PERC Water Press

FOR IMMEDIATE RELEASE: Contact: Marian Clark PERC Water 714-352-7754 mclark@percwater.com

PERC Water to Operate and Upgrade Adelanto Wastewater Treatment Facility Adelanto, California, February 9, 2012 – PERC Water, a water infrastructure company, was unanimously selected by the Adelanto City Council last night to take over the operation and maintenance of their wastewater treatment facility and immediately begin designing an expansion of that facility.

Adelanto, California is located approximately 50 miles north of Riverside and has a population of 31,000.

Due to a steady stream of new residents, Adelanto began an expansion of their original wastewater treatment facility in 2007 but progress remained at a standstill four years later, resulting in a Cease and Desist Order from the Regional Water Quality Control Board. Without the necessary capacity, the City has had to divert a significant portion of their wastewater to a regional facility.

Dr. D. James Hart, City Manager of Adelanto, said, “Currently the City’s wastewater treatment facility is undersized to meet the incoming flow. There has been an effort to expand the plant since 2007. However, the City and Contractor ran into difficulties that would forestall completion of the expansion within the time lines required by the Regional Water Board. As a result, the City was under the threat of having a connection ban imposed. Through the diligent effort of the City team, the connection ban was not imposed and the City needed to move quickly to finalize the expansion.”

Under the terms of the contract, PERC Water will implement their trademarked Turn Around Plan (TAP™), a program designed to assist water and wastewater infrastructure owners in restructuring their operations and upgrading their facilities to bring them into compliance in an economical manner. PERC Water is contracted to operate the facility for seven years and will implement their TAP, performing the necessary upgrades to reach a treatment capacity of 4 million gallons per day by mid 2013. This will satisfy the requirements of the Cease and Desist Order and allow the City to stop diverting the excess wastewater to the regional facility. As a result of PERC Water’s integrated design-build-operate team, they have the inhouse expertise necessary to perform all of the upgrades and expansions necessary to bring the Adelanto Facility into compliance and treat all of its wastewater.

Dr. Hart continued, “The City was pleased to select PERC Water as the company to finalize the wastewater plant expansion and to come in as the City’s plant operator once the plant is expanded. As the City staff reviewed proposals and interviewed prospects, it became clear that PERC Water shared the same philosophy regarding the urgency to finish the plant expansion and had highly skilled staff who would get the expansion completed timely. Additionally, PERC Water was willing to work under a guaranteed price and that was attractive to the City because it ensured the City Council and public that there are no hidden costs or over runs that would inflate the final price. This was truly a transparent process.”

Bob Nespeca, PERC Water’s Vice President of Infrastructure Concessions, commented, "We are looking forward to our partnership with the City of Adelanto and are excited to implement our tried and tested TAP program to alleviate the City’s compliance issues. We are very impressed by the City’s dedication and commitment to its ratepayers and the environment.” ### PERC Water Corporation is a water infrastructure company that develops, designs, builds, operates and manages water infrastructure throughout the United States. We have designed approximately 60 water

infrastructure projects over the past 14 years, 20 of which we have built and placed into operation. Our project approach results in performance guarantees of water quality and the assumption of the risks associated with implementing complex water infrastructure projects. PERC Water is headquartered in Costa Mesa, California. www.percwater.com

FOR IMMEDIATE RELEASE: Contact: Marian Clark PERC Water 714-352-7754 mclayton@percwater.com

Santa Paula Water Recycling Facility Receives Prestigious 2011 Public-Private Partnership Award for Innovation

Santa Paula, California, August 17, 2011 – The Santa Paula Water Recycling Facility has been awarded the 2011 Public-Private Partnership Award for Innovation from the National Council for PublicPrivate Partnerships. This honor recognizes projects developed through a public agency and private company partnership that demonstrated a significant new advancement in the field of public-private partnerships. The Award will be presented at a special Reception and Awards Banquet in Tampa, Florida th on Tuesday, October 4 .

The Santa Paula Facility has been recognized for its innovative approach to water recycling by numerous organizations including the Design-Build Institute of America, Global Water Intelligence and the Environmental Business Journal.

“We are proud the facility is continuing to be honored for its fiscally responsible approach to a vital infrastructure problem,” said Santa Paula’s Vice Mayor Bob Gonzales. “The cost of doing business was significant for our City. We had to build a new wastewater treatment facility and we did not have the necessary funds. The public-private partnership gave the City a lot more latitude and the risk was transferred to the company who was doing the work.”

As a result of the public-private partnership, the City of Santa Paula transferred the financing, design, construction, and operating risk to a private entity for 30 years. The facility was 100% privately funded and required no upfront capital outlay by City. Socio-economic benefits included almost 90% of the hours worked were from local labor and more than $4.5 million was invested in the local economy excluding sales tax revenue. It began full operation seven months ahead of the deadline and has exceeded the compliance requirements by the state.

Utilizing public-private partnerships to develop water and wastewater infrastructure is a paradigm shift from traditional methods. In today’s difficult economic markets, it is imperative municipalities explore new alternative delivery methods. PERC Water invested months in public outreach with the City staff and Santa Paula community members discussing the advantages of partnering with a single, united team that is invested in and responsible for not only the short and long-term success of the project but for the future recycled water reuse within the local area.

The Santa Paula Facility was designed, built and is currently being operated by PERC Water. They, in partnership with Alinda Capital, financed the project and it is the first of its type under California Code 5956, which encourages public-private partnership by using private investment to solve public infrastructure needs. It is the first 100% privately funded water recycling facility in the US. The facility has been in operation since May 2010.

To learn more about this project, see its case study. ###

PERC Water Corporation is a water infrastructure company that develops and operates water concession projects. PERC Water has designed approximately 60 water infrastructure projects – 20 of which they have constructed and placed into operation. They provide innovative, efficient solutions to water infrastructure needs, utilizing public-private and private-private partnerships to develop mission-critical infrastructure. The company’s project portfolio demonstrates how water infrastructure can be developed efficiently and aesthetically to produce reliable, safe water of the highest quality. PERC Water is headquartered in Costa Mesa, California and has offices in San Diego, Sacramento and Phoenix. www.percwater.com.

FOR IMMEDIATE RELEASE: Contact: Marian Clark PERC Water 714-352-7754 mclark@percwater.com

Ribbon Cutting Ceremony Celebrates Award-Winning Santa Paula Water Recycling Facility

Santa Paula Water Recycling Facility, Ventura County, California Santa Paula, California, June 8, 2011 – Local and regional government officials, members of the local community, and project team members participated in the ribbon cutting ceremony of the award-winning nd Santa Paula Water Recycling Facility last Thursday, June 2 .

In 2007, the City of Santa Paula’s non-compliant, almost 70-year-old wastewater treatment facility faced severe compliance fines and needed to be replaced quickly. However, the City lacked certainty of funding, cost and schedule to achieve its compliance mandate. Realizing traditional delivery methods would not provide adequate certainty, they chose to utilize a public-private partnership.

In May 2008, the City contracted with one entity, Santa Paula Water (an alliance of PERC Water Corporation and Alinda Capital Partners), to design, build, operate (for 30 years) and finance the new facility. The facility was completed in May 2010 – seven months ahead of schedule. The City of Santa Paula’s Mayor Fred Robinson said, “It was done very, very, very quickly.”

Brian Cullen, President of PERC Water, said the City Council wanted “certainty for the long term for the citizens of Santa Paula. They were very insightful to have that certainty of compliance, certainty of capacity and certainty of cost for 30 years.”

Philip Dyk, a Partner at Alinda Capital, said, “If the City had taken a more traditional finance route, they would have (had difficulty) trying to raise money,” when funds were needed to complete construction within the regulatory timeframe. The facility was 100% privately funded and the City did not pay anything toward the facility until after it was in full operation. They now pay a monthly service fee, which includes 30 years of capital replacements, debt service and operations and maintenance.

David Dornbirer, a Vice President at CoBank, one of the project’s lenders, said, “This is a first of its kind financing…. People all over the country and internationally in the water sector know where Santa Paula, California is because of the innovative nature of this facility and this project.”

The facility has been the recipient of many national and international awards, including most recently the Design-Build Institute of America Western Pacific Region’s top tier Best Project – Water Award.

The facility is designed to complement the surrounding area, including a small footprint where all treatment occurs in underground tanks covered by attractive operations buildings. Mayor Robinson added the facility produces “no odors,” specifically thanking the team as the original facility was notorious for its smell. He added that the facility is “a wonderful addition to (their) community.”

Jeff Beecher, Executive Vice President of Layton Construction, the lead project construction firm, said they “used as much local labor and subcontractors as possible” resulting in “about 85% of the labor from the local area.”

The facility is considered one of the most energy-efficient and cost-effective of its kind in the world according to Dr. Shane Trussell, a leading expert in membrane bioreactors and the project’s process design advisor. The City saved on average more than $10,000 a month in the first seven months of operation as a result of the facility’s energy saving technology. The recycled water produced by the facility exceeds the state requirements by 60% on average, much of that a result of the Koch Membranes utilized in the treatment process.

Jamie Matthews, Senior Vice President of PACE (the project’s engineer of record), said, “Engineers often get caught up thinking their job is done when the plans are out,” but with a design, build, operate and finance project, their job “isn’t done for 30 plus years.”

To learn more about this project and watch the case study video, visit www.percwater.com. ### PERC Water Corporation is a water recycling company that designs, builds, operates and manages water recycling facilities throughout the United States. They have designed more than 55 facilities – 20 of which they have designed, built and operated. The company guarantees water of the highest quality and assumes the risks associated with water recycling. PERC Water is headquartered in Costa Mesa, California. For more information, visit www.percwater.com.

Alinda Capital Partners is an independent firm that is the largest manager in the United States of pension assets for investment in infrastructure and the third largest in the world, with over $7 billion of assets under management. Alinda’s investors are predominantly U.S. and European pension funds for public sector and private sector workers, and include some of the largest institutional investors in the world. Funds managed

by Alinda have ownership interests in airports – including Heathrow Airport in the United Kingdom – roads, bridges and a tunnel, a rail service, natural gas distribution utilities, natural gas pipelines and storage, water supply and wastewater treatment, telecommunications networks, water tanks and other infrastructure assets providing essential services to communities. Alinda has invested in infrastructure companies that operate in 30 states in the United States as well as in Canada, the United Kingdom, Germany, the Netherlands, Luxembourg and Italy. These businesses employ approximately 15,000 people and serve over 125 million customers annually in over 400 cities. For more information, visit www.alinda.com.

CoBank is a $69 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture and the nation's rural economy. In addition to serving its direct retail borrowers, the bank also provides wholesale loans and other financial services to affiliated Farm Credit associations and other partners across the country. Headquartered outside Denver, Colorado, CoBank serves customers from

regional banking centers across the U.S. and also maintains an international representative office in Singapore. For more information about CoBank, visit the bank's web site at www.cobank.com.

Layton Construction Company is a nationally-ranked commercial construction company specializing in construction management, design-build construction and general contracting. Layton’s construction projects are found throughout the United States, and cover a wide spectrum of industry sectors, including health care, hospitality, education, office buildings, manufacturing, sewerage and solid waste, sports and entertainment and public safety. The company is a leader in sustainable building practices, with more than half of its 2010 company revenues coming from certified sustainable building projects. Headquartered in Utah, Layton also has regional offices in California, Arizona, Florida, Hawaii, Idaho and Tennessee. Layton th is currently ranked as the 64 largest commercial contractor in the country on the Engineering NewsRecord Top 400 Contractors list.

PACE is a specialized civil engineering firm offering advanced water resource services. A wide range of engineering services are offered related to water, wastewater, stormwater management and water resource permitting and regulatory compliance to ensure projects are both economically viable and environmentally sustainable.

Koch Membrane Systems, Inc. is a global leader in membrane filtration technology and engineering support for close to half a century. KMS offers a wide range of products and engineering services which span industrial applications in food and life sciences, industrial processes and water & wastewater. As a designer and manufacturer of state-of-the-art membrane elements as well as complete membrane systems, KMS is specified for some of the most demanding applications. KMS offers comprehensive process engineering design, piloting and field service expertise. With an installed base approaching 20,000 systems throughout the world, KMS is setting the standard as a comprehensive solutions provider for membrane technology.

See www.kochmembrane.com for more information.

FOR IMMEDIATE RELEASE: Contact: Marian Clark PERC Water 714-352-7754 mclayton@percwater.com

PERC Water Wins Top Award at 2011 DBIA Western Pacific Regional Awards Banquet

The Santa Paula Water Recycling Facility

Newport Beach, California, May 27, 2011 – PERC Water was awarded a top tier award at 2011 DesignBuild Institute of America (DBIA) Western Pacific Region’s Awards Banquet last night at the Newport Marriott. They were presented the “Best Project – Water” Regional Award for implementing “interdisciplinary teamwork, innovation, and problem solving” for the Santa Paula Water Recycling Facility.

The DBIA awards honor projects for their “advanced and innovative application of total integrated project delivery and finding unique solutions for project challenges.” The Santa Paula Facility was recognized for its ground breaking approach to developing water recycling infrastructure, both in its utilization of the Design – Build – Operate - Finance (DBOF) delivery method and its innovative design. The facility was 100% privately funded without any up front capital cost requirements from the City of Santa Paula, was completed seven months in advance of its mandated compliance deadline, saves approximately 35% in power consumption costs, and produces recycled water that is available for reuse within the community.

The Santa Paula Facility was designed, built and is currently being operated by PERC Water. They, in partnership with Alinda Capital, financed the project and it is the first of its type under California Code 5956, allowing for a DBOF delivery method. They were awarded the DBOF contract in May 2008, broke ground two months later, and the new facility began treating 100% of the City’s wastewater in May 2010.

The Facility utilizes advanced treatment process technologies incorporating MBR (membrane bioreactors), aerobic sludge digestion, and UV (ultraviolet) disinfection that produces CA Title 22 compliant effluent. PERC Water’s unique design utilizes common wall construction and underground tanks to help achieve a small footprint and maximum odor and noise control.

To learn more about this project, see its case study. ### PERC Water is a water recycling company that designs, builds, operates and manages water recycling facilities throughout the United States. They have designed more than 55 facilities – 20 of which they have designed, built and operated. The company guarantees water of the highest quality and assumes the risks associated with water recycling. PERC Water is headquartered in Costa Mesa, California. www.percwater.com.

FOR IMMEDIATE RELEASE: Contact: Marian Clayton PERC Water 714-352-7754 mclayton@percwater.com

Santa Paula Water Recycling Facility Achieves Final Completion

Santa Paula, California, March 8, 2010 – The Santa Paula Water Recycling Facility has received its formal Notice of Final Completion from the City of Santa Paula. Santa Paula Water, the partnership of PERC Water and Alinda Capital Partners, received the notification from the City on February 15, 2011 in response to their October 12, 2010 submission package that demonstrated they had met the agreed upon requirements.

“Our team is pleased the City of Santa Paula has formally recognized the facility’s completion,” said Brian Cullen, President of PERC Water. “From the early conceptual stage of the project, we worked closely with the City to ensure the facility not only met the State mandated requirements and brought the City back into compliance, but that it sets a new standard for water infrastructure in technological innovation, fiscal responsibility, and energy efficiency.”

The facility was designed, permitted, built and commissioned in 23 months, and on May 13, 2010, seven months heads of schedule, the facility began treating the entirety of the City’s wastewater. The recycled water it produced this past January is on average 60% cleaner than the Regional Water Quality Control Board permit requires.

In addition, the City saved on average more than $10,000 a month in the first seven months of operation as a result of PERC Water’s investment in energy saving technology. The facility is considered one of the most energy-efficient and cost-effective of its kind in the world.

To learn more about this project and watch the case study video, visit www.percwater.com. ### PERC Water Corporation is a water recycling company that designs, builds, operates and manages water recycling facilities throughout the United States. They have designed more than 55 facilities – 20 of which they have designed, built and operated. The company guarantees water of the highest quality and assumes the risks associated with water recycling. PERC Water is headquartered in Costa Mesa, California. www.percwater.com.

Alinda Capital Partners LLC is the world’s largest independent infrastructure firm, with over $7 billion in equity commitments to infrastructure investments. Alinda’s infrastructure companies serve over 125 million customers annually in more than 250 cities. The companies operate in 18 states in the United States as well as in Canada, the United Kingdom, the Netherlands and Italy, and employ more than 15,000 people. Alinda’s investors are predominantly pension funds for public sector and private sector workers. These institutions seek steady investments over the long term, matching their pension liabilities and include some of the largest institutional investors in the world. www.alinda.com

FOR IMMEDIATE RELEASE: Contact: Marian Clayton PERC Water 714-352-7754 mclayton@percwater.com

Santa Paula Water Recycling Facility Completed Ahead of Schedule and Already Creating Savings

The Santa Paula Water Recycling Facility

Santa Paula, California, December 15, 2010 – The Santa Paula Water Recycling Facility is once again exceeding expectations – the facility’s power consumption costs for the first five months of operation are more than 35 percent lower than expected. Initially anticipated to create a 15 percent savings as a result of PERC Water Corporation’s investment in energy saving technology, the facility began full compliant operation seven months ahead of the state’s mandated December 15, 2010 deadline and has used more than 35 percent less power than originally expected.

