Board is hereby established and created to con-
duct the cooperative unclertakinc! contenmiatod by this Agreement,
and to exercise on behalf of the participating municipalities
the powers delegated to it.
Vacancies in the office of aiiy of the members of the Joint
Uoard shall be filled by appointment as according to the re-
spective municipal charters of p,ch of the Parties.
4
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95
3.2 Mcetincjs.
a. Joint hoard Mcc’tinqs sha]l he called as
rsu nt to the P.’— l.a ’s ol the W it rvj1]c—
Winslow Joint Sol’ Waste Disrosal Facility
Corporation, which Ity—Law5 are ;itt-;ichc .d
horcto as ppc.mcl x II and r’i dc a T)art hcrc’f.
b. quorum f r any nh’et- i n j ha] 1 COfl j ! C) f
at least tun—third . (2/3’s) of c ch of the
Parties’ reprcsen tives, nd in order for
a valid vote to ho taken in order to do
business, all actions must pass by a two—
thirds (2/3’s) vote of all members present;
and if at any meeting there is only a
minimum quorum present, then any vote taken
on any action must he unanimous in order for
such vote to be valid and for such action to
pass and for the .loint Board to do business.
3.3 Powers. The Joint Hoard shall have a]l necessary,
incidental, or convenient now ’r. qrant.c’d to l)irector.s of
non—capital stock corpora L i ‘ns inc1”r Ti I 13, Chapter 81,
M.R.S.A., subject to such lirnit.aLions as ar required by
law and this . grcoment, and incluclinq hut, not limited to
th: fo] lc)wi nij J)(Iwcr ; at I u ‘eli; il i I I I i ‘ ; , I n orcic r to
accomplish the purposes stated herein and which are per—
mit.tQrl by l;uw to b oxcrcist ’tl hv the Part:ic ; r pcctivcly:
a. On behalf of the mrticinatinq municina] Parties,
to purchase, 3eai ;e as lc see, rent, hold, niain—
tam, operate, 1 ’ase as lessor, or convey any
and all real and personal property or any
easement or int.ere e therein a]1 as may be
necessary, incic1i’iut 1, or convenient for its
purposes. Owner. hjp of any ricjht, title, or
interest therein shall be held by the Corr ora-
tion unless some other nrranqcmcnt is determined
by the unanimous conSent of the Joint Board to
be more appropriate.
b. To contract with any person, firm, corporation,
or partnership, or other entity, private,
public, governmental, or otherwise, for
scrvices, management, work, matcr a1, or
property in the name of time Corporation.-
‘S
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96
c. To adopt c r alter ru).es and regulations
iind terms and conditions for the manage—
mcnt of solid wasf.” and for the aclminis .
tration, nd opc’ration and maintenance
of the Corporation and its facilities.
d. To cmp]oy or nrr n.;r1 for thu employment oC
such persons as re required for the pur-
poses stated h”r In!
e. To receive and accept from, or contiact
with, the Fk’ral, StaLe, and Municipal
governments, and oLhcr public or private
agc’ncies, for donations, loans, grants, or
other assistance for solid waste management,
and in any such ct ntract ;a’jrco to ho bound
by all app1icablt provisions or Federal,
State, and Municip.il statutes, ordinances,
and regulations as the case may be.
f. To make expcndit- irc for and contract with
rospeet to capit 1 ñ items from funch provided
to the Corpoi-at ic n Ur u nt to this %recment
as stated herein.
g. To contract with rnrsons, corporiit.ions,
districts, other inunicipaliti , or other
] ccjal entities, Ii L Ii inside anil out. 1idc the
boundaries of the Participatinj municipal
Parties, and with the State of Maine, United
St tcs Covcrnmont, and any agency of either,
to provide for the ni .inagemenl. of 5Olid wante
cit rates established by t e Joint Boards
h. ‘ro receive and duthurse, on behalf of the
participating municipal Parties, funct for
any purpose contc!nlplat.ed by thi A IICCI O t.
i. To license or qrant permits to users of the
Corporation’s f3cilities on such termn as
it deems proper.
I’
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97
• . To adopt or alter rules and rccjulations,
and terms and conditions reqarding the types
and nnounts of vtrioiin c1as ifjcatjons of
solid waste which may he c1ispo c1 at. the
(‘ rporat. ion’ 1a i Ii Lit :;
k . L’o plan, cons ii net , equip, opc’ratc tn’J
in.• i III i%ifl a SC)1 iii W 1 I V I1I.1I sI’J1 IIItII1 (IIUqJ Hfl
for the benefit of 1h’ nuiniripal Parties,
and any other p.i r t ‘ by iont r act.
1. To serve as a nuutu. 1 forum 10 identify,
discuss, study, and brincj into focus the
municipal Partir ’ solid w 4 :;tc I roblcm
and needs.
m. To serve as a vehicle for the collection and
exchange of solid waste information ofcon—
cern and interest to the municipal Parties
to this Agreement.
n. To provide continuing organizational ma—
chinc ry to insur ” effc ctivc solid waste
system operation. communication, dnd coor-
dination, and c0’•cr;ition among thc’ munic-
ipal Parties to this grecrnent.
0. To foster, dcvc’lo;. and review policies,
pian , and priori L ; for the Corporation
PAR’I’ 4. 11N NCE
4.1 Costs of Capital and Operation Expenses, and Appor—
tionnient. Costs of acquisi U ons, improvements, and operations,
and i lernz incidental thereto, sh t ll be paid for by fees
collected from municipal commercial, anti/or private users,
grants, donations, and appropriations and the sale of steam
and any salvacjable maU?riLiln Irom such so3id waste disposal
facility. Appropriations shall be allocated between the
Partier in accordance with the following:
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Adjustment to paqe 8, item a.
a. Initial Capital Costs. Each municipality shall furnish
their respective dollar share of initial capital con-
struction costs upon reasonable and timely demand by the
Joint Board. Half of the initial capital cost will be
shared by the two municipalities in proportion to their
population and half in proportion to their respective
municipal valuation.
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99
a. Initlul Capital Cc’-ts . I ac1i Inunicipa]4ty
shall furnish their re pccti doijar share
of initial capital c’nnstructjon costs upon
reasonable and t.im:ly dcnjthcl by the Joint
floard accordinc, tc the r tit- of onc’—h 1f
State municip 4 1 v.,1u ,i’ion and ori —half
popu] a tion to i —h C :t ate nmnic:i pi 1
valuit ion and on ’—h 1 1 C p pn1 i tion.
b. Subsequent Capit ii ;::pcnsc ;. n the event
that a capital (:.pc’nIjturo ir requcstc.d to
b made, the co f which in the Opinion
of the Joint Roard i too great to he met
from annual rcv ntu’.c clurinq the fisc;i] year
in which such capital cxpcnditure is requested,
the Joint Board sh.iU notify the participatjnq
municipal Partios of the propn d capit j
expendIture.
]n it not.ic tr th ’ participatjncj municipal
‘ rt ics , the Jc)I nt I.u. ri1 ;h; ii CICscrjb the
project. for which I lii ’ eapi tal cxpcncjj turn is
r tJu i red, the e:: I. I ui ted cw; t thereof , the
term over which thr COSt shall be funded,
the proportjonatc 5hnrc of the estimated
co5t to be contributed by each earticipating
municipal Party re jucstcd to provide such
funds and the dat.c or dates upon which such
funds arc to ho made available to the Joint
J3o . rd. Such captt;ii funds may be provided
by each participalj.nc 1 municipal Party in
such manner as it shall determine, from
available revenue funds, by tc xation, by
borrowing, or othei-wisc. Each Participating
municipal Party 1hifl promptly take such
action as nc cens:i1-v to provide nch C IT,I ta]
fundz and shal] notify the Joint Uoard as
soon as such funds arc’ avatlabjo. Thc. notice
to the Joint Board shall be accompanied by
an opinion of coun c1 stating that the funds
ha o b cn duly authorized and may properly
be paid to the 3 iiit floarci or, if the funds
L) re to J)t. ra I $;l’c I by lion owi nq , the notice
to the 3oint floard ha11 he accompanied by
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100
preliminary Opinion of r( coqni oc1 Rond
Cnun c’l indie ii inc1 that hy mieli n (lL3atj—
fled opinion provnc the leqality of bonds
or not ‘s 1 o he i :‘;iied for ‘ .i Id r’ lrposo can
reasonably be c pcc:Led at time such bonds
or notes are issued and that the net pro—
ceecis may he ly paid to the 1 Thint
Board.
The funds so prnvich’d by th p irti ciIJatinrj
municipal Partic shal] be used by the
7oint Board for the purposes for which the
request was made. i ny surplu. funds not SO
used shall be retuLned to the participatinq
municipal Parties in the s mc proportion in
which such Parties ‘riqinall’, Contributcd
such funds.
The proportionate !. harc of the capital
expenditures to bc contributed by c’ach
participating muiiirtpal Party shall be
dctcj-rnin d by t.ht’ .J’’int I3odrd on thc•
1)flSjS of the per entflq(? of solid waste
processed from such participatjnr 1 municipal
Party on thQ nv . i iqc dun ncj thi’ Past pre—
C( cl I f b i I r) %IX .CI four (4 ) years
C. Apportionment of Dcht Retirement. The City
of Watorvilic and ihe Town of Winslow, being
the municipal Parties to this Aqrccmen , shall
both raise their I rbportionate share of the
initial capital invo tment for the construc-
tion of a Solid W. stc Disposal Facility, and
for any subscquent c nital investment pursuant
to the above sectIon 4. 1(h). J ach such
municipal Party sh;ilL be responsib o for the
ret i rrnent- of I ti.; d.’hL.
On an annual ba I ;, however, thcr shall be a
proportionate adjustment of capital debt to
one of the municipal. Parties, b scd UDOn
the percentage of the previous year’s actual
usage by each municipal Party. The basis
9
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101
for comput.inq the annual debt. retjrem yj
cost of each munir pal Party shall be the
original cost of Jie facility, and the cost
of any subsequent capital investments, to-
gether with al] debt retirement expenses,
with equal annu . 1 1ueLion amounts over a
twenty (20) year p rioc1 to each municipal
Party. When a rnunicip.il rarty’s usaqr
increases or decrc’az;c,s from the oriqinal
proportionate share, based upon the per-
centage of the previous year’s actual
usage by each munieip 1 Party, the differ-
ence shall be paid to the Corporation with
the other municipal Party’s proportionate
annual contributing shire of operating cost
to the Corporation tncreasing or decreasing
in accordance with the adjusted amount.
d. Short Term Borrowing. The Corporation shall
only have the power to borrow by executing
notes on a short Lerni temporary basis and
for cash—flow purposes only, and the term
for which such notes shall become fully due
and payable shall not execc ci one (1) year,
and which notes cumulatively in any one (1)
fiscal year shall not exceed eighty percent
(BOt) of the previous year’s operating
budget, and which notes shall be paid out
of income revenues during the fiscal year
in which they were made.
e. Mlocatjon of Costs of Operation. Allocation
of all costs of operation of the solid waste
management procjram to the participating
municipal Parties Jiall ho accomplished on
the basis of thc percentage of solid waste
generated by the Parties and as otherwise
herein provided, by charging each of the
participating municipal Parties a uniform
unit cost per ton of solid waste, which shall
be so established each year by the Joint Board
as, to the extont possible, will assure
sufficient income to meet the cost of solid
waste management. for the ensuing year. Such
l 0
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annual opcratiriq xpenscs shall Also .iriclude
unfunded capita] outlay, if any, insurance,
taxes, rentals, and necessary reserves for
COntincjcncjes as Lerminoci by the Joint
Board but not t cxcccd in any yeai- five
percc nt (5? ) of thr! total. opr’ratinci hud et.
After thc? firsi Iisc,tl y ir of opc’r,-ltion
hc n compi c Lc 1 • ;ai ci uni orrn uni t cc) t5
shall be compuLc’d on Lhc ba5is oC thoso
amounts of sol iii Wastes 0c(’!5’cl hy each
Party during th precedinq year with ad-
justments mac1 , ii. any, t:() each Party for
the next cstimawcl year of uniform unit
costs.
rol.]ot. ing the f r’l fufl fisr:iI y’ nr of
npcratioi , said tInhfc)rm unil costs shall be
computed based upon actual amounts of solid
wastes processed from each Participating
municipal Party in the precedinq year as
ch t:c rmjncd from •1 int flo ircI rt.cords with and
including adjustmcnr to each municipal
Party for actual waste disposed in thc pro—
ceding year. Th Joint l3oarrl may require
advance nayment of such op rating costs for
the first fiscal year of operation.
4.2 Di rilnit. ion of UrV-’IiIiC’S. Any ‘xcer s cv ’nn
at the end of any Cisc il y’d r C,VI’i ,,ntl abovi wh i t i ucuduci
to onorate the I’aci ii ty .shal 1 h’ di :thiirsc’cl back to each
municipal Party as ctccorciinc7 to cdch Party’s actual waste
disposed at the Facility in th preceding year.
