2014 2:00:00 PM

Monday, March 24, 2014 2:00 PM
City Council Chambers, Legislative Bldg, 745 Fourth St., Sparks

General Business: 6.7

Title: Consideration and possible approval of the By-Product Removal Agreement with Ostara USA, LLC for an initial 15 Year period, based from the Ameresco Agreement, resulting in new revenue to Truckee Meadows Water Reclamation Facility (TMWRF) of $140,000.00 annually.

Petitioner/Presenter: Neil C. Krutz, P.E. – Deputy City Manager/Michael Drinkwater P.E. – TMWRF Plant Manager

Recommendation: Staff Recommends approval of the Byproduct Removal Agreement with Ostara USA, LLC for the 15-year period of the Energy Services Contract.

Financial Impact: There is no impact to the General Fund. Process changes will provide an output product, fertilizer, which will be sold for $250.00 per ton. An annual estimated tons produced and sold are 560 giving TMWRF a new revenue stream of approximately $140,000 annually. Checks will be made out to TMWRF with the revenue posting to Key Service Area 5605, Joint Treatment Plant Fund, 5605. Following quarterly reconciliation of TMWRF’s operating expenses, affecting the Sanitary Sewer Operations fund (1630), revenue will be shared with the City of Reno based on actual flow splits provided by ADS Environmental. The attached Table 1 provides an illustrative example of the approximate split amounts using the flow split for the Fiscal Year ending June 30, 2013.

Business Impact (Per NRS 237):
A Business Impact Statement is not required because this is not a rule.

Agenda Item Brief: City staff is asking the City Council to approve the By-Product Removal Agreement with Ostara USA, LLC.

Background: In July, 2012, the City of Reno solicited statement of qualification from energy services companies to perform an operational audit of the Truckee Meadows Water Reclamation Facility. Ameresco, Inc was selected and a contract for the audit was approved by Spark’s City Council in August, 2012. Ameresco performed the audit during 2012-13. This audit identified measures that would reduce the cost of operations at TMWRF by reducing electricity, chemical or fuel consumption. These energy conservation measures were described in detail in the Financial Grade Operational Audit, along with other measures that were deemed unsuitable for TMWRF. Discussion: The Financial Grade Operational Audit identified the Ostara Centrate Nutrient Recovery System as a viable process to reduce chemical costs at TMWRF. The system will harvest phosphorous from the centrate produced from the plant’s dewatering process. This phosphorus will be sold as fertilizer to Ostara USA, LLC for the guaranteed price of $250/ton. Based upon the current centrate chemical composition and volume, Ameresco projected that TMWRF will produce approximately 560 tons per year of fertilizer. This results in a positive cash flow to the treatment plant of approximately $140,000. Other operational savings from the Ostara process, including chemical savings and biosolids disposal costs, are guaranteed under the agreement with Ameresco. This agreement contemplates only the production and sale of the Crystal Green fertilizer product. The proposed agreement defines the relationship between Ostara and TMWRF for the purposed of producing and selling the fertilizer. The agreement defines the operational parameters under which the Ostara reactor will be operated to ensure the product is within the defined specification, how the material will be delivered to Ostara, measurement, invoicing, payment and other matters relating thereto.

Analysis: The agreement under consideration is necessary to define the relationship between the two parties for the production and sale of the fertilizer. The terms contained therein provide a guaranteed customer to TMWRF for the product at a guaranteed price.

Alternatives: Council could direct staff to provide other alternative.

Recommended Motion: I move to approve the By-Product Removal Agreement with Ostara USA, LLC. and authorize the Mayor to sign it.

Attached Files:

Table 1.pdf

Byproduct Removal Agreement - Ostara rev 7Feb2014.pdf

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