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HomeMy WebLinkAbout1999-04-12 City CouncilTO: City HONORABLE CITY COUNCIL City of Palo Alto Manager’s Re ]1 FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE:APRIL 12, 1999 CMR:157:99 SUBJECT:APPROVAL TO AMEND THE CAPITAL IMPROVEMENT PROGRAM IN ORDER TO MOVE FORWARD FUNDING FOR PROJECT 9707, "WASTEWATER SOLIDS DISPOSAL" FOR INCINERATOR IMPROVEMENTS AND APPROVAL OF A BUDGET AMENDMENT ORDINANCE IN THE AMOUNT OF $6.5 MILLION RECOMMENDATION Staff recommends that Council approve the attached Budget Amendment Ordinance of $6.5 million to move forward to 1998-99 funding for the rehabilitation of two existing incinerators at the Regional Water Quality Control Plant (RWQCP). BACKGROUND In May 1997, Council approved a Solids Facility Plan to rehabilitate two incinerators at the RWQCP and directed staffto develop a financial plan for the project (CMR:236:97). Staff obtained Council approval in March 1998 (CMR: 165:98) to sell utility revenue bonds to fund the project, and for the City of Palo Alto to be the lead agency in issuing the bonds on behalf .of all RWQCP partner cities (Mountain View, Los Altos, Stanford, East Palo Alto Sanitary District, and Los Altos Hills). An addendum to the Basic Partners Agreement was implemented to facilitate the debt financing and further define partner obligations to pay the City their proportionate share of debt service over the life of the bonds. Council approved the addendum to the Partners Agreement and directed staff to finalize design, secure the necessary permits, and pursue bond financing so construction could begin in summer 1999. Under Project 9707 "Wastewater Solids Disposal," rehabilitation of the existing incinerators originally was planned to begin in 1999-00. To meet requirements of the Bay Area Air Quality Management District (BAAQMD) construction permit, which expires on Januaryl 1, 2001, construction must begin as soon as possible. The use of appropriated funds and the start of construction will be contingent upon the sale of bonds in early June. DISCUSSION Staff has completed the.final design for the incinerators’ rehabilitation and is in the process of obtaining a building permit from the City’s Planning Department. Staff is optimistic that the permit will be issued in early April. CMR:157:99 Page 1 of 3 In addition, staffhas obtained the required construction permit from Bay Area Air Quality Management District. This permit was issued on January 11, 1999 and gives the City only two years to complete the project. Since the RWQCP must continue to treat all incoming wastewater, only one incinerator can be rehabilitated at a time. It is estimated that rehabilitating and testing each incinerator will take a’minimum of nine months, for a total construction period of 18 months. The two-year permi.t requirement and the necessity of sequencing incinerator rehabilitation over two nine month periods results in an extremely tight construction schedule and a somewhat atypical schedule for Council approvals of financing and contract awards. To comply with the BAAQMD permit expiration date of January. 11, 2001, construction should begin in June 1999. For this to occur, a contract must be awarded in May, with the appropriate project budget in place.. The attached Budget Amendment Ordinance (BAO) accomplishes this by moving forward the incinerator rehabilitation Capital Improvement Program (CIP) project budget from 1999-2000 ($3.0 million) and from 2000-2001 ($3.5 million) to 1998-99. A revised CIP project description indicating the timing and amount of funds is provided as Attachment B. Funding for the completed design of the project ($700,000) was budgeted in 1998-99. The tight permit and construction schedule has additional consequences. Staff will be returning to Council in late April to request that Council approve the project’s bond financing package two weeks prior to the award of contract. Staff recommends that financing be moved up so that funding is in hand as soon as is practical after the construction award is issued. Due to the current favorable interest rate climate and the expected high credit Palo Alto can command in the bond marketplace, there is virtually no risk to Palo Alto to award the construction contract prior to receipt of bond funds. The construction contract will be awarded contingent upon the successful sale of the RWQCP utility bonds. RESOURCE IMPACT At this time, total costs for this project, which include design and construction, are estimated at $7.2 million. This includes $.7 million for design and $6.5 million for construction. These capital costs will be funded through a City of Palo Alto bond financing that will be proportionately distributed and paid according to the Regional Water Quality Control Plant’s Partners’ Agreement. Each partner agency’s city council has approved the sale of bonds to finance incinerator improvements. It is estimated that the City of Palo Alto’s share of debt service payments for this project will be around 3 8 percent. ENVIRONMENTAL REVIEW On February 23, 1998, Council approved a Negative Declaration (CMR: 141:98). POLICY IMPLICATIONS The recommended project is consistent with past Council direction. CMR: 157:99 Page 2 of 3 TIMELINE If the BAO is approved, the project will proceed according to the following schedule: Building permit issued City Council approves financing package/bond documents Council awards construction contract ; Bonds sold Construction starts Finish construction April t999 April 1999 May 1999 June 1999 June 1999 December 2000 ATTACHMENTS Attachment A: Attachment B: Attachment C: Attachment D: Attachment E: Budget Amendment Ordinance Revised Project Description 9707 "Wastewater Solids Disposal" CMR:236:97 CMR:165:98 CMR:141:98 PREPARED BY:Bill Miks, Manager RWQCP Joe Saccio, Senior Financial Analyst DEPARTMENT HEAD: CITY MANAGER APPROVAL: ~ City Manag-’JIJN~ I~LE r~ CMR:157:99 Page 3 of 3 ATTACHMENT A ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 1998-99 TO PROVIDE AN ADDITIONAL APPROPRIATION OF $6,500,000 TO CAPITAL IMPROVEMENT PROGRAM PROJECT NUMBER 9707 ’WASTEWATER SOLIDS DISPOSAL’ FOR INCINERATOR IMPROVEMENTS WHEREAS, pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 22, 1998 did adopt a budget for fisca! year 1998-99; and WHEREAS, the Regional Water Quality Control Plant’s RWQCP)incinerators are approaching the end of their useful lives and are showing signs of deterioration; and WHEREAS, on May 12, 1997, Council approved a Solids Facility Plan to rehabilitate two incinerators at the RWQCP and directed staff to develop a financial plan for the project; and WHEREAS, on March 16, 1998, Council approved staff’s request to seek bond financing for the project and approved Addendum Number 6 to the RWQCP Partners’ Agreement which defined partner financial obligations for incinerator improvements; and WHEREAS, the City Councils of our Partner Cities, Mountain View and Los Altos, also approved Addendum Number 6 concurrently; and WHEREAS, the final design for the rehabilitation project has been completed and the Bay Area Air Quality Management District (BAAQMD) has issued a construction permit on January ii, 1999; and WHEREAS,-an award of contract should be awarded in May 1999 so construction can begin in June 1999 and be completed before BAAQMD’s permit expires on January ii, 2001; and WHEREAS, CIP 9707, Wastewater Solids Disposal, needs to be increased by $6,500,000 to provide budgeted funds that can be encumbered when a contract is awarded in May for rehabilitation of the incinerators to begin in June 1999; and WHEREAS, funding had been planned in the 1999-00 CIP budget, and needs to be moved forward to expedite construction to ensure completion within the BAAQMD permit expiration date; and WHEREAS, the use of appropriated funds for the award of the construction contract and for construction are contingent upon the successful sale of bonds in early June 1999; and WHEREAS, the budget needs to be: amended to fund capital improvements for Project 9707, Wastewater Solids Disposal; and WHEREAS, City Council authorization is needed to amend the 1998-99 budget as hereinafter set forth. NOW, THEREFORE, the Council of the City of Palo Alto does ORDAIN as follows: SECTION io The sum of Six Million Five Hundred Thousand Dollars ($6,500,000) is hereby appropriated to Capital Improvement Project No. 9707 Wastewater Solids Disposal, which will be funded from the sale of bonds in June 1999. SECTION 2. This transaction will have no impact on Reserves. SECTION 3. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 4. On February 23, 1998 The Council of the City of Palo Alto approved a Negative Declaration for the project. SECTION 5. As provided in Section 2.04.350 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney APPROVED: Mayor City Manager Director of Services Administrative Director of Public Works ATTACHMENT B PROJECT DESCRIPTION All pollutants and waste solids removed from the wastewater during treatment must be stabilized and disposed of properly. Currently, solids are fully stabilized by incineration. The ash is then recovere2 and used as a soil amendment on alfalfa fields near Hollister. This project is to investigate, design and bu!d a solids handling system to replace the current incinerators. Design work for this project was already budgeted i~ 1998-99 and final design work was completed in 1998-99. With the issuance of a Bay Area Air Quality Management District (BAAQMD) construction permit that expires on January 11, 2001, staff is targeting completion of construction by December 2000. PROJECT JUSTIFICATION The current incinerators are 25 years old and their estimated useful life is 15 to 25 year.~. Due to the high demands placed on the incinerators, they are showing signs of deterioration. After investigating 2 number of options such as completely refurbishing the existing incinerators to replacing them or providing another solids disposal alternative, the participating Regional Water Quality Control Plant (RWQCP) agencies, which include Palo Alto, Mountain View, Los Altos, Los Altos Hills, Stanford University, and the East Palo Alto Sanitary District, decided to rehabilitate the existing incinerators. Since the BAAQMD permit for construction expi.-es on January 11, 2001, staff needs to begin construction by June 1999. Staff is requesting that $6.5 million in construction funds be appropriated in 1998-99. Use of these funds for construction will be made contingent upon the successful sale of bonds in early June. FUTURE FINANCIAL REQUIREMENTS FISCAL YEAR AMOUNT 1998-99 $7,200,000 1999-00 2001-02 2002-03 Sources of Funding: Bond financing whose costs will be shared by RWQCP partners. COMPONENTS Design ($700,000) and Construction ($6,500,0.0) IMPACT AND SUPPORT ANALYSIS Environmental: Design Elements: Operating: Telecommunications: On February 23, 1998, Council approved a Negative Declaration. Design elements have been completed. Operating requirements will be reviewed and recommended during engineering design. None. COMPREHENSIVE PLAN The project furthers Goal N-4 of the Natural Environment Element, Support Urban Activities, and Protect Public Health and Safety. 236 ATTACHMENT C 7City of Palo Alto City Manager’s Report TO: FROM: HONORABLE .CITY COUNCIL CITY MANAGER AGENDA DATE: MAY 12,1997 DEPARTMENT: Public Works CMR:236:97 SUBJECT:POLICY DIRECTION FOR THE SOLIDS FACILITY PLAN FOR THE REGIONAL WATER QUALITY CONTROL PLANT This report requests that Council accept the Solids Facility Plan (Plan) and direct staff to make the necessary preparations to implement the Plan for the Regional Water Quality Control Plant (RWQCP). RECOMMENDATIONS Staff recommends that Council: Accept the Plan and its recommendation of a two-phase project m rehabilitate the existing incinerators immediately and to add a dryer for peak loads if and when needed, potentially in ten years’ time. Direct Staff to proceed with the f’mancial planning m implement the first phase of the recommended project of the Plan. Funding for the second phase will be deferred until needed. Direct staff m PrePare the amendment to the Parmers’ agreement m formally obtain Partners’ approval of the project, and their agreemem to pay their proportionate share of the project costs. Direct staff to repo.rt back to Council for approval of the signed amendment, the financial package, and approval of the projects when the preparations are in place. The recommendations in the Plan do not represent any change m current City policies. CMR:236:97 Page 1 of 4 EXECUTIVE SUMMARY The RWQCP provides advanced wastewater treatment for the cities of Palo Alto, Mountain View, Los Altos, the Town of Los Altos Hills, East P.alo Alto, and Stanford University. The Solids Facility Plan is the RWQCP’s road map for the next twenty years to manage the sewage sludge inan economical and environmentally sensitive way. Sludge is the solid material removed from the incoming wastewater. The RWQCP removes and treats approximately 40 tons of sludge each day in its incinerators. There are many issues concerning the aging incinerators that prompted the RWQCP to initiate the Plan. These issues were highlighted in previous reports and informational reports. The latest updated informational booklet was di.stributed among the Partners in March this year. A copy of the booklet is attached to this staff report. The Plan was developed through two studies which have been under way since 1994. The first study evaluated the feasibility of the full realm of alternatives for handling the sludge, and narrowed down the number of feasible alternatives. The recommendation of the feasibility study formed the basis of the second study, the Plan. The Plan has been conducted according to a decision analysis process. The goal of the decision process is to build a consensus among the stakeholders and to include the values and priorities of all affected parties in evaluating the alternatives. Staffs of the Partner agencies worked with the RWQCP staff as technical advisors to the Plan. Informal meetings were conducted with focus groups to discuss issues of concern. The Plan focused on six solids treatment options. The options were evaluated from an overall "cradle-to-grave" perspective as to the environment, cost, energy, and resources. One treatment option was dropped from consideration because it will not meet the capacity requirement for the next 20 years. The costs of the remaining five options range from $11.4 million to $29.7 million in 1998 dollars. The recommended solids facility includes a two-phase project at a total cost of $11.4 million to rehabilitate the existing incinerators immediately and to add a dryer for peak loads when needed, probably in ten years time. A copy of the executive summary of the Plan is attached. The recommendation was made because of the following reasons: The pollutant emissions of the recommended facility will be either lower than or the same as the current emissions. The recommended facility meets all current and-known potential future air quality requirements. CMR:236:97 Page 2 of 4 The recommended facility has the advantage of destroying PCBs and pesticides. other options utilizing digestion and heat drying do not. The The recommended project is the lowest in total cost, and the non-economic benefits gained by choosing the more expensive options do not seem to merit their additional cost. Staff met with Partner agencies to discuss the recommendation and the funding options. Parmer staffs support the recommendation of the Plan and prefer to participate in a joint financing plan that would pay for the project via the issuance of debt. FISCAL IMPACT The Plan recommended a two-phase project costing approximately $6.2 million in 1998 and approximately $6.7 in the year 2009. A cash flow analysis was prepared for the life of the project which assumed funding the project by revenue bonds. The estimated annual payment for the bonds for each Partner agency is tabulated in the March informational booklet. Due to the ~complexities and time involved in arranging the funding for a joint project, the financial plan will need to proceed immediately. Amendment to the Partners’ agreement is also needed to arrange for the Partners to assume their proportionate shares of the project costs. Such an amendment will require a rate increase in the future. Proposition 218, the "Right to Vote on Taxes" initiative, passed by voters in November 1996, appears to cover wastewater rate increases to residents and businesses in Palo Alto, to the extent wastewater charges fit within the ambiguous definition of "property related fees" in the proposition. Part of staff’s eventual work with bond counsel and rating agencies, when this project is ready for the sale of bonds, is to determine the extent to which the bonds’ ratings may be impacted by Proposition 218. The Plan recommends the rehabilitation of the existing incinerators that will result in emissions either at the same level or lower than the current emissions, hence would not trigger a new source permit. The cost of the rehabilitation is substantially lower than the cost of new replacement incinerators. The re6ommended project is a repair project of an existing facility that could be categorically exempt from CEQA either under Section 15301 or Section 15302. The project will be submitted to the Planning Department for determination. -Planning Department’s determination on the project’s environmental impact will be submitted to Council when staff returns to Council for project approval. CMR:236:97 Page 3 of 4 March 1997 Informational Booklet Executive Summary of the Solids Facility Plan PREPARED BY: William Miks, Manager, Water Quality Control Plant DEPARTMENT HEAD REVIEW: CITY MANAGER APPROVAL: GLENN S. ROBERTS Director of Pu~orks E FLEMING Manager CMR:236:97 Page 4 of 4 PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Solids Facility Plan EXECUTIVE SUMMARY CH2MHILL in association with Applied Decision Analysis Carlson Associates Kennedy Jenks Consultants May 1997 Palo Alto Regional Water Quality