4.3 In—Kind Contributions. Subject to approval by
the Joint Board, credit shall. h• qiven to the Parties for
in—kind contributions to time L’c’rporation.
4.4 Financial Procedures.
a. Budget. The 1 in1. Hcard shall prepare a
budqot, establish uner tc cs, determine
rccornmr’ncled shares o costs, and transmit
the S C to the Parties at least 90 days
1. 1
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prior to the bcqinninq of each Party’s-
fiscal year; and which C ]Cu1atjons shall
also include an iternizec.1 C’StjTn U. of the
expenditures and thri anticipated revenues
for the fo11ow1n yc ar, all of which cal—
cu]afion , 051 inmt , mid rc’porlF; shall be
Submitted upon eomplc’tion to t-hc r sri cf-jve
City and Town Coun i]s of Ihi: Participating
municipal Parties. Such itc mizcd estimates
of exp ndj tures and anti ipa t c1 revenues
for the followinq yr ar shall include the
following:
1. ltnticinatod Revenues. An itcinjz c1
estimate of ant icipatncl revenues
during the ensuing fiscal year from
each source.
2. 1 stimato of Exp nditurc. An itemized
c stjrnatc of c’xpc’nclj Lures for each
classification for such ensuincl fiscal
year. Expend I t I1L CS will i ncliidc’ esti-
mated Opcratjn j c’xymndjti,rcs and the
actual amount of debt retirement,
principal and interest, scbcdujcd for
each municipal Party to this Agreement
for money they have borrowed for Lhe
joint Solid Waste Disposal Facility in
accordance with sections 4 .l(a) or 4.1(b).
3. Actual Receipts. After the first year
of operation, an itemized statement of
all actual receipts from all sources to
and I nc3 wi i nq .Tiim’ 30 ol (‘ach pr:v i n t is
fiscal year.
4. Actual Expenditures. After the first
year of operaL,nn, an it’mi cd statement
of all actual Qxpcnditures to and includ-
ing June 30 of each previous fiscal year.
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. F.stimated Cost. Pcr Ton. ‘hE’ estimated
uniform unit c-o t per ton of solid-waste
to be charqe ,.1 for the c iir.uinq fisCdl
year.
On or before Mnrr)i 1 nC c’m-h yc’;ir, the 3oin
floarci nhall adr,,i .i j nal budqcL br t.hc up—
comincj fiscal yc.ir wh icli ;h 1 l1 he i Lcmi ?.ed
in the same manner ts th’ àstimat.c of
cxpendjtures anti rt• ’eI1I1e . ‘Ihc. htidqot shall
include the amount: of any doficit or antici—
pateci deficit foi- the current. Year’s orcratior .
Such budget shal] 1)0 submitted forthwith to
the respective articipatjn municipt l Party’s
City and Town Councils and shall include an
allocation of (ho annual costs of operation,
the determination ol which shall be
pursuant to the section herein at 4 .1(c)
regarding Costs of Operation. Jach partici-
pating municip 1 - 1 Party shall nay not later
than the fifteenth (15th) Jay of July of each
year an amount of money which shall equal
the ostiniatoci unit cost per ton set forth in
said budget nmlt.ip] led Lw the number of tons of
waste material dt 1iv rec1 by and on behalf
of nuc h part i c i p.i t i nq imin i ti p 1 P.irt y to thc’
Corporation’s oiid waste disposal f cj1jtj s
in the prccc’d inq n;nnth nr lelcrminccl by the
Joint Board, but in no event shall such
monthly payment be less than one—twelfth
(1/12th) of the allocated ;harc ol such
Participating municipal Party for said en—
suinq fiscal yeai -
b. Fiscal Year. The fiscal year shall be from
July 1 to June 30 each year. The Parties
shall make twelve (12) pnymentn to the
Corporation, with the first payment due on
July 15 of each year.
c. Audit. The Joint floard shal] OnJaqe a qualified
public accountant to conduct an annual audit of
the Corporation’s accounts. The audit shall be
conducted on the basis of auditing standards
and procedures proscribed by the State Auditor
for municipalities.
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iOS
I’A, r 5 . r’uoI’I :I TV
5.1 Title. The Corporation shall hold title to all
real and pcrsonal property and any leasehold interests
acquired pursuant to the purpo ’s for which it is formed,
subject to the foliowincj:
a. In the ovcnt a site for any facility is
acrjuircd throu h cx r tse of thc power oC
t minent. domain h u y one of the Parties.
then the I’arty so L tking shall retain title
to the property taken and shall lcn e or
donate the use of such property to the Corpor
ntion. The terN of any such lease shall be
the term of this itqrccmcnt or the use u1
life of the site as a solid waste disposal
facility, whichever shall first occurs The
L,essor Party may elect to receive in-kind
contribution credit for the costs of
acquisition. IC th l.( ssor Party does not.
sc elc’ct , the oLh Party may pay amounts
which in num equa L the cost of the taking
less the hes ot- Party ‘ ; proportionate share,
p yrnc n t ;ha ri t I i n a io rcl.i nCc’ vi lit the
l4ipo r Li e iuien L sec L Lons hereinabove • or such
other method as th Parties shall agree to.
5.2 ImDrovemeflts. The Corporation shall develop and
construct all imorovements, kc’c’p the same in good repair,
and shall insure all properties ztcquirocl by or leased to it.
. 3 Disl.ri hut i n 01 As!;c’t S and l.i.ihi lilies. Any Assets
and/or Liabilities of the CorpoLation rcrnaininq at the time
of termination of this Aqreeiiii nt shall be divided among the
Parties accorriinq to ii ir proport ionate payments or contri-
butions to the Corporation durinq the final five (5) years of
this Agreement, subject to the followincj:
a. Upon termination of this Aqreemen all
property, real and personal , acquired by
the corporation shall 1)0 offered for sale
to the Parties at the market value of such
property. Property not purchased by the
Parties shall he sold at public auction.
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b. Upon termjn -itjo, 01 any ]c’ se under seEtjon
5.1(a) h( rc1inahov ., thr other I’arty shall
retain a claim the O n r municipal
Party for a sh n- ’ of thc’ Proc cds of any
resale of such 1tncl or, should the owner
municipal Parts’ elect to retain the land
for other pub] jc, n s, it. shall hriv two (2)
years to pay th .’ other Party for its interests
in the land.
C. Thc right, ti.t1 4 and intr re st. of the par-
ticipating munir:ip l Parties in solid waste
disposa’ sites whcin exhausted of their
capacity and of no urthcr u e in tho
accompljshm , t of ‘h purposes set forth
herein shall be cnnvc yed at no charge to
that particjpz tjnc, municipal Party Within
whose boundaries satd site is located unless
such particjpatjncc ;nunicipa] Party does not
dosire same.
Piu ’r C. ITRSONJ41:T
6.1 Employment Status. ‘The Joint Board may employ such
persons as it deems necessai’• t ’ accomplish the Purposes of
this Aqrocmcn . ny such emplny( os sha’l be cmp]oycos of
the Corporation and shall not b deemed to be employees or
subject to procedures, sIIpc’rvir nn, or rules of any Party.
The Corporatio 1 shall be solely liable to any such employees
for any liability for cotnpcnsaij. on or indemnity for injur ’
or sickness arising out of or Jr the course of their emoloy—
mont.
a. Staff t imc may I)(’ c. nt ri1)IILc (j to thc
Corporation by the Partien. Persons
p rformi ng work under such con Lribution
arrangements shall be under the Supervision
of Lhc Joint Board .r its dcsiJnatc d super-
visory porsonnc], but sliaJi otherwise retain
the st 3tus of an uni;Joyee of the Contributing
Party.
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6.2 Salaries and Benefits. 9’he .loint Board shall
have the power to fix comncnn.-it inn and to determine any
benefits for its crnp1oyo s, rnvi Ic..1, howevcjr, that such
compensation and/or benefits ar not substnntially at
variance with the comnonsation and/or benefi.t.r of cmploy cc
of the Partic who perform similal- dutics.
6.3 Rules. The Joint floard shall establish rules ar 1 d
regulations to govern its eInplofC cS in Lhc pt’rformance of
their duties, which rules and rcqulations m iy include job
descriptions and grievance procedures.
6.4 Hirinci and Termination Procedures.
a. The Joint Board h t1 1 c.ni r ndvcrtj s( m nts
to ho placed in theal publications for a
period not loss than rirtoc -i (15) days prior
to application dc 1 icllines-for any position
created or opened. Applicants shall provide
such references and other information as the
Joint Board may require. Applications shall
be considered without regard to race, color,
creed, national origin, political affiliation,
sex or aqe over 18. Applicants shall possess
such qu ilifications as ioint [ bard shall
os tab ii s h.
b. Tcrminatjc n of t’inplnyment ;h i1 1 he for good
cause and shall follow nn ice and opportunity
for hearing.
PART 7. R1:IiEn71 5
7.1 Breac-h. A Party shall hi’ (1OC’TfloCl to be in broach
of this Agreement if it fail to appronriate or make timely
payment of its share of costs, or if it fails to ucrform or
comply with any of the terms, provisions, or conditions of
this Agreement or of the By—Laws of the Corporation. The
Joint Board shall cjivc a Party written notice of specific
arts or omissions which const tuto broach. The Party so
16
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108
notified shall have thirty (30) days to conform. if the
Party fails to conform within the aI)c)vc’—mcnhionecl time
period, or if the Party waives :hc time pr riocl, then this
Agreement shall be decmc c1 rc cindt d, rrvokcd, or otherwise
discharqed and disso).vecl ari 1 t.he abovi’—ment. iflflc.,C1 Section
regarding Distribution of 7 ssc t$. rh ]1 app’y c lOnq with
eetrh section or (his Part 7.
7.2 Withdrawal and/or i3rr’ach. 1 ny Party which
breaches this Agreement or which m. y withdraw from this
Agreement shall be subject to the following:
a. A participating municipal Party may withdraw
from this Agreernont at the end of any fiscal
year of the Corpor ttion provided that it has
qaven the Joint Hoard at least one (1) year’s
written notice of its intention to do so.
The wjthdrawjnq Party shall make any payments
due during such period.
b. in I_ho c1vi nt I h wi thih- 1 wi n’j Party fails to
comply with subsection a. aboVe, it shall
pay to the Corporat ion an amount equal to
i ts share of co t- ; du throttqh the followincj
Corporation ti c a year.
c. The withdrawinq auci/or breachinci Party shall
convey to the Cnrpur tic,n sufficient riqht,
title, or intei-t- t in the property held by
the Corporation to insure unfettered use
for the purposes stated herein by the re-
maining municipa] I iirty until the solid waste
disposal site’s or SiLOS’ capacity(ies) is
exhausted and of no further use in the ac-
complishment of the purposes set forth
herein, and after ich time the assets of th•
Corporation at sucI site or sites formerly
shared by the Part-ie 3 ,ur ;tIant to this
Agreement shall be distributed Pursuant to
the above—section rcgarcIinq t)istrihutjon of
Assets at section 5.3. Furthermore, the
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109
withclrnwinq and/’i hrc 1 whirtty Party shall —
have no vested riqht to continuc to make
use of any existji q solid waste disposal
site or sites or fiu i]itics of thc Corporation,
ci. The withdrnwjnc; and/or breaching Party shall
pay to thc Corpor it.ion the entire amount of
its share of any outstanding debts of the
Corporation and of any lease payments due to
any person, firm, corporation, or other legal
entity leasing a solid waste disposal facility
sitc to the Corporation, or any payments due
under any other lc’asr’.
7.4 Corporation is ‘third—P.it-1 ’ flcneCi iary. The
Corporation is hc’roby declared to be a third—party bone—
ficiary.of this Agreement and shall be entitled to seek
enforcement of any term, orovision, or condition of this
Agreement.
7.5 Inc]emnjrjcatjon in C r of Liability to Third Parties,
The Parties nqrcc to inth’innit:y each other for any liability
which a Party or Parties may incur as a result of a suit
against the Corporation arisinq ‘ut of activities Derformed
by it for the benefit of the Parties, Any such indemnifica-
tion shall be shared in accorc1an-r with the apDortjonment
provisions as above-stated, or such other method as the
Parties shall agree to.
PART 8, ADOPT]QPI, ? MENflMEN
8.1 !)uraljon. This Aqic •cnwnt shall remain in full
force and effect until either of the following occurs:
a. One of the Parties withdraws from this
Aqrecmcnt or is in substantial breach
thereof, or the Corporation is dissolved;
b. For a term of forty (40) years from its
Of fective date.
