Committee Minutes

MINUTES/PUBLIC SERVICE COMMITTEE
Tuesday, April 14, 1998 - 5:07 p.m.

Members present: Hagness, Klave, Hafner.

1. Matter of bids for Wastewater Treatment Plant process equip-
ment, City Project No. 4371.
Hagness stated they were going to hear from KBM, engineering staff and public re. wastewater treatment options and committee would like to make decision to city council on April 20.

Jim West, professional engineer, KBM, 1604 South Washington Street, stated he would make quick summary and go into letter of recom-mendation. He reported that in June 1996 council approved facility plan which was to provide a different wastewater treatment plant for the city of Grand Forks to deal with additional BOD loads and total suspended solids, ammonia, etc. and to deal with phosphates in the water; that at that time there was a concern that the existing facility was overloaded on BOD and that in the winter the plant could handle about 19,600/lbs. BOD and in the summer about 22,000/lbs. The plant that they looked at for providing for the city was looking about 20-25 years in the future with pop. growth from 52,000 to 64,000 people and having ability to treat approx. 32,000/lb./day in 10 million gal. of water. As such they started on a mission to design a water treatment plant and were commis-sioned by the city council to do that. He reported that one of the companies they looked at closely in the summer of 1995 was the company of BioDigestors Technology (BDT), Grand Forks, and they promoted their process to KBM, was innovative and looked tremendous yet concerned about use of this technology in this country and what they were talking about, and when they proposed facility plan for the city they were working with and looking at equipment from a company out of Salt Lake City, Utah. He reported that in May of 1996 before facility plan was approved, they traveled to Europe to look at installations that BDT took them to and traveled to Salt Lake City to look at wastewater treatment equipment and from then studied what was best alternative for the City from cost standpoint and from a treatment standpoint. Another factor that entered into this very significantly relative to BDT is that BDT is a company that was out of Grand Forks and were very concerned about a local company having a product that they should probably look at but was very new to this country, that if process did work and was fea-sible process wanted to be able to use in this country. He reported that as they went through this, ended up taking a look at the two processes and in February, 1997 recommended to City's staff to take a very serious look at BDT, that City staff went to Europe, and as looked at cost to do job found that BDT was coming in at lower price than what other competition was, and competition was providing a product that they were very concerned about, how it would perform on the wastewater that the city of Grand Forks had, and kept changing their mind, rather quickly and frequently as to how big this plant should really be, but BDT has stayed very firm in their design, and he has cut their physical plant size back to what he calls the base bid complex and received bid on March 9,

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researched their equipment and recommends to the city to take very serious look at it, and would like to go into his recommendations.

Mr. West read their recommendation to the committee: that they recommend that the City of Grand Forks award a contract to BDT/LPH for the base bid sum of $6,273,000. This includes procurement of all of the process equipment and controls as outlined in the pro-cess and instrumentation drawing submitted with the bid. The bid does not include installation of the above items. BDT/LPH is a joint venture of BioDigestor Technologies, Inc. and Lunseth Plumbing & Heating both of Grand Forks, ND (attachment #1)

Mr. West reported that letter dated February 9 and was not handed out, was BDT at $6 million, that when started project were going to include installation, however, in order to do under State law have to have a contractor's license and BDT didn't want to do that, so ended up taking out the installation criteria. He said it ended up that Lunseth Plumbing & Heating bid in joint venture with BDT and could probably have installed, but told too many contractors that they had removed that. (Attachment #2)

He reviewed loadings in the city since June of last year (Attac-hment #3), and City pulled a 7-day 24-hour composite sample on waste treatment and also a 24-hour composite one day a week which they registered and showed spikes which the City already has (in the 20 to 30,000 lbs. loading and if were to run an average of all of those numbers out, would have loading of 25,000/lb.of BOD aver-age daily loading. He reported that Simplot had some problems with their pre-treatment equipment (one day City took loading of 57,000/ lbs./day and when he stated in his letter of recommendation that there was an acceleration rate on usage, there is some.