Control Plant Solids Facility Plan Executive Summary C~=I21WHILL in association with Applied Decision Analysis Carlson Associates Kennedy Jenks May 1997 Executive Summary. Introduction - : The Palo Alto Regional Water Quality Control Plant (PARWQCP) provides advanced wastewater treatment for Palo Alto, Mountain View, Los Altos, Stanford University, Los Altos Hills, and much of East Palo Alto. The facility includes both liquid and solids treat- ment processes. The two processes must both operate efficiently so that the overall plant operations can be called a success. The liquid process removes particulates and dissolved organics from the flow stream, while the solids processes treat the material removed by the liquid processes. Further, the solids processes will normally recycle a relatively small per- centage of solids back to the liquid process for additional treatment. The solids that are removed in the liquid processes include screenings, grit, primary set~led solids, secondary settled solids, scum, and solids from the tertiary filters. The screenings and grit that are removed are hauled to a landfill for disposal. The filtered solids are returned to the plant headworks for subsequent treatment. The primary settled solids and the secondary settled solids are thickened in gravity thickeners, dewatered in belt dewatering presses, and subsequently incinerated in one of two multiple-hearth incin- erators. The liquid from the dewatering process and the incinerator emissions scrubber water are recycled to the plant headworks. The scum is concentrated and incinerated with the dewatered solids. The ash from the incinerators is hauled to the Central Valley and applied to agricultural lands as a fertilizer supplement. Reliability is an important part of wastewater treatment. The treatment process must be able to operate in essentially all conditions. These conditions include periods of peak wastewater production and periods when equipment may malfunction. This aspect of reli- abiliD" is addressed through provision of a spare piece of equipment during peak operating periods. This might be accomplished, for example, by operating one incinerator during peak periods, while keeping the second in reserve. Facility Plan Scope This Solids Facility Plan addresses the handling and treatment of primary settled solids, secondaD" settled solids, and scum. A previous Solids Management Plan dated June 1995 addressed the handling of the screenings, grit, and filtered solids. That plan also evaluated the full realm of alternatives for handling the primary settled solids, secondary settled sol- ids, and scum. The recommended alternatives from that previous Plan, which form the basis for the alternatives in this Solids Facility Plan, include: Continue incineration. Phase out incineration. -Replace with anaerobic digestion. -Replace with heat drying. SFO/G \WATER\I35921\027ES_1 DOC ES-I EXECUTIVE SU~Y ) ) ) Decision Process The Solids Facility Plan has been organized and conducted according to a mod~cation of a proven model called Decision Analysis. The overall goal of this decision process is to build consensus among the stakeholders and decision makers, to include the values and priori- ties of all affected parties, to evaluate alternatives according to a rigorous econoEdc and non-econor~c model, and to produce an effective decision making tool, The modred deci- sion analysis process includes five steps. 1. Develop project commitment and vision 2..Identify key stakeholder values 3.Frame the problem and develop alternatives 4.Collect reliable, meaningful data 5.Evaluate alternatives and decide As part of this process, it is important to present the project vision as developed by staff representatives, stakeholders, and decision makers. This vision includes the following points: Create healthy operations in terms of the impacts to operations and maintenance personnel and the surrounding environment and in terms of reliable, well oper- ating equipment. Reduce the level of air emissions from current levels. Create a smooth, reliable operation. Identify a project scope and phasing, such that increases to sewer charges/rates will not exceed approximately 10 percent. Consider alternatives from an overall, "cradle-to-grave perspective." Beneficially reuse all byproducts, such as biosolids and ash. Demonstrate to stakeholders and decision makers that alternatives have been effectively analyzed so that the best alternative has been identified. Solids Production The PARWQCP construction was completed Ln 1971. The nominal rated capacity is 39 mgd. Currently the flowrate is about 22 mgd (or 56 percent of the rated capacity). These capaci- ties represent average annual conditions. The facility must, however, be able to operate sat- isfacto.rily during various peak conditions, such as the maximum week, day, and hour. Therefore, all treatment facilities must have peak capacities in addition to the nominal capac- ity. Additionally, it is often the case that the liquid and solids capacities do not match. This is the situation at the PARWQCP. The incinerators were recently tested and visually inspected. The testing indicated the existing incineration capacity for each incinerator should be rated at 21 dry tons per day (DTPD) of solids, assuming a feed solids concentration of 28 percent. (Incinerator capacity is related to feed solids concentration, up to a limit. Generally, the greater the reliable feed solids concentration, the greater the incinerator capacity.) This is the capacity for all average and peak loading conditions. Currently, the average solids load- ing is approximately 17 DTPD and the maximum week is about 32 DTPD. During average conditions there is sufficient capacity available when operating one incinerator; however, SFO/G \WATER\~35921\027ES_I DOC ES.2 EXECUTIVE during peak conditions, a single incinerator’s capacity is, at best, marginal. Plant operators are able to handle peak conditions by storing solids in the thickeners and by adopting aggressive operating techniques. These procedures are not considered reliable, long-term options because they increase the risk of process failure. The capacity must be increased to accommodate the peak solids loading conditions. Service Area Growth The planning period for this Facility Plan extends through the year 2020. Projections for growth in the service area have been developed based on information from the Association of Bay Area ~Governments (ABAG) and by the Santa Clara County Center for Urban Analy- sis. Based on these sources, the residential population is expected to increase a total of 5.8 per- cent during the planning period, while total jobs are projected to increase by 16 percent. This translates into an overall increase in solids production of 9.2 percent. The projected average solids loading in 2020 is, therefore, projected to be 18.5 DTPD and the maximum week is 35 DTPD. The maximum week is the typical design criterion for incineration sys- tems. Again, a single incinerator does not have sufficient capacity. The capacity must, therefore, also be increased to accommodate projected growth in addition to being increased to simply meet current maximum week conditions reliably. Existing Incinerator Condition In addition to capacity testing, the incinerators have had several recent visual inspections to evaluate operational parameters and the structural conditions. The incinerators have been in service since 1971. They have provided good service over the years and there has been a good, ongoing preventative maintenance program. Still, incinerator systems are mechani- cally intensive and they experience relatively severe service conditions. Currently, there are some special rehabilitation issues that have been identified together with conditions asso- ciated with general aging of the equipment. The rehabilitation issues include items such as the structural condition of the shell, the structural condition of the hearths that are internal to the incinerators, and the condition of ancillary systems, such as inlet fans, controls, and air emission equipment. All of these can be addressed using conventional technology so that the resulting units will provide reliable, efficient service through the planning period. Capacity The inspection and testing of the incinerators has resulted in a determination of the poten- tial capacity, assuming a complete rehabilitation and expansion program. The reliable future capacity of the incinerators, at the same 28 percent feed s6lids concentration, is esti- mated to be 32 DTPD or 91 percent of the projected maximum week capacity requirement. The incinerator capacity can be further increased, up to a limit, if the feed solids concentration is reliably increased. For example, ff the feed solids concentration is reliably increased to 32 percent, the incinerator capacity can be increased to approximately 35 DTPD (35 DTPD is considered the maximum achievable capacity for these incinerators). Achieving the higher feed solids concentration will require a significant change to the dewatering process. As stated previously, the incinerator loading now averages about 17 DTPD. The estimated future capaci .ty of each incinerator after rehabilitation and expansion is estimated to be approxi- mately 32 DTPD. This compares to the estimated peak solids capacity required in the planning year of 35 DTPD. The future capacities are estimates based on the best available information. SFo/G \WATER\135921~027ES_l DOC ES-3 There is some uncertainty, however, in the estimates. The uncerta:ntv will be reflected pri- marily in the dates that actual growth will cause plant solids load’,ng to exceed the 32 DTPD of a single incinerator’s rehabilitated and expanded incinerator caTacity. The incinerator rehabilitation and expansion will be sufficient to handle plant load:ngs for the initial years of the planning period, say 8 to 10 years. Plant solids loadings wi’." eventually increase to the point where they exceed a single incinerator’s expanded capac:~y. At that time, other system modifications will be required to increase overall capacity. Air Emissions and Controls Air emissions and air emission controls are major considerations in ".he evaluation of alterna- tives. The new, expanded capacity will require new emissions controls to avoid increases in emissions relative to permitting requirements and to achieve the goal of reducing emissions.. The emissions and emissions controls for each alternative will be compared to the current baseline conditions. These baseline conditions have been establishe~ through an extensive stack testing program conducted as part of this Facility Plan. The evaluation of emissions includes a complete "cradle-to-grave" approach. For example, the :tuck emissions associ- ated with hauling ash or biosolids to reuse sites in the Central Valley are included. The evaluation also considers the fate of metals, which are first removec~ in the liquid process and subsequently incinerated. The evaluation addresses the metal components that are removed with the ash and those that are scrubbed from the air errd_~sions and recycled in the scrubber water. Alternatives Based on the screening of alternatives and recommendations contaLned in the previous Sol- ids Management Plan and on a workshop with staff, five alternatives have been identified for detailed evaluation in this Solids Facility Plan. One of the alternatives includes two sub- alternatives. These alternatives include: Alternative 1, phase out the existing incinerators, and revlace them with new, larger capacity incinerators. Alternative 2, rehabilitate and expand the capacity of the existing incinerators, to the maximum extent feasible. (Note that this alternahve does not provide complete redundancy during future, peak conditions.) Alternative 3, rehabilitate and expand the existing incinerators as per Alterna- tive 2, but address the capacity shortfall by implementing other process changes that will either reduce the quantity of solids to be handle~ or create drier feed solids to increase incinerator capacity. Solids can be reduced by implementing anaerobic digestion for a portion of the solids (Alternative 3a). Drier feed solids can be achieved by processing some of the feed solids through a thermal dryer (Alternative 3b). The process of either reducing the amo~.nt of solids to be incin- erated or making them drier is generally referred to as "-~alping." Alternative 4, phase out the existing incinerators and process all solids with anaerobic digestion. Alternative 5, phase out the existing incinerators and prccess all solids with thermal drying. sFo/G \WA]’ER\135921\027ES_1 DOC ES-4 EXECUTIVE SUmMARY Alternatives 1, 2, and 3 will produce an ash product veD" sirr~ar to the existing. Alternative 4 will produce a biosolids product that can also be applied as supplement to agricultural land. Alternative 5 win produce a pelletized product that can be m~-keted to golf courses, parks, etc. Evaluation of Alternatives The alternatives have been evaluated based on Stakeholder values identified early in the decision process. These values include capital and O&M ccsts, human health and safety and Bay ecology impacts, energy use, solids product reuse, plant operations impacts, and visual and odor impacts. Cost Comparison The alternatives have been evaluated for both capital and C&M costs. Table ES-1 summa- rizes the costs. The capital costs for both Alternatives 3a a~n~ 3b assume that the incinerato~ rehabilitation/expansion is done in 1998 but that the addih¢n of either the digester or ther- mal dryer is deferred until 2008. O&M costs above current annual O&M costs were used so that only changes in O&M costs are considered as part of ti-.e total alternative cost. The net present value (NPV) of the O&M costs have been ¢alculate~ based on a discount rate of 2 percent and a 23-year period. Table ES-1 Estimated Costs of Alternatives NPV of O&M Costs Total Capital Cost Compared ’,o Current Costs Total Cost Alternative (1998 $)(1998 $)(1998 $) 1 New Incinerators $23.6 million $0:1 million $23.6 million 2 Rehab Incinerator 6.0 million C .= million 6.8 million 3a Rehab plus Digestion 13.0 million 3 -’ m.;llion 16.4 million 3b Rehab plus Drying 10.1 million 1.3 million 11.4 million 4 Digestion 22.3 million 7 : m~!lion=29.7 million 5 Drying 24.9 million (T - re;Ilion)b 17.2 million aCosts to haul large amounts of biosolids resulting from d=gest=on lea: to high O&M costs. bRevenue from sale of pellets resultin~ from dr~in~ lead to a net decr--:~se in O&M costs. Non-Economic Comparison The alternatives were also compared based on non-economic s:akeholder values identified early in the decision process. These values include human health ~nd safety, Bay ecology, energy use, solids product reuse, plant operations, and aesthetics ar.~ odor. Human health and Bay ecology were identified as the most important non-economic values for comparing alternatives. Air emissions were used as the criterion to assess differences in Fotential impacts to human health and safety and Bay ecology. The development of this measure ~ discussed in further detail later in Chapter 6. To the degree possible, the life cycle emissions of each alternative were calculated, taking into account the solids handling process emissions, associated process equipment emis- sions, and diesel truck emissions to remove solid byproducts. "Fr~e air emissions have been evaluated for the individual components in three categories of pollutants: criteria pollutants (nitrogen oxides, carbon monoxide, etc.), hazardous air pollutants (dio.x’.n, etc.), and metals (mercury, cop- per, etc.). The evaluation includes not only the direct emissions, :a "kang into account emissions SFo/G \WATER\I35921~02.7ES_l DOC ES-5 EXECUTIVE SUMMARY t ) controls, but also the emissions from ancillary equipment, such as internal combustion engines burning the digester gas, and truck exhaust associated with hauling the final biosolids product. To assist with the decision-making process, the noneconomic benefits need to be assessed in combination. For this project, explicit dollar values were not assigned to the non-economic values independently of the alternatives considered, which is sometimes done in decision analysis to determine the least-cost, maximum-value alternative. Instead, the implied tradeoffs between alternatives, meaning what is gained or lost in noneconomic values by choosing a more expensive alternative, are laid out. In this manner, decision makers can make judgments as to whether specific tradeoffs are economically reasonable or not. Recommendation The lowest cost alternative is the Incinerators Rehabilitation alternative (Alternative 2), at a total cost of $6.8 million. This alternative, however, cannot provide full incinerator redundancy dur- ing the anticipated peak week loads later in the planning period (occurring approximately 4 weeks per year), constraining operational reliability. At that time, the PARWQCP may decide to add scalping to maintain redundancy and achieve greater operational reliability. As a result, the Rehabilitation plus Drying alternative (Alternative 3b) provides a more accurate estimate of the "high end" cost and impacts associated with the Incineration Reha- -bilitation alternative. It is possible that the PARWQCP might not need the scalping. As better data is collected on the wastewater load and resulting solids load, the project peak week load may be less. The PARWQCP may also decide to pursue source reduction meas- ures to potentially reduce the peak week load. Another alternative may be preferable, however, for its non-economic benefits, such as low- ered emissions, energy conservation, odor, etc. Table E,S-2 outlines the specific tradeoffs between the Incinerator Rehabilitation plus Dryer alternative as the low cost alternative and other alternatives. The costs shown in Table ES-2 are the capital and total project costs. Permit- ting costs were not included since they are relatively low compared to the total costs of alter- natives and make a negligible difference in how the alternatives compare to each other. To help provide perspective, dioxin emissions were compared to equivalent automobile emissions. Table ES-2 Comparison of Alternatives to Low Cost Alternative Estimated Capital Estimated Cost Project CostAlternative(NPV)(23 years!, "3b Rehabilitation plus $10.1 M $11.4 MDrying’"i’F~ui,~iz~’,~23.6 M’23.6M incinerators 3a Rehabilitation plus 13,0 M 16.4 MD~gestion 4 Digestion 22.3 M 29 7 M 5 Thermal Drying=24.9 M 17.2 M Life-Cycle Dloxln Emissions fib/day) 2.63 E-11 (11 eutos) 2.68 E-11 (11 autos) 2.63 E-11 (11 autos) 1.94 E-10 (81 aulos) 2.42 E.11 (10 autos) Other Life-Cycle Emissions (Ib/day) Less CPs Less metals More CPs Same metals More CPs Less melals Less CPs Less Melals Energy Reuse/Footprint Consumption Resource (add’l sq. , ($1yr)=Value ,ft.)" 168,000 Moderale 800 122.000 Moderate 1.500 106.000 Moderate 20.000 (109.000)Low 45.000 227,000 High 1 Odor Potential Visibility Low Low Low Low High High High High Medium Low =Cost of energy v~s decided to be the besl measure of total energy consumption and =ncludes electricity, natural gas, end d~esal fuel.