This Agreement may be ext.onc]ccl b .’ mutual aqrecment of the
participating municip 1 1 ParLies, evidenced by a duly executed
instrument in writing attached hi rc’to.
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8.2 Adoption. This qrci m fl shall not take effect
with respect to parties siqn 1to2.y un]css the following occurs:
a. it has been approvc d by the legisla-
tive bodies or the respcctivc City
and Pown Councils of the Parties
pursuant to their r spc ctivc municipal
charters, and a n iority of the
municipal of fic’i- thcrc of have
affixed their sitjnauiros below; and
b. It has been approved by the Attorney
r,eneral and the M inc flepartmcnt of:
Environmental Prott c:tion; and
a. It has been filed with the clerk of
each of the Parties, and with the
Secretary of Stnt(’.
8.3 Review by Regional Pl nninq Commission. This
Agreement shall be filed for review with the North Kennebec
Regional Planning Commission at least thirty (30) days prior
to the date of legislative or City or 9 ’own Council action by
any of the Parties.
8.4 Amendment. This Aqreenw’nt may be modified or
amended by the Parties in the .samc manner as that provided
in section 8.2 hereinabove. Othc•r muniripalitios not
original signatories hereof which wish to become partici-
pating municipalities as parties to this Agreement may be
admitted to this Agreement if thc 3oint Poard votes to
admit such additional party, and the ]cqislativo body or
the respective City and Town Conncils of the Parties signa-
tory hereof accepts by approp)-iatc’ action such an additional
municipality, upon that additional municipality’s legislative
body’s or its municiDa]. off iet . r’s duly approved acceptance by
appropriate action under anti pursuant to its municipal charter.
and upon the terms and conditions placed upon such entry
pursuant to this Agreement and any such further or other
terms, conditions, as the Joint Board and/or the Parties
hereto may require.
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IN WITNESS WhEREOF, the various municipaljtjes, Parties to
this Agreement, have causc d this Aqrc’crncnt to be executed and
signed in their corporate n ni ’s by their respective and duly
authorized OfZicers, the day nnd year first above written.
- CITY OF W7 Tr.RVT1,1. TOWN OF WINSLOW
BY _________ fly
Approved:
ALtorney ( ener. l
Maine Department of
1nvironmcnjal J’rotectjon - - - -
- Regional Planning _____
Commission
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APPENDIX A
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‘Xatt’ t1 i±tuiiir APPENDIX A
Certificate of Organization of Coiporatioii, tindci TitIc 13,
Chapter 8! of thc, Revised Star uics, iud Aincndiiicnts thereto.
r1 1 e i.isdcrs ,stiI. i.u ‘ ‘I put iiu i ii .i in pin .i ls ’si i iIiii . u. iiiii .,i ‘ 1.1: !V I .1!. C L Ly HaJ Buf Id i n
m die tuwn ii i . !!. !Y !.!f I;iIt iii M.utw. i,ii i h’ . iI.iv ni
——. .. %. I). III . liii. Ii u -i Iii .s huh i i
The nuise of asd tu 1 wii.st,. ,,i W. ! ‘rviI l —! ii Iow •! ‘ iii W .i: 1 ti l) ;’iis il •Faci I itv Cnrporatioi
id o!pabra I !‘..•‘T.”. 1t t• 1 ” r J 1 ! • hut :uri Ls’prnim ‘ ..V.. tj L. gcn rai social
wel (ari of the p.iri Ic 1p.,L in munir 1p. l’.irI. I u . , and ror :i Ii Jlrpi ’n•?. I’t•rm I ttt .•d by law,
inn uJJi bitt n t 1 imi t i d in hirilvid ill,: liii iii- iii !;IH :;:I I • ‘ I s il iii wast • ; t ad within
the turIl ° the part liip i mutt iiijml it to Lls Wit trw tile—Winslow Interloca]
&ilid W stc Agreement, which ngrec ’menL Is ;ittarhed htritn mid m;ud part hereof; and fo
providing for the disposal of solid wasts’s gi•nvr.itid within tIu. territories of oUter indi-
vidual , ci rpnra t lone; • or mon ic tpa lit I i ; wit jilt may ht ’enhuIL• part I v . to such Agrcemen t or
which may contract with the participaiiiig municipal Part ics Lu such Agreement for the use
of such Corporation’s solid waste dispi’ ;u1 f.ieii i i (is; and to organize, operate and main-
tain thereby a joint Energy Recovery F.ii’iIlty; :ind fir : 11 I Purposes permitted under Title
13, Chapter H I • l. K . S .A. , Co rpiira e ions; Wit unit t Ca1i I at Stiei k ; and to dii all t ii itigs whti c i i
are r ca ’ onahk to carry out and perpctu:ILC all ol nun, purpo. es, Including but not limited
to hold in); or a qui ring, impriw tug, opi’.-at Ln#, el ii op. rnnv v infl, assigning, mi rtgaglng,
or leasing :iny real or Pt’rsnn.i I propert v • and borrow iii money :ind ing suck evidence
of Indebtedness and Buchi ron(racts, .igrevini’nt ;, and In:4trumeiiLs as authorized by such
Ibtervi] l —Wins low .loint Solid Waste A 1 ;rc’i’mi ’iii ;iuid C ’rp4 ’raI Inn Ry—J.aws attaclit d hereto and
s de a part hereof, and to t ’ ecute and d ’l iver any imlrtgagt ’, dt’cd of trust, assignment of
income, or other security Inst ritment in eoiii io tinit I hcri.wiLh. hiring personnel • contract—
I n ; wit Ii 1)1 her lcg.i I tnt II I en • :iiiii all of :is ,h, iii I I. i piur;’mn.,: • (‘i’wirn , anti I ii i nu; ; iwc:wu;ary
or apprupr tate or cunven I wit (or car r I ug Oti :md s’xori Is I its’. :t ii of such fnrc n I ng put r—
poses anti powers a; sta I i ’d huirt’hy, or si .s i’d or ant hi r I .vd or imp 1 ir iL Lii the W a L ervi lie—
Winslow interiocal Solid W.ist Agrt ’imi ’ii anti Liii’ Corporat lout 8y—law . at Larlued hereto ;incl
made a part hereof.
Tb Is Corporat ion shall he a quasi —mimi r Ipal inrpnr.i L Ion, jul nr 1 y m’nt•d by the C l ty of
Wa t cry I I I c and the Town of Winslow, aitti support cii by ituihi ir lurid:; of t hi’ inuni ci pal Par tics
and by revenues produced and/or rt ’ciiv ’4 fr .,m cither users by contract with the Corporation.
The regulation of the intcrnal QffalT!: of the Q’rpnrntitun, rnd ihastribution of assets on
dissolution or final liquidation shall hi as aci-ordin;; to thti, Watirvi l1c—Wjn 1ø Interloca] .
Solid Waste Agreement, and the Watervilli ’—Wjns l ,tw .loint Solid Waste flispw i1 Facility
Corporat. ion h y—Jjiw , both of vii li-h art’ as I .irlu ’ul Iu’rt’t 0 auth mwhe a t rL hi•reuf
The na and place of address sif each of liii’ luws ’rporators ilFi! ns follows:
Paul R. LnVerdlcrc, TLuynr fluvici Ilt:utr
City hail Building Ch.ilrmnn of Wln iow Town Council
Common StTCCt . Coosiridgo Lane
Waterville, Maine 04901 hlnstow, Maine 06902
Robert V. Palmer, Jr. Edw.srd A. C.1 1 ;non
Vaterville City AcIwliulstr itor WInsitiw Towit ftiua ;vr
City thai ] Building Nis.uic1p ?kuildtiig
common Street UaLnpvijle Pit. 0490t ((II Itiitti,n Avesus, — Winslow, Ph’ 04902
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114
A P PE N D I X B
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APPCNDIX B
or
WATCRV1LLC —t’JIN5LO ,J JCIIT OLI UASTE
DISPOSAL FACILITy CORPORMIOr j
ARTICLE I
Off ic
Section 1.01. Principal Offjcc’.
The principal Office of the Corporation in the State
of Iflaine shall be located at W corvi1le, County of Kennebec.
Section 1.02. Rngistcrt’i-J ufric’ and Itqcint.
The Corporation shall havr anti Continuously maintain
in the State of M3ine a rer)iste.LI d office and a registered
agent whose Offj e is idontjco l with such registered office.
ARTICLE TI
Board of Directors .
Section 2.01. Cencral Powers.
The affairs of the Corpor3tjofl shall be managed by its
Board of Directors known as the “Joint Board,”
Section 2.02. Number, Tenure, and Oualificatjona.
The Board of Directors of the Corporation, known as
the Joint Board, shall be tu,o (2) members of eAch of the
Watervj1le...Wjns1o Interlocal Solid Waste Agreement party
municipality’s respective City and Town Councils duly
appointed pursuant to each of Such party municipality’s
charters regarding appointments, plus each of Such party
municipality’s City Administrator and Town mano ar, plun
one (1) citizen—at—large for each ton thousand (10,000)
in population for each of the rosppctjve party municipalities
and wl ch citizen—st..1arq to I r 1 uly arpuintrrl by the
re’ptctivo City or Town Council. Therc,fore, at thc corn—
noncement of this Corporatien, and as according to acIi of
the respective Party municipeljt ’9 populations, the munjcj...
palitv of t’latorvjUc shall have four (4)mombcrs of the Joint !oard and
the municipality of Wins1 w shall have thrari (3)membersoftheJoj,. 8oa!
All terms of members of the Joint eoard who are City or
Town Council members and the City Adminictrator and Town
rnanager shall be co-torminous with municipnl office and
shall hold such position as nambor of the Joint Board
oniy (luring each of their preannt tc’rm! of office. Each
end every citi7en .at...]arge duly apl)ointrci by each of the
respective City or Town Councils of c’uch of the Party municj..
pa1itje shall be so appointed for alternating staggered
three (3) year end two ( ) yenr tirms.
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116
Section 2.!’)3. C1 flj itj i, ’j1 tin n’• flc u1ar rneetjr s.
Upon the effectjvp ctate of this Corpor tjon. o ns oor thpre..
after LiS i’os ib1p, ttir. Board of b’ ini the Joint Boarrl.
ehall hold an Drgani?atjon r’nr’tino, e1 -r.t ri Chnirn ri and Vice—
Chairman who st-all rprforrn the “utic’s nf the Ch rman in his ahsc nce,
elonn with Such othi r off1coi may L.r’ iJ, ”rnr r1 flPc’•nscry or convenient,
inc1u ing but not limited to 3 ! ‘crct iry rod Tr a urt r, and pc!rforn
all actions ner.c sSory to lncorpor..tion pur L,rr;f. to litle 13—B, rn.R.S .i .,
jncludjno the adoption of zules for the c:ond’ict of it mectjn and
its affairs.
ti rugular ;*ruit,nl L tjnr (pf hr Joint Eoard shnll be hold, with-
out other notice than the ;e By—Lows, on tic ________- day of
at thc’ City of Watervilic Council Ch rnbprn. The Joint Ooard iiy pro-
vide by resolution and without other notir.o than u h resolution, the
time and placf.’ for hu1djui , rictiljtju,;zjj rf. qul.’r I”P tirfl of the ’ Joint
Board.
Section 2,04. Sp cj 1 mr’tin,•-.
Special meutinos of tht’ Joint 3oarri may b called by or at thu
request .of the Chairman, or .h ll be callr,t by tho Secretory at the
rctque5t of any two (2) mernbert o t.hi’ Joint Oonrd , Th authorized
per’;or. or persons c;sllin; a sp cia1 meetinq of thp Joint Board may
fj> th timr 1t1i the pl;icr’ of ruch S oci ’1 f eeting Unless by resolu—
t ori t o .‘ojnt Board has deemed nthprijj -p.
Section 2.flS. Notlr.n,
Iotir., of ;sny Spor.j: 1 F cetjun of thi Joint 9o riJ ! ho1l h qivon
ot 1ea t two (2) days Prc!viousiy theroto by t’irittc’n notice delivered
pl r on 11y, or four (4) days noti ’.r Sient by tmil or tr’legrom, to each
mc’ bI r of the Joint. oarii at l’j ’. showr, P,y ttit’ recorth of
the orporation , If mailed, such nutic shall b doomed to be
delivcred whan dr )nr jte ; in the t!nttcd 5t tus ‘lail in a SPF,lcd onvelooc
so addressed, with u’o!;tncjn tiwri•rn rnpoirI , IF notir.c be qivon by
telc’ r;.m, such notice shall be rienmud to be rteljvnre,d when the tele-
gram io cIu1ivL rr’d to the tulonr;u’h (IP t :fly, tiny mcntt,er of the Joint
Board may waive noti:e of any ru ‘tin . Th tti’n.j; n of a me bar
of the Joint Board at any meetin:; ! h;1l1 con!;tjtUtp a I’.aju r of nutiw
of r.%.’ctt meeting, cxce t “ihern ; rncm’ ’r uf thu Joint Ooaz -d attends a
meoting for the expruss purpose of objc r.t.jnt to thc’ tr ansactjon of
any busint’o ; becau’;o the mentjnq j.: not: l;ii”fully or “ropcrly called
or c nvenpd, The business to hc’ trnn: nct,ut at the n.eetinq need not
be specifind in the notice or waiver of notice of Such meeting, unless
specifically required by law or thrr r fly—Laws,
ectjon 2.06. Quorum.