John Quinn, the City of Santa Paula’s Finance and Public Works Director, said, “In this challenging economic environment, California cities are eagerly seeking cost saving opportunities. The City of Santa Paula is enthusiastic about our new water recycling facility’s reduced power costs as it means savings for our citizens over the long term.”

As a result of the energy saving measures employed at the Santa Paula facility, PERC Water was awarded the 2009 Sustainability and Resource Protection Award by the Environmental Business Journal and a grant through Southern California Edison’s “Savings by Design” program to help fund the energy saving technology.

“It is imperative that infrastructure become more sustainable and fiscally responsible,” said Brian Cullen, President of PERC Water. “The technology available in today’s market raises the standard for efficiency and the Santa Paula facility demonstrates that investing in these energy saving technologies results in savings to the ratepayers.”

The 4.2 million gallon per day facility utilizes the most advance treatment technology and was described as “world-class” by Dr. Shane Trussell, a leading expert in membrane bioreactors and PERC Water’s lead advisor for the facility’s process design. Dr. Trussell said, “As a result of the team’s equipment selection and robust design features, it is one of the most energy-efficient and cost-effective Membrane Bioreactor installations in the world.”

The majority of the treatment process takes place in tanks beneath the professional operation buildings, making the facility virtually odorless and noiseless with no negative impact on the surrounding community. As a result of this innovative design, the entire facility sits on less than two acres of land. A cascading waterfall and duck pond in the front of the facility is used as storm water runoff storage and future plans for the facility include solar power integration for even more power consumption savings. The water produced by the facility is higher quality than the state’s stringent quality requirements and is available for reuse within the community.

The facility can also be accessed and controlled wirelessly from anywhere in the world on an iPad, iPhone or Smart phone through Central PERC™, a web application where all the current and historical data necessary to operate and manage water and wastewater infrastructure is centrally hosted and integrated within one platform.

The City of Santa Paula was mandated by the state to replace their 70-year old facility because it had reached the end of its useful life and accrued more than $8 million dollars in compliance-related fines. In May 2008, they awarded Santa Paula Water LLC, a partnership of PERC Water and Alinda Capital Partners, the Design-Build-Operate-Finance contract. PERC Water designed and built the facility and is now operating the facility until 2040.

Phil Dyk, Vice President of Santa Paula Water LLC and a partner at Alinda Capital, said, “The Santa Paula Water project is the first water recycling facility to use California Code Section 5956 to allow for private investment in essential municipal infrastructure. Alinda is extremely proud to be a part of this groundbreaking project and to be serving the City of Santa Paula, and we congratulate our partner PERC Water for designing, building and operating a state-of-the-art facility that entered service seven months ahead of schedule. We look forward to a long-term relationship with the community as we continue to provide an essential service to all Santa Paulans.”

PERC Water and Alinda’s innovative deal with the City was recognized by Global Water Intelligence and they were awarded the Global Water Awards’ 2009 “Water Deal of the Year” Award of Distinction.

To learn more about this project and watch the case study video, visit www.percwater.com. ### PERC Water Corporation is a water recycling company that designs, builds, operates and manages water recycling facilities throughout the United States. They have designed more than 55 facilities – 20 of which they have designed, built and operated. The company guarantees water of the highest quality and assumes the risks associated with water recycling. PERC Water is headquartered in Costa Mesa, California. www.percwater.com.

Alinda Capital Partners LLC is the world’s largest independent infrastructure firm, with over $7 billion in equity commitments to infrastructure investments. Alinda’s infrastructure companies serve over 125 million customers annually in more than 250 cities. The companies operate in 18 states in the United States as well as in Canada, the United Kingdom, the Netherlands and Italy, and employ more than 15,000 people. Alinda’s investors are predominantly pension funds for public sector and private sector workers. These institutions seek steady investments over the long term, matching their pension liabilities and include some of the largest institutional investors in the world. www.alinda.com

FOR IMMEDIATE RELEASE: Contact: Marian Clayton PERC Water 714-352-7754 mclayton@percwater.com

California Gubernatorial Candidate Meg Whitman Tours Santa Paula Water Recycling Facility

Brian Cullen (PERC Water), Meg Whitman (CA Gubernatorial Candidate) and Phil Dyk (Alinda Capital) tour Santa Paula Water Recycling Facility.

Santa Paula, California, June 30, 2010 – California Gubernatorial candidate Meg Whitman toured the recently completed Santa Paula Water Recycling Facility in Ventura County yesterday. After touring the facility, she addressed approximately 150 members of the community and media outlets in front of the facility about job creation. The facility utilized 88% local union labor and employed on average 60 workers per day over the length of the 18 month project.

Whitman said the Santa Paula Water Recycling Facility is “a great example of how we can use technology and innovation to improve vital services to Californians. This environmentally friendly project will save Santa Paula residents and businesses money. We need more of this imaginative thinking.”

“There is a significant funding infrastructure gap, specifically in water infrastructure, in California and it’s imperative that both the public and private spheres work together to create innovative solutions to solve that problem,” said Brian Cullen, President of PERC Water Corporation, the firm responsible for designing, building, operating and, in partnership with Alinda Capital Partners, LLC, financing the Santa Paula Water Recycling Facility. “Meg recognized that the combination of using private funds with an innovative facility design leads to more cost savings for the rate payers, less risk for the municipality and a faster project delivery. Inventive projects like this are what California needs at this critical time.”

The Santa Paula Water Recycling is the first water recycling facility to be built under California’s Government Code 5956 encouraging private investment to solve public infrastructure needs. The designbuild-operate-finance (DBOF) contract was awarded to Santa Paula Water LLC, a company formed by

PERC Water and Alinda Capital, in May 2008 and construction began just two months later. The facility was fully operational in May 2010, 7 months in advance of its compliance deadline, and PERC Water is under contract to operate the facility for 30 years. The City was not responsible for any up front capital costs as a result of the DBOF project delivery method and paid their first service fee this past month after the first complete month of operation.

The 4.2 million gallon per day facility replaced the City’s original treatment facility built in 1939. The new facility utilizes advanced treatment process technologies, uses 70% less land than required by a conventionally designed facility, and resembles professional office buildings with completely covered underground processing tanks. The new facility is serving the City’s population of approximately 30,000 people. Santa Paula is located in Ventura County. ### PERC Water is a water recycling company that designs, builds, operates and manages water recycling facilities throughout the United States. They have designed more than 55 facilities – 20 of which they have designed, built and operated. The company guarantees water of the highest quality and assumes the risks associated with water recycling. PERC Water is headquartered in Costa Mesa, California. Visit www.percwater.com.

Are Public-Private Partnerships The Wave Of The Future?

A Q&A with Brian Cullen, President, PERC Water Water Online is proud to introduce the first installment of our Views From The Top series — a monthly interview with a different, high-level member of the water community. As the industry attempts to navigate a rapidly changing landscape of government regulations, environmental concerns, aging infrastructure, and monetary pressure, these authoritative voices are charting the course for the future.

This month, Water Online spoke to Brian Cullen, president of PERC Water, a water infrastructure company based in Costa Mesa, CA. Utilizing public-private partnerships, PERC Water offers municipalities an alternative to the traditional design-bid-build delivery method. Brian shared with us the characteristics of this emerging approach to community water management, as well as his thoughts on the many challenges currently facing municipalities in the United States.

Thanks for participating, Brian. Can you briefly describe the service PERC Water provides to municipalities?

We’re a water infrastructure company that enters into long-term public-private partnership (PPP) and concession agreements with municipalities to design, construct, and operate facilities for water recycling. Whether it’s building a brand new facility or rehabilitating existing infrastructure, we focus on yielding efficiency to provide the most cost-effective solution to a municipality.

What are the advantages of public-private partnerships?

Given the current state of fiscal affairs within local governments, PPPs and concession agreements provide a very attractive opportunity to implement water infrastructure projects and monetize efficiencies with existing infrastructure. For example, a city that currently spends $5 million a year to operate its wastewater infrastructure may be able to be operated for $4 million a year by implementing alternative energy solutions, improving energy efficiency, increasing automation, changing sequence of operation, and various other methods of efficiencies. To the extent the city contracts with our firm for the same $5 million per year, we can monetize the savings into an upfront cash payment to the city, so they’re essentially extracting value out of an asset that they didn’t know they had. It creates a liquidity opportunity for the municipality, which they can then use to reinvest, rehabilitate other infrastructure, or retire debt.

Another way to create liquidity is if the city is willing to — in that example — increase its operating costs from $5 million to $6 million, in which case we could monetize $2 million overall. That’s actually a less desirable approach because the city needs to comfortable with increasing their operating cost. In our view, the least desirable approach is if the city wants to increase rates to the consumer, which we do not endorse, particularly in the current economic times.

What obstacles must be overcome in establishing a PPP? The biggest obstacle is the perceived cost of money. It’s just a perception that the cost of money is significantly higher using private funding than with public funding. The reality is that the capital cost is going to be lower under a PPP, because you’ve got to factor the risk value – which drives the whole concept of “value for money” (VFM).

Deloitte’s prepared a very good study of VFM, which is the analysis that should occur when a public agency is comparing a traditional delivery method of design-bid-build using public finance versus a public-private partnership using private capital. In the PPP model, we assume the risk and provide the value of certainty for the long term of 30 years.

It’s an education process. Cities are very accustomed to the traditional design-bid-build process; it’s something that they know and have more control over, per se. Public-private partnerships are still a relatively new concept in water infrastructure. The GAO (U.S. Government Accountability Office) prepared a report last year looking into as many examples as they could find, and there were only seven privately funded wastewater projects since 1992. Education is having continual discussions with both the cities and the communities, to help them understand the whole picture and the advantages of PPPs. Can you cite specific advantages to the community?

Beyond just the PPP transaction, there are a variety of socioeconomic benefits to the community. Job creation is perhaps the greatest benefit, as jobs can be created more quickly under a PPP due to the rapid availability of capital and by implementing fast-track project delivery. And then there is the multiplier effect of local jobs within the local economy. There are also the sales tax revenues that are generated from performing the project, as well as the potential to generate revenue from recycled water more quickly. It’s like a mini stimulus program, in a rapid manner.

We also think that it’s critical under a public-private partnership that the city and the municipality continue to be the face of the utility, and be the service provider to the ratepayers. That’s their public service and that’s what they do very well. Under our model, the municipality continues to have control over their assets and their costs, set rates, and perform billings and collections. There is mandatory reversion of the assets back to the municipality at the end of the term. Some people think PPPs are privatization, but they are different arrangements.

Another concern, both on the government and community level, is sustainability. How do you address this?

We’re always seeking efficiencies and better ways of doing what we do, and we’re not hooked to any one technology — we’re just always trying to find a better way to perform our service. We do focus on sustainability, but it’s all tied together. For example, we have a very small facility footprint and all of our designs are built on the same concept — tanks underground, operation buildings on top — which reduces the facility footprint by 70%. And that results in financial savings to the cities and ratepayers, and it’s part of what we call our Total Solution™. At the end of the day, the main goal is to produce the highest water quality that meets all regulatory requirements and is affordable for the city and its ratepayers. Our founder, Johan Perslow, started PERC Water based on the philosophy that everything we do has to be in the best interest of nature, and it has to be the in the best interest of our client.

Considering the state of the economy and water infrastructure in the U.S., do you think public-private partnerships will proliferate and become a trend in the industry?

How else are we going to fund all of this mission critical infrastructure? We live in a country that has aged infrastructure out there and very little liquidity, if any, with the local government. We can defer these projects, which means we don’t have to spend the money, but then we are deferring the inevitable and cities are losing out on the socioeconomic benefits. For example, we are looking at a project now that is projected to take six years to complete. We can complete it in three years, start jobs now, and produce recycled water three years earlier than the current plan.

Can you point to any recent examples as cases in point?

In the city of Santa Paula, CA, we entered into a public-private partnership with the city that received recognition for allowing the municipality to build water infrastructures that it couldn’t have afforded otherwise, particularly given the regulated mandates the city need to comply with. The efficiencies that we are able to realize in Santa Paula yielded more than 35% savings in terms of actual energy costs. It saved a significant amount of money for the city, because we share those savings with the city. So it’s beneficial to us because we’re operating in that space for 30 years, and it’s obviously beneficial for them because of the money saved.

We’re also working with a group right now on trading recycled water that we produce from our plants to create a revenue stream for the municipality. Currently, most recycled water is recharged into the ground or used to irrigate a golf course. Meanwhile, another project we are working on presently is willing to pay a $1,000 an acre-foot for recycled water, which could generate $5 million per year of revenues. These revenues would reduce the operating costs of the facility down to $3 million per year, resulting in sewer rates being cut in half.

Thanks for sharing, Mr. Cullen. I think many municipalities find themselves in a tough spot, and you’ve shed light on an option worth consideration.

Thank you. I hope this will help educate many cities about the benefits of PPPs. We all know that options for local government are limited, and waiting for grants or low-interest loans from the state or federal government will result in delayed projects, delayed compliance, delayed job creation, and delayed recycled water revenue. PPPs can change all of that.

National P3 Council Singles Out Santa Paula Wastewater Plant for Innovation | ENR: Engineering News Record | McGraw-Hill Construction

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National P3 Council Singles Out Santa Paula Wastewater Plant for Innovation 08/25/2011

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California’s first true public-private partnership wastewater treatment plant in Santa Paula, Ventura County, will accept a P3 innovation award from the National Council for Public-Private Partnerships in an awards banquet in Tampa Oct. 4.

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The project was put together in 2008 by the city of Santa Paula and a joint venture Santa Paula Water LLC, which is comprised of PERC Water Corp., Costa Mesa, and Alinda Capital Partners, Greenwich, Conn. Layton Construction, Irvine, was the prime subcontractor and PACE Engineering, Redding, was the engineer of record.

Santa Paula’s original wastewater treatment facility, built in 1939, was out of compliance and needed replacement, but the city did not have sufficient funds to pay for a new facility, according to PERC Water. The Regional Water Quality Control Board mandated a tight completion and compliance deadline or the city would be required to pay more than $8 million dollars in fines.

PERC Water spokeswoman Marian Clayton Clark said that due to the short timeline and cost-saving opportunities, Santa Paula’s city council cancelled its traditional design-bid-build process and moved the project forward using the design-build-operate-finance procurement process for its new facility. The contract runs for 30 years.

PERC Water contends that the design of the recycling plant blends in well with the surrounding community and utilizes a footprint of less than 2 acres, space which includes a 12,162-square-foot treatment facility and conceals a nearly 5.2 million gallon underground tank.

The recycling plant itself is designed for 3.4 million gallons per day (MGD) with expandability to 4.2 MGD. The plant has all new utilities, including fire, water, power, cable and gas, as well as features including an influent sewer lift station, three digester tanks, three anoxic tanks, three aerobic tanks, a UV disinfection tank and system, a foam control system, two-flow equalization tanks and a membrane bioreactor. The plant also includes administration buildings, including a control building with office space, lockers and restrooms, conference rooms, a receiving area and a headworks building, which will contain above-ground equipment as well as an odor control system. The effluent will be released from the plant and recycled into adjacent percolation ponds.

New Blog: Vertically Speaking in Northern California State's New Stormwater Regulations Looming By: robert_carlsen 8/29/2011 11:49 AM CDT

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New Blog: Field Notes State's New Stormwater Regulations Looming By: robert_carlsen 8/29/2011 11:49 AM CDT

When the Shaking Stops, A Way to Pinpoint the Damage By: robert_carlsen 8/24/2011 5:37 PM CDT

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The plant opened its doors in May 2010.

Keywords: Public-Private Partnership; Santa Paula; Wastewater; Treatment; Award

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http://california.construction.com/california_construction_projects/2011/0825-nationalp3councilsinglesoutsantapaulawastewaterplantforinnovation.asp[8/29/2011 5:09:56 PM]

An innovative partnership The City of Santa Paula, Calif., partners with the private industry to build an energysaving WWTP WE&T August 2011

The Santa Paula (Calif.) Water Recycling Facility, originally anticipated to reduce energy consumption by 15%, now is more than 35% energy-efficient than the city’s original wastewater treatment plant. Craig Mailloux

It has been more than a year since the completion of the new Santa Paula (Calif.) Water Recycling Facility, an 3 energy-efficient, 15,900-m /d (4.2-mgd) wastewater treatment plant (WWTP).

Not only did the facility come on-line 7 months early, but it also has exceeded expectations in its energy efficiency and cost savings, according to Marian Clayton, director of marketing at PERC Water, a private water recycling company that built, manages, and operates the facility.

The initial expectation was to reduce energy consumption by 15% compared to the city’s original WWTP, but “that was before we had actually run the facility,” Clayton said. “Now that the facility has been up and running for almost a year, we found that it has been on average more than 35% more energy-efficient than we anticipated.”

According to a March 2010 PERC Water press release, because of the facility’s energy-saving technologies, such as its membrane scouring system and lighting design, the city saved on average more than $10,000 a month during the first 7 months of operation.

A unique problem with a creative solution The City of Santa Paula built its new water recycling facility because it was mandated by the state to replace its 70-year-old WWTP. The plant had “reached the end of its useful life and accrued more than $8 million in compliance-related fines,” according to a December 2010 PERC Water press release.