Mr. West reviewed letter of warranty (Attachment #4), that since this process is so new to this country and other suppliers giving a lot of hassle about this, that many of the BDT owners are in Grand Forks and are professionals and engineers. He asked this plant set up a performance warranty, that they will work with us, and letter of warranty on all alternates (not based on base bid) but I is letter of conditions relative to what wastewater stream is looking like. That II is our request and read to committee. That III is based upon parameters of the wastewater stream and that plant will meet certain specifications, and went to 10 mg/l of BOD, 15 suspended solids etc. for a treatment plant built on the base bid package including Alt. A, Alt. B and bidder's alternate. That IV is that if warranted values in III are not met, BDT/LPH will make any reasonable efforts acceptable to the City, to Engineer and BDT/LPH, including improvements of the algorithms of the control system of the plant in order to meet or exceed the effluent water quality as defined by the above warranted values. That V is process warranty shall be valid for time period of five years or
until deviations from BDT/LPH control parameters are made which are MINUTES/PUBLIC SERVICE COMMITTEE
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not authorized by BDT/LPH, whichever comes first.

Mr. West reported that Letter of Warranty (Revised - 3/27/98) (Attachment #5) is same except III discharge BOD is warranted to below 15 mg/l, plus other reductions on listing, and that is for base bid package treating 10 mg water at 30,000/lbs. BOD. He read IV as previous IV. and V states that this process warranty shall be valid for a time period of five years, or until deviations from BDT/LPH's control parameters are made which are not authorized by BDT/LPH, whichever comes first.

Mr. West reported that is a quick summary and their recommendation is to take the base bid and work with it depending on what Simplot wants to do, originally Simplot at about 9400/BOD/day and they requested 12,000/lbs. BOD/day and they are going higher than that. He stated that going over for a day or so no problem but if for month going to treat wastewater but not reduced down to level that it would be and could be significant problem.

Mr. West reported that if they were to accept Alt. A would be able to treat from 35 to 45,000/lbs. BOD but don't know if can get to go down to 10 mg/l on warranty of 10 mg/l at this point, etc. and they stuck to original criteria; if we go bigger and hit 40,000/lbs. BOD can reduce down, plant has tremendous amount of capability. He stated he's looking at 42,000/lbs. BOD with no problems. Hagness reported that our existing plant handled for short period of time and asked if any anticipation with new system that it won't be as good as our present plant, if they won't warranty it to 40,000/lbs. and present plant has treated up to 58,000/lbs. Mr. West stated that lagoon system accepts waste but only can handle in winter time about 20,000/BOD/day and is difficult to say that existing plant is treating it and existing plant can't deal with ammonia at this time of the year.

Hagness asked what happens to warranty if violated by any industry, Mr. West stated they would know when that load coming in, having sensing equipment to monitor it, what's coming in and what's going out, and that plant can take surge loads and accept, can store sludge. Mr. West stated that's difficult question to answer, and if violated 5 days in row, warranty invalid. Hagness questioned whether better off today or in future with new plant; Mr. West stated they would be better off in the future and still have lagoon with backup. Hafner stated that they need to know how warranty works. Mr. West reported as stated; that they have controls in the plant to optimize every part of it. Klave asked if 5-year warranty but if exceeds limits for two week period is warranty done; Mr. Vein reported that as equipment supplier they can only give guarantee that their equipment will work up to certain limits and if we control within those limits, the five-year warranty will continue through the duration, but if hit spike where effluent
twice strength of what guarantee it to, no way to guarantee ability MINUTES/PUBLIC SERVICE COMMITTEE
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to treat wastewater during that period of time, but when gets back down within limits, warranty isn't void, is there for the full five years but can't expect equipment to operate under extreme condi-tions. Mr. West agreed. Mr. Vein stated that City needs to work with industry so doesn't get too high.

Scott Lund, Simplot Company, stated that there are chances within a five-year period that they could have spike or two in that time, and explained what had happened during spike in January (had two centrifuges in equipment that pull solids out of clarifier went down at the same time) and solids overflowed to lagoon and directly to the city. Mr. West stated he agreed with that, if erase from warranty period, and doesn't invalidate any warranty. Mr. Vein stated that warranty would have to be reviewed and approved by Mr. Swanson. Hagness stated he would like in writing that warranty is void only during the time over the 30,000 lbs/BOD that system is designed for. Mr. West stated he was willing to put in writing. peter Homburg, BDT, stated he would affirm that this interpretation given by Mr. Vein and Mr. West is their understanding of offer of warranty and after that warranty resumes, except if aerocorrosive material coming down the drain, and wastewater treatment plant has to accept any material that comes in, there may be additional refurbishment required; and have seen that in the past that has happened and would be exceptional condition.