A Quorum for tiny m c tinq sh ill coimist of at least two—thirds
(2/3 ’s) of each of the dolnr);I tjn,1 or ri rsrr aentntjye members to the
Joint Board of each of the municipajjtj , Tti PCctivr ly, Which am
Parties to the “Iatnrvj11o_’ Jjns1o ,,, Intnrlocal Solid “Ja!;te Agreuman ,
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Sectiofl 2.07. I ’3nncr of Ar.tiriq.
In ord . r rot s tn!lid vote to br tnk,?n in orrf.r to do bu’31n05S
all oction must i t i by a tu.ci—thjj 1 (7/3’s) votf• of_all mom Jc rs
of the Joint oar’I Prc ent; anI if at any nnr tin thr ’rn is only
minimum uorum prnsnnt. then any vote t kcn On any mat r must be
unz n!mou5 in order for Such vritra to hr.’ v ’1ic’ flr for Such action to
pass on’s for tho Joint L oard to b hu1iinr .:r..
Section 2.fl . Vacanejec.
Vocanciac in the Dffjcr cif any of thr r”, t ‘ “ . c the Joint
boorci Is3l1 b€’ filicri by ar1pojnt.m t nr ;ccordjnr 2 t thç rP’;i1r.ctjvr
municipal charters of each of the rsIunjCinnljt i? , t’ hich are porti 3
to the t iat rviUp— inslo ’, lnt rhmal Solid “J3’ t’ t grr ment. A mem-
ber of’ the Joint oard appoiriter: t r l] ‘Jr cflflcy Oh jll be so
opg ojn ci fot the unexpjreij ter’ Qf hio prr’k r e or in offjc .
Section 2.09. Co’ ’ien tjon.
Pembers or the Joint roard h l1 nol !er oiw’ any compen: tjon
for their iervirna n dirnctorr .
Section 2.10. Absence from Meetings.
Any member of the Joint Conri “io i b’ r nt from three (3) con-
ccutjv rneetin s without GXCLISI’ utisfoctorv to tti” Joint Loard shall
be dnnmc i to h vr, iurrc’n(hI’r,fd hj’ offlt:r’ ;i ; a member of the Joint Board.
Section 7.11. Residuary Poworn.
Th Joint Eo ’rd hr:lI hiyr the rc”tcrs and t utir s n r.r . ary or a
epprorrj tr for the administration or the off j of’ the Corporation.
and including but not limited to the poi’icir’; qrr.ntcd to the Joint
Board by the W3ter ,i1Je ’jjns1n ; Intririncal Snlid inntn Agreement, oxcept
these pecifico11y grantuth or it ;r rus ci by law, the Certificate of
0raanjzatior those By—Laws, or the Watervills—Wjnslow Interlocal Solid
Waste Agreement.
Section 2. ’. Removal From Office.
A member of the Joint 0oz r’I m: y be remounci from Office., for
cause, by vota of not le:;s than th:ec—fourth (3/4’s) of the members
of the. Joint rioarrl prnsent, unlr”r. th,r ’rr ’ i fl minimum •luorum nr. ent
‘ horeby a unanirnouc vote sh; 1l be roquirnrt as acr.erdinc) to Section
2.07 abouc, and proviclud in nny co that noticn of such Proposed
action shall have been duly qive.n in th! notice of the mectinr and
provided the mombor of thi.’ Joint OoarrJ hoc been inforrie.d in writing
of the charges preferred against hin !t lra!.t ten (1(i) days before
such meeting; Such charocs pri’fnrre.d aqain!t any such member of’ the
Joint Board may be brought by any mnmhc r or members of the Joint 803rd.
The n.v mber of’ the Joint Board InvoJ ’jr ’iI ;Iin1l be niven an opportunity
to hc . Pi : d at such r.ioctinr 1 .
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11t’ III
. 2fficer .
Section 3, 1J•
The Officc.,r5 of thc’ Cori’nr tjon I 1l hi- rn rnl n -r of th Joint
Soard und h ll iriciu e Ch iriii n, zi Vir.’ —Ch jrrtmn t’iho .hnlI rrr?cjrm
th2 dutio of tt.t Chnl rr in iii l•i -. ib -i’nr:”, ;i c crc.1t ry, onri ; - Trsc urr r,
olony with such other Cffic:c’ ;i in y b rrrncrJ necc scry or conv .nient;
Such 0ffirnr ; tLp h.uvr’ thr tiithcirity of :‘r.cI r,’rform thr ‘futir irc—
crit.ed, from timn tn ti, iri, by t.I.. Joini. lnrul. Th Cffir.rr . of
Socrt2tury and Tr t!.urIer m:iy hr rn ;’ ’ i rL’ii ;inri hr I by onr p r on.
Section 3,fl’ . lr’ct.jon n ‘ Torni of Ufftrn.
Tho Off r’ro of th- Cor ’iorntjnri ri.cifiritI in :;r tjon ,Ol h31l
be nlei to(I from thr u’ .ihr r ;hfp of tl’t’ Joint oarcJ by th Joint.
aonrd at itc 0fl0u3) mr. ntjni, or a soon thrrnaftpr n po ible. i ew
0ff!crr may be crnatnc and fjtlr’,J it any mrntin of th Joint P o ’rd.
Cacli Officer shall hold offir.r until t.hr nr:’t annu:,l meeting antI
untfl hj ! ucccaso shull havi’ Iwpn duly lrct :tnci shall have
qualifjn , A Chairman of the Joint Board shall not serve more than
three (3) consecutive termL of office,
Election -of t fficc’:r, shall bri by v ritt-,n L ’ i1r-t c 15;t by qu lifjcc1
mcribnr . of tho Joint ‘onrri nr! n ‘cr.orrfjn. to tb n numbr r of votes
necessary _y Snctior 1 :‘nd fl7
r.cCtjOfl Reriov;’l,
Any Officcr elnt;trtl by thr- Joint 1o?lrri r ow.’t! by the
Joint ocrd by vote of not lrn than thr —?oiirLh (3/4’s) of the
msmb r of the Joint Conrd prn rnt, unlr thr’rn i a rljnjfl:um ‘)uorurn
present whereby a un nimoua votr ‘;hnll be r quircr as acr.ortlinri to
Section 2.07 abovr, wherwvor in jL juclqrnrnt th bn t. ir ternsta of
the Corporation i iould br rv iI thu rr1by; but L;uch removal sh il be
without prejudice to such jicrr.on in hin or hor r.a’acity a! a m m or
of thr Joint board .
!.nctjon Z.” . Vacnncjns,
A vscancy in any Office b c itrn’ of th’ th, r’ .i n tjon, r?oot l,
cliraualjfjcatjon. or c.U.nrwi ..., --z y hn fillr’tI by tlv Joint Board for
thc unnxpirnd portion of the tnrm by th rune procI dure u! ed to elect
the oririin tl Officer.
-. Soction 3.P5. Chairman,
The Chairman oh ]1 be thri princi” l rxr’cutjvc’ officer of the
Corporation and shall in ‘ien raj control the
business and ffeirs of thr Cor ’nr;’tjon , P’e ah; ll nresjdp at all
meetings of the mc ibc’rs end a? the Joint roarrt. He mey sic n, with
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attoctation of or nlonr t’ijth- t.hru ‘ nr.ri’t;iry or nny othrr proper Orficor
of the Corporation authori/eti by thc! Joint flonrd, o without any such
attestation or co—’ iqnaturc’ r r c directed by the Joint Board, any
deeds, mortgaqes, bonds, contracts, or ott c r in tru,rpnta which the Joint
Board authori7es to be oxecutni , nxcept in c cs whcrb th irjninq an
execution thcrnof shall be exrirosnly dcilrgaterl by the Joint Board or
these By-Laws or statute to nm- otl-’er Dfficrr or agent of the Corpora-
tion; and in qonerel he shall nrlrfnrni li dutin:. in:irlp.nt to th
O??j of Chairman and such othi r rJuti’: a m y by’ prescribed by the
Joint oard fron time to timr •
- Section 3.06. Vicr Chairman.
In the bsnncu of the Ch:jirman t ’ in thn cvr’nt of hi inz.hility
o refu z l to act, the Vice Chnirman nha]1 perform t.hr ciutic of thu
Chairmen, and, when so acting, sh ifl ha’j nil cowers of and be subject
to all the restrjctjor.a upon the Chuirnnn, Any Vir.o Chairman shall
perform such other duties as from tinin to tSm may be ac igned to
him by the Chairman or the Joint floarrt.
Scction 3.07. TTU L,TflT.
Thp Treasurer shall j r i bonn for th fnitliful di charoe of
his dutic•s in ruct, sum and with nuch surt ty or sureties as the Joint
Goerd shall determine. Un shil’ hr u crv!r end custody of and be
rucponeible for all funds and sr curitir” of the Corcoratjon; rscc’ive
and give rnceipts for moneys due ir.ri r syz blr to the Cor’,oration from
any rource w.’latsonvcr; deposit or in ,c t all such moneys in the name
of the Careoratjon in such henks, t.rust ccnnar;ie s, or ether depositaries,
or in such notes or bonds i s sh ll be ! e1 cted in accordance with the
proviEjons of Artir.le VI of thr By—Levis; and in c,nn ral perform all
duties incident to the office of Treasurer end such other duties as
from time to time ; ssignod to him by the Chairman or the Joint Board.
Section 3.00. Secrcitary.
The Secretary shall keep thr minutr. s of th mentings of the Joint
Doord in one or marc books provided for that purpose; see that all
nctiees are duly niven in accordance with the provision3 of theer
Ey Laris or as roquirud by law; be custorhien of ann ne that the Seal
of the orporation, if any, i . fixed to eli ciocunents the execution
of which on behalf of the Corporation unr r its seal is duly author-
ized nd roquirnnl, if at nil, in ncr.orrfnncn with the provisjon of
those 0y—Lnt’i , by law, or by the Joint Board; anti, in gencral, perform
all duties incidient to the office of 5t’crctary onif such other duties
esfrori tLliaL’ to tir.it mey be assinned by the Chairman or the Joint Board.
• Section 3,09. Executive mananer
If at any time the Joint ! oartI n!c”mr it flecr nary or convenient,
it may appoint an Executive manager as the day-to—r’EIy upcrvi or and
eOninistrator of the Corporation, end who shall bce responsibis to the
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Joint Board, and whor o rJutin ‘Thnll t r thcr,, e’ prescriborj by the
Joint Board, ecu who shall b r.hoscn and nf’r’nir tnd by the Joint
Board on the be is of hi executju and arfministratjue qua1jrj j 0 5
with special rRfcrencr to his actuni rlxpcrionce in, or his knowledge
of, the duties and purposna o 5uch Corporation. Any_Person a2pojntfld
to fill the position of Cxc cutivo Director, or any vacancy therein,
shall have such term as the Joint Boarri fixr , but nO embcr of the
Joint Board shall bri c’lic’jb1 tt, Lhj! pozjtion of Oxecutjve director exc
as a temporary appointee.
Section 3.10. Additional Pcrsonno l.
The Joint 2oerd may from time to timc cmploy such personnt l as
it deems necessary or convenient to ndmini ;tcr or as i t in dmjnjster
in 9 the Corporation, The 5fl1nr.t.j n r nr1 compensatjon nd duties of
such personnel shall be as dCtnrmjn fJ by the Joint Board,
ARTICLE I V
Order of Busint,s ,
Section 4,fl l. Order of usjness ,
The order of busjnes ; at eny re u1ar ; nnt. a1 or pocia1 fleeting
of the Joint Eoord shall be:
(a) floadinq and anprova]. of any uflapprovr!d
minutes.
(b) Rcpo t of Dffjc and Commjttc s,
(c) Unfinj ht,d busjnrss,
Cd) Now businosc•
(3) Arljournnnnt,
Section 4.02. Parli; ms ntary Procr,rlurc.
On qucstioir of Parlinmtintary pror.ndtjrr, not covnred in those
a rulinn by the Chairman shall rrevail.
ARTICLE V
Comr,jtte s .
Section 4.01. ommjttoes.
