COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON FINANCE - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, June 3, 2008 10:20 a.m. - - - PRESENT: COUNCILWOMAN MARIAN B. TASCO, CHAIR COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN BILL GREEN COUNCILMAN WILLIAM GREENLEE COUNCILMAN BRIAN J. O'NEILL COUNCILWOMAN BLONDELL REYNOLDS BROWN BILL 080495 - An ordinance authorizing the Philadelphia Municipal Authority, incorporated pursuant to the "Municipality Authorities Act of 1945," P.L. 382, as amended (the "Act"), to design, build, finance, own, operate, maintain, and lease facilities and equipment, and provide related services, for the management of the City's wastewater treatment solids... BILL 080498 - An ordinance authorizing the Water Commissioner and the Procurement Commissioner, on behalf of the City of Philadelphia, to enter into a Service Contract with the Philadelphia Municipal Authority... V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
Good morning. The Committee on Finance will now come to order. I would note that we do have a quorum in the presence of Councilman William Greenlee, William Green, Wilson Goode, Frank DiCicco and President Verna and Blondell Reynolds Brown. We would have the Clerk please read the bill.
An ordinance 13 authorizing the Philadelphia Municipal Authority, incorporated pursuant to the "Municipality Authorities Act of 1945," as amended (the "Act"), to design, build, finance, own, operate, maintain, and lease facilities and equipment, and provide related services, for the management of the City's wastewater treatment solids; all under certain terms and conditions. An ordinance authorizing the Water Commissioner and the Procurement Commissioner, on behalf of the City of 3 6/3/08 - FINANCE - BILLS 080495 and 080498 Philadelphia, to enter into a Service Contract with the Philadelphia Municipal Authority, pursuant to which the City will assume certain obligations under an agreement that the Authority will enter into with Philadelphia Biosolids Services, LLC to design, finance, build, own and maintain facilities and equipment, and provide operating services for the management of the City's wastewater treatment solids; all under certain terms and conditions.
Thank you very much. The Chair calls to testify from the Administration Mr. Bernard Brunwasser, Debra McCarty, John Donovan and Pamela Racey from Synagro. (Witnesses approached witness table.) COMMISSIONER BRUNWASSER: Good morning, Councilwoman Tasco, Council President Verna and members of the Finance Committee. My name is Bernard 4 6/3/08 - FINANCE - BILLS 080495 and 080498 Brunwasser and I am the Acting Water Commissioner. With me today is Debra McCarty, Deputy Water Commissioner for Operations; Mr. John Donovan, Vice-President with the international environmental engineering firm of Camp, Dresser, McKee where he serves as a recognized national expert in residuals and biosolids management. Finally, we have Ms. Pam Racey of Synagro available to answer questions about her company or the proposed biosolids project. We're all here today to testify on behalf of Bill Nos. 080495 and 080498. These bills will authorize the City of Philadelphia, acting through the Philadelphia Municipal Authority, to engage in a long-term contract with Philadelphia Biosolids Services for the operation of the City's Biosolids Recycling Center. I believe that this major project will result in a number of significant benefits to the City, its water ratepayers and particularly the 5 6/3/08 - FINANCE - BILLS 080495 and 080498 neighboring community in Southwest Philadelphia. Hopefully you've had an opportunity to review my formal testimony and that of Mr. Donovan that was submitted earlier. Rather than reading those testimonies here this morning, I am requesting that they be entered in as part of the record. I will take a few moments to highlight some of the major benefits of this outstanding project. First of all, the project will save the water ratepayers nearly $200 million over the 23-year period of the contract. The numbers are compelling, and as Water Commissioner, I have a fiduciary responsibility to preserve and strengthen the finances of this utility. The current 72-acre site will be cleared of all outdoor-stored biosolids products, assuring citizens and visitors an end to odors emanating from the plant. Carbon monoxide, nitrogen oxide, carbon dioxide, volatile organic 6 6/3/08 - FINANCE - BILLS 080495 and 080498 compounds and particulates in the air will be greatly reduced. Truck traffic to and from the site will be reduced by 7,000 truck trips annually. All produced final product will be Class A biosolids, which is a pathogen-free product regulated as fertilizer. A new aesthetically pleasing plant, with state-of-the-art air pollution controls, will be financed, designed, built, owned and operated by Philadelphia Biosolids Services. All risk of final biosolids disposition transfers from the City to Philadelphia Biosolids Services. Synagro, the guarantor of the contract, is the largest biosolids handler in the United States and has broad markets for all of its products. Finally, and perhaps most importantly, no City employee will lose his or her job. Each employee will be placed in equivalent positions in other units of the Water Department. No one 7 6/3/08 - FINANCE - BILLS 080495 and 080498 will be demoted or suffer any loss in longevity or status. For all of these reasons, I believe this is the best and most compelling project I have seen in my long years with the Water Department. I urge the Committee to approve this legislation and to suspend the rules so as to allow first reading at the next Council session. Thank you. Now, before Deputy Commissioner McCarty takes you through our presentation booklet, I want to reintroduce Mr. John Donovan of Camp, Dresser, McKee, who served as the City's expert in helping us to evaluate all of the technology in the biosolids industry. I believe you've all received a copy of his brief testimony. John.