“The city, for some years before, had tried to procure the [new] project through a design-bid-build scenario,” explained Bob Nespeca, vice president of asset management at PERC Water. With this delivery method, the city would have supplied all the funding, hired an engineering firm to design plans, and later had contractors bid on the project, with the project going to the lowest bidder. But because of financial constraints and the http://www.wef.org/publications/page_wet.aspx?id=10774&page=news ©2011 Water Environment Federation. All rights reserved.

sinking economy, “the city just came to the realization that they did not have the financial wherewithal to complete the project, nor did it have the staffing to do so,” he said.

So the city came back to the marketplace with a modified approach known as a design-build-operate-finance contract, Nespeca explained. This is how PERC Water, along with the independent infrastructure-funded firm, Alinda Capital Partners LLC (New York), became involved.

The Santa Paula facility is the first of its kind to be built under California Government Code Sec. 5956,which permits the use ofprivate investment to build, operate, and maintain public infrastructure. The City of Santa Paula created a public–private partnership with Santa Paula Water, which is an alliance between PERC Water and Alinda. Under the partnership, Santa Paula Water agreed to finance construction of the facility through private equity as well as operate it.

This unique project delivery method has proven to be a success for all parties involved, Clayton said.

“The way the deal works is for 30 years the facility is owned by a private company and is paid for by the city through a service fee,” Nespeca said. “That service fee covers the operational costs of the facility, capital replacements, and the capital reimbursement of the original construction. So at the end of the 30 years, the city becomes — with no money down — the owner of the facility.”

Clayton said the new delivery method has taken some getting used to for everyone involved.

“This was something that was new that hadn’t really been done with this type of infrastructure, and it hadn’t been done before in California,” Clayton said. “So the biggest struggle with this project has been educating and continuing to educate people about the [design-build-operate-finance] structure.”

Smooth sailing Though adapting to the new delivery method was challenging, the construction itself went a lot smoother.

Clayton said construction began in July 2008, was completed by December 2009, and the facility was at full flow by May 13, 2010.

“The date we had contracted to have it up and running was Dec. 15, 2010,” Clayton said. “So we finished 7 months in advance.”

The new facility includes an energy-saving lighting system that incorporates natural lighting, LED lamps, mercury-vapor exterior lights, and electronic ballasts for fluorescent lamps, light sensors, and automatic dimming devices. Also, because membrane scouring and aeration usually account for nearly half of a WWTP’s power consumption, the company chose energy-efficient equipment for these systems.

Nespeca said the team decided to go with a different blower than it had originally chosen for the project. “It was an upgrade,” he said. “It was just more efficient equipment that burned less power.”

The planners also decided to incorporate green infrastructure. The decorative water feature in front of the facility is actually a stormwater retention basin, Nespeca said.

This type of green infrastructure is “sort of a trademark of all projects we do,” Nespeca said.

Nespeca said PERC Water also hopes to eventually incorporate solar energy at the facility by installing solar arrays near the plant.

“This land is available because the city had anticipated a much larger footprint [for the plant],” Clayton explained.

So far the wastewater treated at the facility is being sent into the ground through percolation ponds, Nespeca said. Santa Paula’s effluent is California Title 22 certified so it can be used for various industrial uses, he explained. Nespeca added that the city is in the process of designing a reuse system that will include storage tanks and pumps. The reuse system will use the water to irrigate citrus and avocado groves throughout Ventura County.

—LaShell Stratton-Childers , WE&T http://www.wef.org/publications/page_wet.aspx?id=10774&page=news ©2011 Water Environment Federation. All rights reserved.

NEW

FRIDAY, JUNE 3, 2011

PERC Water awarded a top tier award PERC Water was awarded a top tier award at 2011 DesignBuild Institute of America (DBIA) Western Pacific Region’s Awards Banquet last night at the Newport Marriott. They were presented the “Best Project - Water” Regional Award for implementing “interdisciplinary teamwork, innovation, and problem solving” for the Santa

Paula Water Recycling Facility.

The DBIA awards honor projects for their “advanced and innovative application of total integrated project delivery and finding unique solutions for project challenges.” The Santa Paula Facility was recognized for its ground breaking approach to developing water recycling infrastr ucture, both in its

Ed York Joins Century 21 Buena Vista Ed York is a long time real estate agent and has joined Century 21 Buena Vista and will be working from both the Ventura and Santa Paula offices.

A resident of Santa Paula, Ed was born and raised in a suburb of Boston, Massachusetts.

He moved to Ventura in 1986 to enjoy living in the wonderful mild climate and re-establish his photography business, Images

by York, which specialized in architectural photography.

Over the next 15 years he provided real estate agents, real estate companies and real estate publications with quality photographs and outstanding service. In 2000 he joined Re/Max Gold Coast Realtors and within a year was promoted to office manager for one of the owners.

Three years later he decided to take on the challenge of being a full-time real estate agent.

Since then he has a proven record of providing his clients,

Color photos

both buyers and sellers, with honest, reliable and outstanding service.

He is likely a familiar face around town because of his passion and expertise at holding open houses and making new properties accessible to buyers.

“Ed is the caliber of agent real estate companies are excited to welcome into the family. Ed’s maturity and good view of life is an asset to the industry as well as to our office,” said Kay WilsonBolton, owner of Century 21 Buena Vista.

Ed is a member of theVentura County Coastal Association of REALTORS®, the and the Ventura County Regional Data Share which now has a coverage fromVentura County to San Diego counties.

utilization of the Design - Build - Operate - Finance (DBOF) delivery method and its innovative design. The facility was 100% privately funded without any up front capital cost requirements from the City of Santa Paula, was completed seven months in advance of its mandated compliance deadline, saves approximately 35% in power consumption costs, and produces recycled water that is available for reuse within the community.

The Santa Paula Facility was designed, built and is currently being operated by PERC Water.

They, in partnership with Alinda Capital, financed the project and it is the first of its type under California Code 5956, allowing for a DBOF delivery method. They were awarded the DBOF contract in May 2008, broke ground two months later, and the new facility began treating 100% of the City’s wastewater in May 2010.

The Facility utilizes advanced treatment process technologies incorporating MBR (membrane bio- reactors), aerobic sludge digestion, and UV (ultraviolet) disinfection that produces CA Title 22 compliant effluent. PERC Water’s unique design utilizes common wall construction and underground tanks to help achieve a small footprint and maximum odor and noise control.

EDITOR’SFOCUS

DBOF Delivers

By Marian Clayton

T

he city of Santa Paula, Calif., faced a challenge that is common to many municipalities: Its wastewater treatment facility was out of compliance and needed replacement, and

the city did not have sufficient funds to pay for a new facility. Additionally, the Regional Water Quality Control Board (RWQCB) mandated a tight completion and compliance deadline that if not met would cost the city more than $8 million in fines.

California city builds new

Project Delivery Solution Santa Paula is located just north of Los Angeles in wastewater facility Ventura County, and it has a population of approximately 30,000. The city’s original wastewater facility was built in 1939. Despite several upgrades and modifications, it did not comply with state requirements and had reached the end of its useful service life. The RWQCB agreed that if the city could come into compliance by Dec. 15, 2010, the board would waive the $8 million in fines.

The city initially chose the conventional designbid-build approach funded by public tax-exempt municipal bonds to build the new facility. After years of work and significant financial commitments into engineering studies, however, the city council and staff realized that this method would not meet their tight timeline or budget requirements. In July 2007, the city council approved the design-build-operate-finance (DBOF) method of procurement and began a request for quotes/request for proposals selection process for the new facility.

Santa Paulaâ&#x20AC;&#x2122;s Vice Mayor Bob Gonzales was mayor at the time the DBOF contract was signed. â&#x20AC;&#x153;The cost of 5IF OFX GBDJMJUZ UPPL PO 4BOUB 1BVMB T GVMM GMPX TFWFO NPOUIT BIFBE PG JUT doing business was significant for us,â&#x20AC;? he DPNQMJBODF EFBEMJOF said. â&#x20AC;&#x153;We had to build a new wastewater treatment facility, and we did not have the necessary funds. The DBOF delivery Table 1. Water Quality Results (October 2010) method gave the city a lot more latitude, and the risk was transferred to the com&GGMVFOU 1FSNJU &GGMVFOU pany who was doing the work.â&#x20AC;? *OGMVFOU 3FRVJSFNFOUT 3FTVMUT In May 2008, the city council awarded #0% 340 10 1.1 the DBOF contract to Santa Paula Water 544 283 10 <1 LLC, a joint venture of PERC Water 5PUBM /JUSPHFO n/a 10 6.0 Corp. and Alinda Capital Partners.

24

DBOF Project Structure PERC Water, a water recycling company that designs, builds, operates and manages water recycling facilities, teamed with Alinda Capital Partners, an independent investment firm that specializes in infrastructure investments, to form Santa Paula Water. As permitted under CA Government Code 5956, Santa Paula Water entered into a service agreement with the city to design, build, operate and finance the new facility over a 30-year concession, the longest such agreement for wastewater treatment services in the U.S. The facility was 100% privately funded, and the city was not required to pay any upfront capital costs toward the design and construction. Once the facility was in full operation, the city began paying a monthly service fee that includes facility operations and maintenance, debt service, capitalized interest during construction and 30 years of capital replacements. The city made its first payment toward the facility in July 2010.

PERC Water and Alinda were presented the Global Water Awards 2009 â&#x20AC;&#x153;Water Deal of the Yearâ&#x20AC;? Award of Distinction for their contribution to the advancement of public-private partnerships in the international water sector, specific to this DBOF contract.

Facility Design Overview PERC Water developed a membrane bioreactor (MBR) process design in which the majority of the treatment occurs in underground tanks. The tanks require approximately three-quarters of an acre of land and are built mostly below the existing grade.

The tanks utilize common wall construction, requiring a total volume of 7,000 cu yd of concrete and less yard piping and conduits. The operations buildings are constructed above the tank structure, reducing land requirements, and contain the process equipment, a laboratory, restrooms, workshop, break rooms and administrative offices. The covered tanks and noise and

MAY 2011 t 8"5&3 8"45&4 %*(&45

odor controls makes the facility neighbor friendly and a positive addition to the surrounding community.

The facility was designed to be built in two phases, allowing for an efficient expansion when additional capacity is required. The tank structure was constructed for both Phase I and Phase II at 4.2 million gal per day (mgd) average dry-weather flow. It is equipped with the equipment needed to treat 3.4 mgd, serving a maximum population of approximately 42,500. When it becomes necessary to expand the capacity, additional equipment will be installed in the facility, increasing the rated capacity to 4.2 mgd, serving a population equivalent of approximately 52,500.

This helps to keep operation and maintenance costs as well as future construction costs at a minimum.

The effluent is treated to a tertiary level meeting Title 22 requirements and present requirements of the RWQCB. It currently is disposed of in 13 acres of percolation ponds located to the east of the new facility. The city is drafting an alternate-use plan for the recycled water to reclaim and reuse it as an additional revenue stream.

Facility Construction PERC Water began the engineering of the project on May 6, 2008, following completion and approval of its 30% design, which was submitted to the city as part of PERC Waterâ&#x20AC;&#x2122;s proposal. The combination of the facilityâ&#x20AC;&#x2122;s design and PERC Waterâ&#x20AC;&#x2122;s integrated design-build-operate team allowed the flexibility to start construction two months into the design.

Concurrent to the construction, construction drawings and documents were prepared for future components of the work in a fast-track approach. Work on the tank structures commenced in September 2008 and was completed in January 2009. Construction of the project was completed in December 2009. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve never known of a municipal project to be completed on time,â&#x20AC;? Gonzales said. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve been involved in a number of different organizationsâ&#x20AC;&#x201D; community college district, city school districtsâ&#x20AC;&#x201D; where finishing six months after the projected

completion date is considered a success. This project was completed not just on time but seven months early, and I give credit to PERC Water and their team for getting the job done.â&#x20AC;?

Change orders accounted for less than 1.7% of the construction cost, most of which included additional work requested by the city. More than 85% of the construction hours devoted to the facility were from local union workers. The project required 180,000 man-hours and boasted no loss-time accidents.

After completion of construction, PERC Water commenced electrical, mechanical, equipment installation, controls, programming, testing, commissioning and startup. In May 2010, seven months in advance of its Dec. 15 compliance deadline, the facility took full flow from the city, successfully terminating the use of the original facility.

Operational EfďŹ ciencies Because the DBOF contract stipulated that PERC Water would operate the facility for 30 years, the company invested its own funds in design enhancements during construction to reduce energy consumption costs. These energy-efficient features included an energy-efficient membrane scouring and aeration system, a smart controlling system and an innovative lighting design.

In the first five months of the facilityâ&#x20AC;&#x2122;s operation, the power consumption costs have been approximately 35% lower than expected. The energy savings are split 50/50 with the city. â&#x20AC;&#x153;The savings are significant for the city of Santa Paula, but also for the ratepayers,â&#x20AC;?

Gonzales said. â&#x20AC;&#x153;The benefactors â&#x20AC;Ś are the ratepayers.â&#x20AC;?

As a result of the energy-saving measures employed at the facility, PERC Water was awarded the 2009 Sustainability and Resource Protection Award by the Environmental Business Journal and a grant through Southern California Edisonâ&#x20AC;&#x2122;s â&#x20AC;&#x153;Savings by Designâ&#x20AC;? program to help fund the energy-saving technology.

High-Quality Water for Reuse Beginning May 13, 2010, the facility has been fully

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operational, treating all of the cityâ&#x20AC;&#x2122;s wastewater, and in compliance with the RWQCBâ&#x20AC;&#x2122;s waste discharge permit for what the facility is intended to treat. Table 1 (see page 24) shows the facilityâ&#x20AC;&#x2122;s water quality results for the month of October 2010. The city is developing a reuse plan for the effluent produced by the facility to be used within the community. 88% .BSJBO $MBZUPO JT NBSLFUJOH EJSFDUPS GPS 1&3$ 8BUFS $MBZUPO DBO CF SFBDIFE BU NDMBZUPO!QFSDXBUFS DPN or 714.352.7754.

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25

Water aNd WasteWater//state oF the seCtor

Santa Paula, Calif. was given a state-government mandate to upgrade its water recycling plant.

It did so before the December 2010 deadline.

Water perCs a caLIfornIa fIrM BUILDS thE fIrSt prIVatELY fUnDED WatEr rEcYcLInG facILItY. By fred Minnick

WIth FederaL aNd state governments mandating greener initiatives, cities are facing scrutiny to remain compliant with current laws. In 2007, Santa Paula, Calif., was given a state government mandate with a December 2010 deadline to upgrade its water recycling plant. Public monies were scarce and the municipal bond market at the time did not look promising.

To fulfill the court order, the city would have to upgrade a facility that had not been improved since 1939, while facing more than $8 million in compliance-related fines. To solve its conundrum, Santa Paula—known to some as the Citrus Capital of the World—opted to use a design-build-operate-finance (DBOF) delivery system under California Code 5956, which encourages private investment in public infrastructure. aMerICa’s FIrst prIVateLY FINaNCed pLaNt PERC Water Corp. won the contract, along with Greenwich, Conn., private-equity firm Alinda Capital Partners LLC, making the Santa Paula Water Recycling Facility the country’s first privately funded water recycling plant.

According to the 2009 Global Water Awards, given that U.S. municipalities are scrambling to cover budget gaps with declining tax revenue, private-sector funding is an attractive option. The Santa Paula deal was a groundbreaking transaction that can be emulated across the United States.

Although serving the public, the Santa Paula Water Recycling Facility is privately owned (Alinda owns 90 percent; PERC owns 10 percent). PERC leases the land and receives payment for treating and recycling the city’s wastewater.

“It’s not a conventional design-build delivery method,” says Brian Cullen, president of PERC Water.

However, working with municipalities is one of PERC’s specialties. The Costa Mesa, Calif.–based company has designed more than 55 facilities, 20 of which were design-build-operate.

16

spring//2011

“Working with a municipality was a natural progression for us,” Cullen says. “On many previous projects, we would partner with a large developer to put the infrastructure in under a DBO-type contract using private financing and we would be part of the development agreement between a municipality and developer. These projects were using private money, except it was private money from developers as opposed to private money from infrastructure funds.”

PERC is particularly proud of the fact that the Santa Paula project—a 30-year contract for PERC—was completed seven months ahead of the state’s deadline.

“When a company does a design-build project by itself without the operations component, they are less likely to invest their own capital into the project to lower the operating cost for the next 30 years,” Cullen says. “A design-builder is not going to be there to realize those savings in the future. When we design-build a facility, we design and build for the long-term by focusing on the life cycle costs of the project, 30 years in the case of PERC Water’s Santa Paula project. We don’t think about just the design-build phase, because we have to manage that asset for 30 years.” reduCINg poWer CoNsuMptIoN One of the key goals of the redesign was to reduce power usage.

In the evaluation phase, Juergen Nick, vice president of design for PERC, says the firm focused on high-powered equipment, such as aeration blowers and disinfectors.

For odor control, Nick says, PERC was ionizing the air within the building, then blowing it into the lift-station equalization tanks. To deplete the hydrogen sulfate, he says, PERC scrubbed it out through a carbon scrubber.

“For the carbon scrub, we went with a different system that had lower head loss, which is directly proportional to

the quarterly publication of the design-build institute of america

The Santa Paula Water Recycling Facility became the country’s irst privately funded water recycling plant.

water. In part because of this global water crisis, Cullen sees water recycling projects becoming a hot-button issue for municipalities.