Committees not having and clxcrcJ inq the authority of the Joint
Board as SPecifically prcscrited to the Joint L’o rd by the ‘Iatorvj11e
Jjn 1øw Interlocal Solid Jostr Ac ronm”nL, by law, or by those By—Laws,
may be designated by a resolution adopterl by the Joint Board, Except
as otherwise provided in such resolution, members of each such Committee
shall be members of the Joint Obarci, and/or Citi en .at_1arne who
arc residents of either munici aljty which is a party to the ‘iatorvjlle—
_‘,_
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Winslow Interlocal Solid asto , ijrcnmr nt, and/or municipa’ officers
of ofriciolo of any nuch party munh ip;i1ity t ouch Intorlocal Agree—
mont. Any member of any ouch Commjttpc mny be reno sod by the Joint
Board whenever in it jurJr mcnt thn hc ’ t int rooto of-the Corporation
shall be sorvor by ouch removal, hut any such rr mov of any Committee
membor who is aloo a member or thc Joint goard shall bb Itjjthout
prejudice to such peroon in his or h r capacity as a member of the
Joint Joard.
Section 5.02. Term of Officn.
- Each menber of a Cor:,mjttcp ohn ll continue as Such until the
next regular annual rn etiriq of the Joint flo:rci ann until his successor
is z Dpo iited, uninos the Commjtte :;hnll be Sooner termjnat, d by the
Joint 9oard, or wsleoz thn Corsimittn ‘ xtendpd f r a longer period
of time by rc olutjon of thn Joint ‘oarr , er unlcoo Such mc ’ i5cr of a
Co!nrijttCf, io r.ernovccj f o. ouch ConmittL ’’, or unlcoo Ouch member shall
cease to qualify a ; a membclr of any SUCh Committec .
Section 5. 3. Chairman.
Dne member of each Coz,imjtj.n i h;ill br ;‘ppojntc rj Chojrenn by the
Joint !3bard
Scctjoi, 5.!’4. Vacencjr’r ,.
Vacnncjo in the m r bt’ r,hj• of nny Coi,imjttni may be filled by
oppointmcntz made in thc S mc nannrr ,a erovjnJc cj in the’ eo o of the
Ori jin l 3p7ojntmunt of to :;uch Commjt (’.c!, by the Joint Board
for the uncx jrP i portion or ti•
octinn 5.05.
Unleas otherwise provided in thr’ rPcolutj n :f the Joint EoarcJ
designzitin’ a Committee, a majorjt.y of th ‘“hole Corn jtf r shall
constitute a Quorum and the act of majority of the members prosont
at a meeting st which a quorum i prr’ic nt shall b the act of the
Committe’.
!oction 5.0G. Rules.
Each co.ii.ii ti o r. ay adopt ruli for it!; arm jovnrnmon not incon—
aiztcnt uith t ’ r.3 !3y—L,’ i or with rulr’ ; :)(lfl:It (I by thc Joint floaird.
ARTICLE VI
Contracts, Chocks Dr’aozito, and Fundz .
Section 6.g l. Contracts.
The Joint oard r1 y auth! rj•.c my Officr’r or OffLcc ’rs, agent or
agents of the Corporation, in addition to th Officers !3O authorized
by these y —Lawe, to ntor into nny contriict or nxecute and deliver
any instrunsent in the name of and on b Imlf of th CorporatIon; and
such Quthority r.ay be gcn ral or confined to i inicific instance.
-p
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6•I • Chr’ck’ , Dr3rt’,, rtc,
IU1 check:;, rlrnfts, ordr’rr for thri r y ’rnt r nancy,
bori s, or other ovjcjcncric of ind ’b..’ dn or invc t,, t i i .j
the norno of thc Corrior tjnn i ll ba, ;j )nPrf by such Cffjccr or Cf jcpr ,
eont or cnt of the Corporo jon, and in uch mannóras shell ft ’
time to time b ci trr .ini,cJ by r olutjon of the Joint Eoarci or a
SPocificully Prc cribccJ y th. otrrvjll _ jn.,1oLP Intorlocal 3olid
: astc Agreement, by low, or by th r r niy_Lm . In the Obsence OP such
dctorminotjon by the Joint 2oz,rLJ, such in:tru -cnts shall he si nod
by th TrCDSUr’r an J COUflt ! jqnr’ri by thi’ Chairman of the Joint oard.
Sc tj n 6.0 . DCposjt .
All funda of the Cornorotjon rhall b rIr’rn: jted to the credit
of the Cor’ oratjon ira such Lnn:;r;, tru t cu. rmnj , or other deposita j s,
Or in Such notes or bt ri a:; the Joint 9o; rd m y Select. Any invest-
ments in any notes and/or bonds of corro -; ti’ mon y5 may be made, from
time to time, only with such corporoth mon ys as arc not immediately
fleCoSSory to ocerate or maintain the Cornoration, ann any such moneys
invc sted may only b ’ inuesteci in rnnsnnz jn and prudent notes and/or
5on j In zi fiducIc vmanner.
5 ct1on 6.fl’ 1
Thc Joint flo rri r.;; y or.rrpt nn hr’hilf of the Corporatjon any
contribution, rjift, bequest, or devise for the general purposes or
for any ;pocjal Iurpo o5 of tii’ Corpr3r 1 )1.jt)n
A :TICLF:
9oo!:s and . ccordz .
The Corporatj n shall keep correct and conpiete books cnrJ records
of account and shall also keep ninuti s of the Proceedings of the
Joint • oard and any or it Co,,1mittrm and auIi —Com itte , anl shall
keep 3t the re•Ji tc;cd or princj’m]. office record givinr the names
and addresses of all mcmbc’rs or the Joint oard and of its committees
and cub—Commjtto an.l nqc’ntr anil rmfJ1oy. e’; . All. books and records
of the Corpozotj n may be in pc ’ctnrf by n” :t” iIj r of the general
public or his agent or attorney, for any proper purposes at any
reasonable time. Th Joint Doard : hal1 c une an audit of the records
of the Corporetion to be made each yn r by coiipetpnt auditor.
At TlCLf VIlT
ri ca1 Yo r ,
The fi cal your of the Corr,oratjon 5h3 11 begin on the first ( 1 St)
day of July and end on the last day of June in each year, unless
cheng ’d or mnndcd by resolution of ths Joint oarc1.
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Se j1 .
The Joint 3orr j tiny ;rov.( je Cnr inr.,tt’ St’n’• •‘.hi’h !;‘ll bf in
for,, of n zinrJ h ilJ hn j,• jn’crj’)c’ ,I thr the n ri of
tI CorOor:3Lj3r. :.ntl tIi! ‘,orr$ , “Cor- )r—tn ;ri , n
iVer or ctjc. .
!nnnov!’r nny iiutj .’ 1: rr Ii J:I,. : h ’ ‘, ivr’n un’-’ r ‘.1 provjjor
of thc L u of thc’ t ,tr’ of ‘jtir ,r Lhr’ Ci’rtjfjcitc of
O tIir y—Lr •’ of the Cor’ini-;,t!,,n r’ ivr:r th•r”or in VJrjt.LrII
i noc by th:’ pnr!;ipri or “) u)fl: i’Iu 1t1ri ! tIi rt’to, IJhethc r h forc or
after the tirno tat therein, h li rr m a cr1u.tv 1cnt (:o th’
givinq of such notjc0. m Z tt nd ric , of :ny fler:.on dt L! mectjn , or
P1OCI. t it 1 ,1 in any ouch n:ticr’. or th r’uinq of any act a notjfjcd
In jfly uch notice hn1l con’;t.jtutu a ‘jvt r of notice cxcnpt where
3 riy 3uch p r on attornt :i rnr”tjn-) or th !‘rr .rnt nt an ct fnr I:!
:,r,! . pur o:; of obj ctj,iq to any such ‘nrL’tjnr , act, or d ir ; of
b Sjn bc!cauoc Such wcc not ;‘ro;iflrly c :1l.r’uI or convened
or tim nr ,, nt of
The: ‘y—Ln•: may, from timi to tInt ,, bc, nlt ”r ri, orneflrir.cj,
or ro—macj nnü :;rJo tu cI by Lh’ rneniher of thc Joint ‘3o ird
at ny renu3 r influ l meetjn 1 , or at ny apnc ’) r.u’r,tjn, of the Joint
Soard called for such urno , erovL.- e f, ho”ev , that no c’,ch action
ohz,ll cr ge the tIrpo n of the Corporation .o ;r; to i,lpajr it o
riohtr and Po” r ur.tli’r the Lr’, ; of the of ‘.nini’, or to waive
Ony roquiromene of bone or any provinjon for th3 s:futy and Oc’curity
of the PrO! erty ond fur 1 cf ; of the Cor! orfl j t, or to r!rs%rjv: rn” mc rnbcr
of ti Joint eony j or any municjr,oljtw !hjCI, i a narty to the
J3t_I r loij Intr rl , ;. 1 olid t !zi ;tr !%r rPrr n , 9’lthOut their
Oxpre a oent, of ri mt-, rivi1Pn’, , or iu.1rnun.!.tjr’ th-n exF tirig.
ot1ce of Ony maiCir 1 r), CrfQpt1flr , iltrrin’ 7 , :lrI’nPfr.uuint, or repc’ l of thc e
y—Lr ”!c to be offt rn,; t. :in., ;.u r.tjnc 1 Of thu Jnint. . o;ird ‘ ,rifl b r,jvon
not 1c than zc’ r n (7) n r.wr,’ than thj Ly (30) tiayo before ouch
meotinc en ziell set forth : u i1 alt.’ration, 3rlr.ndnjnt, or rnpe l of
cuch 3 y—Lawz
icr c :j ALL ‘lEI.! D V THEcE SCNTS: that th undor:;jrpned S cretcry
of the Corporation £i t’ntjfj ri in the foranoin y—Lai’io doo heresy
cortify that the foreuoin 0 3y—Lni’ ,uer riuly adopterl by the Incor —
porators and Joint oarri of ‘;nid Co?porr tjnn a fly—Lot of oauid
Corporation, on th ______ day of ________, 19(11), ot a duly c;’llerJ
and cOnOtjtutrd’m1etjn nd that they rio n i’s conotj .jjc the y—Lawo
of sairi Corpor tjon.
— —
n’crf!t Jry
(Corp&k nte 5n 1
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APPENDIX 2
MAJOR REOURCE RECOVERY RISK AREAS
AND GENERAL EXAMPLES
Gordian Associates Incorporated
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The following section has been excerpted froiii the publi—
c tion, Resource Recovery Plant IpIe entation Guides for
Municipal Officials Risks and Contracts , compiled for the
U.S. Environmental Protection Agency, Office of Solid Waste,
by Robert E. Randol in 1976. It has been modified by Gordian
to further clarify examples of risks. It serves as a useful
guide in understanding the relevant areas of risk in resource
recovery project implementation.
Gordian Associates Incorporated
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1. Risk Areas Affecting Waste Supply
Risk Area Examples
Waste Composition New laws or consumer behavior can alter the compo-
sition of the waste. Changes in the compo *tion of
the waste stream, in turn, can: (1) lower the frac-
tion or quality of combustibles or recoverab)e ma—
- terials and thereby reduce the revenue potential
per ton of input; or (2) increase the unprocessable
wastes to be landfilled and, thus, increase the net
cost of operations.
Waste Quantity New laws affecting consumer behavior can cause sea-
sonal or permanent reductions in the quantity,
which, in turn, will result in: (1) increased costs
to process each ton of waste (because of fixed cost
associated with facilities and equipment); and (2)
decreased total annual revenues and, therefore, re-
turn on fixed investment.
Jurisdiction If a jurisdiction decides to discontinue delivery
Withdrawal of waste to a recovery facility, all the conse-
quences of a waste quantity change, plus the possi-
bility of discontinuing recovery operations, are
felt by other participants in recovery operations.
Generally, no public legislative body may bind fu-
ture legislative bodies to continue to participate
in a project (i.e., regional system).
Competition from Resource recovery is undergoing significant tech—
Processing nological change. If a new competing processing
Alternative alternative is implemented and attracts some of the
waste that could have been processed by the recov-
ery facility, then the consequences are the same as
those for a waste quantity change.
Gorthan Associates Incorporated
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2. Risk Areas Affecting Markets
Risk Area Examples
Competing Reductions in the price of primary fuels and/or
Materials Prices secondary materials may drive down the pricet for
the recovered fuels and materials, thus, rethicing
project revenues. If these reductions forces the
project into a period of economic frustration,
operations may have to be discontinued.
Substitutability Due to changes in production processes, recovered
of Recovered fuels and/or materials may in the future be less
Product substitutable for primary fuels and materials. Al-
though most trends are toward recovered materials,
some are not (notably power generation where the
overall trend is toward nuclear plants). The more
likely event is that the specifications required of
recovered fuels and materials by buyers could ex-
ceed a recovery facility’s ability to produce. In
either event, the revenues of the recovery project
could be reduced and some of the- output may have to
be landfilled.