Al Vanerro, plant engineer at Simplot, and asked if warranty with or without chemical additions and where it states including improvements in the algorithms, is that saying just worry about whether programming is correct with this warranty or are including but limiting to the improvement of the algorithms, do they have to make chemical additions to support the algorithms. Mr. West reported this includes with chemical additions, with warranty on algorithms, it includes fact that can make adjustments to the algorithms and if that doesn't solve problem, other considerations are taken into account. He stated that he would like council to know that they dealt with national company by name of WestTech and they looked at providing dissolved air flotation systems and couldn't get down to level that a micro fine bubble flotation system could get to.

Mr. Lund reported they have been involved with KBM and City, had concern and brought people in to look at and they don't have better system to try but main concerns is that it's unproven technology, but have asked for a few things: best alternative for Simplot would be if possible to ask for 20,000/lb. limit for BOD, but cost approx. $500,000 extra over a year and if did that, could they be exempt from any additional changes forward to the system because it doesn't work (not including project overruns); 2) is it feasible to do pilot test to make small version of system and put on line for 6-9 months; 3) going to Germany and looking at some of these units.
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He stated if it does work, Simplot would be one of the first to put it in because could lower their BOD; 4) valued engineering study, bringing in someone else to do background study.

Mr. Vein stated risk involved in this but major reason doing is because of Simplot and if remove them from risk in an effort to handle BOD's from Simplot, then who will pay that cost. Mr. Vein stated that they have to be careful about using up capacity. Mr. West stated that this is based on EPA construction grant monies that were used years ago and anybody now who participates in the project, that they pay fair share of whatever, whether flow or BOD loadings. Mr. West reported that what happened originally that when studying plant, 12,000 lbs. would take care of Simplot, RDO requested 3,000/lbs. and 11,000/from city population, and future capacity 4,000/lbs., and if they request 20,000 and only use 15,000 okay, but need to purchase what they need for their work. Mr. Lund stated that knowing what they know about future expansion, that they are going to ask for the 20,000 lbs. up front. Mr. Vein stated makes difference if future expansion. Mr. Lund stated not building to the plant but upgrading, up-sizing plant to be more capable. He stated they will ask for 15 or 20,000 lbs.

Mr. Lund stated that if went to Germany would like to do that before awarding contract. He stated that they would like more detailed information about the plant. Hagness stated that prior managers had opportunity to go to Germany and they didn't go. Mr. West stated they have brochure from that plant and he will review with Mr. Lund. Mr. West reported they took bids March 9 and have 45 days to hold bids.

Mr. West reported re. pilot plant - gets concerned about pulling stream of water off, how representative is it of stream itself, and pilot plant is expensive to do. Peter Homburg made some comments about non established micro fine bubble flotation technology, when they visited Germany they saw final construction phases of plant which is probably largest treatment plant in the world, treats 194 mil. gals per day and 20 times size of Grand Forks, and price tag for installation is $370 mil. and did 5-year test of micro fine bubble flotation before they committed so much money for this facility. He asked whether professional engineers would make this kind of commitment on unproven technology. He stated that question of unproven technology is overplayed, what would be worst scenario, and would have wastewater treatment plant that runs a conventional activated sludge process and wastewater treatment plant where have settling process, clarifier, and worst scenario would be to end up with conventional facility.

