3. Accept Proposal - Wastewater Sludge Disposaly Post Office Box l99i. s i ii, b ors ua 5990, -i9 9� - Telephone (� 6)75-i72�3, Fax (i 6) iS -7931
REPORT TO: Mayor and City Council
FROM: James C. Hansz, P.E., Director of Public Works
SUBJECT: Accept Proposal — Wastewater Sludge Disposal
MEETING DATE: February 17, 2004
BACKGROUND: For ten years the Kalispell Wastewater Treatment Plant has disposed of the sludge
produced by its wastewater operations by transporting it to a privately owned composting facility in
Olney where it is further treated and manufactured into a landscape and garden compost for sale to the
public. In order to remain in compliance with Montana law regarding the length of its contracts, the City
advertised for proposals from all qualified firms presently engaged in this type of operation. The proposal
was structured to give the City maximum flexibility regarding the contracting arrangements while
minimizing the potential for adverse impacts to its plant operation. The proposal data also stipulated the
mandatory requirements to be met by a successful firm. Among these requirements were the need for the
proposing firm to be in full compliance with Federal and State rules and regulations for commercial
composting facilities using treated wastewater sludge. In addition, the successful firm was required to
present a record of experience and history of successful operation over a number of years in order to
ensure that this critical element of the City's treatment operations would be placed in experienced and
reliable hands. This last point was extremely critical because responsibility and legal liability for the safe
disposal of sludge produced by our facility, by law, remains with the City until it has received full and
complete supplemental treatment by the composting facility to reduce pathogenic organisms in the sludge
below the limits set by EPA and State regulators.
We are aware of three Montana firms in this region currently operating composting facilities.
They were provided proposal materials and a general advertisement was made for any other firms
currently in the business. We were contacted by all three known firms and we had discussions with each
to answer their questions and to encourage them to respond. One proposal, from Glacier Gold LLC, was
received by the 3 February deadline. It included a basic proposal and an alternate proposal as provided for
in the announcement and met all other requirements specified in the announcement.
We have completed a review of the two options presented by Glacier Gold LLC. They were
basically similar but varied in cost per ton and two other areas. The basic proposal priced the disposal cost
at $240/dry ton and the alternate at $200/dry ton. Based on the review we believe the lower cost alternate
February 17, 2004, sludge Disposal.doc
is in the City's best interest. Briefly, the $200/dry ton cost reflects a small increase above the current rate
of $188.30 per dry ton. The anticipated contract will hold this cost for two years and then allow it to
increase each year thereafter by the change in CPI for the preceding year. We anticipate a five-year term
with a renewal clause similar to the previous contract. In addition, GG LLC has indicated a 600 dry-
ton/year limit is their current capability to accept sludge. This quantity is greater than we presently deliver
but less than we anticipate as wastewater .flow increases over time. We look at this limit as an opportunity
for the City rather than a restriction. Finally, GG LLC has indicated a desire for a termination clause with
12 month notice for a specific husiness reason that we have found to be reasonable and manageable
within our operation.
RECOMMENDATION: Accept Alternate Proposal from Glacier Gold LLC, with a disposal cost of
$200Idry° ton and instruct PW staff to develop a contract for City Manager's signature.
ACTION REQUESTED: AT CITY COUNCIL MEETING OF FEB t UARY 17, 2004 — MOTION TO
ACCEPT ALTERNATIVE SL UDGE PROPOSAL BY GLACIER GOLD LLC OF OLNEY, MT.
FISCAL EFFECTS: Expenditures of Wastewater Treatment operating funds of $200/Dry Ton for sludge
disposal for the first two years of the contract. Annual costs are approximately $ 1 00,000/year at current
rates of disposal and cost.
ALTERNATIVES: As suggested by the City Council
Respectfully
C. Hansz, P.E.
Director of Public Works f
Februan 17, 2004- Sludge Disposal. doe
Chris A. Kukulski
City Manager
Report compiled February 11, 2004