He says this privately funded, design-build-operate delivery method offers four benefits: Municipalities get in compliance; private funding eases the financial burden for municipalities; jobs are created; and water is saved.

Approximately 1.5 billion gallons a day of treated wastewater flows into the Pacific, Cullen says, and there is water scarcity throughout California. “Your first objective should be to stop putting wastewater in the ocean,” he says. “If we can deploy privately funded water recycling facilities under this DBOF model, it creates a new supply of water in an expedited manner. Now, you’ve just eased the pressure on the water supply.”

In addition to water, Cullen believes, PERC’s private financing methods for cities could be used more.

“It’s not a pioneering structure by any means; privately funded infrastructure has been around a long time, such as in the waste-to-energy sector,” he says. “It’s just that it hasn’t been applied to the water and wastewater space very often.” frED MInnIcK IS a natIonaL JoUrnaLISt Who coVErS a WIDE ranGE of SUBJEctS. hIS WorK haS appEarED In DBIa’S DatELInE MaGaZInE, aS WELL aS ManY othEr pUBLIcatIonS. VIEW hIS WorK at frEDWrItE.coM.

/ sNapshot

power consumption,” says Nick. “Odor control doesn’t sound like much, but it runs 24/7. So, you rack it up over the entire year and small loads really become quite a burden on your power bill.”

The facility now uses 35 percent less power than expected.

Furthermore, according to PERC, the company’s activated sludge process membrane bioreactor (ASP MBR) design had numerous efficiencies that resulted in lower life-cycle cost.

PERC’s project overview indicates the 32,000-tank area freed up five acres of land and required less yard piping. The 13 acres of percolation ponds allowed half the basins to accept flow while the other half dried for maintenance. In addition, the Koch Puron Membranes used saved up to 15 percent in wastewater treatment power consumption.

“Koch Membrane scouring was far superior than anything else that was on the market,” Nick says.

After all these improvements, PERC saved Santa Paula more than 5.8 million kilowatt hours a year. That is just one of the reasons the project has been showered with environmental awards, including the Global Water Awards’ 2009 “Water Deal of the Year” distinction and a Southern California Edison grant.

“The capital cost was lower than what they were considering and energy savings became phenomenal,” Cullen says. But, he adds, education is key to showing the energy savings’ benefits.

“Whether it’s education on the structure of how you put the DBOF deal together or education on the socioeconomic aspects of water recycling, it’s one big education process,” Cullen says.

“Recycling is a responsibility. We don’t even like to call it wastewater, because we don’t want to waste the water.”

Project: Santa Paula Water Recycling Facility, Santa Paula, Calif.

Players: PERC Water Corp. and Alinda Capital Partners LLC Achievement: The project was completed seven months ahead of the deadline and kept to a tight budget in tough times.

the Water treNd According to the World Water Council think tank, more than one out of six people lack access to safe drinking

dbia.org

spring//2011

17

Recycling Facility Benefits from Energy Efficient Processes - WaterWorld

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Recycling Facility Benefits from Energy Efficient Processes In the current environment of rising energy costs, municipalities are under pressure to reduce power consumption while continuing to maintain the quality and efficiency of public infrastructure. The City of Santa Paula, CA, faced this challenge when it became necessary to replace its noncompliant wastewater treatment facility.

As a result of an investment in energy-efficient technology, the city's new facility power consumption costs for the first five months of operation were more than 35 percent lower than expected.

Santa Paula is located in Ventura County and has a population of approximately 30,000. Its original wastewater treatment facility was built in 1939 and had accrued more than $8 million dollars in compliance related fines. The Regional Board agreed that if the city could come into compliance by a certain date, they would waive the fines.

Although originally choosing the conventional design-bid-build approach, after years of work and funding engineering studies, the City Council and staff realized this method would not meet their tight timeline or budget requirements. In July 2007, the City Council approved the design-build-operate-finance (DBOF) method of procurement and in May 2008, the City Council awarded the DBOF contract to Santa Paula Water, LLC, a joint venture of PERC Water Corp. and Alinda Capital Partners.

Energy-efficient high speed turbine blowers provide air for the plant's membrane scouring and aeration systems.

PERC Water began project engineering on May 6, 2008, the day after the DBOF contract was signed, and commenced construction two months later. Construction was completed in December 2009 and on May 13, 2010, seven months in advance of its December 15 compliance deadline, the facility took full flow from the city.

Facility Design PERC Water designed a 4.2 mgd membrane bioreactor (MBR) facility where the majority of the treatment occurs in underground tanks. The tanks require approximately three-quarters of an acre of land and are built mostly below the existing grade. The tanks use common wall construction, requiring a total volume of 7,000 cubic yards of concrete and less yard piping and conduits. The operations buildings are constructed above the tank structure, reducing land requirements, and contain the process equipment, a laboratory, administrative offices, etc. The covered tanks and noise and odor controls make the facility neighbor-friendly and a positive addition to the surrounding community.

The wastewater is treated to a tertiary level meeting Title 22 requirements and is currently discharged to 13 acres of

http://www.waterworld.com/index/display/article-display/8815035635/articles/waterworld/wastewater/2011/april-2011/recycling-facility-benefits-from-energy-efficient-processes.html[3/31/2011 12:05:16 PM]

Recycling Facility Benefits from Energy Efficient Processes - WaterWorld percolation ponds located to the east of the new facility. However, the city is drafting an alternate use plan for the recycled water to reclaim and reuse it as an additional revenue stream.

Energy Efficiencies The contract stipulated that PERC Water would operate the facility for 30 years. Because the company is responsible for the facility's long-term operations and maintenance, they designed and constructed the facility to control and minimize energy consumption costs and deliver the smallest environmental footprint possible.

PERC Water invested their own funds beyond the contract cost in design enhancements during construction to reduce energy consumption costs. It paid off - in the first five months of the facility's operation, power consumption costs were approximately 35 percent lower than expected. The energy savings are split 50/50 with the city.

The Santa Paula water recycling facility

The Santa Paula water recycling facility was built using a design-build-operate-finance procurement.

Energy-efficient features included: UV Disinfection - The facility uses the Degremont Technologies' AquarayÂŽ 3X UV Modules which are equipped with amalgam lamps for UV disinfection. Amalgam lamps are the most energy efficient lamps for generating ultra violet light at the high power density required. Additionally, the control system can vary the lamp output to precisely meet the UV dose requirements for disinfection, minimizing the electrical consumption.

Membrane system - The MBR technology combines biological wastewater treatment and membrane filtration into one unit process, producing a consistently high quality effluent in an extremely compact footprint. PERC Water incorporated Koch Membrane Systems' single header PURONâ&#x201E;˘ membrane filtration modules into the MBR design because they are energy efficient and provide significantly lower lifecycle costs.

Aeration system - As membrane scouring and aeration account for nearly half of a facility's power consumption, PERC Water selected energy-efficient air production and usage systems. Most noticeable are the facility's K-Turbo High Speed Turbine blowers which are used throughout the facility's various process areas. The blowers' internal variable frequency drives allow operators to control, monitor and specifically adjust the air flow for aeration over a wide range of operations.

Smart control system - The Supervisory Control and Data Acquisition (SCADA) system developed by PERC Water has the unique ability to gather, display, track and store live data generated by the facility. In an effort to optimize energy consumption, the system is designed to consistently update operators on the exact status and measurements of all of the facility's processes such as air flow, water flow and tank capacity and will notify operators of abnormal conditions directly to the operator's cell phone.

The SCADA system is accessed through Central PERCâ&#x201E;˘, a web application where all the facility's current and historical operational data is integrated within one platform that can be accessed and controlled wirelessly from an iPad, iPhone, Droid or any other web-capable device.

The 4.2 mgd MBR facility discharges to 13 acres of percolation ponds

The 4.2 mgd MBR facility discharges to 13 acres of percolation ponds.

http://www.waterworld.com/index/display/article-display/8815035635/articles/waterworld/wastewater/2011/april-2011/recycling-facility-benefits-from-energy-efficient-processes.html[3/31/2011 12:05:16 PM]

Recycling Facility Benefits from Energy Efficient Processes - WaterWorld

Lighting design - Using a combination of natural lighting, LED lamps, electronic ballast for fluorescent lamps, light sensors and automatic dimming devices, the facility exceeded the state's Title 24 energy-efficiency requirements and Southern California Edison's stringent standard.

As a result of the energy saving measures employed at the facility, PERC Water was awarded the 2009 Sustainability and Resource Protection Award by the Environmental Business Journal and a grant through Southern California Edison's "Savings by Design" program to help fund the energy saving technology.

John Quinn, the city's Finance and Public Works Director, said, "The City of Santa Paula is enthusiastic about our new water recycling facility's reduced power costs as it means savings for our citizens over the long term."

Vice Mayor Gonzales likewise said, "The savings are significant for the City of Santa Paula. In the end, the benefactors are the rate payers."

"It is imperative that infrastructure become more sustainable and fiscally responsible," said Brian Cullen, President of PERC Water. "The technology available in today's market raises the standard for efficiency and the Santa Paula facility demonstrates that investing in these energy saving technologies results in savings to the ratepayers."

Dr. Shane Trussell, a leading expert in membrane bioreactors and PERC Water's lead advisor for the facility's process design, described the facility as "world-class." He said, "As a result of the team's equipment selection and robust design features, it is one of the most energy-efficient and cost-effective membrane bioreactor installations in the world."

WW Learn more about this project at: www.percwater.com.

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http://www.waterworld.com/index/display/article-display/8815035635/articles/waterworld/wastewater/2011/april-2011/recycling-facility-benefits-from-energy-efficient-processes.html[3/31/2011 12:05:16 PM]

Wastewater Reuse

Santa Paula: A case study in energy efficiency Marian Clayton, PERC Water, USA Editor’s note Sometimes when a wastewater treatment works is found to be in non-compliance with regulations this can be the spur to producing a revamp which suddenly becomes a model for others to follow. Such is the case with the City of Santa Paula in California. As a result of the revised wastewater plant’s equipment selection and robust design features, it is now one of the most energy-efficient and cost-effective membrane bioreactor installations in the world.

I

n the current environment of rising energy costs, municipalities are under pressure to reduce power consumption while continuing to maintain the quality and efficiency of public infrastructure. The City of Santa Paula faced this challenge when it became necessary to replace its noncompliant wastewater treatment facility.

As a result of an investment in energyefficient technology, the new facility’s power consumption costs for the first five months of operation are 35% lower than expected.

Desalination & Water Reuse Vol. 20/4

Project history

16

Santa Paula is located in Ventura County, California and has a population of approximately 30,000. Its original wastewater treatment facility was built in 1939 and had accrued more than US$ 8 million dollars in compliance related fines. The Los Angeles Regional Water Quality Control Board (LARWQCB) agreed that if the city could come into compliance by a certain date, they would waive the fines.

Although originally choosing the conventional design-bid-build approach,

after years of work and funding engineering studies, the city council and staff realized this method would not meet their tight timeline or budget requirements. In July 2007, the council approved the design-build-operatefinance (DBOF) method of procurement and in May 2008, awarded the DBOF contract to Santa Paula Water LLC, a joint venture of PERC Water Corporation and Alinda Capital Partners.

PERC Water began the engineering of the project on 6 May 2008, the day after the DBOF contract was signed, and commenced construction two months later. Construction was completed in December 2009 and on 13 May 2010, seven months in advance of its 15 December 2010 compliance deadline, the facility took full flow from the city.

Energy Efficiencies The contract stipulated that PERC Water would operate the facility for 30 years.

Because the company is responsible for the long-term operations and maintenance costs of the facility, it designed and constructed the facility to control and minimize energy consumption costs and deliver the smallest environmental footprint possible. PERC Water invested its own funds beyond the contract cost in design enhancements during construction to reduce the energy consumption costs.

It paid off. In the first five months of the facility’s operation, the power consumption costs have been approximately 35% lower than expected.

The energy savings are split 50/50 with the city.

These energy-efficient features included:

Facility Design PERC Water designed a 4.2 million gallon per day membrane bioreactor (MBR) facility (see description page 18), where the majority of the treatment occurs in underground tanks. The operations buildings are constructed above the tank structure, reducing land requirements, and contain the process equipment, a laboratory, administrative offices, etc. The covered tanks and noise and odor controls makes the facility neighbor-friendly and a positive addition to the surrounding community.

The facility is in compliance with the LARWQCB’s waste discharge permit for what the facility is intended to treat.

The wastewater is treated to a tertiary level meeting Title 22 requirements and is currently disposed in 13 acres (5.26 ha) of percolation ponds located to the east of the new facility. The city is drafting an alternate use plan for the recycled water to reclaim and reuse it as an additional revenue stream for the City.

UV Disinfection – The facility uses the Degremont Technologies’ Aquaray® 3X UV Modules which are equipped with amalgam lamps for UV disinfection.

Amalgam lamps are the most energy efficient lamps for generating ultra violet light at the high power density required.

Additionally, the control system can vary the lamp output to precisely meet the UV dose requirements for disinfection, minimizing the electrical consumption.

Membrane system – The MBR technology combines biological wastewater treatment and membrane filtration into one unit process, producing a consistently high quality effluent in an extremely compact footprint. PERC Water incorporated Koch Membrane Systems’ single header Puron™ membrane filtration modules into the MBR design because they are energy efficient and provide significantly lower lifecycle costs.

Wastewater Reuse

The Santa Paula MBR process could be one of the most energy efficient in the world

Smart controlling system – A proprietary technology developed by PERC Water, the Supervisory Control & Data Acquisition (SCADA) system has the unique ability to gather, display, track and store live data generated by the facility. In an effort to optimize energy consumption, the SCADA system is designed to consistently update operators on the exact status and measurements of all of the facility’s processes such as air flow, water flow and tank capacity and will notify operators of abnormal conditions directly to the operator’s cell phone.

The SCADA system is accessed through Central PERC™, a web application where all the facility’s current and historical operational data is integrated within one platform that can be accessed and controlled wirelessly from an iPad, iPhone, Droid or any other webcapable device.

Lighting design – Using a combination of natural lighting, LED lamps, mercuryvapor exterior lights, electronic ballast for fluorescent lamps, light sensors and automatic dimming devices, the facility exceeded the state’s Title 24 (energyefficiency standards for residential and non-residential buildings) requirements and Southern California Edison’s stringent standard.

As a result of the energy-saving measures employed at the facility, PERC Water was awarded the 2009 Sustainability and Resource Protection Award by the Environmental Business Journal and a grant through Southern California Edison’s “Savings by Design” program to help fund the energy saving technology.

Savings for city John Quinn, the city’s finance and public works director, said, “The City of Santa Paula is enthusiastic about our new water recycling facility’s reduced power costs as it means savings for our citizens over the long term.”

“It is imperative that infrastructure become more sustainable and fiscally responsible,” said Brian Cullen, President of PERC Water. “The technology available in today’s market raises the standard for efficiency and the Santa Paula facility demonstrates that investing in these energy-saving technologies results in savings to the ratepayers.”

Dr Shane Trussell, a leading expert in membrane bioreactors and PERC Water’s lead advisor for the facility’s process design, described the facility as “worldclass.” He said, “As a result of the team’s equipment selection and robust design features, it is one of the most energyefficient and cost-effective membrane bioreactor installations in the world.”

Desalination & Water Reuse Vol. 20/4

Aeration system – As membrane scouring and aeration account for nearly half of a facility’s power consumption, PERC Water selected energy-efficient air production and usage systems. Most noticeable are the facility’s K-Turbo High Speed Turbine blowers, which are used throughout the facility’s various process areas. The blower’s internal variablefrequency drives allows PERC Water to control, monitor and specifically adjust the air-flow for aeration over a wide range of operations.

17

Wastewater Reuse MBR Technology is energy efficient and reduces lifecycle costs Koch Membrane Systems

T

he City of Santa Paula selected the PERC Water / Alinda Capital team to design, build, operate and finance a 7.2 MGD (27,250 m3/d) peak day flow (10.4 MGD (39,360 m3/d) peak hour) membrane bioreactor (MBR) to meet compliance standards and enable the use of recycled wastewater for irrigation.

Santa Paula chose MBR technology because it combines biological wastewater treatment and membrane filtration into one unit process, producing a consistently high quality effluent in an extremely compact footprint.

PERC Water selected the single header Puron™ membrane filtration modules from Koch Membrane Systems (KMS) to incorporate into the MBR design because they were energy efficient and provided significantly lower lifecycle costs than other alternatives. The Santa Paula project is the first large MBR installation in North America to use Puron membrane filtration modules.

Desalination & Water Reuse Vol. 20/4

Compact design The Santa Paula MBR facility has a compact design, with fully redundant headworks, conservative and efficient aeration design, biological foam spray system, hollow fiber membranes with incorporated aeration. Effluent from the system will discharge into evaporation/ percolation ponds, and a portion of

18 Fig. 1: MBR design process flow

the water will eventually be used for irrigation.

Figure 1 provides a general illustration of the overall system.

The new water recycling facility is designed to produce an effluent that meets or exceeds all current environmental wastewater quality standards mandated by the US Environmental Protection Agency and the RWQCB. The MBR is designed to produce a finished effluent with biochemical oxygen demand and total suspended solids concentrations of less than 5 mg/L, total nitrogen less than 8 mg/L and turbidity less than 0.2 Nephelometric Turbidity Units (NTU).