User Incremental Buyers of recovered materials or fuels may have to
Costs make unanticipated investments in order to use
them, or their operating costs may increase as a
result of their use. These cost impacts may be re-
flected in the price that the user is willing to
pay for the products — or in demands on the recov-
ery project for user—based investment — thus
affecting the recovery project’s cost and/or reve-
nues.
Shipment Size Most producers require that raw material shipments
and Frequency be scheduled over regular intervals and sized
Requirements according to their production schedules. Devia-
tions from these requirements by suppliers can
cause production problems. If a recovery project
cannot consistently meet the delivery requirements
of its buyers, then its marketing contracts may be
cancelled. This would affect project revenues and
could put the project in jeopardy.
User Requirements by users of recovered fuels or mater—
Specifications isis for consistent quality could affect: (1) the
operating cost of the recovery project; (2) the
price paid by buyers per unit of output; or (3) the
duration of the contract between the project and
the buyer. In the extreme case of inability to
meet specificktionB, the project may find its mar-
keting contracts cancelled.
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Risk Area Examples
User Location A change in the locations of one or more buyers of
recovered materials or fuel could affect the net
price (net of transportation costs) per unit of
output and, in the extreme case, the ability-of the
recovery project to service the buyer. In either
event, the revenues of the project would be
affected.
User’s Financial If the buyer of recovered fuel or materials goes
Condition Out of business or is unable to pay for deliveries,
the project’s revenues will be correspondingly
d 1mm £ shed.
Legislation and Changes in freight rates and rate structures could
Regulations result in higher transportation costs (and, possib-
ly, lower net revenues) or in cost discrimination
against a recovered fuel or material. Either event
could affect both the demand for and the price of
recovered materials and fuel.
Contract Duration Marketing contracts may elapse before the invest—
ment in the recovery facilities is recovered. This
could place the project in a precarious position
should the operator be unable to renew the contract
or find new buyers.
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3. Risk Areas Affecting Facility Construction
Risk Area Examples
Delays Delays in the completion of construction aM in the
start—up date can cause cost overruns in the pro-
ject and necessitate the continued use of obsolete
or undesirable disposal methods. Delays also re—
- suit in an inability to deliver the anticipated
output of the recovery plant to customers.
Contract Suspension of a construction contract has the same
Suspension consequences as construction delays.
Increased Capital Increases in the coat of equipment or materials
Costs during the facility construction phase can cause
the cost to process each ton of waste to increase
as a result of the increased fixed cost. If these
increases are large enough, the entire project may
be jeopardized if additional financing cannot be
secured.
Site Availability If it proves difficult to find and acquire a facil-
ity Bite that is environmentally suited to recovery
operations: (1) the project may be delayed; (2) the
cost of operating may be increased, especially if
the site is distant from the source of waste and/or
the buyers of output; or (3) the project may be
jeopardized.
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4. Risk Areas Affecting Facility Operation
Risk Area Examples
System Reliability Since solid waste cannot be stored for more çhan a
short period, excessive downtime for the recovery
system may result in foregone revenues from hater—
ial or fuels tht otherwise would have been r cov—
ered and sold. Likewise, inferior quality of re-
covered materials could result in lower prices per
unit and, therefore, reduce revenues. Either event
could lead to cancellation of contracts for pur-
chase of outputs. Either event also could require
temporary use of a less desirable means of waste
disposal which would add to the total system cost.
(NOTE: The solid waste must be disposed whether the
system is operational or not.)
Economic Should the participants in the resource recovery
Frustrations project find it impossible to operate at a reason-
able cost, the project may be jeopardized with the
consequences of: (1) having to find alternative
means for disposing of the waste; (2) discontinuing
or revising whatever services relied upon the Out-
put of the recovery facility; and (3) satisfying
debts to project financers.
Inflation Inflationary forces may increase operating costs
faster than revenues are increasing, thus causing
the project’s net cost to increase. In addition,
if allowable cost increases are tied to a national
or state cost index and the index changes faster or
slower than the actual costs, then one or more par-
ticipants in the project may suffer economically.
Labor Productivity Reductions in the productivity of labor may cause
the operating cost of the project to increase or
could result in an inability to process the target—
ed tonnage per day. The latter consequence would
result in lower output of materials end reduced
revenues.
Razardous Wastes Should explosive, radioactive, or chemically dan-
gerous wastes find their way to the recovery facil-
ity, the health and safety of the project’s labor
force and the safety of the facility itself may be
jeopardized. This could result in unscheduled
downtime or even cancellation of operations. The
consequences could include lost revenues, increased
costs, interz upted production, and temporary use of
alternative disposal methods.
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Risk Area Examples
Legislation and Certain legislation, especially that which could
Regulations affect waste quality (e.g.. mandatory source separ-
ation), or facility design (e.g.. pollution control
standards), could result in decreased revenues or
increased costs per ton of waste processed. In the
extreme case of removing a large portion of the in—
- put to an individual subsystem of a resource #recov
cry plant (such as the possible effect of beverage
container deposit legislation on an aluminum recov-
ery subsystem), the econo nic viability of that sub-
system may be jeopardized.
Waste Stream Discussed under “Waste Supply” risks.
Quantity and
Composition
Storage Capacity If the storage capacity for incoming waste or out-
going materials is not sufficient to handle emer-
gencies (such as shut—downs, storms, etc.), then
waste may have to be diverted to alternative dis-
posal. This could affect project costs and
revenues.
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5. Risk Areas Affecting Disposal
Risk Area Examples
Site Capacity The capacity of the disposal site for resi dusls
from the recovery operation, and f or unprocessable
wastes, may run Out before the end of facility Op-
erations, thus causing a need to find an emefjency
disposal site (probably at extra cost).
Legislation and Regulations may be implemented which require design
Regulations changes for landfills (e.g., liners to prevent
ground water pollution). This would increase the
cost of recovery system operations.
Site Location A change in the location of the site for land—
filling residuals could increase operating costs by
requiring a longer haul from the recovery facility
to the landfill.
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APPENDIX 3
PRICE SUPPORT LOANS FOR MUNICIPAL WASTE ENERGY PROJECTS
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Price Support Loans for Municipal Waste Energy Projects
Introduction
The Energy Security Act (ESA), which was signed by President
Carter on July 2, 1980, contains several significant incentives for
resource recovery projects including price support loans. The
objective of this program is to encourage the development of alternate
energy sources which will displace fossil fuels, particularly oil and
natural gas. Through the price support loan program, the sale of
energy from a resource recovery facility will be subsidized during the
early years of the project when its economics might normally require a
tipping fee which would make it unattractive in comparison to landfill
disposal. In later years, when increased revenues from energy sales
improve project economics, the price support loans are repaid.
Price Support Loan Program
The amount of the price support to be disbursed to a resource
recovery project will be determined as the standard support price (ssP)
reduced by the cost of fuel displaced by waste derived energy, with a
mazimum allowable support of $2.00 per MMZTUs. The SSP is defined as
the world price of oil at the time of enactment of ESA, and will remain
unchanged throughout the life of the program.
For a new resource recovery facility, price supports will be
provided over a seven year period. The full price support will be
provided for the first year, six—sevenths for the second year, five—
sevenths for the third year, and so on until, in the seventh year,
one—seventh of the price support is paid. (For existing projects,
price supports loans will be provided for five years, with a similar
reduction in support amount over that time period.)
In the year following the final disbursement (the eighth year for
new facilities), the price supports will be repaid over the remaining
planned life of the project (but not to exceed 15 years). The interest
rate for the loan repayment will be determined following the final loan
disbursement and will be based on the current average market yield
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on outstanding marketable obligations of the United States plus not to
exceed one per cent.
Standard Support Price
The standard support price (ssP) has been set at $5.37 per ) fBTUs
.in rules proposed by DOE ( Federal Register , 9/25/80). If the fuel
being displaced is No. 6 fuel oil or a higher grade petrolet product
(as is the case with Keyes), the price support will be increased by 25%
(to $6.71 per MMBTUa).
Cost of Fuel Displaced
The amount of fuel displaced can be determined by the following
equation:
Amount of fuel displaced —
( quantity of working fluid ) — (quantity of fossil fuel used)
.85
The working fluid is steam or hot water and when multiplied by the
enthalpy of the steam, h (in BTU per lb) gives the energy contained in
a given quantity of steam or hot water. Using a representative effici-
ency for a fossil fuel boiler (.85), an estimate of the fossil fuel
energy that would have been needed to produce that quantity of steam/
hot water is obtained. From this is subtracted the energy used as
auxiliary fuel in the secondary combustion chamber.
The cost of this displaced fuel will be determined on a case—by—
case basis from actual costs incurred during a base period of any 12
consecutive months during the 18 month period preceding any commitment
on the part of DOE to make a price support loan to the project.
Effect on Project Economics
In order to illustrate the effect of price support loans on the
economics of the Waterville/Wiuslow project, the probable amount of the
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price support loans for Alternative A have been calculated. These cal-
culations use the following assumptions:
MSW accepted by facility: 23,380 TPY
MSW processed by facility: 22,211 TPY
Steam produced per ton MSW: 5,800 lbs
Steam conditions: 125 psig, saturated
Enthalpy, h: 1,191 BTUI1b
Cost of displaced fuel: $4.96 per )INBTUs
(based on $30.29 per barrel in 1981,
at 6.11 )OIBTIJs/bbl)
Auxiliary fuel use per ton MSW: 0.3 BTUs
The energy produced annually by the facility can be calculated:
22,211 TV! x 5,800 lb/ton x 1,191 BTTJ/lb 153,429 MMBTU
Since the fuel displaced would be No. 6 fuel oil, the SSP can be cal-
culated using $6.71 per !4MBTUs:
6.71 x 153,429 = $1,029,510
The amount of displaced fuel can be obtained using the following
equation:
( 22,211 x 5,800 x 1191 ) — (300,000 x 22,211)
.85
= (180,500 — 6,663)(106)
173,837 )OthTUs
Assuming that the cost of the displaced fuel is determined in 1981 at
$4.96 per MN3TUs, the cost of the displaced fuel is estimated at:
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173,837 x 4.96 — $862,231 thus, the maximum amount of price
support loan is found by subtraction
— SSP — displaced fuel cost
— 1,029,510 — 862,231
$167,270
If the facility accepts 23,380 TPY of MSW, the price support loan
amounts to $7.15 per ton in the first year of the project.
The probable effect of price support loans on the proposed Water—
yule—Winslow project (Alternative A) is shown in Table 111—1. A total
of $669,112 in price supports would be provided in the first year of
the jroject (1983). The loan payback would begin in 1990 and continue
for the remaining 13 year planned life. The interest rate assumed for
this projection is 13%, based on an average 12% rate for treasure notes
over the disbursement period plus one per cent.
The debt service for this would be $109,300 per year which repre-
sents an additional cost of $4.67 per ton in the remaining 13 years of
the project.
The effect of price support loans on the disposal cost or effec-
tive tipping fee for Alternative A is shown in Figure Ill— I. This cost
is significantly lower in the early years of the project with price
support loans, but it does not decrease as rapidly in the middle years.
However, due to the effect of increasing energy revenues on project
economics, the facility would become profitable only one year later
with price supports than without.
Gordian Associates Incorporated
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- 1 00 I ’
I
—1 1O
I
1983
. . V •
1988
V V V
1993
. p p p J
1998
p p p p
2003 I.- .
FIGURE 111.1
EFFECT OF PRICE SUPPORT LOANS ON DISPOSAL COSTS
FOR ALTERNATIVE A
-p
z
0
I-i
0
U
0
p4
‘-4
— — — — — — =
without price support loans
with price support loans
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APPENDIX 4
PRELIMINARY EVALUATIONS FOR THREE POTENTIAL SITES
I ,
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ROBERT P STEARNS. PB
£ 1. CONRAD. PE
r CURTIS J. SCHMIDT. PB
STEARNS. CONRAD * 1 10 SCHMIDT MARK L BRECH R
IISULTINC EN0INEE . INC. RODERICK A. CARR
i ISODSLP E VAU.EYO VE MILES J. HAVEN
PBSTOPI V 0 A22OO GARY I.. MITCHELL PB
RONALD B. PERKINS. PB
DAVID B. ROSS. PB
DONALD U. SHILESKY. ScD
JOHN P. WOODYARD. PB
November 17, 1980
File No. A0280-1
Mr. William H. Ranney
Gordian Associates, Inc.
1919 Pennsylvania Avenue, NW
Washington, D.C. 20006
Subject: Waterville—Winslow, Maine, Phase II, Site Investiga-
tions, Prime Contract No. 68-01-4940 (68—01-60001)
Dear Bill:
This letter and attachments constitute our output for Task 3,
Site Investigations, Amendment No. 6 to the Agreement between
SCS and Gordian. Under this scope of work, SCS was to perform
an Investigation of three potential sites for the proposed re-
source recovery facility and to determine on a preliminary bas-
is the differences between the sites.