=A large addihonal footprint reduces operalmnal flexibility and limits options for future facility changes or expansion, =Total Then’nat Drying Project Cost is less Ihan Thermal Drying Capital Cost due to Iong-lerm savings in Operations and Ma=ntenance costs, CP = Criteria pollutanls SFO/G \ViATER\135921\027E$_l DOC ES..6 The information in Table ES-2 can be used by decision-makers to evaluate the tradeoffs obtained by paying for one of the more expensive alternatives. For example, the additional $5.0 million for the Incinerator Rehabilitation plus Digestion alternative "buys" some reduction in energy consumption but also imposes substantial plant operations and aesthetics penalties and increases the criteria pollutant emissions. In this case, the choice of Rehabilitation plus Digestion over Rehabilitation plus.Drying is a poor tradeoff. Other tradeoffs can be evaluated in a similar manner by decision-makers. The recommended alternative is Rehabilitation plus Drying, for the following reasons: Alternative has the °lowest capital cost of alternatives that provide complete redun- dancy in the primary process and meets capacity needs through 2020. As discussed above, the City may not need to add the scalping in the future, which would lower, the capital cost to .the same as the Incinerator Rehabilitation alternative. Alternative pollutant emissions are either the same or lower than current emissions for this alternative. Alternative meets all current and know potential future air quality requirements, including dioxin requirements. Alternative should be able to maintain Grandfather Status and as a result would not trigger a new permit application. Alternative has the advantage of destroying PCBs and pesticides, which the Diges- tion and Thermal Drying alternatives do not. The non-economic benefits gained by choosing one of the more expensive alterna- tives do not seem to merit their additional cost. For example, the air emissions benefits from the Fluidized Bed Incinerators or Thermal Drying would cost millions of dollars. The same benefits could be achieved at a much lower cost through other programs, such as ride sharing programs that reduce auto use. Some of the more expensive alternatives also have substantial non-economic penalties, such higher life-cycle dioxin emissions or increased odor potential, compared to the Rehabilita- tion plus Drying alternative. Reference Figures Five figures taken from Chapter 1 of the report have been appended to this Executive Sum- mary for reference. ) ) SFO/G \WATER\13592~\027ES_l DOC ES-7 E Belt Presses Solids Cake Feed Screw Combustion Air Blower Bypass To Truck =1 Air Inlet I I Air Inlet Ash Conditionei To Truck Ash Screw Conveyor Exhaust Stack 01 Cooling Air : Recy~cle ~T,--Cooling AirExhaust Hearth 1 Hearth 2 Hearth 3 Hearth 4 Hearth ,5 Hearth 6 T Note: Hearth 1 currently used as the afterburner Induced Draft Fan Inlet Damper Drain ~F urnE~ace Natural Gas CoolingAir (~C°°ling Fan = Figure 1.4 Sewage Solids Incineration Palo Alto Regional Water Quality Control Plant Solids Facility Plan CH:21VIHILL Steel She{I Insulatio Refracto Belly Band (Typical) -.~ I AIternate Sludge Feed Point HEARTH 1 HEARTH 2 Current I SludgeIFeed I Point~ ~ :~::::.. HEARTH 4 1 I HEARTH 3 / / Rabble (Typical) Center Shaft Figure 1-5 Typical Furnace Construction Palo Alto Regional Water Quality Control Plant Solids Facility Plan ATTACHMENT D Cite of Palo Alto City Manager’s Report 5 TO: FROM: HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE:MARCH 16, 1998 CMR:165:98 SUBJECT:APPROVAL OF ADDENDUM NO. 6 TO THE WATER QUALITY CONTROL PLANT PARTNERS’ BASIC AGREEMENT TO: INCREASE THE ANNUAL ONGOING CAPITAL IMPROVEMENT BUDGET CAP; DEFINE PARTNER OBLIGATIONS WITH REGARDS TO REIMBURSING PALO ALTO FOR COSTS FOR INCINERATOR REHABILITATION PORT IN BRIEF Following Council’s direction to proceed with the financial planning for the rehabilitation of the RWQCP’s incinerators, staff is submitting Addendum No.6 to the Partners’ agreement for Council’s approval. The RWQCP partners (the cities of Palo Alto, Mountain View, and Los Altos) are responsible for financing the project. The financial advisor and Partners’ staff recommend that the project be bond funded to spread the cost to ratepayers over a number of years. The City of Palo Alto will be the lead agency in issuing the debt. The addendum to the Partners’ agreement is needed prior to bond sale to clarify the financial obligations among the Partnei" agencies. The addendum also increases the cap for the ongoing capital improvement budget. The- existing cap is ambiguous and is based on the original value of the RWQCP. The capital improvement program will continue to be reviewed by the Partner agencies prior to approval by Palo Alto City Council. CMR.: 165:98 Page 1 of~"-~ RECOMMENDATION Staff recommends that Council: Direct staff to proceed with the necessary steps to obtain bond financing for rehabilitating the incinerators at the Water Quality Control Plant (RWQCP). Bond financing would occur concurrently with the beginning of construction, approximately August 1999. Prior to the bond sale, staff will return to Council for approval of the bond documents. Approve and authorize the Mayor to execute Addendum No. 6 to the Basic Partners Agreement between the City of Palo Alto, the City of Mountain View, and the City of Los Altos. Addendum No. 6 increases the annual budget cap for ongoing capital improvements, and defines Partner obligations to reimburse Palo Alto for the future costs of debt service for bond financing of RWQCP incinerator rehabilitation project. BACKGROUND The City disposes of solid wastes treated by the RWQCP by means of incineration. In May 1996 (CMR:278:96), staff reported to Council that a recent study had concluded "the incinerators (at the Plant) have reached the end of their economic life, and that major rehabilitations are required if the RWQCP is to continue with incineration." Council approved staff’s selection of the consulting firms CH2M Hill and Kennedy Jencks to prepare a Solids Facility Plan (Plan) for the RWQCP. The Plan examined the issues and solutions for continued use of incineration, and evaluated other technologies that replace incineration. In May 1997, staffretumed to Council (CMR:236:97) with the results of the Plan. The Plan was approved by Council, and included: A two-phase project to rehabilitate the existing incienerators immediately, and in ten years potentially add a dryer for peak loads if and when needed. Direction for staff to proceed with financial planning to implement the incinerator rehabilitation. Direction to obtain Partners’ approval of the necessary addendum to the existing Partners’ agreement and financial package needed to implement the Plan. The Partners" Agreement was originally written in 1968, and has been amended five times to date. Changes are needed to clarify various financial obligations now that the City of Palo Alto is preparing to rehabilitate the RWQCP. CMR: 165:98 Page 2 of 5 DISCUSSION Staff met several times with the Partner agencies staff to discuss the funding of the project, and has obtained the advice of a financial advisor, Stone and Youngberg. The financial advisor and Palo Alto’s outside counsel attended two meetings with the Partner agencies’ staff. Given the size of the improvements, and the need to spread the cost to ratepayers over a number of years, and given the varying levels of wastewater financial reserves currently available to the different Partner cities, staff recommends that the, improvements be bond funded. As has been done in a previous debt issuance in early 1980, staff recommends that the City of Palo Alto, as the operator of the RWQCP, be the lead agency in issuing the debt. This approach was unanimously agreed to by the staff from all Partner agencies. Staff anticipates selling bonds prior to construction, approximately May 1999. Palo Alto has sufficient funds in its Wastewater Treatment Fund reserve for the design itself, and will be reimbursed from bond proceeds later. The attached Addendum requires, that the Partner agencies reimburse Palo Alto for their share of the bond costs, including the front design costs, over the life of the bonds. The approximate cos~-for the design is $700,000, and is included in the proposed FY 1998-99 capital budget for the Wastewater Treatment Fund. In order to clarify the financial obligations among all Farmer agencies, staffhas worked with the City Attorney’s Office and outside counsel to amend the current Partner’s agreement. That addendum is attached to this report and is being submitted to Council for approval. Staff from the other Partner agencies are also taking this addendum to their respective Councils concurrently. Major provisions of the addendum include the following: The revision of the annual capital improvement budget cap for ongoing repair and replacement. It will now be set at a base level of $1.9 million for 1998-99, and will be adjusted annually by the Consumer Price Index (CPI). The existing cap is ambiguous,’ and is based on the original value of the RWQCP. This change is needed to provide for more budget flexibility in the future. The annual capital improvement program will continue to be reviewed by staff from each Partner agency prior to submission to the Palo Alto City Council. °Authorization for the City of Palo Alto to implement the Solids Facility Plan,-including rehabilitation of the incinerators: Each Partner city is responsible to pay Palo Alto for its proportionate share of the rehabilitation. Authorization for the City, of Palo Alto to issue debt to pay for the rehabilitation, and requiring the Partners to pay Palo Alto for their proportionate share of the debt service. CMK: 165:98 Page 3 of 5 Because Palo Alto will issue the debt, it must covenant in its bond documents to raise sufficient revenues to meet annual debt service requirements. All of the requirements below are legal commitments that the Partners are making to each other, and are consistent with the legal commitments Palo Alto will have to make in its bond documents in order to issue debt. ; a)In order to protect the City of Palo Alto, and to reassure potential investors, the Parmer agencies are required by this addendum to raise sewer revenues sufficient to pay their share of the debt service to Palo Alto in the future. These clarifications will make the debt less risky to investors, and therefore will help the Cit-y of Palo Alto obtain the highest rating it can get for the bonds. This will lower the interest rate, and therefore will lower the financing costs for the bonds. Based on discussions with Stone and Youngberg, staff expects that the bonds can be sold at around a double A rating. b)Specifies that while the bonds are to be issued by Palo Alto, the Partners will reimburse Palo Alto annually for an amou~ equal to their share of the debt service. c)Defines the annual Partner obligations to Palo Alto as special obligations payable "solely from the net revenues" of the Partners’ sewer systems. (The obligations are therefore not general obligations of the Partner cities). d)States that the obligations of Mountain View and Los Altos are unconditional until the time that debt service is paid off. e)Obligates the cities of Mountain View and Los Altos to collect sufficient sewer revenues to pay for at least 1.25 times the annual debt service requirement. g) Clarifies that for as long as this debt is still outstanding, no party may issue sewer bonds for its oWn City that are superior in credit obligation to this debt obligation. Parity debt, or debt equal in stature to creditors to this debt may be issued provided that the Partner city continues to collect revenues at least 1.25 times its total level of debt service. Clarifies that revenue growth due to sewer expansions by Partner cities, such as a new development, may be counted towards the revenue requirement of 1.25 times debt service. Clarifies that neither Mountain View nor Los Altos are liable for each other’s obligations to Palo Alto. S . EMP T Funds for the capital improvements are being proposed in the 1998-99 Wastewater Treatment capital improvement budget. 1998-99 funding inctudes $700,000 for design, and future years" capital budgets will include construction dollars. Those dollars and design costs, will CMR: ! 65:98 Page 4 of 5 be reimbursed out of bond proceeds in approximately August 1999. Capital expenditures for design and construction are estimated to cost a total of approximately $6.2 million. ENVIRONMENTAL REVIEW On February 23, 1998, Council approved the Negative Declaration and the project to rehabilitate the RWQCP’s incinerators, CMR: 141:98. TIMELINE Attached is a rough timeline for the project: City Councils of Partner cities approve addendum Palo Alto awards design contract Final design completed Sell bonds Begin construction Finish construction on incinerators March 1998 April 1998 February 1999 August 1999 August 1999 August 2001 POLICy IMPLICATIONS The recommendation of this staff report is consistent with City policies, ATTACHMENTS Addendum No. 6 to Basic Agreement PREPARED BY:Bill Miks, Manager RWQCP Jim Steele, Manager Investments and Debt DEPARTMENT HEAD: Glenn S. Melissa berts, Director Acting: ublic Works of Administrative Services CITY MANAGER APPROVAL: JUNE City Manager CMR: 165:98 Page 5 of 5 ADDENDUM NO. 6 TO BASIC AGREEMENT BETWEEN THE CITY OF PALO ALTO, THE CITY OF MOUIqTAIN VIEW Ah’D THE CITY OF LOS ALTOS FOR ACQUISITION, CONSTRUCTION A!hTD 5LkINTENA~CE OF A JOINT SEWER SYSTEM This Addendum No.’ 6 to ~asic Agreement is made and entered into on , 1998, by and among the CITY O? PALO ALTO ("Palo Alto"), the CITY OF MOUNTAIN VIEW ("Mo[~nEain View"), and the CITY OF LOS ALTOS ("Los Altos") (individually, "Party", and collec~vely, the "Parties"), all municipal corporations under the laws of the State of California. i. The Parties have entered into an agreemen~ for the acquis!tion~ construction, nnd maintenance of a joint sewer system ("Joint sewer’"), executed o~ October I0, 1968, and as amended from time to ~ime ("Basic Agreement"). The Basic Agreement has been amended five times on 1977, 1980, 1985, 1990 and 1992, respectively (collectively, "Addenda"). 2. Palo Alto is the administrator of the Joint Sewer and is responsible for capital additions. Under the Basic Agreement and Addenda thereto, capital additions for the replacement of obsolete or worn-out units or minor capital additions to improve the efficiency of the plant operations shall not exceed two percent (2%) of the total capita! investment in any one year, except.with the prior written approval of the Parties hereto. 3. .The solids Management Study of June 1995 prepared by Carollo Engineers concluded that. the incineration facility needs to bc rebuilt or replaced. The Solids Facility Pl~n of May 1997 prepared by CH2M HILL recommended a two-phase project to rebuild the existins incineration facility portion of the Joint Sewer. The Parties desire tO implement the recommended project, and, accordingly, hereby revise the Basic Agreement and ~he AddeI~da thereto, to provide for the rehabilitation of the inciuerator facility portion of the Joint System, and i~crease the total capita! investment in capital additions. NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this Addendum No. ~ to Basic Agreement, the Basic Agreement is hereby amended as follows: ~F~.¢TION I. Subparagraph 8(e) is hereby amended in its entirety to read as follows: 2 SHARING OF COST~.q OF ~,ODIFIC~TrO~_~ID REHABILITATION OF THE CON STR U CT ~ 0[{. (e) Capital additions for the replacement of obsolete or worn-out units, or minor capital additions to improve the cfficiency of the plant operations, shall not exceed the amount specif£ed for the base year adjusted annually in accordance with the Consumer Price Index-Urban Wage Earners and Clerica! Workers for the San Francisco-Oakland-San Jose area ("CPI"]. The base year shall be fiscal year 1998-19S9. The capital addition amou~]t for the base year is set at 1.9 million dollars. The CPI for the twelve (12) months prior to Ju].y of each fiscal year shall be used to calculate the adjusted.capital addition cost for the following fiscal year." SECTIO~ 2, Paragraph 36 is hereby added to the Basic Agreement to read as follows: "36. IMPLEMENTATYON O2_THE ~0LIDS FACI~.~TY P~AN, PALe ALTO, MOUNTAIN VIEW, and LOS ALTOS approve a two-phase project to in, mediately rehabilitate, the incinerators as soon as possible an~ add a dryer for peak loads in approximately ten (i0) years in accordance with the Solids Facility Plan prepared by CH2M Hill, consulting engineers. The funding~ for the incinerator rehabilitation will be developed as soon as possible by each of the Parties, wh~le the funding for the dryer w~ll be deferred until needed.’ As determined by each Party, each Party shall proceed to pay for the rehabilitation of the incinerators in proportion as the Parties own capacity in the Joint System or portion thereof as shown in Exhibit "H". If the Parties intend to defray the costs of rehabilitation through Pale Alto’s issuance of debt for the rehabilitaZion, the Parties shall pay £o Pale Alto their Proportionate Share of Debt Service in accordance with Addendum 4 of the Basic Agreement, as revised by Section 3 of this Addendum SECTIQN ..i. Section 5 of Addendum 4 to the Basic Agreement is hereby amended in its entirety to read as follows: "(a) D_~.~initions. For purposes of this Section 5, the followin~ capitalized terms shall have the meanings set forth below. ’Bond Do=umen~s’ meansthe bond resolutions, indentures, t~ust agreements, installment sale agreements or other dozuments under which Bonds are issued. ’Bonds’means bonds, installment sale agreements or ether obligations already issued or to be issu4d by the City of Palo Alto to finance improvements, additions or extensions to the Joint System, payable from the ’Net Revenues’, as defined in the Bond Documents. ’Debt Service’ means, for any period in question, the sum of the debt service on the Bonds due and payable in such period. ’ Gross Revenues’ means all gross income and revenue received by either Mo%~ntain View or Los Al~os from the ownership and opel’ation of its Sewer System, including, without limiting the generality of the foregoing, (a) all income, rents, rates, fees, connection fees, cha1"ges or other moneys derJ.ved from the services, facilities and corn.modifies sold, furnished or supplied through the facilities of its Sewer System, (b) reserves on deposit in the sewer utility enterprise fund of Mountain View or Los Altos, as ~appropriate, including unrestricted cash available and (c) the earnings on and income derived from the invest~..ent of such income, ren~s, rates, fees,, charges or other moneys to the ex’.ent that the use of such earnings and income is limited by or pursuan~ to the law to its Sewer System (including interest earnings on reserves)~ ¯ provided, however, that the term ’Gross Revenues’ shall not include customers’ deposits or any other deposits subject to refund until such deposits have become the p~-operty of Mountain View. or Los Altos, as appropriate. "Joint System’ has the meaning given to said term in the Basic Agreement. ’Net Revenues’ means Gross Kevenues less Operation and Maintenance Expenses. ’Operation and Maintenance Expenses’ means all expenses and costs of management, operation, maintenance and repair of a Sewer System, bu~ excluding debt service or other simila~ payments on Parity Debt or other obligations and depreciation and obsolescence ~charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature, and any expense classified.as discretionary by Mc\~ntain View or Los Altos tc the operation of its Sewer System. 9{~0304 I-,~ 003191 } ’Parity Debt’ means bonds, indebtedness o[" other ob!ig~tions (including leases and installment sale agreements) hereafter issuedor incurred by Mountain View or Los Altos and secured by a pledge of and.llen on Net Revenues equall)’ and ratably with Mountain View’s cr Los Altos’s Proportionate Share of Debt -Service. : ’Part}" means the city o£ Palo Alto, Mountain View or Los Altos. ’Parties’. means the Cities of Palo Alto, Mountain View and Los Altos. ’Proportionate Share’ has the meaning given to said term in ~he Basic Agreement. ’Sewer System’ means any and all properties and assets, real and personal, tangible and intangible, of Mountain View or Los Altos, now or hereafter existing, used or pertaining to the disposal or reuse of wastewater, including sewage treatment plants, intercepting and collecting sewers, outfall sewers, force m~i,]s, pumping stations, ejector stations, pipes,.valves, machinery mnd all other appurtenances necessary, useful or convenient for the collec~ion, treatment, purification or disposal of sewage, and any necessary lands, rights of way and other real or personal property ~seful in connection therewith, and all additions, extensions, expansions, improvements and betterments thereto and equippings thereof. ’Subordinate Debt’ means indebtedness or other obligations (including leases and installment sale agreements) hereafter issued or incurred by Mountain View or Los Altos and secured by a pledge of and lien on Net Revenues subordinate to the obligation of Moustain View or Los Altos to pay its Fropor~ionate Share of Debt ~Service. "(b) ,Issuance_of_Bonds by P_~io~ Alto: Spe~qns .of Mountain View and ~,o~Altos. Palo Alto has issue~ Bonds to finance the Joint system, and expects to issue Bonds in the future to finance improvements to theJoint System. Under the Bond Documents, Palo Alto is obligated to pay 100% of the Debt Service. In consideration of the issuance and pa)~ent of the Bonds by Palo Alto to finance the Joint System, Mountain View and Los Altos agree to pay their proportionate Share of Debt Service, payable solely from Net Revenues, as hereinafter proyided. Mountain View’s and Los Altos’s obligation to pay their Pz’oportionate Share of Debt Service shall be a special obligation limited solely to Net Revenues. Under no circumstances shall Mountain View or Los Altos be required to" advance any mcne},s derived from any source of income other :than the Net P.evenues and 6thor sources specifically identified hereln for the payment of their Proportionate Share of Debt Service, nor shall any other funds or property of Mountain View or Los Altos be liable for the payment of their Proportionate Share of Debt Service. The obligation of Mountain View and Los Altos to pay their Proportionate Share of Debt Service from Net Revenues and to perfor~:, and observe the other asreements contained herein shall be absolute and unconditional and shall not he subject to any defense or any right of set-off, counterclaim or recoupment arising out of any breach of a Party of any obligation to another Party or o~herwise with respect to either of theil’-Sewer systems, whether hereunder or otherwise, or out of indebtedness or liability at any time owing to Mountain View or Los Altos by another Party. Until such time as all of the Debt Service shall have been fully paid or prepaid, Mountain View and Los Altos (a) will not suspend, abate, or discontinue any payments provided for herein, (b) will perform a~d observe all other agreements contained in this Agl’eement, and (c) will not terminate this Agreement for any cause, inc].uding0 withou~ limiting the generality of the foresoing, the occurrence of any acts or circu~stances that may constit~Ue failure of consideration, eviction or constructive eviction, destruction of or damage to their Sewer Systems, the taking by eminent domain of title to cr tem, porary use of any or all of either of their Sewer Systems, commercial frustration of pu~.-pose, .any change in th=. tax or other laws of the United States of America or of the State or any political subdivision of either thereof or any failure of a Party to perform, and observe any a~reement, whether express or i,lplied, cr any duty, liability or obligation arising out of or connected with this Agreement. "(c) pledme of ~e[ Revenu..e~. (i) Pledge of Net Revenues. Mountain View and Los Altos hereby agree that the payment of their Proportionate Share of Debt Service shall be secured by a pledge, charge and first and prior lien upon their Net Revenues, and Net Revenues sufficient to pay their proportionate Share of Debt Service as the same becomes due and p~yable are hereby pledged, charged, assigned, transfe£red and. set over by Los Altos anl ~<ountai:l View te Palo Alto and its assig~s for the purpose of securing payz:en% of their Proportionate Share of Debt Service. The Net Revenues shall constitute a trust fund for the security and payment o£ Mountain View’s and Los Altos’s Proportionate Share of Debt Service. [ii) Release from ’Lien. Following the payments by ~:n.untain View and Los Altos to Pale Alto o~ their Proportionate Shnre of Debt Service, Net Revenues in excess of amounts req<~ired for the payment of such Proportionate Share of Debt Service~ in thmt Fiscal Year, shall be released from the lien of this Agreement and shall be available for any !mwful purpose of Mountain View or Los Altos, as applicable. "(d) Rate Covenant. Mountain View and Los Altos hereby covenant that they shall p[escribe, revise and collect such charges for the services and facilities of their respective Sewer Systems which, after allowances for contingencies and error in the estiEates, shall produce Gross Revenues sufficient’ in each Fiscal Year to provide Net Revenues equal to 1.25 times (i) their Proportionate Share. of Dsbt Service coming due and payable during such Fisca! Year, and (~i) all payments required with respect to Pari.ty Debt. LimitatioD9 O/l_F_P~ure Obliq@tions Secured by Net; (i) No Obligations Superior to Debt Service. In order to protect further the availability of the Net Revenues and the security for the Debt Service, Mountain View and Los Altos hereby agree that they shall not, so long as any Bonds are outstanding, issue or incur any obligations payable from Gross Revenues or Net Revenues superior to their obligation to pay their Proportionate Share of Debt Service. (ii) Parity Debt. Mountain View and Los Altos further covenant that, exceFt for obligations issued or incurred to refund any obligations secured by Net Revenues, they shall not issue or incur any Parity Debt unless: (A)The Party proposin9 to issue the Parity Debt is not in default under the terms of this Agreement; and Net Revenues, calculated on sound accounting principles, as shown by the books of the Party proposing to issue 9,~0]04 I~*c 001191~ the Parity Debt, for the latest Fiscal Year or any more recent twelve (12) month period selected by the Party proposing to issue the Parity Debt ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which instrument such Pagity Debt is issued or i~curred, as shown by the boo}~s of the Party proposing to~ .issue the Parity Debt, shall have ~mounted to at least 1,25 times such Party’s maxi~.ulm Properticnate Share of Debt Service, plus, maximum annual debt service on such Party’s Pa~’ity Debt coming due and payable in any future Fiscal Year’. (iii) Adjustment to Net Revenues. Either or both of the following items may be added to such Net Revenues for~ the purpose of applying the .restriction contained in subsection (ii) (B) of this subsection (e): An allowance for revenues from any additions to or improvements or extensions of the Sewer System to be constructed with the proceeds of such additional obligations, and also for Net Revenues from any such additions, improvements or extensions which have been constructed ’from any source of funds but which, during all or any part.of such Fiscal Year, were not i~ service, all in an amount equal to estimated additional average annual Net Revenues~ to be derived from such ~additions, improvements and extensions for the first 36-month period following issuance of the proposed Parity Debt, all as shown by the certificate or opinion of a qualified independent consultant employed by Mountain View or Los Altos, as appropriate. An allowance for earnings arising from any increase in the charges made for service from the Sewer System which has become effective prior to the incurring of such additional obligations but which, during all or any part of such Fiscal Year, was not in effect, in an amount equal to 100% of the amount by which the Net Revenues would have been increased if such increase in charges had been i~i effect during ~he whole of sucl~ Fiscal Year and any period prior to the incurring of such a~ditional obligations, as shown by the certificate or opinion of a qualified independent consultant employed by Mountain: View or Los Altos, as appropriate, or upon the mutual agreement of the other parties. (iv) Subordinate Debt. Mountain View and Los Altos ~ay issue or incur Subordinate Debt so ions as it is not in default hereunder or under any Parity Debt. "(f) Compliance WIEh Lsw. The Parties agree that they shall co~nply with provisions of the Constitution and laws of ~he State of California, including specifically Article XIIIC and Article XIIID of the California Constitution. In the event a Party fails to comply with the foreHoing covenant, any other Party may bring an action against the Party in breach, and seek all remedies available at law or in equity, including specific performance. Joint and S~v_~r.~l~Liability. Neither Mountain View nor Los Altos shall be liable for the debts or obligations of another Party pursumnt to this Section 5, and no~hing contained in this Section 5 is intended, nor shall it be interpreted, to create joint and several liability of Mountain View or Los Altos." SECTION 4. Except as herein modified, the BRsic Agreement and all Addenda thereto shall remain unchanged, and they are hereby ratified and confirmed. // // /! IN WITNESS WHEREOF, the parties have by their dul~’ authorized representatives executed this Amendment on the date first above written. ATTEST:CITY OF PALO ALTO City Clerk APPROVED AS TO FORM: Mayor Senior Asst. City Attorney APPROVED: Assistant City Manager Director of Public Works ActinH Director of Administrative Services Kisk Manager ATTEST:CITY OF MOUNTAIN VIEW City Clerk APPROVED AS TO FORM: City Manager APPROVED AS TO CONTENT: City Attorney Public Services Director i0 :FINANCIAL APPROVALI Finance and Administrative Services Director ATTEST:CITY OF LOS ALTOS City Clerk APPROVED AS TO FORM: City Attorney City Manager APPROVED AS TO CONTENT: Director of Public Works CERTIFICATE OF ACKNOWLEDGMENT (Civil Code § 1189) STATE OF ) .C )ss. COUNTY OF ) On _, before me, , .~ notal-y public in and for said County, pcrs~nally appeared , pel-sonally known to me (or proved to me on the basis of satisfactory eviden=e) to be the person(s) whose name(s) is/are subscribed to the within instrum~_nt, and acknowledged to me that h~./she/~hey executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. 00319~ 3 11 CERTIFICATE OF ACKNOWLEDGMENT (civil Code § 1189) STATE OF ) COUNTY OF ) On ........, before me,, a notary public in and for said County, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrum.ent, and acknowledged, to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument ~he person(s), or tile entity upon behalf of which the person(s) acted, executed ’the instrument. WITNESS my hand and official seal. 910.’104 h: 00,I 191f" CERTIFICATE OF ACKNOWLEDGMENT (Civil Code 5 1189) STATE OF )’. COUNTY OF ) On , before me, , a notary public in and for said County, personally appeared , personally known to me (or proved to mc on the basis of satisfactory evidence) to be th~ person(s) whose name(s) is/are subscribed to the within instrument, ~nd acknowledged to me that he/she/they executed ~he Same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. 980304 L,~ 0031915 13 ATTACHMENT E City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE:FEBRUARY 23, 1998 CMR:141:98 SUBJECT:ADOPTION OF THE NEGATIVE DECLARATION - REGIONAL WATER QUALITY CONTROL PLANT, AND APPROVAL OF THE SOLIDS FACILITY PLAN’S RECOMMENDATION TO REHABILITATE THE INCINERATORS REPORT IN BRIEF The Solids Facility Plan evaluates options and recommends a plan to manage the solid residue at the Regional Water Quality Control Plant (RWQCP). The RWQCP currently uses two incinerators to burn and reduce the sludge to a manageable amount of ash product for beneficial reuse. After 26 years of continuous operation, the incinerators have deteriorated significantly prompting the preparation of the Plan. The Plan examines the environmental, economic, and operational impact of sludge treatment options and recommends rehabilitation of the two incinerators immediately, with the addition of a sludge dryer in the future, if needed. Certain environmental advocacy groups have serious reservations about the continuation of sewage sludge incineration. However, following extensive discussions with such groups and further data gathering,, staff was unable to conclude that other options are environmentally better. Staff believes the RWQCP should continue to analyze future options, ree;caluate and adopt a set of long range goals that are responsive to the communities and in context with future regulations. Major changes in plant design and policy should not be made until long range goals are complete. CMR:141:98 Page 1 of 8 RECOMMENDATIONS Staff recommends that Council: Approve the recommendations of the Solids Facility Plan to rehabilitate the sewage sludge incinerators at the RWQCP immediately,..and add a thermal dryer when peak loading capacity is required, or if pilot testing of a sludge dryer is desired. Adopt the negative declaration for the recommended project to rehabilitate the incinerators at the RWQCP immediately, and add a thermal dryer, if needed. o Direct staff to forward the amendments to the Partners’ Agreements to Partner agencies for approval. / Direct staff to develop policies for reducing environmental releases of mercury, dioxins, polychlorinated biphenols. Direct staffto establish a process for developing long term goals for the RWQCP, and then return to Council for approval of the process. BACKGROUND The RWQCP is required to continuously process all incoming sewage. It currently operates two incinerators to treat the solid residue (sludge) of the sewage. The sludge is burned and reduced to a manageable amount of ash suitable for beneficial reuse. The sludge, before buming, is unsuitable for disposal in landfills. The incinerators are the RWQCP’s only means to treat and prepare the sludge for proper disposal. The reliability and redundancy of these incinerators are extremely important to the RWQCP. Concems with the incinerators were discussed in earlier staffreports, (CMR:278:96 and CMR:236:97), and are summarized below. The first concern is reliability: The incinerators were constructed in 1971 and have become more and more difficult to keep in operating condition. Large cracks have developed in the half-inch steel shell, and the chances of both incinerators being down at the same time have increased to a point of very serious concern. Given the 24-hour per day, 