Table 1 shows the facility’s water quality results for October 2010.

MBR advantages An MBR is a biological process that combines secondary and tertiary treatment using a membrane filtration

process. Because membranes are used to provide the necessary solids-liquid separation, MBR effluent is consistently high quality with low turbidity, low bacterial counts, and low TSS and NTU. The filtrate quality, in many instances, is suitable for feeding directly into a reverse osmosis (RO) process, if required in the future. An additional advantage of an MBR system is its compact footprint. This is achieved by replacing the secondary clarification process with membrane separation and by operating the biological process with higher mixedliquor suspended solids than conventional activated-sludge systems.

Despite its advantages, using membranes for solids-liquid separation requires careful assessment of several critical design elements. Table 2 shows these design requirements along with a brief overview of how they were handled in the Santa Paula Water project.

According to Juergen Nick, PERC Water’s vice president of design and

Table 1: Santa Paula Water Recycling Facility October 2010 Water Quality Results Influent BOD

340

Effluent Permit Requirements 10

Effluent Results 1.1

TSS

283

10

<1

Total Nitrogen

n/a

10

6.0

Wastewater Reuse

Desalination & Water Reuse Vol. 20/4

engineering, “The water recycling technology we are employing in the Santa Paula Facility sets the industry bar to help control and minimize operational energy costs within the smallest environmental footprint possible. As membrane scouring and biological aeration account for nearly half of the facility’s power consumption, PERC Water chose to employ the most energy-efficient air production and usage systems on the market . . . KMS’ Puron membranes. In total, 24 PSH-1500 modules were installed, making it one of the largest MBR installations in North America.”

Puron modules are energy-efficient, with the lowest energy demand of all commercially available MBR modules.

The system is easy to operate, with features that are designed to provide significantly lower lifecycle costs, including a single header design that provides better solids management in the module, braided fibers to reduce the risk of fiber breakage, and highly effective air scouring that virtually eliminates sludging.

20

Single header design An important advantage of the patented Puron module is the use of a single header with reinforced hollow fibers that are fixed only at the bottom. The sealed upper end of the fiber is allowed to float freely. The free floating tip design eliminates the build-up of hair and fibrous materials that typically clog the upper ends of membrane fibers in MBR module designs that employ both top and bottom headers.

Solids and particulates, including bacteria, are retained by the membrane and remain on the outside, while permeate is drawn through the membrane to the inside of the fibers. The outside-to-inside flow pattern provides optimal solids management and a high flow-rate.

Figure 2 illustrates the single header design of the Puron module’s fiber bundles.

Larger Puron module The Santa Paula facility includes the larger 1,500 m2 Puron module, which simplifies design, operation and retrofit

Table 2: Unique MBR design requirements Influent

Effluent Permit Requirements

Wastewater characterization

Confirms the design assumptions and ensures compliance with product warrantees

Independent laboratory performed the water quality assessments to ensure proper design and warranty compliance

Accurate estimates of peak flows

MBR facilities are even more susceptible to wet-weather flows than conventional gravity solids-liquid separated plants

Flow hydrographs used to understand the peak-hour flow-rate and determine the time elapsed to produce the inflow volume. To reduce the peak wet-weather flow that would need to be sustained, this design incorporated a 1.0 MG (3,785 m3) equalization basin to attenuate flow

Careful design of headworks

Headworks protect the membranes and minimize the accumulation of inert debris in the membrane tanks, and ensure reliable performance without requiring extensive maintenance

Facility designed with two gross solids removal processes ahead of the fine screens. Headwork process units were oversized to reduce the frequency of required maintenance and ensure consistent performance

Membrane equipment selection

Ensures reliability, compatibility with competing products, energy efficiency and customer support

Hollow fiber membranes were selected for the solid-liquid separation to provide an energy efficient solution with separate membrane tankage for ease of maintenance and process control.

Biological foam control

MBRs provide a perfect trapping environment for filamentous bacteria that float and cause biological foaming, which can result in undesired loss of biomass and increased membrane fouling rates. The PERC facility’s unique covered aeration basin design made this issue a particular challenge

Automated spray system designed to fit the roof design for each basin using the smallest practical nozzles, achieving full coverage spray of the water surface at the normal average operating level

Aeration design and operation

Special concern with the MBR process due to the increased mixed liquor suspended solids concentrations at which MBRs operate compared to conventional processes

Required airflow rates to maintain the aerobic zones at dissolved oxygen concentrations of 2 mg/L were determined using an factor of 0.45 and a standard oxygen transfer efficiency of 30% for the membrane aeration panels

MBRs may trap filamentous bacteria Biological that floats and causes biological treatment concerns foaming events

Biological modeling simulations were performed using a modular, multipurpose modeling environment used for the simulation of municipal and industrial wastewater treatment plants

Softened water requirement

Inorganic foulants can be a significant factor in MBR facilities when the wastewater contains high mineral or metal concentrations, causing increased operation and maintenance costs due to additional chemical cleans required to maintain design capacity

The design includes a reverse-osmosis skid to provide sufficient softened water for the sprayer system, maintenance cleans and intensive cleans

Biological startup

Crucial to plant success and should be designed to minimize the startup period to quickly reach stable activated sludge process operating conditions and maintain overall membrane integrity and mitigate untimely membrane fouling

The biological startup process was modeled using GPS-X process simulator, while taking into consideration the system’s physical constraints

Wastewater Reuse

Fig. 2: Puron MBR module design

Desalination & Water Reuse Vol. 20/4

of large-scale MBR plants. The improved submerged membrane module features greater packing density, lower energy costs for aeration, and simplified installation while providing even greater compatibility with other commercially available systems.

The 1,500 m2 module is particularly significant because it was specifically designed for large-scale MBR projects.

Features such as an optimized permeate extraction manifold and air supply lines reduce the number of piping connections during installation.

For additional flexibility, the new product line enables users to easily retrofit the advanced Puron technology into systems with comparably sized modules. Figure 3 shows how the module works.

22

In addition, to simplify membrane cleaning and maintenance, the central aeration system and the bottom header have been redesigned. The new aeration system reduces the flow rate during air scouring, resulting in a decrease in air usage by up to 20% over the original design.

PERC Waterâ&#x20AC;&#x2122;s innovative design uses 5 acres (2 ha) less land than would be required by a conventional wastewater treatment facility. The plan includes a

The Santa Paula Water Recycling Facility in California

Fig. 3: Overall design of the 1500 m2 module

recycling education center, where local students can learn how water recycling facilities function.

Low power consumption In its first few months of operation, the power consumption of the plant was only 4.4 kWh/1000 gallons treated. The consumption is based on power used by all processes throughout the facility

including digestion, building power, MBR process, UV system, RO system etc. As flows increase, it is expected that the power consumption per thousand gallons will further decrease.

With the equipment selected for this facility, Santa Paulaâ&#x20AC;&#x2122;s MBR promises to be one of the most energy-efficient MBR installations in the world.

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Water recycling facility creates more than 35 percent in energy savings

<< BACK

Thursday, December 16, 2010

SANTA PAULA, CALIF. — PERC Water Cooperation announced that its Santa Paula, Calif., water recycling facility, which began full compliant operation seven months ahead of the state’s mandated Dec. 15, 2010 deadline, has used more than 35 percent less power than originally expected, according to a press release.

The Santa Paula Water Recycling Facility was initially anticipated to create a 15 percent savings as a result of PERC Water’s investment in energy-saving technology, the release stated.

As a result of the energy saving measures employed at the Santa Paula facility, PERC Water was awarded the 2009 Sustainability and Resource Protection Award by the Environmental Business Journal and a grant through Southern California Edison’s “Savings by Design” program to help fund the energy saving technology.

“In this challenging economic environment, California cities are eagerly seeking cost saving opportunities,” said John Quinn, Santa Paula’s finance and public works director. “The city of Santa Paula is enthusiastic about our new water recycling facility’s reduced power costs as it means savings for our citizens over the long term.”

To read the entire article, click here.

For related information, click here.

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Santa Paula Water Recycling Facility - Water Technology

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Santa Paula, California Design-Build-Operate-Finance 4.2MGD, initially rated at 3.4MGD Approximately $58m 1.5 acres Membrane Bio-Reactor May 2008

Full specifications The Santa Paula water recycling facility (WRF) is a membrane bioreactor (MBR)based, 3.4MGD (expandable to 4.2MGD) water recycling facility located in the City of Santa Paula, California. The new facility is the first of its kind built under California's Government Code Section 5956, which promotes public-private partnerships in public infrastructure projects.

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Construction was completed in December 2009 and the facility became fully operational in May 2010, seven months ahead of the Regional Board compliance deadline.

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Santa Paula water recycling facility background and purpose Before commissioning the new facility, the City of Santa Paula was served by a wastewater treatment plant built in 1939. It had reached the end of its service life and required replacement.

The original plant was also unable to comply with the waste discharge requirements of the Los Angeles Regional Water Quality Control Board.

"Santa Paula water recycling facility was designed to be built in two phases."

Expand Image

The non-compliance discharges were being transferred Aerial view of Santa Paula into the Santa Clara River, as a result of which the city Water Recycling Facility. faced fines of over $8m from the State Regional Water Quality Control Board.

In May 2007, a consent judgement given to the state allowed that it could apply the fines toward construction of a new wastewater treatment facility, if completed by December 2010. Following the judgement, the city decided to replace its old plant with a new wastewater recycling facility.

Expand Image The facility has initial treatment capacity of 3.4 The city initially considered adopting a design / bid / build approach, but due to time constraint and budget requirements the city council approved a design / build MGD.

Key players

/ operate / finance (DBOF) method in July 2007.

In a competitive selection process Santa Paula Water, a joint venture formed between PERC Water and Alinda Capital Partners, was voted on by the city council.

The DBOF contract was awarded in May 2008. The joint venture has a 30-year concession period to own and operate the new wastewater facility.

Santa Paula water recycling plant design Santa Paula WRF was designed to be built in two phases. Phase 1 has a rated capacity of 3.4MGD average dry weather flow (ADWF). It is capable of serving a maximum population of 42,500.

The combined treatment capacity of phase 1 and phase 2 is 4.2MGD ADWF, serving a maximum population of 52,500. The designed loadings are 11,209lb of biochemical oxygen demand (BOD) and total suspended solids (TSS), and 1,856lb of total Kjeldahl nitrogen (TKN).

The plant's footprint area is 1.5 acres and the total tank area is 32,000ft². The processing tanks are built underground using common wall construction to generate substantial capital savings as less piping / conduits are required. As a result of covered process tanks, the plant does not produce offensive odours or noise.

http://www.water-technology.net/projects/santapaularecyclingf/[1/24/2011 3:22:40 PM]

Expand Image The plant's footprint area is only 1.5 acres.

Santa Paula Water Recycling Facility - Water Technology Expand Image The Plant's operations and administrative buildings are constructed above the Percolation ponds consisting of three storage basins are built in area of 13 acres. process tanks, which are The basins are designed to operate on a 50:50 wet-dry cycle. While half the basins built underground.

Another innovative feature of the plant is that its operations and administrative offices are built above the process tanks.

are used to accept flow, the other half are allowed to dry for maintenance.

MBR technology Santa Paula WRF uses MBR technology because of its ability to use biological wastewater treatment and membrane filtration process in a single unit.

The plant is fitted with single header PURON membrane filtration modules supplied by Koch Membrane Systems.

"The new facility is the first of its kind built under California's Government Code Section 5956."

To cut down the energy requirements, the plant is equipped with an innovative lighting design that uses natural lighting, mercury vapour exterior lights, LED lamps, electronic ballast for fluorescent lamps, automatic dimming devices and light sensors. After the first five months of operation, the facility's power consumption costs have been approximately 35% lower than estimated.

Expand Image The Santa Paula WRF uses energy savings lighting systems such as natural lighting, mercury vapour exterior lights, and LED lamps.

The $58m facility has a smart control system which can be accessed and controlled from anywhere in the world on a smart phone through a web application called Central PERC.

Treatment Santa Paula WRF treatment processes encompass an influent lift station, screening and head works, flow equalisation tanks, a pre-anoxic zone, an aerobic zone, a post–anoxic zone, a membrane separation tank, UV–disinfection, effluent storage, an effluent pump station and percolation ponds.

The biological and membrane separation processes are achieved by using most of the 1.2m gal. flow equalisation tank. The remaining space in the tank is utilised for flow equalisation. Aerobic digestion and sludge de-watering constitute the solids processes.

Related Projects: Municipal Wastewater Treatment Santa Paula Water Recycling Facility Bootawa Dam Water Treatment Plant, North Head Sewage Treatment Plant Improvements Perth Metropolitan Wastewater Treatment Plant Upgrade Wonthaggi Desalination Plant Post to:

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SANTA PAULA TIMES

The Community Voice of Santa Paula

Wednesday, December 15, 2010

Volume 18, Number 100 • 75 Cents, Includes Sales Tax

Santa Paula’s new water recycling facility officially completed

By Peggy Kelly Santa Paula Times When Santa Paula’s aging wastewater plant received an updated permit in 1997, it started a chain of events that will cumulate Wednesday with the official sanction by the state of the city’s new water recycling facility. The approximately $58 million plant is processing about two million gallons of sewage a day, and as the city grows the facility is capable of handling up to 4.2 MGD. The city was not responsible for any upfront payments and began paying a monthly service fee once the facility was in operation. The monthly service fee of approximately $500,000 a month includes payment of the plant, operation, maintenance and future capital replacements and is based on daily flows. The service fee is scheduled to run the next 30 years.

In 2000 the city began to rack up fines for polluting discharges into the Santa Clara River, a situation unknown by the City Council who for years had a contractor operating the facility.

Citizens living near the plant had also been complaining for years that noxious odors plagued their

neighborhoods.

By2003thecitywasnegotiating with the State Regional Water Quality Control Board to get a grip on the fines that were expected to hit up to $10 million resulting from the plant, built in 1939, being unable to meet the discharge requirements of the 1997 permit.

One of the provisions of the consent decree reached by the city team of then Mayor John Procter, then Vice Mayor Gabino Aguirre, then City Manager Wally Bobkiewicz, City Attorney Karl Berger and the state was that Santa Paula would build a new state-of-the-art facility with a mandated completion/fully operational deadline of December 15, 2010. The $8 million plus in fines accrued by the city would instead be applied to the new facility, although the city paid about $400,000 directly to the state as part of the deal.

What followed was years of study, Council meetings, and the abandonment of an initial plan between Santa Paula and Fillmore - also under the state gun - to share a new facility. The effort to

FACILITY: Continued on Page 5

The Santa Paula water recycling plant is located behind the old plant off Corporation Road. Above is a night shot of the plant. A large pond of water in front is used for storm water containment. The majority of the systems used to treat wastewater is located below the main building pictured above.

The Santa Paula water recycling plant is complete and meets the State Water Quality standards. The plant was built on time. The deadline for the completion of the plant was December 15. The plant with miles of piping, filters, and treatment has been online for several months and has been working as designed and planned.

Steve Owen, Vice-President PERC Water holds a beaker full of water that is at the end of the treatment process. The water is then sent to a percolation pond.

NEWS

WEDNESDAY, DECEMBER 15, 2010

SANTA PAULA TIMES

5

Facility: build a new plant was at times controversial, with the council considering a new technology involving deep shaft treatment.

The water recycling plant issue created splits in the community and among the council, but today the city’s new water recycling facility, located south of the old plant, is one of the first of its kind in the state and the only such operation created through the Design/Build/Operate/Finance process.

After a long bidding process, PERC Water and Alinda Capital Partners joined together to form a DBOF partnership, Santa Paula Water, which designed, built, operated and financed the plant.

The city retains ownership of the property where the plant sits.

According to Finance/Acting Public Works Director John Quinn, the last steps are in process: “We’ve drafted a final report that will be mailed out as soon as we get done editing it... it’s more of the same” in a series of state correspondence on the status of the new plant.

This document, though, will be the last one: “We’re saying everything is in compliance with the WDR” Water Discharge Requirement.

No longer is the end product of the plant discharged into the Santa Clara River. The new PERC plant produces Title 22

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high-grade crystal clear water that is discharged into nearby percolation ponds that gradually replenish the aquifer. Quinn said the city has provided the state RWQCB with Santa Paula letters of “substantial completion... we’re in the process of giving them the final notice of completion and our letter to PERC is the state’s part of that.”

Ground for the new plant was broken in July 2008, just two months after the contract was signed and a little more than a week ahead of the state mandated start date. From then on construction was ahead of schedule, with test batches and then full operation reached months before the initial September 15, 2010 deadline and even earlier than the December 15 full completion/operational deadline.

With a gentle tiered waterfall in the front, the purpose of which is storm water containment, the new plant is small, its footprint one of layers; the facility is largely built over concrete holding and processing tanks. There is only a slight, musky odor when hatches leading to the underground basins ranging from 24 to 30 feet are opened.

“Everything,” notes PERC

Water Operations Manager Gina Dorrington, “can be pulled up” for maintenance. A separator discharges the trash that can be found in sewage, plastic bags and other debris, and the sewer sludge fills about eight oversized bins each week - 28 metric tons a month - for disposal at Toland Road Landfill.