Thank you, Bernie. Good morning, Councilwoman 8 6/3/08 - FINANCE - BILLS 080495 and 080498 Tasco and members of the Finance Committee. I work for CDM. I have for nearly 35 years, and most of my efforts over those years have been in wastewater and biosolids projects. A little bit of what CDM has been asked to do for the Water Department: Starting five years ago, we assisted the Water Department in both the RFQ and RFP phases. That means we set minimum standards in those documents for the financial strength of the proposer, the technical experience, DBE participation and technology guidelines, which I'll refer to in just a moment. We also set standards for selection criteria so it is very clear how the Water Department is going to select a firm. So CDM was requested to do two primary things: One, to recommend a technology which would be appropriate for the Water Department and later on to review the Local 394 proposal, which I'll get to in a moment. 9 6/3/08 - FINANCE - BILLS 080495 and 080498 With regard to technology, we first looked at where the product is going. These are waste products, so we wanted the absolute best product, because public acceptance is a big issue. So we wanted a product that had established markets. We also wanted a product that could be produced at BRC in a way that would be okay for the neighbors; namely, inside a factory-type building with total odor control. And coming out of that analysis we selected two technologies, composting, which the Water Department has experience with, and thermal drying, is acceptable at the BRC. We required the composting to be inside a complete building, as well as the thermal drying. We also gave the proposers the opportunity to suggest other technologies if they were going to process the biosolids at some other site other than the one the Water Department owned. The Synagro proposal that it's 10 6/3/08 - FINANCE - BILLS 080495 and 080498 received did in fact select thermal drying and the marketing of a pellet. Now, what about these pellets. Why is that a good product? First of all, the products are Class A. They meet all federal and state standards. There's essentially no moisture left in the product. That means it can be stored and transported easily, with reduced truck traffic, and that's in comparison to the present Class B product, which has nearly 70 percent moisture and, of course, requires much more trucking. These products, these pellet products, have an established national market on farmlands, on golf courses and to fertilizer blenders, and, interestingly, these products are being discovered now as a fuel. This is somewhat ironic since these pellets have been used for over 20 years in Europe as a fuel. But just a few years ago, the Baltimore pellet, which is produced by Synagro, was started to be used as a fuel 11 6/3/08 - FINANCE - BILLS 080495 and 080498 and a cement count, and I expect that trend to continue in the future. So that's the product. What about the processing? The processing is through a thermal dryer, and Synagro has proposed an Andritz dryer. One of the tasks the Department asked us to do was to call around to Synagro entities where Synagro is running a major municipal operation for a city and basically check references. We talked to the operators who actually deal with Synagro, and to a person. They basically said that they got good cooperation, Synagro worked well with their staff, and they thought it was a good relationship. The technology itself has been around for many years. S. cities. It's at Boston, it's in New York, it's in Baltimore, Tampa and coming online in Chicago. The last point that I'll make is with regard to the Local 394 proposal. Last year, we were asked to look at that 12 6/3/08 - FINANCE - BILLS 080495 and 080498 proposal. In our opinion, the proposal has numerous serious deficiencies. It's likely to be more odorous, both at the BRC and for the products that are disposed on land.