Hagness noted that exemption from changes, didn't know if council could or would want to give them that, wouldn't commit future councils and wouldn't go ahead if not convinced that this is the best option at this time. Mike Shea met with each of them and he's MINUTES/PUBLIC SERVICE COMMITTEE
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done a lot of work on industry and waste treatment options and he recommended this. He stated with valued engineering study, have had lot of second opinions lately and not sure ready to do that on this even though delayed and asked for other opinions. He stated that for basic bid is $15,500,000 with alternates that he's not sure should be considering at this time and which is another $5 mil. and rate study committee has looked at costs and built into rates over next several years. Chuck Grotte reported that the rate schedule prepared in 1996 was based on project at $13.6 mil. and reviewed schedule of percentage increases: this year 7.5% increase, next year 5%, and following 5% and then 10%, and if go with plant that at $15.5 those rates adjusted. He stated that another concern is that Simplot asking for 20,000, City 11, and RDO 3 have gone over limits, and will need to go with Alt. A or if Simplot does improvements at their plant, don't need to. Klave asked if Simplot increases and over limits, what good is warranty. Mr. West asked if they buy 20,000/lbs. of capacity, are they not going to make any improvements, and if they are, will they make cushion. It was noted that the basic bid is 30,000/lbs and with Alt. A BDT didn't supply them with a higher number. Mr. Homburg stated that if this is to ask them to reconsider their letter of warranty, get another revision where increase warranty discharge levels and at same time increase the acceptable BOD, that he gave verbally to Mr. West that by raising the affluent level for this plant including all the alternates and bid assumption that they have provided, can handle 45,000/lbs of BOD. Hagness stated that if committee requests that Mr. Homburg stated he would put that in writing.

Mr. Lund stated if they were to do something themselves, would go with anaerobic digestor costing between $4 and 5 million, and over course to pay off, cost same as what paying to the City now, they would rather put their money into making french fries than treating water; and that's reason they would like to go with City's proposal providing it works. He stated only reason questioning is that have had other people evaluating that didn't give them good feeling that it would work. Hagness stated that they looked at those letters also - Energy Research, and other firm (they had suggested pilot plant and going to Germany).

Joan Klunen, Simplot, vice president for environment and regulatory affairs out of Boise, Id, stated on the 20,000/lbs. that they are looking to do some expansion in production and gives them a cushion, and perhaps not hit that limit but hope that would be staying under the 15,000/lbs. and doing some minor things in the plant and looked at everything except micro fine bubble floatation and that it's not familiarly technology for them; had hoped that before made a decision for some of their experts to go over to Germany to see working plants and look at their data and this is significant investment for them, and would prefer that the City take care of wastewater. She stated they would support in going forward but would wish had more time to get more background

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information; that they would support City but want to see good decisions made as well. There was some discussion re. another visit to Germany, that in Germany there's 3 week vacation time, reimbursement for Mr. West and Mr. Homburg, $20,000, etc.

Bill O'Connell, president of Lunseth's, spoke for the process.

Mr. Grotte reported that the building not part of the package. Gary Goetz stated he endorses this bid.

Moved by Klave and Hafner to accept the base bid of BDT/LPH, Grand Forks, for $6,273,000 with Alternate A for $2,855,000, that letter of warranty be revised to increase the BOD loading level, review of the letters of warranty by the city attorney, and contingent upon approval of the North Dakota State Department of Health,

Mr. Homburg stated that there is one important engineering aspect that hasn't ben discussed, that a wastewater treatment plant can take 45,000 lbs/Bod and question is whether run the plant statically, as a totally constant load, no realistic wastewater plant does that, the problem comes in when you do the dynamic analysis, what are swings that plant has to respond to, and this is possibly where need lot more area for micro fine bubble floatation than is included in the base bid; was yes in the 45,000 lbs. can be handled but cannot allow for more fluctuation.

Committee suggested that Joan Klunen meet with Mr. West re. this matter and she stated that she would.

Tom Walton, EERC, stated that Mr. Homburg stated this was proven technology in Germany and no doubt about that, but not proven with this type of wastewater, and what is difference in our wastewater with other cities, that we have very unique wastewater and don't know how that system will work with this type of affluence, and encourages the City to consider a pilot testing of this system, that pilot test will give lot of answers and might clear up some problems before they happen.

Motion carried. Hagness stated this will go to council on April 20, and if they had more comments, that would be time to do it.

Meeting adjourned at 6:55 p.m.

Alice Fontaine
City Clerk

Dated: 4/16/98