PERC Vice President Steve Owen said, “Redundancy is built in,” so if one tank is disabled for repair a second one kicks in for processing, preventing any downtime for repairs. The complicated treatment process utilizes blowers, scrubbers and aerobotic digesters among other equipment for the 24-7 plant operation that can be controlled on an iPhone or iPad via Central PERC. Although there are two other operators that work each day with Dorrington on an eight-hour shift, she said computer technology allows access to equipment “24 hours a day.” Dorrington

demonstrated on a purple iPhone decorated with a large yellow sunflower, noting, “We can see what’s going on” and in most cases do adjustments without coming to the plant, which has its own house cat, PERCkins.

“You’d think there’d be firecrackers, maybe a parade,” joked Quinn about the official completion of the plant. As it is, there will be a public dedication in the future.

Santa Paula Art Museum announces the closing reception of the De Colores exhibition The Santa Paula Art Museum is pleased to announce the closing reception for the 17th Annual De Colores art exhibition on Thursday, December 30th from 6-8:30 PM.The exhibition highlights the narrative paintings and cultural story telling of forty Latino visual artists. The Museum is located at 117 North 10th Street in historic downtown Santa Paula. Reservations are encouraged by calling 805-525-5554 or emailing info@santapaulaartmuseum.org. Closing exhibit admission is: $10.

The program will include a reception hour including guest artists: Louie Moreno,Veronica Valadez, Andrea Vargas-Mendoza, and Jose Zuniga. Musical Entertainment provided by Angels On Harps, and by classical harpist Xavier Montes. The evening also includes spoken word performances by Joseph Casteñeda and Vanessa Teran as well as a short film screening by director Karen Farfán.

Because occupancy at the museum is limited we recommend an RSVP to secure entrance.

For further information about the Santa Paula Art Museum please call 805-525-5554 or email them at info@santapaulaartmuseum.org.

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NEWS

SANTA PAULA TIMES

WEDNESDAY, DECEMBER 29, 2010

Santa Paula Water Recycling Facility completed ahead of schedule and already creating savings The Santa Paula Water Recycling Facility is once again exceeding expectations - the facility’s power consumption costs for the first five months of operation are more than 35 percent lower than expected.

Initially anticipated to create a 15 percent savings as a result of PERC Water Corporation’s investment in energy saving technology, the facility began full compliant operation seven months ahead of the state’s mandated December 15, 2010 deadline and has used more than 35 percent less power than originally expected.

John Quinn, the City of Santa Paula’s Finance and PublicWorks Director, said, “In this challenging economic environment,California cities are eagerly seeking cost saving opportunities. The City of Santa Paula is enthusiastic about our new water recycling facility’s reduced power costs as it means savings for our citizens over the long term.”

As a result of the energy saving measures employed at the Santa Paula facility, PERC Water was awarded the 2009 Sustainability

City Council questions but approves in-kind services, fees

By Peggy Kelly Santa Paula Times Two items, asking for city co-sponsorship of a fundraiser and the winter war ming shelter, caused last minute closed session discussion at the December 20 City Council meeting.

The Boys & Girls Club of Santa Clara Valley asked the council to waive unspecified temporary use permit fees and provide in-kind services for its New Year’s Eve dinner/auction fundraiser,“Diamonds, Spies & Private Eyes.”

A second item was SPIRIT of Santa Paula asking that the city waive temporary use fees of $450 for the Winter Warming Shelter at El Buen Pastor Methodist Church on East Santa Paula Street, and a dropin center focusing on services to the homeless located at the First United Methodist Church on North Mill Street.

Both items were on the consent calendar, but Councilman Ralph Fernandez noted “I just wanted to make sure it is within the law do this.”

City Attorney Karl Berger said he provided the council with a confidential memo on the subject “and will leave it in your hands” for consideration.“That is the extent of my remarks,” but Berger added the council could

and Resource Protection Award by the Environmental Business Journal and a grant through Southern California Edison’s “Savings by Design” program to help fund the energy saving technology.

“It is imperative that infrastructure become more sustainable and fiscally responsible,” said Brian Cullen, President of PERC Water. “The technology available in today’s market raises the standard for efficiency and the Santa Paula facility demonstrates that investing in these energy saving technologies results in savings to the ratepayers.”

The 4.2 million gallon per day facility utilizes the most advance treatment technology and was described as “world-class” by Dr. Shane Trussell, a leading expert in membrane bioreactors and PERC Water’s lead advisor for the facility’s process design.

Dr. Trussell said, “As a result of the team’s equipment selection and robust design features, it is one of the most energy-efficient and cost-effective Membrane Bioreactor installations in the world.”

The majority of the treatment process takes place in tanks beneath the professional operation buildings, making the facility virtually odorless and noiseless with no negative impact on the surrounding community. As a result of this innovative design, the entire facility sits on less than two acres of land. A cascading waterfall and duck pond in the front of the facility is used as storm water runoff storage and future plans for the facility include solar power integration for even more power consumption savings. The water produced by the facility is higher quality than the state’s stringent quality requirements and is available for reuse within the community.

The facility can also be accessed and controlled wirelessly from anywhere in the world on an iPad, iPhone or Smart phone through Central PERC(tm), a web application where all the current and historical data necessary to operate and manage water and wastewater infrastructure is centrally hosted and integrated within one platform.

The City of Santa Paula was mandated by the state to replace their 70-year old facility because it had reached the end of its useful life and accrued more than $8 million dollars in compliancerelated fines. In May 2008, they awarded Santa Paula Water LLC, a partnership of PERC Water and Alinda Capital Partners, the Design-Build-Operate-Finance contract. PERC Water designed and built the facility and is now operating the facility until 2040.

Phil Dyk, Vice President of

Santa Paula Water LLC and a partner at Alinda Capital, said, “The Santa PaulaWater project is the first water recycling facility to use California Code Section 5956 to allow for private investment in essential municipal infrastructure.

Alinda is extremely proud to be a part of this groundbreaking project and to be serving the City of Santa Paula, and we congratulate our partner PERC Water for designing, building and operating a state-of-theart facility that entered service seven months ahead of schedule.

We look forward to a long-term relationship with the community as we continue to provide an essential service to all Santa Paulans.”

PERC Water and Alinda’s innovative deal with the City was recognized by Global Water Intelligence and they were awarded the GlobalWater Awards’ 2009 “Water Deal of the Year” Award of Distinction.

To learn more about this project and watch the case study video, visit www.percwater.com.

PERC Water Corporation

Celebrating 20 Years This Month

is a water recycling company that designs, builds, operates and manages water recycling facilities throughout the United States. They have designed more than 55 facilities - 20 of which they have designed, built and operated. The company guarantees water of the highest quality and assumes the risks associated with water recycling.

PERC Water is headquartered in Costa Mesa, California. www. percwater.com.

Alinda Capital Partners LLC is the world’s largest independent infrastructure firm, with over $7 billion in equity commitments

to infrastructure investments.

Alinda’s infrastructure companies serve over 125 million customers annually in more than 250 cities.

The companies operate in 18 states in the United States as well as in Canada, the United Kingdom, the Netherlands and Italy, and employ more than 15,000 people. Alinda’s investors are predominantly pension funds for public sector and private sector workers. These institutions seek steady investments over the long term, matching their pension liabilities and include some of the largest institutional investors in the world. www.alinda.com

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MBRs Come of Age As discharge criteria are becoming more stringent and reuse applications are increasing, membrane bioreactors are getting another look. BY DIANE GOW MCDILDA

M

embrane bioreactors (MBRs) are coming of age. Once the technology was considered too high-maintenance and not cost-effective, but the drivers for selecting wastewater treatment technologies has changed. Now, as discharge criteria are becoming more stringent and reuse applications are increasing, membrane bioreactors are getting another look.

Adaptable to both municipal and industrial wastewater treatment 50

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for aerobic and anaerobic applications, the field is expanding with more manufacturers, municipalities, and industrial users.

Peter Bouchard is global director marketing and communications with Koch Membrane Systems (KMS) Inc., a company thatâ&#x20AC;&#x2122;s developed and manufactured membranes for over 25 years. Bouchard has seen more municipalities take an interest in the technology, as well as more manufacturers, and believes this scenario serves everyone better.

September/October 2010

7/13/10 2:45:20 PM

Ken Foods Inc.

At Ken Foods, pretreatment has reduced COD by 99.4%.

“The introduction of membranes to the municipal wastewater treatment market is relatively new, and, therefore, the technology

w w w. wate re f f i c i e n c y. n e t

50-60WE1009_MBR.indd 51

continues to improve with more research,” says Bouchard. “Along with the growth of the market, we see a growing list of companies attempting to participate in providing membranes to the municipal wastewater treatment segment. The entry of new companies in this market further drives innovation, efficiency, and, ultimately, better technology at a lower price.”

Scott Christian is a process engineer with ADI Systems Inc., a company with a long history of developing and manufacturing anaerobic digesters and membrane technology. Christian agrees that the MBR market is dynamic, and that companies are constantly looking to improve performance while lowering costs.

“ADI Systems continuously studies the MBR processes and undertakes extensive research and development efforts to improve the aerobic MBR and anaerobic MBR [AnMBR] technologies,” says Christian.

“These activities are focused on developing an understanding on what new applications the technology is well suited for, as well as developing methods and modifications which allow the technology to be more cost-effective for all sizes of industry,” he continues. “For instance, through research

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and development, the ADI-AnMBR process is the most cost-effective choice for anaerobically digesting high-strength wastes with high COD [Chemical Oxygen Demand] and suspended solids, due the compact nature of the process, while operating at higher volumetric organic loading rates and producing high-quality effluent within one simple process.”

The basic operation of an MBR system is this: Where the standard activated sludge process includes a primary clarifier, biological reactor, and a secondary clarifier for solids and liquid separation, MBRs eliminate the need for a separate secondary clarifier. MBRs can be installed within the digester or as a separate unit. Either way, the filter acts as a physical barrier to solids. Because the difficulty of

Board for discharge to the Santa Clara River,” explains Marian Clayton, marketing director for PERC Water, which partnered with Alinda Capital Partners to design, build, operate, and finance the $58-million facility. “The original plant was built in 1939; over time there had been major upgrades, but now it was time to start fresh.”

Starting fresh also meant starting in a hurry to design and build the 4.2-million-gallons-per-day (MGD) water recycling facility (WRF). The city had previously hired an engineering consultant to design the new wastewater treatment system. Unfortunately, it did not meet their budget requirements, and the city took a step back to look for alternatives. The clock was running out and fines loomed.

The city was introduced to California’s Code 5956, which

Adaptable to both municipal and industrial wastewater treatment for aerobic and anaerobic applications, the field is expanding with more manufacturers, municipalities, and industrial users. settling floc using gravity is no longer an issue, MBR systems have a higher number of microorganisms which increases the rate at which pollutants are removed; thereby, increasing the organic component of effluent quality. One of the major factors in MBR performance is aeration, which not only provides oxygen to the biomass—it scours the membrane surface and keeps solids in suspension.

What this technology always did, and continues to offer, is improved effluent quality with a smaller construction footprint.

“The selection of membranes for a wastewater treatment facility is typically driven by the need for high-quality effluent [typically for reuse], or when a wastewater treatment facility has a restricted footprint,” says Bouchard. “The capital cost of membrane facilities can be very competitive with conventional treatment facilities, but the O&M [operation and maintenance] costs of membrane facilities is typically greater than conventional treatment facilities, due to membrane replacement costs and increased power consumption.”

In certain parts of the country, as water supplies dwindle, the need to find alternative water sources increase. While alternative sources may not be potable themselves, they serves as a substitute for other demands such as irrigation.

“Many municipalities in water scarce areas—typically the Southeast and Southwest areas of the US—are using membranes to provide reuse of wastewater where appropriate,” says Bouchard. “Reusing wastewater places value on the water and recognizes it as a resource, while reducing demand on the potable water supply.”

Advanced Technology in Santa Paula For the city of Santa Paula, CA, 65 miles north of Los Angeles, CA, membrane technology helped keep them from paying millions of dollars of fines.

“The city of Santa Paula was out of compliance and was facing $8 million of fines by the Los Angeles Regional Water Quality Control 52

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50-60WE1009_MBR.indd 52

encourages private investment to solve public infrastructure needs, and decided to switch to a Design-Build-Operate-Finance (DBOF) delivery method of procurement for the new WRF. They sought a single entity to finance, design, build, operate, and maintain the new WRF, and awarded the contract to Santa Paula Water LLC, a joint venture between Alinda Capital Partners and PERC Water Corporation. The DBOF approach allows the project to commence without requiring any capital costs from the city during the design and construction of the WRF. “What’s interesting about this model is that we lease the land from the city,” says Clayton. “Santa Paula Water LLC owns the facility.

Wastewater is conveyed to the facility, and recycled water is delivered back to the city for their future use. It’s like any other utility, power, et. cetera; except, the city of Santa Paula continues to set the rates and provide service to the residents of Santa Paula. Santa Paula Water charges the city a set monthly service fee, at which they rely on to set and maintain the rates.”

Another advantage to using this model was the ability to meet the compressed schedule. The city was required to have a new treatment system in place by December 2010. PERC Water received the notice to proceed with engineering on May 6, 2008, and broke ground only two months later. Operations of the new WRF started in April 2010, seven months ahead of schedule.

While the schedule was challenging, the expedited, fast-track nature of design and construction was relatively straight forward for PERC Water, because the company has extensive experience with the design, construction, and commissioning of very similar facilities. They have designed, built, and operated 22 other facilities with a similar design, all in the southwest US. This is their first venture working with an independent private equity firm.

The design is compact. The actual treatment area takes up less than 1 acre. The tank structures are built beneath the operations September/October 2010

7/13/10 2:45:43 PM

Photos: City of Santa Paula

Facing $8 million in fines, the city of Santa Paula, CA, used DBOF to finance the construction of its new 4.2 MGD WRF.

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September/October 2010

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buildings, which reduces noise and odors for nearby neighbors. Because of the belowground tanks, all the process equipment, SCADA, and controls are strategically located

the potential for a dead zone to occur, where dead microorganism collect on the membranes, reducing efficiency.

KMS provided the MBR for the system

valves, instrumentation, permeate pumps, chemical cleaning equipment, and engineering support during the design phase of the facility, and startup support during the

Where the standard activated sludge process includes a primary clarifier, biological reactor, and a secondary clarifier for solids and liquid separation, MBRs eliminate the need for a separate secondary clarifier. directly above the associated process tanks, keeping piping and wiring, and associated costs, minimal. The operations buildings are also built with both the public and employees in mind.

“The office includes an educational area, and the main lobby has two flat screen televisions, where visitors can learn about the water recycling process,” says Clayton.

“Operators enjoy working at our facilities because it has a professional environment.”

Another reason Clayton believes that the operators take pride in working at their facility is the advanced equipment. “Because we are responsible for a 30-year term of operation,” says Clayton, “ it is advantageous for us to invest in top-of-the-line equipment up front, knowing they will consume less energy and have a lower life cycle cost.”

The progressive equipment selected for the WRF includes Koch PURON Membrane.

The hollow fibrous membranes, 0.05 µm in diameter, are similar to straws, fixed at the bottom and individually sealed at the top. Each group of membranes is called a bundle. Bundles are connected in rows, and these rows are lined up a stainless steel form.

A vacuum is applied at the base of each bundle, which draws water in through the sides of the membrane tubes and down through the base. Aeration is used to both supply the microorganisms with oxygen, and remove hair and other deleterious material. A single header in the center of the bundles forces air up through the membranes. This provides a scouring mechanism to remove material and allows the material to float away from the membranes. Pumping air through the middle also alleviates

w w w. wate re f f i c i e n c y. n e t

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and proved to be an advantage when it came to space. The total tank area is 32,000 square feet. This freed up space that had been originally set aside by the city for the new WRF, and will be used for a city corporate yard facility.

“KMS is the membrane supplier for the membrane bioreactor treatment facility,” says Bouchard. “In addition to supplying membranes, KMS also provided air control

construction and commissioning phases of the project.”

For now, effluent from the recycling plant will be discharged to 13 acres of percolation ponds. But this is temporary.

The city is working with the state to receive a grant to perform a feasibility study to determine the most effective reuse system.

Once results shake out from the study, they continued on page 58

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continued from page 55

When used for reclamation, MBR technology is replacing potable water—not in ice-filled glasses, but on lawns and landscapes, in toilets, for dust control, and even as industrial process water. will be one step closer to utilizing the MBR system to its fullest potential.

From Wastewater to Drinking Water For now, MBR technology is primarily used to reach effluent goals needed for reuse and reclamation or improving pre-treatment operations. When used for reclamation, it’s replacing potable water—not in ice-filled glasses, but on lawns and landscapes, in toilets, for dust control, and even as industrial process water. Will Americans ever find wastewater effluent potable, or palatable?

Some parts of the US have already started down that path. Orange County’s (CA) Groundwater Replenishment Plant utilizes MBR technology for ultrafiltration of its wastewater. While it’s not pumped directly to citizen’s taps, it is pumped to the drinking water aquifer.

Here it keeps the water table elevated to avoid saltwater intrusion, but it will also serve to alleviate future drinking water shortages.

For now, the use of MBR systems continues to grow, mostly for the purpose of reuse. But as water sources begin to tap out, that clean, clear glass of wastewater effluent may start to look tasty. we Diane Gow McDilda is a technical writer and engineer living in Gainesville, FL.