It's going to generate higher truck traffic trips because there's more moisture in that product, and, of course, it costs more. But, most importantly, of the three processes proposed, two are unproven without any long-term demonstrated experience. So just in the way of a summary, the Synagro proposal has been thoroughly reviewed. We've worked closely with your department. We have a very good contract, one that looks at the financial costs and other aspects and properly shifts risk to the private sector. That proposal is better than the current operations at the BRC and is superior to the Local 394 proposal. There are three things going for this proposal: One, it's from a well-established company, Synagro; two, 13 6/3/08 - FINANCE - BILLS 080495 and 080498 it is produced in a tried and true thermal dryer; and, three, the marketing plan is sound. It is our opinion that that is a process which is going to last the City for years. Thank you. )
Please. We ask your cooperation as we have this hearing and that we know and feel your passion for this issue, but hopefully -- (Audience yelling.)
Would you please proceed with your testimony. DEPUTY COMMISSIONER McCARTY: Thank you, Councilwoman Tasco, and good morning, Committee. My name is Debra McCarty. I'm the Deputy Commissioner of the Water Department and -- (Audience booing.) DEPUTY COMMISSIONER McCARTY: Apparently many of my employees aren't happy with me today, but I'm going to try to get through -- 14 6/3/08 - FINANCE - BILLS 080495 and 080498 (Audience yelling.)
Would you please. We're going to ask you to give respect to the people who are testifying. No matter how you may feel about that person, they're here to present testimony before this Committee and we do ask for your cooperation. Thank you very much. Proceed. DEPUTY COMMISSIONER McCARTY: I'm going to try to quickly go through the PowerPoint presentation that you all have. We go to the first page. Right now we're producing 100 percent Class B biosolids cake, and so that's -- what you see on that first picture is the cake as we store it on site and move it around to make high piles until we can move it off site to our many outlets that I'll get into in a minute. The next page, , is an artist's rendition of the heat-drying facility built onto our current facility 15 6/3/08 - FINANCE - BILLS 080495 and 080498 where it would take the sludge right from our current facility and into the heat dryers. And the bridge in the back, that's the George Platt Bridge if you want to get your bearings. The history of the biosolids, believe it or not, we used to ocean dump, as well as a lot of other folks, but we did stop that in 1980, and currently the facility at BRC was brought online around 1986 and in its final stages in 1988. The facility is on . You see an overview. At the top, that road above is 95 and then the diagonal from the right to the left is the George Platt Bridge again. And it's a 72-acre site close to the airport. And at this facility, this is our main facility for processing the biosolids or sludge, if you will, from our three wastewater treatment plants. A hundred percent of that material, again, is Class B right now. Now, Class B contains pathogens and it's 16 6/3/08 - FINANCE - BILLS 080495 and 080498 not as accepted by the public at its various outlets as is Class A. Class A is pathogen-free, or disease-causing origin pathogens. Additionally, Class B is regulated as a solid waste and Class A is considered a fertilizer. The current operations at BRC, we stopped composting, which was our only Class A product, in 2007, and the reason we did that is because it was a large generator of odors in the community beyond our fence line and consequently, though, we are now 100 percent Class B. Currently, we produce about 220 tons a year of this -- 220,000 -- I always forget those other three zeroes -- of Class B product, and that includes a labor-intensive process that has 68 employees budgeted, 60 of which are members or can be members of District Council 33, Local 394. 5 million. So it's a cost savings of about four and a half million dollars annually for the current cost. Now, the problems we're facing at the facility are the odors beyond our fence line. We're not compliant with the air management regulations. Site aesthetics, we do at times store a lot more material than at other times because of the nature of our outlets. The uncertain future of Class B biosolids, more and more the public does not want to see that in their backyard, if you will, in the farm next door to them, and that is one of the reasons we look to go to 100 percent Class A and move forward with this project. The other outlet for us is, in addition to agricultural application, is landfill, and landfill costs are uncontrollable and we're somewhat at the mercy of whatever is going on with landfills. So that's an uncertain future 18 6/3/08 - FINANCE - BILLS 080495 and 080498 for us. And then, of course, fuel costs related to those 10,000 trucks per year in and out of the facility. So the project objectives for moving forward with 100 percent Class A was to ensure long-term integrity and sustainability of our processing for beneficial use. Landfill is not considered beneficial use. And we believe we do have a good product. We want to eliminate the odors. I can't emphasize that enough. I talked to community folks. They're very anxious to see things change out there. And we don't like to be bad neighbors either.