The scope of this effort was as follows:
• Preparatory work such as reviewing the files and previ-
ous reports and developing a data form for collecting
information.
• A one day site visit to see the sites and to collect
the information that could be obtained within the time
avail able.
• Limited follow—up telephone calls to obtain additional
information.
• Compilation of the data and preparation of this submit-
tal.
This report submittal consists of the following:
• A data form for each site. Most of the Information
that was obtained during the site visit is noted on it.
• A budgetary order-of-magnitude cost estimate for site
development for each of the sites.
OFFICES IN RES1ON. VIRGINIA; LONG BEACH. CALIFORNIA. AUGUSTA. MAINE. REDMOND. WASHINGTON. AND COVINGTON. KENTUCKY
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Mr. William H. Ranney
Page two
It should be emphasized that these cost estimates are primarily
for comparison and are intended only as a starting point. Ad-
ditional effort is needed In order to more precisely define the
work required in order to develop any of these sites. Also,
these estimates reflect a conservative approach; i.e., some of
these costs could likely be reduced by detailed Investigation
and engineering analysis. For example, we assumed at the Keyes
No. 1 site that water would be brought in some 800 feet from
College Avenue, including crossing of the railroad tracks,
rather than estimating lower costs for unconventional means of
providing water.
Further investigations and engineer1n should be authorized if
this cost information is Intended for more than comparative
analysis between the sites. For example, If the costs would be
used for contract negotiations with the user, more definitive
data Is needed. Furthermore, we recommend that further engi-
neering Input be provided to the Northern Kennebec Regional
Planning Commission to help this project to proceed forward.
Historically, this project has had a lack of engineering in
comparison to the amount of planning and meeting etc. I pre-
ceive that if the project is allowed to continue to be drug
out, the primary potential steam user will likely become impa-
tient and develop alternative strategies for reducing their en-
ergy costs.
We welcomed this opportunity to provide these additional ser-
vices to you and EPA and look forward to continuing to serve
you all.
Very truly yours,
E. 1. Conrad, PE
Principal
SCS ENGINEERS
ETC/sib
End osure
cc: 1 n Perkins
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PR Dm RY SI ISSN XE
DP FORM, 1 YES #1
SI’IE WCA.TI(
.• See vicinity maps, USGS 15 Minute Quadrangle, Waterville,
1959, Figure 1
City zoning nap, Figure 2
• Distance to user - 300’ to Keyes plant
— Keyes to install steam line, incl x3ing
constructing it ixider railroad tracks
TEANSPO TI P? 4 CIO
• Vehicles hauling refuse to site - Esti.nated 25 packer loads per day
• Loads of residue - less than 6 per day
• Distance to major road and condition of major road
- 0.55 miles to College Avenue, which is a 4-lane arterial road.
- Exit of f College Avenue is 0.5 north of Keyes’ plant
- When traveling north on College Avenue, an 160° turn mist be made
off of College Avenue.
- When traveling south on College Avenue, a left turn of about 20°
is required.
- Trucks delivering refuse f cin WinslcI 7 can reach the turn off the
College Avenue about as fast as by traveling north to the bridge
at Fairfield and then traveling south on College Avenue, as they
could by driving through Watexville and north on College Avenue.
Thus, not all packer trucks delivering refuse ould have to nake
the 1600 turn off College Avenue.
— If Fafrfi ld and other to s to the north start delivering refuse
to the facility, they will have an easy turn off College Avenue.
• Trucks (packers delivering refuse and trucks hauling residue can often
exit by crossing railroad tracks 0.1 mile south of the site and travelling
through Keyes’ yard to College Avenue 0 • 4 miles away, when there are no
railroad cars parked at the crossing. The railroad will not agree to
keeping the tracks clear of trains.
• ess road to site
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143
- 0.45 miles of 10’ wide a1l- ather road exists. It should be widened/
unproved to 24’ width and it ould be desirable to pave the road. This
road passes within 60’ of 2 residences.
- 0.10 miles of paved, 20’ to 35’ wide public road exists. AlthoWh
paved, it appears to have been paved and patched. I suspect that
the base c es not c 1y with cwrent road building standards. This
road passes 7 or B residences.
SITE DESCRIPTICI9
• cisting land uses
— Industrial zoning and use. Keyes plant was built in 1903 at
s location.
— No )ax n change is apparent.
The proposed site is currently mused. it is separated £ u the plant
by t tracks of the Nairie Central Railroad.
• Size of potent 1 site
260’ x120’ +
• ner of site: Keyes Fibres, Inc.
land to be leased
Assessed Land Value $15,000 to $17,000/acre of raw land
(Assessed Value = 0.93 x narket value)
• Ttçogra y
— Gentle slope (less than 2%) £ u the plant to the bank of Kennebec River
• £S pole lines pass through the site. I think both lines have telepI ne
and poker cables. They will both prrJ ab1y have to be relocated.
• appearance of site.
— Unused and kept industrial land cx,vered with wild grass.
— No planting required as screening.
• Drainage Requir Tents
— Existing conditions and problans. Generally drains to the river and
the la area to the north.
— Required inpzov tents — ndnixnal.
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144
• Soil Conditions
— Sandy loam , 2,500 psf al1o ble bearing pressure
- Use spread foundations
— Water table is probably ll below the site
— river is 30’ below the site
• Site grading requirertents - grade to provide drainage
• Potential for vandalian - miniiiel
- Keyes tries to operate 24 Ix urs per day, 365 days per year
- Keyes has caretaker/guazd to watch their facilities
-: No fencing required
=
Water
• Purveyor - Kennebec Water District
Waterville, E
bd haan
872—2763
• Location of nearest public lines
- 12” line and private (Keyes) fire hydrants on College Aven
- ctension required - 800’ + incl ing passing tmder t railroad
tracks (a casing xsuld have to be jacked under the tracks arid the
pipeline jacked through the casing).
— Connection charge — none
• Alternate water s plies
- Fire protection line - connect to Keyes’ fire protection line, which
obtains its water £r. u the river.
— Ash qj enching (procass) water
—Install an intake in the river and p izp, or
—Connect to the cooling water (for vacu in punps) system that Keyes
has if sufficient capacity exists. Install a neter. Crossing of
the railroad tracks uld prr l ly be required.
U
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- Potable water, nnect to Keyes’ potable water syst n in the plant
and install a neter. Jack a casing irider the railroad tracks.
• Keyes will provide treated neke- water for the boilers.
• Ca nection charge — no charge by Kennebec Water District.
Se r
• Q ner - Kennebec Sanitary Watexvii.le Sewerage District
Treat iwit District Waterville,
Bill Cu11€ rt I w Bl i r
873—06U 872—2763
• Nearest line and size
— 24” or 30” industrial interceptor, 100’ west of site. It has adequate
vol etric capacity.
- Keyes also has a 24” RCP Industrial waste line, about 70’ south of
the site.
— KS D applies its sludge to land. Thus, it has stringent limitations
on heavy netals. Pre-treatnent would be required to ove heavy
netals £i xu ash qusnching.
- A vol ite neasuring tructure would be required.
- A site sanpier would probably have to be installed.
— Sanitary wastes can be discharged to the industrial interceptor
• Connection charge - none.
Electric Line
• Utility c tpany - Central Maine P zer Co.
Watexville, ?‘E
Gordon M P1’ l 1
873—4201
• Nearest line
— Site is 150’ fx C PC substation which reduces voltage to 12,470v.
This substation serves Keyes. CWC or resource recovery facility
could build a line to the resource recovery facility and install a
transforner at the facility to provide pager. This would involve a
significant capital cost which can probably be avoided.
— The 1 t cost extension would probably consist of extending a new
line £ College Avenus arotz d the Keyes plant to the railroad
fat i1ity, which would be about 800’ long.
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146
• Special proble!ns in neking connection. £‘ pole lines exist across
the site. They nay require relocation. This site needs further study;
it is rather 1 1icated.
• Connection charge - No extension charge anticipated. A pole line re-
location charge of about $3,000 might be required.
Telep!X)ne Line
• Utility Caiçany - New Digland Telepkxne and Telegraph Co.
Waterville, NE
Peter Go an
947—9911 (Bangor office for new non- -
services)
• Nearest line
- There are two lines across the site which nay be usable.
- Alternately a new line will have to be extended f u College Avenue.
- ?A tionally, Maine Central Railroad has a pole line on south side
of tracks which might be us hle for this purpose.
• Connection charge - $3,000 estimated for extension and relocating pole
lines.
O1 R V 1M L FACV /PO1 TThL PIGB1 M5
Noise
- Sbould not be a probl n, except trucks passing by 10 residences on
the haul road north of Keyes.
E missions
- Ccxnply with State standards. Keyes would insist upon that too to
ensure that DEP would not blaite Keyes for probl ts that the resource
recoi exy facility might cause.
— Refuse-contaminated drainage cannot drain to river. Containnent
facilities would be m edpd.
Nearby Residents/ andc ’iners
— Trucks delivering refuse to the resource recovery facility n st pass
close by about 10 residences. That could be a imajor prthlest.
Wind Consideration - No problEn.
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Ot} r
- Special exception pemnit required to locate within 250’ of river.
- The line separating t1 n of Fairfield and the City of Waterville
passes through the Keyes plant, just north of the site. This is also
t1 line that separates SaTnerset and Kennebec Q,unties.
147
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148
/ ‘ m è5;
- ---S,, •11) •. ‘ ( , / .
L j A1 - - I - -:! /• j S
- ,4 ,, ,
- ‘r 4 Wth.w’.” :- 1 Ls .__ t.-)
4” t % ’ L i r 3 b t
- . i..n.w - 1
, q - / 4 W
R i . •
¶ / ¶ -
1* / ::,,y’ J 4 I)
‘ ,L ‘,i !i-
‘4 c f2 ? ‘ q
5
& 1n : 1 2OOO’ SQirce: US 15 mm.
Quad., Tt tetviUe, ? ,
1957
Figure 1. VICflII?i MPIP
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Kt a 1
Loc Uon
Locat
on
Scale: 1N=l000
S irce: City of WaterviUe
Zoning Ilap, 1979
I
0
0
0
Fiqure 2. OC1 TIC MAP PI JPCS ]) RFSWR E REOCYtFERY FACILITf
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150
P RY a E
FOR SITE PEEpJ RAI’Ia , KE #1
Land a uisition, Keyes to lease
C1 ring and gr 4 ’ g
- Clearing $ 500
Grading 500
Siltation C ntxc1 500
2 coass road
Grading to wi i road to 24’, 2400’ length 3,000
Drainage culverts, , 150’ @ $14/LF 2,100
incinding end sections and daylighting
6” crushed stone base @ $5/ ton, 24’ wide
x 2400’ long = 6,400 sy @ $1.60/sy 10,200
3” asphalt paving @ $16/ton, 12’ wide x
2400’ long = 3,200 sy @ $4.10/sy 13,100
Site Preparation
Finished grading and 9” crushed stone base @ $5/ton
= 4000 sy @ $2.30 9,200
3” asphalt paving @ $16/ton
= 2,500 @ $4.10 10,300
Utilities
ter
6” pipe, 800’ @ $16 F 12,800
nnection to existing Line 2,000
Jack pipe zider railroad tracks 8,000
Fire hydrant 1,000
S er
6” lateral, 200’ @ $l5/ F 3,000
1 nanhole @ $1,000 1,000
c xtçosite sarr ler 2,000
tering struct me 5,000
Electric Service
No charge for ocnnection
Pole line relocation 3,000
Telephone Service
No charge for connection
Pole line relocat ie 3,000
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Subtotal $ 90,400
ntingencies and engineering, 25 percent 22,600
$113,000
151
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152
PR JD ARY SITE ISSA
DATA FO 4, ITIES #2
SITE IOC7 iTIC1
-. See vicinity maps, USGS Quaxx3rangle, Waterville, Figure 1
‘in Zoning Map, Figure 2
• Distance to user (s) - 3000 feet to main user
- Keyes s.xuld bui]d a steam line ar r&uc!e
cost of steam acoordinjly
SPOP2ATI FACIORS
• Vehicles hauling refuse to site
- Estimated 25 packer 1o per day.
• Loads of residue
- Less than six truck lo is per day.
• Distance to major road ard conittions of major road
- 250 feet to College Avenue which is a four-lane arterial road.
• access road to site
— Perbie Street.
— Patched up pavenent witlxxit good definition of width.
— For p cposed truck traffic, repave with 1½ inch surface course.
• Lard uses adjacent to access road
— iinercia]. ard irxlustrial.
SITE DESCRIPrI(1
• Size of potential site
— Gross size of parcel is 280’x215’, bit creek throuqh it reduces
useable acreaqe ard fill for parkir* lot to tbe west appears to
be on the parcel.