MBR for treatment and reuse

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GOP candidate Whitman brings ideas to Santa Paula » Ventura County Star

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GOP candidate Whitman brings ideas to Santa Paula Jobs are priority, she says

By Kathleen Wilson Posted June 30, 2010 at 11:19 p.m.

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Meg Whitman speaks with Carl Barringer after touring the wastewater treatment plant Wednesday in Santa Paula. Whitman is the Republican candidate for governor.

Republican gubernatorial candidate Meg Whitman came to Santa Paula on Wednesday to tour the city’s newly opened wastewater plant and talk up her plan for fixing California.

http://www.vcstar.com/news/2010/jun/30/whitman-brings-ideas-to-s-paula/[7/1/2010 12:00:32 PM]

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GOP candidate Whitman brings ideas to Santa Paula » Ventura County Star

Juan Carlo / Star staff 06/30/10 in Santa Paula: Meg Whitman speaks to some people after touring Santa Paula's new wastewater treatment plant. Whitman is running for governor of California and at the press conference she talk about creating jobs, education and cutting expenses.

Speaking to dozens of supporters, business officials and city dignitaries gathered outside the plant, Whitman preached jobs as her No. 1 priority.

“If we don’t get Californians back to work, there is no way out of this mess,” she said.

Her other priorities are cutting government spending and fixing public schools, which rank near the bottom in funding per student among the 50 states.

Meg Whitman talks to Brian Cullen, president of Perc Water, and Philip Dyk of Alinda Capital Partners on Wednesday in Santa Paula.

In a news conference after her speech, Whitman said she could cut $15 billion out of the state’s $19 billion budget deficit. She would do it by reducing the state payroll, reforming the pension system, putting limits on welfare benefits and running government more efficiently, Whitman said.

Legislature, the courts and the voters.

Whitman’s remarks were tailored mainly to the themes of her statewide campaign, not local issues. During

Meg Whitman speaks after touring the wastewater treatment plant Wednesday in Santa Paula. Whitman is the Republican candidate for governor.

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questioning from the media, though, she pledged not to balance the state budget on the backs of cities.

Santa Paula newspaperman Don Johnson said he asked Whitman about the issue because Santa Paula has been devastated by the Legislature’s decision to

take redevelopment funds to balance the state budget.

Redevelopment money, which is derived from a share of local property taxes, can be used to improve infrastructure and encourage development.

“We have no redevelopment money,” he said. “It’s put a real hamstring on the city of Santa Paula, which in turn is really detrimental to the citizens.”

The private interests that designed, built, operated and financed the plant invited

http://www.vcstar.com/news/2010/jun/30/whitman-brings-ideas-to-s-paula/[7/1/2010 12:00:32 PM]

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The former CEO of eBay said the state is “bleeding jobs” to Texas, Arizona, Utah, Nevada and Colorado because it is simpler and easier to do business there.

“If I could do only one thing as governor, it would be to fix California’s business climate,” said the candidate, who is running against Democrat Jerry Brown.

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Whitman to see the facility as an example of an innovative private-public partnership.

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Normally, city governments split up the contracts for public works projects. But in this case, the Santa Paula City Council chose Costa Mesa-based PERC Water and its New York financing partner, Alinda Capital Partners, to handle the job from start to finish.

City officials predicted they could arrange the financing cheaper themselves, but the City Council considered the private partnership less risky.

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Santa Paula Mayor Jim Tovias, who attended Whitman’s speech, said the result has exceeded his expectations. The Santa Paula Water Recycling Facility opened in May, several months ahead of schedule, officials said. It replaced a 1939 plant that could not meet clean water standards. A recent state report shows no violations.

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PERC Water Marketing Director Marian Clayton, who got to know Whitman when both worked on the presidential bid of former Massachusetts Gov. Mitt Romney, arranged the visit.

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“I thought how exciting a project it is,” Clayton said.

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The event marked Whitman’s fourth visit to Ventura County since her campaign began, Press Secretary Sarah Pompei said.

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WASTEWATER INFRASTRUCTURE FINANCING Accountability Integrity Reliability

Highlights

Stakeholder Views on a National Infrastructure Bank and Public-Private Partnerships

Highlights of GAO-10-728, a report to the Ranking Member, Committee on Transportation and Infrastructure, House of Representatives

Why GAO Did This Study

What GAO Found

Communities will need hundreds of billions of dollars in coming years to construct and upgrade wastewater infrastructure.

Policymakers have proposed a variety of approaches to finance this infrastructure, including the creation of a national infrastructure bank (NIB) and the increased use of privately financed public-private partnerships (PPP).

Stakeholders who responded to GAO’s questionnaire discussed issues in the following three key areas that should be considered in designing an NIB: • Mission and administrative structure. While a majority of stakeholders supported the creation of an NIB, their views varied on its mission and administrative structure. One-third supported an NIB to fund only water and wastewater infrastructure, while two-thirds responded that it should also fund transportation and energy projects.

There was no consensus among stakeholders on whether an NIB should be administered by an existing federal agency, structured as a government corporation, or structured as a government-sponsored enterprise. GAO has previously reported that an entity’s administrative structure affects the extent to which it is under federal control, how its activities are reflected in the federal budget, and the risk exposure of U.S. taxpayers.

• Financing authorities. A majority of stakeholders agreed on an NIB’s financing authorities. Specifically, a majority said the federal government should provide the initial capital; an NIB should be authorized to use a variety of options to generate funds for operating expenses and lending; and an NIB should offer a variety of mechanisms for financing projects, such as providing direct loans, loan guarantees, and funding for the Environmental Protection Agency’s existing wastewater funding program—the Clean Water State Revolving Fund.

• Project eligibility and prioritization. Stakeholders’ views varied on which types of projects should be eligible for NIB financing, such as whether it should exclusively finance large projects. In addition, a majority agreed an NIB should prioritize projects that address the greatest infrastructure need and generate the greatest environmental and public health benefits.

In this context, GAO was asked to identify (1) stakeholder views on issues to be considered in the design of an NIB and (2) the extent to which private financing has been used in wastewater PPPs and its reported advantages and challenges. In conducting this work, GAO developed a questionnaire based on existing NIB proposals and administered it to 37 stakeholders with expertise in wastewater utilities, infrastructure needs, and financing; GAO received 29 responses from stakeholders with a variety of perspectives about an NIB. To determine the extent to which wastewater PPPs have been privately financed and their advantages and disadvantages, GAO identified and interviewed municipalities involved in privately financed PPPs and wastewater services companies, conducted case studies in states with privately financed PPPs, and conducted a literature review.

GAO is not making any recommendations. While this report discusses a number of funding approaches, GAO is not endorsing any option and does not have a position on whether an NIB should be established.

View GAO-10-728 or key components.

For more information, contact David Trimble at (202) 512-3841 or trimbled@gao.gov.

GAO identified seven municipalities that have entered into privately financed PPPs—contractual agreements in which the private partner invests funds in the wastewater infrastructure—since 1992: Arvin, California; Cranston, Rhode Island; Fairbanks, Alaska; Franklin, Ohio; North Brunswick, New Jersey; Santa Paula, California; and Woonsocket, Rhode Island. Municipal and wastewater company officials GAO interviewed identified the following examples of advantages of privately financed PPPs: • Provide access to financing for municipalities that have difficulty using traditional financing sources, such as municipal bond markets.

• May make operations more efficient, for example, by taking advantage of economies of scale by buying key supplies, like chemicals, in bulk.

• May bring new infrastructure online faster than traditional public procurement because companies have more flexibility.

These officials identified challenges of privately financed PPPs, including: • Local opposition may arise out of concerns about higher wastewater rates and the potential loss of municipal wastewater jobs.

• Private financing is generally more costly than tax-exempt municipal bonds because of higher interest rates; a 2002 National Research Council study reported that private financing is 20 to 40 percent more expensive.

• Contracts can be costly and difficult to develop because they are complex, and municipalities and companies are unfamiliar with this type of PPP. United States Government Accountability Office

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Next-generation recycling A West Coast city shaves the cost of installing one of the nation's largest membrane bioreactor systems by one-third.

Thanks to their small footprint and process refinements since the technology was introduced to the U.S. market more than a decade ago, submerged membrane bioreactors are increasingly popular in areas where water is scarce, space is at a premium, and discharge standards exceed federal requirements.

Santa Paula, Calif., is one such area.

Located 65 miles northwest of Los Angeles and 14 miles Santa Paula's water-recycling plant uses 5 fewer east of the Pacific Ocean, the city of 30,000 is at the acres than a conventional treatment facility requires, so the city built an educational center where the geographical center of Ventura County. Surrounded by public can learn how wastewater is recycled. rolling hills and rugged mountain peaks in addition to Illustrations: Koch Membrane Systems orange, lemon, and avocado groves, the “Citrus Capital of the World” lies in the heart of the rich agricultural Santa Clara River Valley.

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Built in 1939, the city's activated sludge 2.5-mgd water recycling facility had become noncompliant even after several upgrades. After receiving $8 million in fines for 3,000 violations, the city decided it was time for a new facility, one that would generate revenue by selling water to local farmers.

In California, water for surface irrigation must be disinfected tertiary recycled water whose effluent turbidity doesn't exceed 2 nephelometric turbidity units (NTU). When consultants estimated that a facility meeting those standards would cost $80 million, the city considered a new financing model to keep costs down. Proponents say that design-build-operate-finance is less risky than projects funded by tax-exempt financing.

Passed in 1996, California Code 5956 streamlines the public-private partnership process for infrastructure projects. As one of the state's least compliant wastewater sites, Santa Paula's facility was a prime candidate for design-build-operate-finance.

In 2008 the city entered into a 30-year concession with Santa Paula Water LLC — a joint venture of water recycling company Pacific Environmental Resources Corp. (PERC) and an investment fund managed by Alinda Capital Partners LLC — making the new plant the largest waste-water project under the 14-year-old law.

Vice President of Infrastructure Development Steve Owen says that PERC estimated the design-buildoperate-finance project-delivery method lowers the facility's cost to $57 million.

Of the plant itself, which has common-wall box construction that allows the head works building to sit directly above the lift station, he says: “It's a paradigm shift in the industry, applying tried-and-true technology in a different way.” The rotary drum thickeners sit directly above the digesters, eliminating the need to install hundreds of feet of pipe.

“This 1-acre site houses a wastewater treatment plant in a 14,000-square-foot building,” he says.

The 3.4-mgd facility is expected to be 15% more energy efficient than the old plant. Based on Koch Membrane Systems' 1,500 m2 Puron module, the system uses a single header with reinforced hollow fibers that are fixed only at the bottom. The sealed upper end of the fiber is allowed to float freely, eliminating the build up of hair and fibrous materials that typically clog the upper ends of membrane fibers in membrane modules that have both top and bottom headers.

The $58 million water recycling facility is designed to produce an effluent that meets or exceeds all current environmental wastewater quality standards mandated by the U.S. EPA and the California Regional Water Quality Control Board.

Solids and particulates, including bacteria, are retained by the membrane and remain on the outside, while permeate is drawn through the membrane to the inside of the fibers. The outside-to-inside flow pattern provides a high flow-rate with up to half the energy of older technology. In addition, the free-floating, fiber tip central air scour nozzles reduce air scour requirements.

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Scheduled to begin operating no later than Dec. 15, the facility will produce a finished effluent with biochemical oxygen demand and total suspended solids concentrations less than 5 milligrams per liter (mg/L), total nitrogen less than 8 mg/L, and turbidity less than 0.2 NTU. All of the effluent will be sent to three new percolation ponds designed to recharge the aquifer before being piped to local farms.

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AMERICAS

The “O” that completes the circle

Convincing US municipalities to consider the full lifecycle cost of a new treatment plant is not as easy as it sounds.

Emily Pickrell examines the anatomy of the design-build-operate model.

A

t a time when US municipalities are trying to think creatively about how to meet both their budgets and increasingly strict environmental regulations, the design-build-operate (DBO) option may yet have its time in the sun.

For some cities, the default procurement option – the design-bid-build (DBB) model – is still the preferred choice. This approach allows a city to hire a consulting engineer to draw up plans, which are then put out to competitive bid among contractors, with the contract being awarded to the lowest bidder.

This bias is only now beginning to change, and a growing number of cities are showing interest in exploring the design-build (DB) approach. DBs require close cooperation between engineers and contractors. A municipality will hire a consulting engineer to draw up a broad specification of a project, but the percentage of the completed design is much lower, and the project is then put out to bid for delivery as a complete package by a team of engineers and contractors.

One of the strongest arguments for DB procurement is that the engineer and the contractor are required to work together as part of a team. This team collaboratively designs and builds a plant, solving challenges as they come up during the plant’s construction, rather than establishing a blueprint, regardless of unforeseen outcomes and logistical challenges.

This argument is even stronger when it comes to including an operational phase, which allows an operator to provide input on how a certain design solution will play out in practice, or how the construction will impact the operation of the plant.

When the City of Fillmore in California began planning a new wastewater reuse plant, it decided to go down the DBO route to utilise the knowledge of operators – as well as contractors and engineers – on how best to apply cutting-edge know-how and technology to meet the city’s needs.

“What I wanted to do was to bring in an experienced water treatment plant operator, someone who had already operated a variety of technologies for membrane reactors,” says Burt Rapp, chief engineer for the City of Fillmore.

“I wanted a contractor on board who had built sewage treatment plants before,

GWI – May 2010

and can make decisions on whether one building, or a two-storey facility with components built around it, is a better solution. And I wanted an engineer who has already designed a variety of treatment plants and is familiar with differing sizes and standards.”

Rapp said that the inclusion of an operator was especially important, as they would be key to ensuring that the plant be built to last for decades and could be readily maintained.

“The design-bid-build model hires one engineer, and that engineer has his opinion,” Rapp told GWI. “You can accept his opinions and put it out to bid, but the agency is then left to try to make it run after he is done. You don’t know if you got a gold-plated, oversized plant or one that was done too cheaply. It could be a case where the builder got you in the door but you have a maintenance nightmare on your hands for the next 30 to 50 years.”

DBOs offer some protection against future maintenance costs, as they lessen

the manufacturer did not need to please the end-user, only the design engineer. They never dealt with people who are going to be using it, like an operator. This is a huge change for how this stuff will be sold in the future.”

For many US cities, however, the option to include operations as part of a DB contract has been slow to take off, despite its widespread popularity in much of the rest of the world. After a flurry of activity during 1997-2001, there have only been a handful of DBO projects commissioned in the US water and wastewater sector over the past five years, despite the strong track record of many of the completed plants (see table p24).

“The DBO market is flat and slow,” says Jeff Kowal, executive vice president of Veolia Water North America. “We are hopeful, given the economy, that the marketplace will come back in the near future, but it has been quiet for the last couple of years.”

Advocates of DBOs also say that cities are bit like lemmings when it comes to

“The agency may specify equipment, such as different types of pumps, but sometimes they’re doing it because a salesman is calling them.” the danger that cheaper components will be used that reduce the initial capital expenditure.

The operator can also provide insight into when municipalities are being given a bum steer on what equipment to use. “The agency may specify equipment, such as different types of pumps, but sometimes they’re doing it because a salesman is calling them,” said Tom Peterson, the American Water operator for the Fillmore plant.

“The salesman has no idea how tough it is to maintain. The design engineer is not going to be dealing with that municipality ever again – the operator will.”

Having an operator on board from the start can make negotiating with manufacturers much easier, Peterson added. “When we had a seal fall out, they replaced the whole pump; people answer our phone calls,” he told GWI. “Historically, www.globalwaterintel.com

trying something new, and that historically, one of the roadblocks to taking the DBO approach was the fact that for many years, there just weren’t many successful examples in the US to compare with.

Indeed, when Seattle first considered using a DBO approach in the mid-1990s, it turned to Europe for examples of successful projects.

“I did an international investigation,” said Scott Haskins, the former deputy director of the Seattle Water Department, who was part of the team that commissioned the Tolt River water treatment plant in 2000. “I looked at people in the marketplace, in Australia, in Europe – the French – to find different companies that were executing models that were nontraditional.”

Haskins said that this comparison is what convinced him that this model could work in Washington State. “I saw 25

AMERICAS

an opportunity to use new technology and new contracting options to get the pieces of design, construction and operations into a single point of accountability, cost, and performance-based type of contract,” he explained to GWI. The San Diego County Water Authority, which procured the 100MGD (378,540m3/d) Twin Oaks water treatment plant in 2005 using a DBO contract worth $157 million – including an annual operating fee of $6 million – used Seattle’s experience to plan the structure of its own project, forming a team of experts to help advise them.

“During the preparation and solicitation

of documents, we hired five or six individuals who were experienced in water quality as senior consultants,” said Tim Suydam, water quality manager of the San Diego County Water Authority (SDCWA).

“Between them we had over three hundred years of experience in reviewing these documents.”

Suydam said that these consultants gave a broad spectrum of invaluable guidance: operational guidelines, guidance on procedures, as well as advice on how to keep the solicitation transparent and the documents confidential.

They also helped the SDCWA develop

good strategies for ensuring that rules of communication were established and followed.

Studying plant life Proponents of DBOs say that one of the most attractive features of using the procurement method is that the lifetime cost of a plant can be more accurately assessed when the operations component is included.