We wanted a reliable product, Class A pathogen-free again, and we want to comply with all air management regulations, site aesthetics, and then the icing on the cake is the long-term cost savings. Criteria for a proven technology -- and that was very important for us to have a proven technology. We 19 6/3/08 - FINANCE - BILLS 080495 and 080498 don't want Philadelphia and our citizens, the ratepayers, to be beta test cases -- is to have an established technology, which is -- EPA has different definitions for established and innovative and embryonic. "Embryonic" are technologies in demonstration or on bench-scale operation, and they're really not -- some of them are demonstrated overseas, but there's really nothing full scale in this country. "Innovative," there is a full-scale operation, but it's been less than facilities and it's been around 16 for less than five years. S. So we're going again 20 with the established technology. And 21 that's for soundness of the proposal and 22 our future. The thermal drying system 23 then, of course, is the established 24 technology. 25 Now, as Mr. Donovan pointed 20 6/3/08 - FINANCE - BILLS 080495 and 080498 out, there was a lot of qualifications to meet the criteria to be able to even submit a proposal to the Department. You had to have designed at least two facilities that had dry tons per day 7 of the proposed technology that you're 8 submitting. You had to have constructed 9 two projects greater than $25 million, 10 and you had to operate and maintain a 11 facility of 20 dry tons a year or -- tons 12 per day or greater for at least five 13 years. And the primary contractor had to 14 have five years of direct biosolids 15 operation and maintenance experience. 16 They also needed to have minority 17 participation. We have at least ten 18 percent minority equity for minority 19 business enterprise and five percent for 20 women business enterprises. And they had to have -- financially they had to be very sound, and that is key if we're going to enter into a long-term relationship with this company. And, again, Synagro met that qualifications. 21 6/3/08 - FINANCE - BILLS 080495 and 080498 The procurement process for the request for qualifications and the request for proposals, the team was made up of, in addition to folks from the Water Department, Procurement, Law Department, Minority Business Enterprise Council, City Council staff, technical staff, and our consultant, Camp, Dresser and McKee. The RFQ was issued in June of 2003 and we got the RFP issued in May of 2004. PBS, Philadelphia Biosolids, was the only proposal that was submitted as responsive and -- responsive. Three other firms did not either meet the qualifications or did not submit a proposal. The Philadelphia Biosolids Services is -- the main guarantor, as previously mentioned, is Synagro, and McKissack and McKissack is the design and construction. They're our 20 percent WBE equity member, and Len Parker Associates, the general contractor, is our ten 22 6/3/08 - FINANCE - BILLS 080495 and 080498 percent MBE equity member. Andritz-Ruther will be the thermal drying equipment, and CH2MHill will be the design consultant for this company. The Synagro qualifications, again, our prime contractor, they're one of the nation's largest biosolids management company. They have over 600 municipal contracts whose material they handle. They operate all of the proven biosolids processing and recycling technologies that are out there. They maintain the largest product marketing/distribution channels in the industry. And the good thing is, they're technology neutral. They didn't say, Oh, Philadelphia, we're aligned with this company, so that's why we want to go this way. They looked at what would be best for our site for the community to meet all of our objectives, and that's why they came up with the heat dryer. The proposal is for a period of about three to five years.