I ,
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153
• cist rg laid uses
— anercial (CC) zoning.
- Used car dealer be zeen site aid Collee Avenue with partially
paved aid paritally gravel-surfaced parking.
- Was foimerly the site of the gas plant where gas was manu.facbired
fran coal .
- A large gas storage plant exists at the eastern edge of the
site. It is currently used to store aid distribite gas.
- It is assumed that the gas storage aid distribition f”-ilities
will rBna.in in service as is, aid the p 1 o csed resource
facility will use the r naurder of the site. Maine gas will
likely not agree to this “sharing” of the site. Also, sharing
of the site will cause the site layout to be difficult aid not
as efficient as other sites.
— Laid south of the site (across the creek) is l ,-1evel
ccmnercial davelopnent. irther south, 1/4 + mile fran the site,
is residenI-i l. The residences are gradn l Ty being replaced
with irxlustrial/camiercial developnent.
• ¶Lbpography
- Gently sloping, 3 percent +, except parking lot fill to the
west which appears to be partially on this operty. Pai]xoad
tracks to east are higher.
— 250 feet to piblic road.
- Cordition of nearest t*iblic road: excellent
- improve roadway to Coll e Avenue, 250 feet long by 28 feet wide.
• Appearance of site
— Site is grass covered. ees are on south side along the creek.
— Planting re jiired as screening - ne.
• Drainage Ra jiirenents
- cisting coiditions aid probl ns - A drainage ditch is at the
east side of the site adjacent to aid at the toe of the fill
for the railroad tracks. A creek is on the south side of site.
Ii .
— Reu.i.red improvanents — t ne.
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154
• Soil conditions
- up to 5 feet of fill on site.
— probably sandy loam, like at Keyes, with 2500 psf ali. ,ab1e
bearing pressure.
— use spread footings.
• Site grading r 1irGnents
— Ratove uncxznpacted fill and recciripact.
— Parove fill on west side of parcel if itional space is ne d .
• Poten - 4 1 for vandalisu
- I ccessible frau Ollege Avenue.
— Install a 6 foot chainlink fence with barbad-wire guard.
ILITIES
Water
• Purveyor - Kennebic Water District
Waterville, Maine
Tad hnan
872—2673
• Location of nearest lines and sizes (map)
— 20 inch line crosses site, 20 feet east of west property line.
- Fire hydrants cist on Coll e Avenue, 300 feet ± fran site.
— 100+ psi static pressure.
• ctension r uirenents - ninal
• Connection charge - b charge
Sanitary S r
• CX.Jner - Waterville S ierage District
Waterville, Maine
Dave BThir
873—5191
• Nearest lines aid sizes
— 30 inch industrial interc ptQr on riverside of C4RR tracks. It
xsu1d be cpensive to jack a s ,er under the tracks. It could be
possibly rcutad on the surface thra.igh the culvert under the
railroad tracks. A 200-300 foot lateral uld be r frad.
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155
- 10 ix h sa ier on the south bank of the brook south of the
site. A p p station aid force main or an invert sipl n
would be reguir to connect to this line. A 200-300 foot
lateral would be requir 1.
• Special r jiirenents - Same as for Keyes #1 site.
• Connection charge - None
Electric Line
• Utility iipany - Central Maine Power Cat pany
Waterville, Maine
Gordon McPhail
873—4201
• Nearest line
— Transformers are on a pole on north side of site. Power lines
are also on College Drive.
• ny special problans in makin3 connection - none anticipat
• Connection charge - none e cpected
Tel ne Line
• Utility ca pany - New Englaxd Te1epI ne aid Telegraph C npany
Waterville, Maine
Peter Gorman
947—9911 (Baxvor office for new non_residen i 1l
services)
• Nearest line
- On College Avenue; also appears to be a telepl ne line on the
north side of the site.
• Connection charge - Less than $100
OTHER VI MENTAL F CTORS/POrENTIAL P OBL 4S
Noise - No apparent probl ns.
flnissions - Must ouqly with State starx3ards
Nearby Residents/Landowners - None within ]J4 mile of site.
,1
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156
Wire Cbnsideration
- West wir s are prevelant
— CXzxinercial laid uses are ininediately to the south arx residei ces
are about 1/4 mile to the south of the site.
- the east is the river; on other side of river (1/4 mile away)
is ithustrial property.
Other
- A special exception peimit is r ured for facilities located within
250 feet of the river.
1usion — I d.i r t see any re n why there u1d be any serious
objections to use of this site for an incinerator ar
steam generation facility.
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157
PPELD a r ES TE
FOR SITE Pi EPI BPTICI , KF #1
Land a uisition, 1 acres @ $25,000 (if available at all) $ 25,000
rlaingas storage and distribution facility to reirain where
it -is
Clearing and gradi.ng
Clearing 500
avation of loose fill and reccaupaction. 8,000
Additional grading
I taining wall on west side of property 6,000
Siltation control 500
Acoess/I ad
Drainage devices 1,800
1½” asphalt resurfacing @ $16/ton, 28’ wide x 250’ 2,400
lông = 800 sy @ $3. 00/sy
Site Preparation
Finished grading and 9” crushed stone base @ $5/ton 9,200
= 4000 sy @ $2.30/sy
3” asphalt paving @ $16/ton 10,300
= 2,500 sy @ $4.lO/sy
Grade and pay area for Maingas facility 15, 000
6’ chainlink fence with guard, 800’ @ $9.00/LF 7,200
Utilities
Water - nnecticn and fire hydrant 4,000
Se r
4’ force train, 200’ @ $20,tF 4,000
P Station and u tering device 15,300
Qxr osite san 1er 2,000
Electric Service NC
1ephone Sexy os NC
subtotal $111,200
Qxitingencies and engineers, 25 percent 27 800
$139,000
a ,
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158
P .D INM ( SITE I ISSA E
DATA OR4 — TIUiYER C US
MD— fl E DI L II’ER
SITE -LC TIC.V
• See vicinity maps, USGS 15 Minute Quandrangle, Waterville,
1959, Figure 1
City zoning map, Figure 3
• Distance to user Cs) - 700 feet + to Thayer boiler
- !.kil jn to other users; iore than 1/4 mile
TRA SPO ATI F IO
• Vehicles hauling refuse to site - esthnated 25 packer loads per day
• Loads of residue - less than six per day
• Distance to major road arid condition of ro
- The Thayer campis is on North Avenue, a major ti o-lane arterial
that is in good condition. It is heavily traveled. Packer use
of this road sbould be no problaa.
— reach site, thrn north off North Street onto Quarry ad
arid travel about 0.15 miles. Quarry &ad is a residenii 1
type street that is in good condition; Quarry I ad is lightly
traveled.
- At corner of North Avenue aid Quarry 1 ed is a 3nall scbool.
Beyond that are woods to the turnoff of the site. Another 0.1
miles beyond the turnoff is a lune for the mentally retarded,
aid 0.1 to 0.2 miles beyond that is an apar nent cauplex. The
truck traffic to the facility sluild not be a major problen.
— The Mid—Maine staff arid their architect stated that the 25 to
30 trucks traveling to the facility would not be a problen
for the bospital.
— The access road to the resource recovery facility could be
located on an undeveloped right-of-way for about 500 feet;
another 200 feet of road on Mid-Maine property uld have to
be built. All of this road ‘xuld be in heavily ooded laid
that is undulating.
— It is doubtful that Mid-Maine would al1 z packer trucks to
gain access to the resource recovery facility through its
parking lot, altbough that ild be less costly to construct.
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159
SITE D IP I(X4
• cisting ].and use
— Institutional zoning where the resource r rery facility uid
be located.
- A ixderate to high ircane residenF 1 area exists alxxit 1/4 +
mile to the west. —
- A slxpping center exists to the ncrtl ,est.
• ithre land uses
— Not expected to change significantly in the general area.
- This area appears to be growing slowly.
• Size of poten -ia1 site - several acres. This is nc probl n
• ner of site - Mid-Name M ica1 Center
• Land value - Assessed value is $700 per acre, undeveloped
Assessed value is reportedly 93 percent of market value
• pography
- Site, variable slopes up to 10 percent.
- access road - Variab t e up to 20 percent, including crossizx
snail swales.
• 1 ad - 700 feet to Quarry 1 ad
• Appearance of site
— Heavily oded deciduous trees. bu]d provide excellent
screenm .
• Drainage B jiiraments
— No foreseeable problGns.
- Drain to the swale.
— Minimal downstream prob]ans.
— Culverts required for access road where it would cross
swales.
‘I
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• Soil O rx1itions per SCS nap
— ( i sification is silt and claycy.
— 8—15 percent slopes.
— We] ]. dra.inBI.
• Foundation Problans
— Use spread foundations.
• Site grading reqjiiranents
— Q,nsiderable clearing.
- Fair ano mt of grading.
• Poten’ l for vandalisn
- Tbought to be relatively low.
- Apart2nents to the northwest and hi4h to nv derate in ne l isirx
to the east, both 1/4 ± mile away.
• Fencing Re jiiretentS
— Six foot chainlink fencing around site.
t7r1T S
Water
• Purveyor - Kennebec Water District
Waterville, Maine
Tad hnan, Superint xIent
87 2—27 63
• Location of nearest lines and sizes
— 20 inch line on Quarry I ad.
• ctension r ijiiranents
- 700 foot extension plus a fire hydrant at site.
• Connection Charge — N ne
Sanitary S
• Owner - Waterville Sewer District
Waterville, Maine
1 ve iTh iy
827—2763
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• Nearest line and sizes
- 8 inch or 10 inch sewer in Quarry ad (700 feet away via
the c posed a ess ro or thineitately adjacent to the
Thayer parking lot).
- 15 inch interceptor between North Street and the river
(1000 feet away via a route ixElnEliately afjacent to the
mayer parking lot).
• Special r pfrenents
— Sane as for Keyes #1 site.
• Connection change
— None.
Electric Line
• Utility ca çany - Central Maine P .ier Canpany
Watervifle, Maine
Gordon McP111 4l
873—4201
• Nearest line
- Three Phase line on North Street, near Eustis Parkway.
— No special problans in making cxnnection. ctend an overh
line along North Street to beyond Thayer Unit and north outside
parking lot to the res irce recovery facility.
• Connection charge
- Probably no charge. Dmarxl sluild warrant no-c st extension.
Teleplcne Line
• Utility Canpany - New ig1and Te1ept ne and Telegraph Canpany
Waterville, Maine
Peter Gonnan
947-9911 (Bangor office for new non-residential
services)
• Nearest line
— North Avenue and. on Quarry I ad.
• Connection charge
— Less than $500.
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an VI L ThC1ORS/PcYL NrIAL P BTB4S
Noise - far er ugh fran the I spita1 to be rc ob1an.
flnissions - must cunply with State starx1ards.
- Nearby residents/1ar ownerS - ncne within 0.1 miles accept mayer
Unit. Mid-Maine M&ical Center supports
the concept of construction of resource
recovery facility on their property.
I
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INST.
Figure 3. WCATIW MAP PIU C6 ]) RFS(XJFCE REOCWER! F ILtT
S irco: City of Jatervi1e
zoniiij Map, 1979
L)
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. 164
PBEZ m ST ESTD TE
FOR S3 TE DP fl’ - THPJYER T1411’
Land a uisition, 2 acres @ $1,000 per acre plus $2,000 closing $ 4,000
Clearj.ng and grading
CLearing, 1½ acres @ $2,000 per acre 3,000
ading 6,000
Siltation itxol (during nstruction) 1,000
1 ccess/1 ad, 24’ wide, 700’ long
Clearing 2,000
ading, 700’ @ $15/LF 10,500
airiage culuerts, P, 150’ @ $144? 2,100
inc1 x1ing end sections
Siltation control (during nstruction) 1,000
9” crushed stone base @ $15/ton
24’ wide x 700’ long
= 2,000 sy @ $2.30/sy 4,600
3” asphalt paving @ $16/ton, 12’ wide x 00’ long
= 1,000 sy @ $4.10/sy 4,100
Site Preparation
Finished grading and 9” crushed stone base @ $5/ton
= 4,000 sy @ $2.30/sy 9,200
2” asphalt paving @ $16/ton
= 2,500 sy @ $4.10/ton 10,300
6’ high chain].ink fence with barbed wire guard,
900’ @ $9.00/LF 8,100
Utilities
ter
6” pipe, 700’ @ $14/LF 9,000
nnection to e dsting 20” line 2,000
Valves (2) 800
Fire hydrant 1,000
S r
6” lateral, 1,000’ @ $13/LF 12,000
3 uen1 les @ $1,000 3,000
Q. . osite sampler 2,000
tering str’.rture 5,000
Electric service
Tel xme service 500
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Subtotal $102,000
ntthgencies and engineers, 25 per zit 25, 000
$127,000
165
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