365 day per year nature of the operation, inability to operate the incinerators would present immediate emergency conditions and, within 24 hours, human health concerns. The second concern is redundancy: The wastewater flow going into the RWQCP varies daily and seasonally. While the two existing incinerators are permitted to operate-concurrently to meet varying flow requirements, this operating mode does not allow for emergencies or repairs. Currently, one of the incinerators is so frequently under repair that a back-up almost never exists. The RWQCP is required to provide reliable, uninterrupted service. CMR:I41:9g Page 2 of 8 The third concern is pollutant releases: The RWQCP incinerators are in compliance with current regulations. However, the existing emission control devices on the incinerators are outdated and therefore, maximum reduction of pollutants cannot be achieved. The solids treatment and disposal options are currently heavily regulated, and future regulations are uncertain. The issues associated with the pollutant releases to air, land, and water from sludge treatment and disposal continue to be a concern with the public and regulatory agencies. These concerns prompted the preparation of the Solids Facility Plan(Plan). The Plan examines the current and future potential regulations, and evaluates the environmental and economic impact of several options. DISCUSSION RWQCP staff and staff from Partner agencies worked as technical advisors in preparing the Plan. The Plan was developed through two studies, which have been under way since 1994. The first study evaluated the feasibility of the full realm of technologies for handling the sludge, and reduced down the number of feasible options. The recommendation of the feasibility study formed the basis of the second study, the Plan. Two technologies are considered feasible options besides incineration: sludge digestion and sludge drying. Sludge digestion is the anaerobic breakdown of sludge in large holding tanks over long periods. The end product is digested sludge, commonly called biosolids. Sludge drying uses low heat to evaporate the water out of the sludge without burning the organics. The residue from the dryer is in the form of pellets. The residue from both processes are typically used on agricultural land as soil supplement. Virtually all sewage treatment plants the size of the RWQCP use incineration, digestion, or drying. In the West, almost all plants use digestion, with land application of the digested sludge. The RWQCP chose incineration 27 years ago because incineration takes less land and produces less odor and residue. Recent studies demonstrate that another advantage of incineration is that pathogens, and most organic pollutants in the sludge such as polychlorinated biphen01s (PCBs) and organochlorine pesticides (e.g. DDT), are destroyed in the incinerators. Thus, when the ash from the incinerators is applied to land, it contains less pollutants than the residue from digestion or drying. It is difficult to compare the environmental effects of the three options. Staffwas unable to conclude that one technology is "better" for the environment than another. All options have certain negative environmental impacts. Each releases different pollutants to different media - air, land or water. Incineration produces air pollutants, consumes energy, and does not preserve the organic material for sludge reuse. Digestion does not destroy organic pollutants, or dioxin. Dryers consume even more energy and apparently have never been tested for dioxin air emissions. The inability to draw conclusions is a!so due to the difficulty of comparing different types of environmental releases. The pathways for the final impact CMR: 141:98 Page 3 of 8 resulting from initial pollutant releases are numerous and difficult to trace. All three options can meet all current environmental, health and safetyrequirements Therefore, staff focussed on the following criteria in comparing the options: ® Cost Land use Visual impact Potential odor The table below is the comparison of the three options: Options Incinerator Rehab. Plus Dryer Digesters Dryers Total Cost $11.4 million $29.7 million $17.2 million Footprint 800 sf > existing 45,000 sf> existing 1500 sf> existing Visual Impact Low High Low Odor Low High Medium The incinerator rehabilitation, plus dryer option, will meet the current and the known future regulations; it is the lowest cost, has the smallest footprint, least visual impact, and least odor. Staff, therefore, recommends the project to rehabilitate the incinerators immediately, and to add the dryer if needed. The project will include three major elements: 1.Repair the existing incinerators to ensure safe and reliable operation. Relocate the emission control device to outside of the incinerator to allow full utilization of the entire incinerator for combustion. The improved efficiency will enable a single incinerator to take care of the varying flow most of the time, leaving one incinerator as a reliable standby. A dryer may be installed, if the City decides to pilot test the dryer, or when it is needed to help treat the solids. Replace the existing emission control devices with new state-of-the-art devices to improve the emission. The Partners’ staff support City staff’s recommendation and have agreed to participate in a joint financial plan entailing debt financing. City staffis presently working with the Partners on the amendment to finance the project. Palo Alto would issue the debt, and Partner agencies would pay Palo Alto in accordance With the amendment to the Partners CMR:I41:98 Page 4 of 8 agreements, which is consistent with past capital financing. The dral~ amendment was prepared jointly by Palo Alto’s City Attomey’s office and outside counsel at Jones, Hall, Hill & White. It incorporates comments from the City’s financial advisor, Stone & Youngberg. The amendment will be presented to the Council in March 1998. Many environmental advocacy groups (EAGs) raised.the concern that a non-incineration option may be better for the environment (CMR:356:97). In response to their concerns, additional data was collected and a Response Study was prepared. Many of the EAGs made the point that, if the sludge were made substantially cleaner by keeping pollutants out of the wastewater, non-incineration technologies (principally sludge digestion or sludge drying) would be better for the environment. The non-incineration option uses less energy, produces less air emission, and would allow reuse of the organic matter as a soil supplement without the current negative side-effect of putting pollutants on the soil as well, if the wastewater is "cleaner." While this logic is sound, it depends upon making the sludge cleaner through source control. Staff investigated the potential for source control of key pollutants (dioxins, mercury, organochlorine pesticides, polychlorinated biphenols - PCB ) and found that there was no reason to assume that major reductions would occur quickly. Action items for implementation by Palo Alto were developed, but it is not anticipated that those reductions will be greater than approximately 20 percent. Thus, non-incineration options will continue to have the draw-back of placing the pollutants on the soil. For this and other reasons described in the Response Study, staff’s recommendation has not been changed. Given currently available data, the current pollutant levels in sludge, and the current ability to evaluate impact on the environment, staffbelieves this recommendation to be the appropriate one. However, it is not at all certain that incineration should be the long term technology of choice for the RWQCP. Air emissions, high energy use, and failure to reuse organic matter are features of incineration that raise significant concerns about its long term use. Therefore, staff is also recommending the development of long term goals to guide future design work at the RWQCP. Staffis also recommending the development of specific policies to achieve reductions of releases of mercury, dioxins, and organoehlodne pesticides to the environment. These policies will also assist staff in the long term planning that must be accomplished for the RWQCP. ALTERNATIVES TO STAFF RECOMMENDATION If Council does not adopt the Negative Declaration and approve the recommendations, the RWQCP would continue to attempt to keep the incinerators in operation. Downtime, repair costs, and safety issues would continue to escalate. Should an incinerator fail, the RWQCP is required by law to repair the incinerator immediate!y. At that time, the cost of the repair would almost certainly be higher than the planned repair, and any work to improve the air emissions would most likely not be implemented because of the urgency of the situation. CMR:,I 41:98 Page 5 of 8 With respect to the alternatives to incineration, both digestion and drying options would have a significant affect on the environment, odor control, and visual impact. Without full environmental review by the public, these options cannot be considered as an alternate project. Therefore, staffwould be required to restart data gathering, conceptual design and environmental review. It would be several years before staff could return to Council with an alternative digestion or drying option. RESOURCE IMPACT The capital project is estimated to cost approximately $6.2 million for the rehabilitation of the incinerators, and $5.2 million for the dryer (in 1998 dollars). The attached cash flow analysis (Attachment B) shows the Partners’ share of a twenty-year bond funding for the project. If the rehabilitation is constructed in 1999 it is estimated that the sewer rate impact to the Palo Alto rate payers will be an increase of less than three percent. POLICY IMPLICATIONS The recommended project is consistent with City policies. The recommendation to establish a process for determining longterm goals will lead to the adoption of new policies. TIMELINE If approved, the.rehabilitation of the incinerators will proceed immediately at the following schedule: Final design starts Permitting Debt financing Bid Construction starts Bond Sale May 1998 February 1999 May 1999 May 1999 August 1999 Fall 1999 ENVIRONMENTAL REVIEW An environmental check list was prepared for the recommended project (Project). Compared to the existing incinerators, the check list showed that the Project has no major increase in impact. The Project will result in better emissions compared ,to the existing facility. There will be some temporary impact due to construction activities that will be mitigated. A Negative Declaration (N.D.) has, therefore, been prepared for the Project. The N.D. (Attachment A) was distributed and notice was given to the public for review and comments. The review period sta~ed on January 16, 1998 and ended on February 14, 1998. Staff received some questions related to the details of the design and repair. A pre-design was performed on the Project prior to the preparation of the N.D. Final design will be CMR: 141:98 Page 6 of 8 performed upon Council approval of the Project. The final design will include all the details for the repair and the construction. A letter was received from the League of Women Voters of Palo Alto. The letter stated that the incinerator rehabilitation project is probably the appropriate solution at the present time, and urged the RWQCP to continue to evaluate other options and work on the long range plan. A copy of the letter is attached (Attachment C). A second letter (Attachment D) was received from Bay Area Action with the following five suggestions: .1.Develop dioxin reduction policy for the City of Palo Alto, and request neighboring cities to do the same. 2.Build a solids thermal dryer to pilot test a non-dioxin creating alternative to handling sewage sludge. 3. Explore alternatives to safely dispose of sludge or ash which contains dioxins. 4.Educate other public agencies and the public about dioxins and provide information on how to reduce them. 5. Continue to monitor the influent and effluent from the RWQCP for dioxins. Staff believes that these suggestions can be addressed in the long-term goals and policy development process described in staff recommendations 4 and 5. ATTACHMENTS A - Initial Study/Negative Declaration B - 20 year cash flow analysis C o Letter from the League of Women Voters of Palo Alto D - Letter from Bay Area Action E - November informational booklet Response Study - A copy is available for review at the Public Works Engineering, 6th floor counter PREPARED BY: Bill Miks, Manager Regional Water Quality Control Plant Phil Bobel, Manager Environmental Compliance Division CMR:141:98 Page 7 of 8 REVIEWED BY: GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL:. ~ity Manager CMR: 141:98 "’ Page 8 of 8 ATTACHMENT A Initial Study/Negative Declaration (IS/ND) Palo Alto Regional Water Quality Control Plant Solids Facility Plan City of Palo Alto Project Title: Palo Alto Regional Water Quality Control Plant (PARWQCP) Solids Facility Plan Lead Agency Name and Address:City of Palo Alto Public Works Department Regional Water Quality Control Plant 2501 Embarcadero Way Palo Alto, California 94303 Contact Person and Phone Number: Daisy Stark, PARWQCP Engineer, 650-329-2598 Project Location: 2501 Embarcadero Way, Palo Alto, California Application Number(s): Not Applicable Project Sponsor’s Name and Address: City of Palo Alto, Public Works Department, Regional Water Quality Control Plant, 2501 Embarcadero Way, Palo Alto, California, 94303 General Plan Designation: Major Institution/Special Facilities Zoning: Public Facilities with Site Design overlay (PF(D)) Desc.ripfion of Project: PARWQCP Background The Palo Alto Regional Water Quality Control Plant (PARWQCP) provides advanced wastewater treatment for Palo Alto, Mountain View, Los Altos, Stanford University, Los Altos Hills, and much of East Palo Alto (Figure 1). The Project is located at the PARWQCP in the City of Palo Alto at the east end of Embarcadero Way, east of Highway 101 (Figure 2). The PARWQCP separates the solid substances from the incoming wastewater (influent) EAST PALO ALTO SANITARY DIST. To San Francisco WATER QUALITY CONTROL PLANT San Francisco Bay Not To Scale PALO ALTO To San Jos~ PALO ALTO Figure 1 Service Area Palo Alto Regional Water Quality Control Plant 0 (see Figure 3). The liquid and solid portions are then treated. The treated wastewater is discharged via an outfall to the San Francisco Bay. The solid substance removed from the wastewater is called sewage sludge and is treated in the solids facility of the PARWQCP. The solids facility includes gravity thickeners and belt presses which remove more of the water : from the sludge, two existing .incinerators which bum the sludge" to an ash product, and an ash storage silo and bagging system. The ash product is trucked to the Central Valley and applied to agricultural lands as a soil amendment. Figure 3 Simplified PARWOCP $¢hema#c Wastewater PARWQCP Wastewater Treatment Processes Solids Incineration Treated San Francisco;> Wastewater Bay --Ash--~~ Farmland A more detailed discussion of the incineration process and the need for the Project is provided in the following sections of this IS/ND. 4 The Incineration Process and the Need for Project The Incineration Process Figure 4 shows the location of the incineration building at the PARWQCP. The incineration process, depicted graphically in Figure 5, consists of’two multiple-hearth incinerators, each with two air pollution control devices to minimize emissions into the atmosphere. The two incinerators each consist of six hearths (separate chambers) in a vertical column where natural gas can be used in varying amounts to ignite the residual solids. Currently, the top hearth in each incinerator is used as an afterburner to bum organic molecules in the stack gas and prevent their release into the environment. In addition, each incinerator has a wet scrubber that removes pollutants from the incinerator stack gases. Need for the Proiect The PARWQCP incineraiors, which have been in service since 1971, have become more and more difficult to maintain in recent years and require frequent, costly repairs. Equipment downtime has increased dramatically because of the frequent repairs. The chance of both incinerators being out of service at the same time has increased to the point of causing concerns about safe operations of the plant. The wastewater treatment plant must be able to continuously process all incoming sewage. Given the 24-hour-per-day, 365-day-per-year nature of the operation, the inability to operate the incinerators would present immediate emergency conditions and, within 24 hours, human health concerns. Project Goals The proposed Project involves improvements to the solids facility, and is designed to meet the following goals: Repair the two existing incinerators to ensure a safe operating environment. Improve the efficiency of the incinerators so that only one incinerator needs to operate at a time, leaving one incinerator as a firm, reliable standby. Upgrade the air pollution control devices to improve the emissions of the incinerators. 