They'll 23 6/3/08 - FINANCE - BILLS 080495 and 080498 maintain the current operation of Class B biosolids and moving that material off site to their many outlets while they finance, design, build and start up the Class A thermal drying facility for 7 years. They will operate that. And 8 there's also a five-year extension if all 9 goes well, at the City's sole discretion, 10 of course. 11 Basically, the thermal drying 12 process is a big heat dryer. And I did 13 bring some, if anybody wants any. Here 14 are the pellets. They're essentially 15 odorless. We have more if anybody wants 16 them. But very dry. And if you open the 17 packet, I think -- they might be a little 18 smaller than some folks had expected, but 19 that's what they are. 20 This project benefits us in many ways. It saves the water ratepayers nearly $200 million over the 23-year life of the contract, which should minimize future rate increases. It eliminates the odors and achieves compliance with our 24 6/3/08 - FINANCE - BILLS 080495 and 080498 air management regulations. It reduces emissions of greenhouse gases, and it's 100 percent Class A pathogen-free biosolids as opposed to in the long run, after the three to five years, the Class B biosolids product would be discontinued. It's a proven and reliable technology operated by Synagro for many years, and the new enclosed processing facility will have state-of-the-art air pollution controls on anything that could enter into the atmosphere. There will ultimately be no stored biosolids on site, and truck traffic is reduced from 10,000 trips a year to 3,000, and the risk of ultimate disposition of this material transfers to the vendor, PBS. 5 million a year during that interim period and while they're financing and raising the $70 million to build this new state-of-the-art facility. And after that, when the heat drying is online, we 25 6/3/08 - FINANCE - BILLS 080495 and 080498 will be paying them $26 million a year for the heat drying and ultimate disposition of that material. The chart shows the anticipated or projected cost of continuing with our current operation compared to what the PBS project would be, which is, again, about $194 million. The labor issues, this is a difficult one for me because these folks work for me, but it's very important to understand that there will be no layoffs or demotions, and that's an important key to this project for us. All of the employees will be transferred to other positions in the Department, will maintain their job titles and their pay for that job. The staff may also seek jobs with PBS if they so choose. And we have been meeting with DC 33, Local 394 for a few years, since January of '05. And, additionally, this does create 75 construction jobs during the construction and then 30 long-term jobs with the 6/3/08 - FINANCE - BILLS 080495 and 080498 company, PBS. So we do believe this is an excellent project for the City, with many benefits. It's good for the environment, the community, the ratepayers and keeps City workers employed with the City, and we are hoping that we can move forward with this project so we can realize these savings and benefits. Thank you very much. )
All right. Moving right along. COMMISSIONER BRUNWASSER: Chairwoman Tasco, I just wanted to repeat that we're asking for the suspension of the rules so as to allow first reading at the next Council session, and we're now prepared to answer questions.
According to this proposal, the City will be 27 6/3/08 - FINANCE - BILLS 080495 and 080498 responsible for paying $6 million per year in energy costs after the new facility is completed. Do these costs include water and wastewater services? (Audience yelling "no.") DEPUTY COMMISSIONER McCARTY: That was factored into the price.
Excuse me, please. Now, we have people at the table who are testifying. We can't hear them if you're going to constantly interrupt. So we appreciate your respect for the people at the table, no matter how you agree or disagree, or mostly disagree with them and their answers. We have to have this hearing, and we would like to have it in an orderly fashion. So we thank you for being here and understand your passion, as I said before, but we need to have this discussion. Thank you. (Witness yelling "point of order for a question.")
You cannot 28 6/3/08 - FINANCE - BILLS 080495 and 080498 have a question. This is not for the public at this time. You can come when we open the floor for discussion by other parties after this panel is finished. DEPUTY COMMISSIONER McCARTY: Councilwoman, that was factored into the price. In the proposal, the RFP, it was stated that the successful vendor would not have to pay for water and wastewater services. I mean, it's a -- (Audience yelling.)
When you have an opportunity to testify, you will have the opportunity to dispute whatever is being said. We will be here until this hearing is completed. So I ask your indulgence. I ask you to respect the people at the table and I ask you to respect this Committee. Thank you. DEPUTY COMMISSIONER McCARTY: If we had them pay for it, then they would just put it in their price and we would pay for it again. So it's pretty 29 6/3/08 - FINANCE - BILLS 080495 and 080498 much a wash.