“When you have a water treatment plant, these are long-term operations,” observes John Young, president of American Water Services. “When you bring

US municipal water and wastewater DBOs since 2000 Year of award Project location State Contractor

Capacity (m3/d)

Contract duration (years)

Contract scope

2010

East Providence

RI

AECOM/United Water

39,364

10

WWTP

2009

Spokane

WA

CH2M Hill

30,280

20

WWTP

2008 Santa Paula CA

PERC/PACE/Trussell Engineering/Kennedy Jenks/W.M. Lyles

12,869

30

Water recycling facility

2007

Veolia Water NA

181,680

13

Surface water TP

2006 Fillmore CA

American Water/Boyle Eng./W.M. Lyles/Kennedy Jenks

6,813

20

Water recycling facility

2006

CH2M Hill

10,598

10

WWTP MBR

2006 Rockland NY

Veolia Water ST/Jett Industries/CDM/Delaware Engineering

5,678

5

WWTP

2005

Twin Oaks

CA

CH2M Hill

378,500

15

WTP

2004

Tampa Bay

FL

American Water/Acciona

94,625

20

SWRO

2003

Lake Pleasant

AZ

American Water

302,800

15

WTP

2003

Lathrop

CA

Veolia Water

2,839

20

Tertiary treatment plant

2003

Stockton

CA

CH2M Hill

208,175

20

WWTP + Water

2003

Cle Elum

WA

Veolia Water

13,626

20

WWTP

ECO Resources, Inc./ Boyle Engineering/ARB Inc.

19,455

20

BWRO

Tampa Bay

Clovis

FL

CA

2002 San Juan Capistrano CA

2002

Taunton River (1)

MA

Inima/Metcalf & Eddy

18,925

20

BWRO

2002

Pawtucket

RI

Earth Tech

94,625

20

WTP

2002

Richmond

CA

USFilter (Veolia Water)

60,560

20

WWTP

2001

Seattle (Cedar)

WA

CH2M Hill

681,300

25

WTP

2001

Newport

RI

Earth Tech

40,500

20

WWTP

2001

Beverly Hillls (1) (2)

CA

Earth Tech

11,355

20

WTP

2001 Camp Creek GA

American Water/Western Summit Constructors/Parsons

90,840

15

WWTP

2001

Lynn

MA

Aqua Alliance (Veolia)

97,653

20

WWTP

2001

Glens Falls (3)

NY

Earth Tech

26,495

20

WTP

2000

Tampa Bay

FL

Veolia Water NA/CDM/Clark

249,810

15

Surface water TP

2000

Quincy (1)

WA

Earth Tech

19,493

20

WWTP

2000

Springfield

MA

US Water (United Water)

253,595

20

WWTP

(1) DBFO (2) The city repurchased the plant after five years (3) Contract terminated in 2006; also included upgrades and 20-year O&M of a 5.5MGD WWTP Sources: Company releases, NCPPP, USCM

26

www.globalwaterintel.com

GWI – May 2010

AMERICAS

the contractor and the operator together, they can determine not only what is the best way to design it, but the operator can tell you what might have a high capital cost but a low operational cost. They factor in the lifecycle cost of the equipment, and are not just looking at the price of building something – it drives the value throughout that entire lifecycle.”

It also forces the firms building the plant to avoid some of the cost-cutting that DB construction can spawn. “DB delivery can encourage and get a good price for clients in terms of the facility, but you may not get a long-term perspective on the facility,” explained Veolia Water’s Kowal.

“As a long-term operations and maintenance contractor, we look at the facility as a city would – we try to select the process and equipment that provides the lowest lifecycle cost to the client. In a DB, you may not get that; firms want to design a plant, and do it cheaply. They don’t have the long-term horizon in the clients’ best interest and focus, so they may cut corners to save construction costs and may not give the client the best facility over the long term.”

So why aren’t DBOs catching on more readily? The reasons, like the water industry itself, are varied and complex.

Historically, state laws have not permitted the use of design-build, which has provided an initial hurdle for municipalities interested in adopting any form of alternative procurement. The laws have, however, been changing at a rapid clip in recent years, and Eric Petersen of Hawkins, Delafield & Wood LLP lists only New York, Pennsylvania, Louisiana and Mississippi as having legislation that make alternative procurement extremely difficult.

Local communities sometimes raise opposition as well, fearing the loss of local jobs, according to Mark Alpert, senior vice president of design-build for CH2MHill.

While the lifetime cost estimate that a DBO can provide is attractive, others have pointed out that DBO contracts also generate additional costs.

These complex contracts sometimes add substantial costs to the procurement process, as all DB contracts are performance-based.

Including an operational component adds a contractual warranty to the client, which also means expensive legal haggling over risk allocation, Hawkins’ Petersen explained.

David Stanton, former chief operating officer at SouthWest Water and a veteran of Earth Tech in its DBO heyday, notes that because the risk related to the operational GWI – May 2010

component of a contract is inherently different from the construction risk, it is often easier to establish a separate contract for operations, rather than include it in a single DBO contract.

“It is often more efficient to have a separate O&M agreement that doesn’t intermingle all the contractual issues,” said Stanton, who added that what clients really want is the transition between construction and operation of the plant to be handled smoothly.

“The solution is to get people together that understand DB, and those who do O&M,” said Stanton. “Partnering is a good solution.”

Construction firms also suggest that adding operations to a DB contract raises the complexity in terms of getting the necessary insurance coverage. “Unless it is a short operation, our insurance coverage will not provide a bond for more than five years,” said Marc Filanc, founder of J.R. Filanc Construction. “You have to get creative on how to deliver a DBO.” Filanc explained that one option is to disengage the bond for the operator from the construction and performance bond.

Another option is for a team consisting of the engineer and contractor to ‘prime’ the job, and at the end of that portion of the contract, to phase out one team and have the operator then work with the municipality.

Filanc emphasized that this turnover could only take place after the plant had been demonstrated as being up and

of the bid can easily run to a million dollars or more, and potential suitors have to weigh the options, trying to determine if the terms of the deal and their potential to win merit the chase.

American Water, for example, had been pursuing the Pima DBO contract, but decided to drop out, explaining that the project scope was too prescriptive and that the contract terms and risk allocation were not favourable.

The competition for such contracts is intense, with no single company dominating the market.

Although criticisms have been raised over the lack of meaningful competition for such contracts as the wastewater DBO in Lynn, MA, “there are enough players in the field, so that owners have a choice to get the best value, whether that value is price, or price with strong technical solutions,” says CH2M Hill’s Alpert. He notes that while many overseas companies have expressed interest in the US market, they continue to puzzle over how to make a reasonable return out of it.

“My sense is that they would rather parcel out the design and construction risk to others, and keep the operations,” observes Alpert. “I don’t think it is their core competency, or else they have simply chosen not to bring that core competency here to the United States.”

Despite all of these challenges, DBOs continue to be the most practical route for cities such as Santa Paula, CA, which was up against the wall to build a new 3.4

“It is often more efficient to have a separate O&M agreement that doesn’t intermingle all the contractual issues.” running, which typically takes one to two years.

Despite these considerations, many firms are still pursuing existing DBO opportunities, and are eagerly awaiting more to come.

One of the most attractive high-profile DBO contracts out in the market is for Pima, AZ, which will involve building and operating a new 32MGD (121,000m3/d) water reclamation plant to replace the Roger Road Water Reclamation Facility in the City of Tucson. The contract itself is valued at $260 million and has a 15-year O&M component that can be extended for an additional five years.

For each new contract, the preparation www.globalwaterintel.com

MGD (12,870m3/d) water recycling facility

by December 2010 to avoid heavy EPA penalties.

After beginning its procurement of a new plant using DBB, the city decided instead to use DBO to meet tight deadlines and financial constraints, resulting in a plant that is scheduled to be commissioned on 15 December 2010.

“We had a fixed timeline from the state,” said former Santa Paula mayor Ralph Fernandez. “We didn’t want to have to deal with one entity trying to blame another for problems or delays and still keep on track financially and meet our deadline. With design-build-operate, there is only one party to deal with.”

27

2

| Message from the President Little Things Mean A Lot David S. Layton

A Quarterly Publication from The Layton Companies www.laytoncompanies.com

Spring 2010 Santa Paula Water Recycling Facility Santa Paula, California

3 | NUTS AND BOLTS Layton in the News

4-6 | CLIENT PROFILE PERC Water

CLIENT PROFILE | SANTA PAULA WATER

The water recycling facility in Santa Paula, Calif., includes beauty and design unheard of in similar facilities throughout the country.

A Total Solution Layton-PERC Water partnership solves municipal problems

T

here’s a dilemma facing municipalities.

How do they pay for badly needed infrastructure improvements in an economic environment that supplies them with less tax revenue?

The city of Santa Paula, Calif., partnered with PERC Water Corporation to find a creative solution to the city’s need for a new water recycling facility. The result was so good that it’s been recognized by water professionals worldwide (see Page 6).

THE DILEMMA

Cities in California — like Santa Paula — are being required to continually meet higher standards of quality and efficiency in a variety of areas, including water treatment.

4

|

FOUNDATION

|

However, the increased capabilities typically only come from new equipment or a new facility.

Santa Paula was no different. The city was in need of a new water recycling facility. However, it was reluctant to try to pass a bond to pay for the construction.

In addition to the uncertainty of capital funding, Santa Paula had been given a specific — and aggressive — timeframe to comply with state regulations or face heavy fines.

Enter California’s new government code Section 5956.

The Details SANTA PAULA WATER RECYCLING FACILITY START DATE July 7, 2008

COMPLETION DATE December 31, 2009

OPERATIONS BEGIN May 15, 2010

EVENTUAL CAPACITY

THE CODE

In an effort to allow municipalities to find creative funding solutions to government projects, the California legislature passed government code Section 5956, encouraging private investment to solve public infrastructure needs.

“We assisted the city on the new 5956 service agreement approach,” says Brian D. Cullen, president of PERC Water Corporation.

The result was an efficient partnership between the city of Santa Paula and the newly formed Santa Paula Water LLC (a joint venture of PERC Water Corporation and investment partner company Alinda Capital Partners).

THE DEAL

The city of Santa Paula entered into a design-build-operate-finance contract with Santa Paula Water, LLC, for a 30-year term. PERC Water is

The Layton Companies

4.2 million gallons per day (50,000 people)

DESIGN-BUILD-OPERATE FIRM PERC Water

“

The No. 1 reason why Layton got involved is because I knew them ... and I knew they could perform.”

”

Nate Owen Vice president of construction PERC Water Corporation

SANTA PAULA WATER | CLIENT PROFILE responsible for designing, building and operating the new water recycling facility.

One of the key benefits of this arrangement is that the capital construction costs are absorbed — 100 percent — by Santa Paula Water, LLC. This means there was no bond, no up-front cost to the city and the city pays one monthly invoice to Santa Paula Water, LLC, for the facility and operation costs.

Then, after the 30-year contract is over, the city of Santa Paula will own the facility.

“It’s a very unique structure,” Cullen says. “We’re providing water treatment and recycling services to the city. It’s our responsibility to make sure the equipment meets state requirements. Then, after 30 years, we transfer the facility back to Santa Paula.”

The arrangement guarantees the cost to the city, meaning there will be no surprises on the invoice the city pays to Santa Paula Water.

“They can hang their hat on that number,” Cullen says.

THE FACILITY

Johan Perslow, the founder of PERC Water, has always preached that consumers simply borrow the earth’s resources — including the water we drink — so we should take care of them and return them in better quality than we found them.

This idea of responsible stewardship is evident in the design, construction and execution of the recycling facility in Santa Paula.

“Our competitive advantage comes in the Total Solution™ approach,” Cullen says. “We take a different approach to water recycling facilities.”

For example, the tanks that process the sewage are placed underground — beneath the operations buildings — and are located immediately adjacent to each other, utilizing common wall construction. Then a concrete slab lies on top of them, with offices and operations systems located

The facility uses membrane bio-reactor process. Santa Paula Water carefully timed ordering equipment to ensure the newest available technology was used throughout.

The

WOW Factor

The facility looks nothing like the water recycling facilities we’ve all grown up with. It has beautiful offices, spectacular landscaping and lacks the odor and visible ponds usually associated with this kind of facility.

“ above ground.

The design means a smaller footprint (Santa Paula Water was able to save the city eight acres) and reduces the odor prevalent at other wastewater facilities. Plus, the offices were designed to create a professional environment where employees enjoy working each day.

“We wanted to create an atmosphere where people are proud to go to work,” Cullen says. “This building blends with the community and doesn’t have the traditional ‘public works’ look.”

Part of the positive feel the facility brings comes from the cascading water feature that stands out in front of the building that functions as a storm water containment pond.

THE CAPABILITY

We wanted to create a work area where people are proud to go to work. This building blends with the community and doesn’t have the traditional ‘public works’ look.

”

Brian D. Cullen President PERC Water Corporation

At the end of the day, what residents of Santa Paula should be most

What’s Unique

Wonderful Water Works A drop-by-drop look at what Santa Paula Water provides:

Title 22 water quality. The water quality is guaranteed to meet or exceed permit requirements.

A small environmental footprint. All water treatment takes place underground, which allows clients to use the land around the treatment facility for alternate uses.

Neighbor-friendly facilities. Covered process tanks allow for maximum odor control and noise reduction.

Guaranteed performance. Based on preliminary design at a very early stage of the project, PERC Water can provide a guaranteed fixed capital cost, guaranteed operating cost and a guaranteed delivery schedule.

Significant cost savings. Cost-sensitive design features like common wall construction and less yard piping/conduits create significant capital savings.

There are three unique features in the design of this water recycling facility.

The tanks that do most of the work in processing the waste water are located underground, meaning no odor and a smaller footprint than comparable facilities.

The tanks were built to share walls, which means they cost less to build and take up less space.

Beautiful offices are located on top of a concrete slab. All processing tanks are under the slab, out of sight.

The Layton Companies

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FOUNDATION

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CLIENT PROFILE | SANTA PAULA WATER

Worldwide Aquatic Acclaim PERC Water was presented the Global Water Awards’ 2009 “Water Deal of the Year” Award of Distinction for their contribution to the advancement of publicprivate partnerships in the international water sector specific to their contract to design, build, operate and finance the Santa Paula Water Recycling Facility.

The award was given to PERC Water

by Al Gore, former vice president of the United States and Nobel laureate, at an awards banquet at the Zurich Marriott Hotel in Zurich, Switzerland. The prizes were awarded on the basis of votes cast by readers of Global Water Intelligence (GWI), one of the premier international news magazines for professionals in the water sector, and members of the International Private Water Association and the International Desalinization Association.

GWI described the Santa Paula deal as a “groundbreaking transaction that can be emulated across the United States.”

PERC Water was chosen from among three other projects from the Middle East and Russia, respectively.

For information on the Global Water Awards 2009, please visit www. globalwaterawards.com.

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FOUNDATION

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The cascading waterfall welcomes workers and visitors alike — part of what makes the facility more “neighbor friendly.”

PERC Water Corporation FOUNDED 1998 HEADQUARTERS Costa Mesa, Calif.

OFFICES Phoenix, Ariz.

excited for is the fact that the new facility can effectively service about 40,000 people (current population of Santa Paula is 29,000) and can easily be expanded to service 50,000 people. This expected expansion will happen when needed with no additional cost to the city.

PERC Water’s operations team was heavily involved in the facility’s design and construction. They were invaluable in determining what equipment was used.

“Our internal operations team got more involved as the project moved on,” says Nate Owen, vice president of construction for PERC Water. “They would adjust where pipes went and how things flowed together. They’re the ones that will be working here everyday, which is one of our competitive advantages having operations involved with the team from the beginning.”

THE PARTNERSHIP

PERC Water selected Layton Construction to be the project’s Prime Construction Contractor.

“This was our first project of this type,” says Jeff Beecher, executive vice president with Layton Construction. “But our building experience and partner-driven attitude helped make it a success.”

PERC Water feels the partnership with Layton is a key component to the project’s success. From the beginning, PERC Water knew they needed a construction firm that could meet its high standards.

“Layton has the image and perception of being a high-end, high-class company,” Cullen says. “They do modern things and are known for great tenant improvement work, which is something we wanted in the interiors of our facilities.”

And early involvement equals better outcomes.

“When we’re involved early, we can help find solutions to problems,” Beecher says. “That was the case here. We were able to be a true partner in the process.”

Both sides hope the partnership can continue for years, as PERC Water takes this model to other cities in California and beyond.

“The No. 1 reason why Layton got involved is because I knew them — I knew Jeff — and I knew they could perform,” Owen says. “I knew they were versatile and that they could get things put together quickly.”

And the partnership is ready to continue solving problems for municipalities across the southwest as PERC Water and Layton Construction work together to solve dilemmas efficiently.

The Layton Companies

TYPE OF WORK • Water recycling company focused on returning water to nature. PERC designs, builds, operates and manages water recycling facilities throughout the United States, is committed to producing water of the highest quality, and guarantees the risks associated with water recycling for every client.

HIGH-PROFILE JOBS WITH LAYTON • Santa Paula Water Recycling Facility, Santa Paula, Calif.

CONTACT 959 South Coast Drive, Suite 315 Costa Mesa, CA 92626 (714) 352-7750 www.percwater.com

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Layton is versatile and easy to work with. In spite of changes, we never had a change in schedule.

That’s a huge advantage to working with Layton.

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— Nate Owen VP of construction PERC Water