5 <o Figure 5 Currant Incinerator Process Residual Solids’----~ Incinerator f Atmosphere Air Scrubber Afterburner Cooling Hearth Residual Solids ~ Ash Afterburner Cooling Hearth Burning Hearths Incinerator The fast goaJ of the’ proposed Project is to make repairs to the two incinerators that will eliminate the frequent and costly short-term repairs, greatlY reduce equipment downtime, and insure a safe operating environment for plant personnel. This will include repair of crocks that have developed in the half-inch steel shell of the incinerators. The second goal of the proposed Project is to provide redundancy in the incineration process, allowing one of the incinerators to be held in reserve as a back up to deal with emergency situations. The wastewater flow going into the PARWQCP varies daily and seasonally. While the two existing incinerators are permitted to operate concurrently to meet the varying 7 flow requirements, this operating mode does not allow for emergencies or repairs. Currently, one of the incinerators is under such frequent repair that a back-up incinerator almost never exists and urgent conditions are the norm. To relieve these urgent conditions, two Project. cbmponents are proposed. The first component, a true (separate) afterburner, will be constructed to allow the top hearth to be used to bum the solids. This will increase the throughput (the amount of solids that can be handled by one incinerator) and will also reduce the need to run both incinerators simultaneously. The second component, a solids thermal dryer, will be added if the City decides to pilot test the dryer or when it is needed to help treat the solids from anticipated population growth in the PARWQCP service area. The dryer will further reduce the water content of some of the solids before feeding the solids to the incinerators. The drier solids are much easier for the incinerator to.handle and further decrease the likelihood that both incinerators would have to be operated simultaneously. The third goal of the proposed Project is to upgrade the solids facility’s air pollution control equipment. This goal .will be met with two Project components for each incinerator. First, the new afterburners, which will help to meet the second goal, will be more efficient than the current afterburner and will operate at a higher temperature to completely oxidize the organics in the stack gas. Second, new two-stage wet scrubbers will be installed that capture substantially more gases and particulate matter than the current scrubbers. Figure 6 shows the improved incineration system upon completion of the Project. Impact of the Proposed Project on PARWQCP Treatment Capacity The proposed project will not increase the PARWQCP’s treatment capacity. The incineration system is a component of the PARWQCP, and a modification to the incineration system wouldonly cause an increase in the PARWQCP capacity if it were currently the only limiting component of the plant. The average dry weather flow to the PARWQCP in 1996 was 24 million gallons per day (IVIGD) from the PARWQCP’s service area of approximate 220,000 Figure 6 Proposed/ncinera#on System Residual Solids Incinerator 2-Stage Scrubber [Afterburner] Stack Gas Atmosphere [ [ Cooling Hearth Ash Farmland 2-Stage Scrubber Afterburner ] Stack Gas Residual ~ ~ ~ Solids ~~ Cooling Hearth ~ Incinerator Burning Hearths people. The wastewater treatment processes (as distinguished fi’om the incineration system shown in Figure 3) have a design capacity of 38 MGD average dry weather flow, which could serve a population of approximately 350,000. By contrast, the incineration system has a current approved maximum capacity of 60 dry tons per day (DT/D) (30 DT/D per incinerator), with a 1996 usage of approximately 17 DT/D to serve 220,000 people. The proposed Project will increase the peak capacity of one incinerator to 32 DT/I). While it could be argued that the capacity of incinerator system would then be 64 DT/I) (32 X 2 incinerators), this is not the case for two reasons. First, only one incinerator would be operated at a time. The purpose of the project components is to insure a back-up incinerator is ready at all times. Second, the Bay Area Air Quality Management District (BAAQMD) Permit to Operate for the PARWQCP limits maximum throughput to 60 DT/D. No modification to that permit is being sought. Therefore, the incinerator system capacity would remain at 60 DT/D. This system could serve a population as great as approximately 410,000. The incinerator capacity can support a larger additional population than the available capacity in the wastewater treatment processes. The incineration system could serve a population as great as approximately 410,000, while the wastewater treatment process could only serve a population of approximately 350,~000 (see Table 1). Therefore, it is the wastewater treatment Table 1 Current Throughput and Maximum Capaci~, Wastewater Treatment Processes Incineration System 1996 VALUES CURRENT MAXIMUM CAPACITY PopulationThroughput Average 24 MGD 17 DTD 220,000 220,000 *Average Throughput Capaci~ 38 MGD* 60 DTD°* Approximate Population Equivalency 350,000 410,000 "60 DTD = Maximum Peak Daily Capacity. Average capacity associated . .,with this peak capacity used to determine Population Equivalency 10 processes, not the incineration system, that limit the PARWQCP’s capacity. The proposed Project does not increase the capacity of the PARWQCP. A major capi~l improvement project for the wastewater treatment processes and regulatory agency approval would both be required to increase the capacity of the wastewater.treatment processes and thus increase the capacity of the PARWQCP. Such a project is .unlikely within the next several decades because the current PARWQCP capacity exceeds current demand by almost 100%, while the anticipated growth in the service area during the 20-year life of the proposed Project is less than 10%. Project Approach Following are additional details on the proposed Project components. Repair of Existing Incinerators The~ two incinerators are 18.75 foot diameter, 6-hearth furnaces. The interior of each incinerator is lined with refractories of firebrick and insulation material. Dewatered solids are introduced into the furnace for combustion. An ash handling system conveys the ash to a storage silo. The repair of the incinerators, all taking place within the existing building, will consist of the following measures: Identify hot spots on the steel shell and flaws in the refractory and insulation Add ste~Iplate patches on the shell Replace hearths (including flattened hearth) as needed Repaint incinerator steel shells Replace fans and ducting to the stack, incinerator control systems, and furnace draft control system Add new sludge feed conveyor II Modification of Incineration System The modification will increase the efficiency of the existing incinerators and improve air emissions. It will consist of the following: Construction of a new structure (possible locati~in shown on Figure 4) immediately adjacent to the existing building to house the new air pollution control equipment, including an external afterburner, Venturi-Pak scrubber, and exhaust ducting. The new structure will be an 800 square foot addition to the existing 5,300 square foot incinerator building. It will be about the same height as the existing building (46 feet), and will be sheltered from the street and the public by other treatment plant structures and trees surrounding the plant. The new air pollution control equipment will provide significant reductions in emissions compared to current emissions. Operational changes to use the top hearth as a burning hearth. Installation of an equalization storage tank. The quantity of dewatered sludge to be incinerated will vary hourly. The ability to temporarily store, or equalize, these variations will enhance operating results, particularly at peak conditions. A new equalization storage tank will be e~nstrueted adjacent to the south side of the incinerator building as shown on Figure 4. It will consist of a steel storage tank with a closed top and mixers. It will be25 feet in diameter and 30 feet tall, providing 100,000 gallons of storage. It will be sized for the projected average annual day’s sludge production of 18.5 DT/D. The tank will be vented to the incinerator inlet combustion air to make use of the incinerators’ new air pollution control equipment. The height of the-tank is lower than the existing incinerator building and the surrounding structures. It will not be visible from the street or by the public. Addition of a Thermal Dryer A small thermal dryer unit would be added if the City decides to pilot test the dryer or when a single incinerator is unable to meet peak loads during the project life (through 2020). The purpose of the thermal dryer is to increase the dryness of sludge beyond that which can be 12 achieved with the existing beltpress dewatering. Available incinerator capacity is greater with drier solids. The sludge dried by the thermal dryer during peak periods would be added to the remaining dewatered sludge before incineration. The thermal dryer is expected to be operated only sporadically during peak loading conditions, for a total of about 4 weeks during the year. This will typically occur during the wet weathei" months in the winter after periods of particularly heavy storms. Thermal drying involves removal of moisture from the solids to a heated air stream. There are certain issues associated with drying that can be successfully addressed with proper design and operational procedures. The product from the dryers is organic and very dry, which can cause dust. Since organic dust can be a source of explosions, thereby creating a potential safety problem, the system will be designed and constructed with dust handling systems that bring the level of dust down below the hazardous level and that meet all applicable safety, requirements. Also, the dried sludge product is initially hot. If it is placed directly into a storage hopper, there is a potential for heat buildup, which may eventually cause the pellets to catch fire. Two measures will be included to reduce the fire hazard. First, the pellets will be cooled before being placed in storage to reduce the fire hazard. Second, nitrogen padding of the storage hopper air space can also be implemented as a means to reduce the fife hazard. The proposed thermal dryer uses indirect drying, in which fuel is eombusted in a boiler to produce steam or in a thermal oil heater to heat oil. The steam or heated oil is passed through an indirect dryer, where hollow metal disks or paddles are heated from the inside and conduct heat ~o the solids on the outside of the paddles. The thermal drying facility can be located inside or outside the existing sludge incinerator building. A site just north of and adjacent to the existing incinerator building, as shown in Figure 4, has been identified for an outside location. Conveyors will be installed to transport 13 the dewatered solids to the thermal drying system from the belt presses and to return the dried solids to the incinerator. Also, for odor con~ol, the foul air created during the thermal drying process will be discharged to the incinerator inlet air stream as part of the inlet ,’. ...~ustion air. This air eventually flows to the incinerator air emissions control system and heii~ in fuel savings in incinerator operations since it is heatedi The dryer unit includes abatement equipment for the boiler, which bums natural gas to heat the dryer. If the outdoor location is selected, the facility will be lower in height than the existing incinerator building and other surrounding structures. It will be sheltered from the street and the public by other treatment plant structures and trees surrounding the plant. California Environmental Quality Act (CEQA) Requirements The California Environmental Quality Act (CEQA) requires that potential significant environmental effects of a project proposed by a public agency be identified and disclosed to the public. A signlficani effect on the environment is generally defined as a "substantial or potentially substantial adverse change in the physical environment." "Environment" means the physical conditions, including both natural and man-made conditions, that exist within the area affected by a proposed project. The environmental assessment for the proposed project has identified no sigrfi.ficant environmental effects. A Negative Declaration .must include a written statement briefly explaining why a proposed project will not have a significant environmental effect when compared to the existing environment. It must include a description of the project and location, identification of the project proponent, and proposed finding of no significant effect. It must also include a copy of the Initial Study checklist that justifies the finding of no significant effect. This Negative Declaration contains all of the required information. 14 11.Other agencies whose approval is required (e.g., permits, financing approval, or participation agreement.) Agency State/Regional Agencies Bay Area Air Quality Management District San Francisco Bay Regional Water Quality Control Board City of Palo Alto City of Palo Alto Public Works Department City of Palo Alto Department of Planning and Community Development City of Palo Alto Architectural Review Board City of Palo Alto Fire Department Other Local Agencies City of Mountain View City of Los Altos East Palo Alto Sanitary District Town of Los Altos Hills :Permits/Issue Authority to ConsU’uct (A/C) and Permit to Operate(P/O) - if grandfather status is not maintained, then will be needed (existing facility attained grandfather stares because it was constructed before 1972, and will retain this status as long as it is not modified in a manner that results in an air emission increase of a regulated pollutant or the repair co~ts are not greater than 50% of the capital cost of a new incinerator) Clean Water Act: 40 CFR Part 503 Rules--proposed revisions to CWA Part 503 will be incorporated into the existing NPDES Permit; will require Continuous Emissions Monitoring for CO and NOx along with existing requirements for Total Hydrocarbons by 2000 Grading and Drainage Review Building Use Permit Site and Design Review Architectural Review Hazardous Materials Disclosure Checklist/Inspection Approval and Funding Approval and Funding Approval and Funding Approval and Funding 15 Environmental Factors Potentially Affected: The environmental factors checked below would be potentially affected by this project as indicated by the checklist on the following pages. []Land Use and Planning []Population and Housing []Geologic Problems [] Water [] Air Quality []Transportation/Circulation []Biological Resources E1Energy and Mineral Resources []Hazards []Noise [] Mandatory Findings of Significance []Public Services []Utilities and Service Systems []Aesthetics []Cultural Resources []Recreation 16 Determination: On the basis of this initial evaluation: I find that the proposed project COULD NOT have a significant effect on the environment, and a NEGATIVE DECLARATION will be prepared. I find that although the proposed project could have a significant effect on the environment, there will not be a significant effect in this case because the mitigation measures described on an attached sheet have been added to the project. A NEGATIVE DECLARATION will be prepared. I find that the proposed project MAY have a significant effect on the environment, and an ENVIRONMENTAL IMPACT REPORT is required. , I find that the proposed project MAY have a significant effect(s) on the environment, but at least one effect I) has been adequately analyzed in an earlier document pursuant to applicable legal standards, and 2) has been addressed by mitigation measures based on the earlier analysis as described on attached sheets, if the effect is a "potentially significant impact" or "potentially significant unless mitigated." An ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects that remain to be addressed. Project Planner Date Director of Planning & Community Environment 17 Evaluation of Environmental Impacts: 1)A brief explanation is required for all answers except "No Impact" answers that are adequately supported by the information sources a lead agency cities in the parentheses folio’sang each question. A "No Impact" answer is adequately supported if the referenced information sources show that the impact simply does not apply to projects like the one involved (e.g. the project falls outside a fault rupture zone). A "No Impact" answer should be explained where’it is based on project-specific factors as well as general standards (e.g. the project will not expose sensitive receptors to pollutants, based on a project- specific screening analysis). 2)All answers must take account of the whole action involved, including off-site as well as on-site, cumulative as well as project-level, indirect as well as direct, and construction as well as operational impacts. "Potentially Significant Impact" is appropriate if there is substantial evidence that an effect is significant. If there are one or more "Potentially Significant Impact" entries when the determination is made, an EIR is required. - 4)"Negative Declaration: Potentially Significant Unless Mitigation Incorporated" applies where the incorporation of mitigation measures has reduced an effect from "Potentially Significant Impact" to a "Less than Significant Impact." The lead agency must describe the mitigation measures, and briefly explain how they reduce the effect to a less than significant level (mitigation measures from Section XVII, "Earlier Analyses," may be cross-referenced). 5)Earlier analyses may be used where, pursuant to the tiering, program EIR, or other CEQA process, an effect has been adequately analyzed in an earlier EIR or negative declaration. Section 15063(e)(3)(D). Earlier analyses are discussed in Section XVII at the end of the checklist. 6)Lead agencies are encouraged to incorporate into the checklist references to information sources for potential impacts (e.g. general plans, zoning ordinances). Reference to a previously prepared or outside document should, where appropriate, include a reference to the page or pages where the statement is substantiated. See the sample question below. A source list should be attached, and other sources used or individuals contacted should be cited in the discussion.. 7)This is only a suggested form, and lead agencies are free to use different ones. 18 Issues (and Supporting Information Sources): I. LAND USE AND PLANNING. Would the proposal: a) b) c) Conflict with general plan designation or zoning? Conflict with applicable environmental plans or policies adopted by agencies with jurisdiction over the project? Be incompatible with existing land use in the vicinity? d)Affect agricultural resources or operations (e.g. impacts to soils or farmlands, or impacts from incompatible land uses)? e)Disrupt or divide the physical arrangement of an established community (including a low-income or minority community? I1. POPULATION AND HOUSING. Would the proposal: a)Cumulatively exceed official regional or local population projections? b) c) Induce substantial growth in an area either directly or indirectly (e.g. through projects in an undeveloped area or extension of major infrastructure)? Dispi’ace existing housing, especially affordable housing? IlL GEOLOGIC PROBLEMS. Would the proposal result in or expose people to potential impacts involving: a) Fault"rupture? b) Seismic ground shaking? Sources 3 3 Potentially Significant Impact Negative Declaration: Potentially Significant Unless Mitigatibn Incorporated Less Than Significant Impact No Impact 19 Issues (and Supporting Information Sou~’ces): c) Seismic ground failure, including liquefaction? d) Seiche. tsunami, or volcanic hazard? e) Landslides or mudflows? f) Erosion, changes in topography or unstable soil conditions from excavation, grading, or fill? g) Subsidence of the land? h) Expansive soils? i) Unique geologic or physical features? IV. WATER. Would the proposal result in: a)Changes in absorption rates, drainage patterns, or the rate and amount of surface runoff?. b)Exposure of people or property to water related hazards such as flooding? c)Discharge into surface waters or other alteration of surface water quality (e.g. temperature, dissolved oxygen or turbidity)? d)Changes in the amount of surface water in any water body? e)Changes in currents, or the course or direction of water movements? ’ 19 Change in the quantity of ground waters, either through direct additions or withdrawals, or through interception of an aquifer by cuts or excavations or through substantial loss of groundwater recharge capability? g) Altered direction or rate of flow of groundwater? ’h) Impacts to groundwater quality? Sources 3 3 1,3 3 3 1,3 Potentially Significant ¯ Impact Negative Declaration: Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact 20 Issues (and Supporting Information Sources): i) Substantial reduction in the amount of groundwater otherwise available for public water supplies? V. AIR QUALITY. Would the proposal: a)Violate any air quality standard or contribute to an existing or projected air quality violation? b) Expose sensitive receptors to pollutants7 c)Alter air movement, moisture, or temperature, or cause any change in climate? d) Create objectionable odors? VI. TRANSPORTATION/CIRCULATION. Would the proposal result in: a) Increased vehicle trips or traffic congestion? b)Hazards to safety from design features (e.g. sharp curves or dangerous intersections) or incompatible uses (e.g. farm equipment)? c)Inadequate emergency access or access to nearby uses? d) Insufficient parking Capacity on-site or off-site? e) Hazards or barriers for pedestrians or bicyclists? ~ Conflicts with adopted policies supporting alternative transportation (e.g. bus turnouts, bicycle racks)? g) Rail, waterborne or air traffic impacts? Vii.BIOLOGICAL RESOURCES. Would the proposal result in impacts to: a) Endangered, threatened or rare species or their habitats (including but not limited to plants, fish, insects, animals, and birds)? Sources 1 1 1 I 1 1,2 1,2 1,2 Potentially Significant : Impact Negative Declaration: Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact 21 Issues (and Supporting Information Sources): b) Loca:. ,’ designated species (e.g. heritage trees)? c)Locally designated natural communities (e.g. oak forest, coastal habitat, etc.)? d)Wetland habitat (e.g. marsh, riparian and vernal pool)? e) VIII. a) b) c) Wildlife dispersal or migration corridors? ENERGY AND MINERAL RESOURCES. Would the proposal: Conflict with adopted energy conservation plans? Use non-renewable resources in a wasteful and inefficient manner? Result in the loss of availability of a known mineral resource that would be of future value to the region and the residents of the State? HAZARDS. Would the proposal involve: A risk of accidental explosion or release of hazardous substances (including, but not limited to: oil, pesticides, chemicals or radiation)? b)Possible interference with an emergency response plan or emergency evacuation plan? c)The creation of any health hazard or potential health hazards? d)Exposure of people to existing sources of potential health hazards? e)Increased fire hazard in areas with flammable brush, grass, or trees? X. NOISE. Would’the proposal result in: a) Increases in existing noise levels? Sources 1 I Potentially Significant : Impact 1,2 1 Negative Declaration: Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact 22 Issues (and Supporting Information Sources): b) Exposure of people to severe noise levels? Xl.PUBLIC SERVICES. Would the proposal have an effect upon, or result in a need for new or altered government services in any of the following areas a) Fire protection? b) Police protection? c) Schools? d) M;iintenance of public facilities, including roads? e) Other governmental services? Xll.UTILITIES AND SERVICE SYSTEMS. Would the proposal result in a need for new systems or supplies, or substantial alterations to the following utilities: a) Power or natural gas? b) Communications systems? c)Local or regional water treatment or distribution facilities? d) Sewer or septic tanks? ’ e) Storm water drainage? f) Solid waste disposal? g) Local or regional water supplies? XIII. AESTHETICS. Would the proposal: a) Affect a scenic vista or scenic highway? b) Have a demonstrable negative aesthetic effect? Sources 1 1 1 1 1 1 1 1 I 1 i Potentially Significant ., Impact Negative Declaration: Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact NO Impact 23 Issues (and Supporting Information Sources): c) Create light or glare? Sources Potentially Significant ~. Impact Negative Declaration: Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact XIV. CULTURAL RESOURCES. Would the proposal: a) Disturb paleontological resources? b) Disturb archaeological resources? c) Affect historical resources?1,2 d)Have the potential to cause a physical change which would affect unique ethnic cultural values? 1,2 Restrict existing religious or sacred uses within the potential impact area? 1,2 XV. RECREATION. Would the proposal: a)Increase the demand for neighborhood or regional parks or other recreational facilities? 1,2 b) Affect existing recreational opportunities?1,2 XVI.MANDATORY FINDINGS OF SIGNIFICANCE. a)Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? NO Impact 24 b)Does the project have the potential to achieve short- term, Io the disadvantage of long-term, environmental goals? c) d) Does the project have impacts that are individually limited, but cumulatively considerable? ("Cumulatively considerable" means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects) Does the project have environmen .tal effects which will cause substantial adverse effects on human beings, either directly or indirectly? XVII. EARLIER ANALYSES. Earlier analyses may be used where, pursuant to the tiering, program EIR, or other CEQA process, one or more effects have been adequately analyzed in an earlier EIR or negative declaration. Section 15063(C)(3)(D). In this case a discussion should identify the following on attached sheets: a) Earlier analyses used, Identify earlier analyses and state where they are available for review. b) c) Impacts adequately addressed. Identify which effects from the above checklist were within the scope of and adequately analyzed in an earlier document pursuant tot he applicable legal standards, and state whether such effects were addressed by mitigation measured based on the earlier analysis. Miiigation measures. For effects that are "’Negative Declarations: Less than Significant with Mitigation Incorporated," describe the mitigation measures which were incorporated or refined from the earlier document and the extent to which they address site-specific conditions for the project. XVIII. SOURCE REFERENCES 1 Paio Alto Regional Water Quality Control Plant, Solids Facility Plan, May 1997 2 Paio Alto Comprehensive Plan, 1980-1995 3 Palo Alto Comprehensive Plan Update Draft Environmental Impact Report, December 1996 4 Voice mail message from Jim Giililand (City of Paio Alto) regarding zoning, on June 24, 1997 5 Voice mail message from Jim Gilliland (City of Palo Alto) regarding zoning, on June 26, 1997 25 IXX. EXPLANATIONS FOR CHECKLIST RESPONSES ]a The proposed project is consistent with the existin~ Major Institution/Special Facilities general plan designation of the PARWQCP and the Public Facilities with Site Design Overlay (PF(D)) zoning. The PARWQCP site is bordered on the west by one- and two-story office buildings, on the south by the City landfill, on the east by the Bay and Baylands Nature Preserve, and on the north by the Pale Alto Airport. The Pale Alto Golf Course is also located just wes~ of the airport. Much of the PARWQCP site is screened from these land uses by trees along its perimeter. However, the access road to the land’ ~uns directly along the east plant boundary, so some PARWQCP facilities, such as the fixed film reactors, are clcz~ ~’isible. The proximity to the airport places height restrictions on the treatment facilities. Thc top of the existing inc;,’~erat0rs are generally considered the maximum height allowed. I b The proposed project does not conflict with any applicable environmental plans or policies adopted by agencies wit.- jurisdiction over the project. I c The proposed project would not be incompatible with existing land use in the vicinity. Modificati0n~ to PARWQCP facilities would be limited to the existing treatment plant site. I d The proposed project would not impact agricultural resources or operations. I e The proposed project has no. impact on the physical arrangement of any established communities. I1 a The proposed project will not cumulatively exceed official regional or local population projections. See discussion for Issue II b below. II b The proposed project will not induce growth directly or indirectly. See discussion on pages 5 to 7 of the attached project description. I1 c The proposed project is limited to the existing treatment plant site and would not displace any existing housing. 111 a The proposed project is not located on a fault and would not result in or expose people to fault rupture. III b The Pale Alto Comprehensive Plan designates the project area to be prone to violent shaking in the event of a major earthquake. This shaking could cause significant damage to structures if not properly designed or constructed. A geotechnical report for the project will be prepared and the recommended design measures identified in that report w!ll be incorporated into the project. III c Iii d III e III f 111 g III h lll i IVa Liquefaction can occur when loose, saturated, relatively clean cohesionless soils are subjected to ground vibrations. The project area is situated adjacent to the San Francisco Bay and is underlain in part by Bay mud, an organic clay which is soft and compressible. Sand lenses are interspersed throughout the Bay mud; these lenses carry groundwater in the vicinity of the Bay and, during seismic events, have the potential to liquefy. According to’ the City of Pale Alto Comprehensive Plan, the site has a high liquefaction potential. The geotechnical, investigation to be prepared for the project will identify appropriate design measures that will be incorporated into the project to address liquefaction ISSUES. The ’proposed project would not result in or expose people to seiche, Tsunami, or volcanic hazard. The proposed project would not result in or expose people to landslides or mudflows. The proposed project would not result in or expose people to erosion, changes in topography or unstable soil conditions from excavation, grading, or fill. The proposed project would not result in or expose people to subsidence of land. The proposed project would not result in or expose people to potential impacts from expansive soils. No unique geologic or physical features exist at the project site, so the proposed project would not result in or expose people to potential impacts from unique geologic or physical features. The proposed project would be constructed on currently paved ground and would not add paved area. Hence the ~ proposed project would not result inany changes in abso~tion rates, drainage patterns, or the rate and amount of IXX. EXPLANATIONS F’OR CHEcKLIsT RESPONSES IV b IVc surface runoff. The treatment plant site is in a flood zone, as designated by FEMA. However, the proposed project would not result in an)’ additional exposure of people or property to water related hazards such as flooding. All applicable FEMA requirements will be met. The air pollution conirol equipment in the proposed project would recycle trace amounts of metals from the scrubber back to thc treatment plant headworks. With the addition of scrubber water treatment there will be no increase in metals in the wastewater discharged to the Bay and the adjacent Baylands Nature Preserve The wastewater discharged will still meet permit requirements for metals. The proposed project Would not chang~ the amount of surface water in any water body.IV d IV e The proposed project would not change currents or the course or direction of water movements. IV f The proposed project would not change the quantity of ground waters, either through direct additions or withdrawals, or through interception of an aquifer by cuts or excavations or through substantial loss of groundwater recharge capability. IV g The proposed project would not alter the direction or rate of flow of groundwater. IV h The proposed project would not result in impacts to groundwater quality. IV i The proposed project would not result in substantial reduction in the amount of groundwater otherwise available for public water supplies. V a Construction-related emissions, such as dust (fine paniculate matter, PMto), vehicle exhaust, and equipment exhaust are expected to occur at the facility for a period of up to 6 months. Minimal dust emissions are anticipated since the facility has paved roads and controlled speed limits, and major demolition and grading would not occur. Some excavation will be required to pour the foundation for the project facility, but minimal dust emissions are expected because the construction area is relatively small (800 square feet for air pollution control equipment, about 500 square feet for the equalization basin). Basic dust control measures, such as watering active construction areas and water sweeping all paved access roads, parking lots, and staging areas’, will be required by the Bay Area Air Quality Management District (BAAQMD) to reduce any potential dust emissions. Applying effective and comprehensive control measures during project construction would prevent violations of any air standards. There will be no net increase in emissions as compared with current emission levels based on recent source test data. Table t at the end of this checklist summarizes the current and future emissions associated with this project. The project will be designed with a new air emissions abatement system that will handle emissions from the incinerator, thermal solids dryer, scum handling system, and feed sludge equalization tank. The Solids Facility Plan describes in greater detail the air emissions abatement system. The proposed system will be more efficient and capable of handling the projected solids increase, and will improve existing air emissions by reducing, on the average, metals by 54 percent, criteria pollutants by 48 percent, and dioxins/furans by 99 percent from current emission levels. The project does not require an increase in track pick-ups for ash. Therefore, there will be no increased truck traffic emissions beyond what is currently occurring. With operation of the new emissions abatement technology and implementation of dust control measures during construction, the project would meet all current and known potential future air quality requirements and no significant air quality impacts would occur. Because the project site is not located near sensitive receptors and no net increases in air emissions would occur based on current source test data and future emission estimates, there will be no pollutant exposure to sensitive receptors. Sensitive receptors include schools, daycare centers, hospitals, and nursing homes. The PARWQCP staffwill adhere to 27 IXX. EXPLANATIONS FOR CHECKLIST RESPONSES Vc proper abatement"~quipment installation (including scheduled shutdown of in’~inerators during installation), testing, operating procedures to minimize any potential air emission impacts to workers in the light industrial businesses near the project site. The project does not include’the addition or modification of major heat or moisture sources ~nd would not result in a significant alteration of air movement, moisture, temperature, o.r other climatic changes. The dryer, which would only be operated only occasionally (typicaliy m~ximum 4 weeks per year), is the only new potential odor source, but is not expected to create an impact. The project will be designed to handle odor sources (i.e. dryer, scum handling, and feed tank) by venting the exhaust directly to the incinerator inlet air. There it will be. combusted and then sent to the incinerator emissions abatement system for added destruction of combustion by- products. Because of this configuration, the potential for odor outside of the abatement system will not be created. Therefore, no additional odors will be released beyond current operating conditions. Objectionable odors are not expected to occur. VI a Facility construction will have a less than significant impact on traffic. The number of trucks to haul solids by-product~- (ash) will be the same as the current number, which is one truck per week. Traffic related to construction activities are expected to be similar to the traffic that occurs during annual maintehance and rehabilitation of the Plant’s existing systems. This could include up to 8-10 workers entering the.site per day and a limited number of trucks delivering concrete, other materials, and equipment to the site. Traffic impacts from construction would be less than significant. Vl b The proposed project does not contain any transportation design features and would not result Jn hazards to safety from design features such as sharp curves o.r dangerous intersections. VI c Project construction activities and operations at PARWQCP would not interfere with emergency access or access to nearby uses, nor are they expected to interfere with emergency access at the PARWQCP. VI d PARWQCP currently has adequate parking capacity and would not add any additional employees as a rcsuk of the project. Parking needs for construction activities would not exceed current parking needs for rehabilitation and maintenance activities. VIe Facilities at PARWQCp would not be expanded outside the current plant boundaries and would not be a hazard to aedestrians or bicyclists. There are no pedestrian or bicycle paths within the PARWQCP. VI f The project does not conflict with City of Palo Alto adopted poli~ies supporting altemativetransponation. V! g The project would have no impacts on rail or waterborne traffic. Traffic at the adjacent airport would not be impacted " by the project construction or operation. No pan of the rehabilitation or expansion would be greater in height than the existing incinerators, which are considered the maximum height allowable to avoid impacting airport traffic. VII a The proposed project will result in a 99.9% decrease in dioxin and furan emissions, ’an average .54 percent decrease in metals air emissions, and an average 48 percent decrease in criteria pollutant emissions compa~:ed to current emissions, resulting in a project benefit. As a result, no impacts to endangered, threatened, or rare species in the adjacent marshes are expected. VII b VII c vli d The proposed project would require the removal of one or two eucalyptus trees next to the incinerator on the PARWQCP site. However, these trees are not heritage trees and they are less than 20 years old. They will need to be removed with or without this project, since they pose a fire hazard due to their proximity to the incinerator chimney, and the tree roots are invasive and have the potential to damage building foundations, pipes, and high voltage conduits. The proposed project would not result in impacts to locally designated natural communities such as oak forest or coastal habitat. The incinerator abatement air scrubber would’ recycle trace amounts of metals removed from the air stream back to the ~lant headworks. Use of scrubber water treatment to precipitate, concentrate, and remove metals from the recycle water will result in no increase in metals in the wastewater discharged to the Bay and the adjacent Baylands Nature Preserve. This is a mitigation.measure to prevent discharge of the metals to air or water. The wastewater discharged will still 28 IXX. EXPLANATIONS FOR CHECKLIST RESPONSES VII e VII1 a VIII b meet permit requirements for metals. As a result, no impacts to wetland habitat are expected. The proposed project would be located on the existing PARWQCP site and would not result in impacts to wildlife dispersal or migration corridors. The proposed project would not conflict with adopted energy conservation plans. Through the rehabilitation measures, the proposed project would result in greater fuel efficiency (i.e., less fuel use per unit of sludge processed) compared to current efficiency. The proposed project would not use non-renewable resources in a wasteful and inefficient manner. VIII c The proposed project would not result in the loss of availability of a known mineral resource that would be of future value to the region and to the residents of the State. IX a IXe Xa The thermal dryer may present a small risk of accidental explosion or fire. However, the proposed project would be designed with safety measures including proper dust handling systems to reduce explosion potential, and nitrogen padding of the storage hopper air space to reduce fire hazard. With these design measures, the potential impacts are expected to be less than significant. IX b The proposed project would not interfere with an emergency response plan or emergency evacuation plans. IX c The proposed project will result in a 99.9% decrease in dioxin and furan emissions, an average 54 percent decrease in metals air emissions, and an average 48 percent decrease in criteria pollutant emissions compared to current emissions from the incinerators, resulting in a project benefit. As a result; the project will result in no new impacts to health. " IX d Neither the proposed project nor the PARWQCP create metals; any metals emissions result from metals in the plant influent. However, the metals, primarily mercury, that would be removed by scrubber water treatment discussed in VIld may need to be recycled or handled as a hazardous waste. Amounts that would be removed would be small and are estimated to bc approximately 0.1 lb/year for the lighter metals and approximately 30 Ib/year of the heaviest metals. Metals resulting from scrubber water treatment would be handled properly in accordance with all applicable and stringent local, state, and federal regulations that govern the use, storage, and disposal of such materials. As a result, no significant impacts are expected. The proposed project area does not contain flammable brash, grass, or trees, and the proposed project would not increase fire hazard in areas with flammable brush, grass, or trees. The proposed project may result in short-term increases in existing noise levels associated with c.onstruction activities. However, the impacts are expected to be minor and not noticeably different than current noise associated with rehabilitation and maintenance activities. No sensitive receptors are located near the project area. Therefore, impacts to existing noise levels are expected to be less than significant. X b The proposed project would not result in exposure of people to severe noise levels. XI a The proposed project would not affect or result in a need for new or altered fire protection services. XI b The proposed project would not affect or result in a need for new or altered police protection services. X’i c The proposed project would not affect or result in a need for new or altered schools. Xld XI e XII a The proposed project consists of rehabilitation and modifications to a public facility (a portion of the PARWQCP). The rehabilitation and modifications are expected to improve the operations and reduce the maintenance needs of the solids handling facility. As a result, the proposed project would not affect or result in a need for new or altered maintenance of public facilities. The proposed project would not affect or result in a need for any other new or altered governmental services. The proposed project would not result in a need for new systems or supplies of or substantial alterations to power or natural gas utilities. 29 IXX. EXPLANATIONS FOR CHECKLIST RESPONSES XII b The proposed project would not result in a need’ for new systems or supplies of or substantial alterations to communications systems. XII c The proposed’ project would not result" in a need for new systems or supplies of or substantial alterations to local or regional water treatment or distribution facilities. .~ XII d The proposed project Would not result in a’"need for new systems or supplies of or substantial alterations to sewer or septic tanks. Xll e The proposed project would not resuliin a need for new systems or supplies of or substantial alterations to storm water drainage. XlI f The proposed project would not result in a need’for new systems or supplies of or substantial alterations to solid waste disposal. XII g The proposed project Would not result’ in a"need for new systems or supplies of or Substantial alterations to local or regional water supplies. XIII a The proposed project would not affect a sc~’nic vista or scenic highw’ay. XIII b The proposed project would not have ’~ demonstrable negative aesthetic effect. The"new facilities would be within the existing plant boundaries and would not be visible to the general public. New structures would be attached or adjacent to existing structures, would.match existing exteriors, would be the same as or lower in height than the existing structures, and would be sheltered from view by other existing structui’es in the plant and by trees that surround the plant. XIII c The proposed project would not create light or glare. XIV a The proposed project would be located on the existing PARWQCP site and would not di’sturb paleontological resources. XIV b The proposed project would be located on the existing PARWQCP site and would not disturb archaeological resources. XIV c The proposed project would be located on the existing PARWQCP site and would not affect historical resources. XlV d’The proposed ’project would not have the potential to cause a physical change which would affect unique ethnic cultural values. XIV e The proposed project would not restrict existing religious or sacred uses within the. potential impact area. XV a The proposed project would not eliminate any.existing parks or recreational facilities and would not induce growth in the region. As a result, the proposed project would not increase the demand for neighborhood or regional parks or other recreational facilities. XV b The proposed Project would not affect existing recreational opportunities. 30 Table 1:Current and Future Emissions, PARWQCP Incinerator Rehabilitation Pollutant Current Emissions Criteria Pollutant5 Carbon monoxide Nitrous Oxides Sulfur oxides THC Particulate matter Volatile Organic Carbons Hazardous Air Pollutants Dioxin Furans Metals Arsenic Beryllium Cadmium Chromium Copper Manganese Mercury Nickel Selenium Zinc (Ib/day) I 16.98 87.96 52.99 2.16 16.2 0.54 2.34 x 10-8 1.03 x 10-7 4.51 x 10-3 4.33 x 10-6 1.53 x 10-2 2.34 x 10-3 i.23 x 10-2 9.01 x 10-3 4.15 x 10-2 2.34 x 10-3 8.47 x 10-3 6.49 x 10"1 Emissions After Incinerator Rehabilitation (ib/day) 22.64 37.07 1.55 1.45 12.95 0.53 ~2.17 x 10"11 9.50 x 10"11 3.48 x 10-3 3.98 x 10"6 4.11 x 10-3 5.37 x 10-4 1.18 x 10-2 3.52 x 10-4 4.05 x 10-2 2.96 x 10-4 3.69 x IO-4 1.64 x 10"1 AuthoriD’: Public RcsourccsCodc Sections21083 and21087. Reference: Public Resourccs Code Sections 21080(c). 21080.1.21080.3. 21082. I, 21083.21083.3, 21093, 21094. 21151; Sundstrom v. County of Mendocino, 202 Cal. App. 3d 296 (1988); Leonoff r. Monterey Board of Super~,isor~, 222 Cal. App. 3d 1337 (1990) 31 ATTACHMENT B ATTACHMENT C February 4, 1998 Palo Alto City Council 250 Hamilton Avenue Palo Alto, CA 94301 Dear Mayor Rosenbaum and members of the City Council: The League of Women Voters of Palo Alto supports comprehensive measures to. provide maximum protection to human health and the environment from the adverse effects of hazardous materials. Because certain hazardous materials are associated with the treatment and disposal of sewage sludge, we have some concerns about the proposal to repair and improve the existing sewage sludge incinerators at the Palo Alto Regional Water Quality Control Plant. The proposed solution to the problem of how to handle the sludge from sewage treatment when the present incinerators are on the verge of breaking down, may not be the best solution from an environmental perspective, but when space requirements, time, and cost are considered, it is probably the appropriate solution at the present time. We are concerned that the performance figures presented in the EIR are estimates and projections that may have no relation to how the rehabilitated incinerators, with the addition of an afterburner and new scrubbers, will actually work. If you approve this proposal, we believe it is imperative that you include a regular and frequent monitoring program to ensure that the system is working as well or better than advertised. Although the dryer is included in the negative declaration, it appears that the addition of this dryer needs more study to avoid safety problems and will not be added to the system unless volume makes it necessary. However, there is a possibility that the addition of such a dryer could act as a pilot project for possible elimination of the incinerators in the future. This idea should be considered in deliberations over a long range plan. The repaired system and the existing treatment plant are expected to last less tha0 twenty years. In the context of planning for major changes, that is not a long time. It is not necessary to wait twenty years to make changes; the establishment of long range environmental goals and the search for more effective ways to recycle the sludge should be an ongoing process. We encourage you to instruct the staff of the Regional Water Quality Control Plant to begin now to work on a long range plan for waste water management that will meet the needs of the area in an environmentally friendly way. We commend Phil Bobel and his staff for the efforts they made to meet with local citizens to try to address the concerns of those who are worried about the effects of incin, .... tion. Dioxin production is a major concern. The staff was able to show that so muct:, oxin comes into the plant in the waste water (from toilet paper, laundry water,. human waste, etc.) that the proposed system will actually reduce the total dioxin level, even though some new dioxins will likely be produced in the incinerator. We hope this reduction will be true. " The League of Women Voters of Palo Alto believes that the public has the right to know the potentially harmfu effects of materials they encounter in the home, the workplace and the community, and so encourages you to help educate them in ways to reduce toxins in waste water. We also encourage you to include citizens in the planning and decision-making processes of hazardous material management. Sincerely, Ruth Lacey Geri Stewart Co-Presidents, League of Women Voters of Palo Alto cc:Phil Bobel, Mana.ger, Environmental Compliance Division, PARWQCP Daisy Stark, Engineer, PARWQCP J ma~n telephone no. 65o.32x.x994 facsimde 650.321.1995 Schools Group 650~325.5690 Polo Alto City_Council City, Hall 250 Hamilton Ave. Palo Alto, CA 94301 P [ O PL E FOR THIr ENVIRONMENT _ATTACHMENT D "71~ Colorado Avenue, Suite 1 " Polo Alto, California 94303.3913 email baactioneigc.or~ http://www,bo a ct~on,org Feb. 13, 1998 :’ ’ ,’ "\ Dear City Council, On February 23, Polo Alto City Council ~s scheduled to consider the "WQCP. Solids Management l~roject.’’ Bay Area Adtion and a number of other local environmental groups ifi conjuction with City staff, have been reviewing the proposed plan to repair.the, incinerators at the Palo Alto Regional Water Quality Control Plant (RWQCP). According tO reports prepared for the RWQCP, as w~ell as numerous other supporting documents, there are serious health and environmental eghe’ems~associated With dioxins contained in both the influent and effluent of the plant that need the due consideration of the Council before the~, make a decisibn ¯ about this projec~t, r . .. .... According to "Dioxins Source Identification," a report written for the RWQCP in ~ept. 1997, dioxini; enter the RWQCP through the following sources: laundry graywater, storm water, human waste, shower .water, and toilet paper. The, incineration of the- .: sludge destroys some of the dioxins coming into the plant, but also creates more in the burning process. The city staff estimates that th.e incinerators release halt~as many dioxins ihto the environment as come into the plant from the above mentioned sources; however, there is a high level of uncertainty of how man’y di0xins re-form after being released into th~ a, ir, which may~ske~ this approximation. Dioxins are also released from the incinerators through the water efflueiat and through the ash. The water effluent pollutes the bay, and the ash is shipped to the Central Valley and used in agriculttfl’e, thus completing the circle of~ contaminating our food supply. , " Dioxins are a highly toxieby-product created frbm the ’" " ’ ’ " " ’" ’" ’productmn and mcmeratton of chlorine-containing products, such as organochlorine pesticides, polyvinyl chloride’(PVC) plastics, and polychlorinated biphenyls (PCBs).’’~ Dioxins are dangerous to’ humans and wildlife, because they bioaceumulate in fatty tissue. "In humans, dioxins have been shown to cause cancer, weaken ~ the immune system, and interfere with the endocrine system, which is responsible for making hormones needed, to regulate bodily functions, including sexual development and fertility.’’z We highly recolnmend that thecouncil review this document as well as ¯ the :’Dioxins Pollution Prevention Plan," which was prepared for the RWQCP in October 1997 before th~ Feb. 23 council .. meeting. Both docufnents el;acidate the necessity to reduce the amount of dioxins going to and coming from the RWQCP. : ’ ¯ In addition to the sources of di~xins directly affecting the RWQCP, ~i9% of dioxins emitted locally come from diesel-fueled’. motor vehicles, and another 15% from residential wood burning. Although these sources fall outsidd the scope of the.WQCP Solids Management Project~ we request that the council take a comprehensive approach to addressing how to reduce the amount of~lioxins in our environment. Some suggested approaches are as ,follows:’ "’ ~ Develop a dioxins reduction policy for the.City of Palo Alto, and r~quest neighboring cities to do the sameBuild a solids thermal dryer to pilot test a non-dmxm creating alternative to handhng sewage sludge ~Explore alternatives to safely dispose of sludg~ or’ash whidh contain dioxins .~Educate other publi~ agencies and the public abouffdioxins and provid~ information how to ieduce them ,- ¯Continue to monitor, the influent ahd effluent from the RWQCP for.dioxins , ,, Please give this serious issue your full consideration. Thank you’, Susan Stansbury ¯ l~ay Area,Action ~ Executive Director ~ EIP Associates. 1997. Dioxins Source ldentificatio’n2 Ibid.