What is the annual cost for water and wastewater services? (Audience yelling.) DEPUTY COMMISSIONER McCARTY: I don't know off the top of my head. We could get you the price. (Audience yelling.) DEPUTY COMMISSIONER McCARTY: If it's $100,000 and the -- so we say, Okay, Vendor, you owe us $100,000, that's going to be in their cost when they charge us for the service that they charge us for. So we'll either pay when we charge them for it because they're going to charge us back or if we -- the way we handled that was to -- (Audience yelling.)
So you say the cost is built in the -- DEPUTY COMMISSIONER McCARTY: Exactly.
-- in the 30 6/3/08 - FINANCE - BILLS 080495 and 080498 total cost of the proposal? DEPUTY COMMISSIONER McCARTY: Yes, ma'am.
Can you explain how the City will be saving money under this proposal when the energy costs can increase during the contract?
I'm Pam Racey with Synagro. Our contract requires that we guarantee a maximum consumption rate of natural gas. So if we consume more than that, we have to pay for it ourselves. The City does not have to pay anything over our maximum guarantee. In addition, the City is giving digester gas that's currently being flared off at the wastewater treatment plant, which is a big contributor to greenhouse gas emissions. We are going to take that digester gas, pipe it over 31 6/3/08 - FINANCE - BILLS 080495 and 080498 and use it so that we don't have as much natural gas consumption. And, in fact, John talked about how we're working with both cement companies and electric companies using the pellets as a fuel source to replace coal. The BTU value of the pellets we produce is twice as much as energy as we consume in the project. So overall, the project is a net green energy, renewable energy gain.
You talked about natural gas when you build this facility. Will it be fueled by natural gas and where do you -- who will you have your agreement with to provide the gas?
It's going to be partially fueled by natural gas, partially by digester gas. We also have the ability to take a third fuel source. If, for example, No. 2 diesel or reclaimed oil becomes more cost effective, we have a three-fuel burner and can use any of those. But our normal plan of operation would be to fire 32 6/3/08 - FINANCE - BILLS 080495 and 080498 partially with digester gas and partially with natural gas, which we would be buying from the Philadelphia Gas Works.
Councilwoman Blackwell has a follow-up question relative to the gas.
Good morning. I understand that the City will provide the new plant with 85 decatherms of gas per year. How much would that cost?
That's not a correct number. That's the total amount of decatherms that the plant will use. As I said, a portion of it, like 35 percent of that, will come from digester gas. And when they did the savings calculations, I think they assumed $10, and then they did sensitivities that showed if it went double and triple that cost, it still would not be more expensive than what the City is spending now. So that analysis was done.
Well, 33 6/3/08 - FINANCE - BILLS 080495 and 080498 has PGW been involved in estimating what this cost would be at its current and projected levels?
Has PGW been involved in determining costs and projected costs, current and projected costs? COMMISSIONER BRUNWASSER: Yes. There were discussions with PGW.
Well, PGW tells us they haven't visited this issue in years. (Applause.)
And our concern is that this estimated 4.5 million, that should be less. If there's no real, legitimate estimate, it could be doubled or tripled, and it's a real factor in terms of the savings that you say we have. (Witness approached witness table.) 34 6/3/08 - FINANCE - BILLS 080495 and 080498
Good morning. I'm Jim Bolno. I'm with the Finance Division of the Water Department. I've worked on a number of these cost estimates and cost-benefit analyses. We did meet with PGW back when the project was initially proposed to City Council. We determined with PGW that the best way, on their advice, the best way to provide the gas needed for this project would be to purchase the gas at the well head and to transport it through the PGW system, paying them for the transportation, not for the cost of the gas. We did assume about a $10 price per million BTU for the gas, which at the time we were doing most of these analyses was a very conservative number. And we did do sensitivity analysis to see what would happen to the project, how would the project be affected if the cost of gas were to increase, and we found that the price of gas would have to triple 35 6/3/08 - FINANCE - BILLS 080495 and 080498 over the next three years to $25 or $30 per million BTU in order for the project savings as estimated to begin -- to be eroded. And even under that scenario, this is extremely conservative because it only looked at an increase in the gas to the thermal drying system. It didn't account for the fact that if gas were to increase by that amount, it would also have a substantial increase on the current operation. So we feel comfortable, given the risk-mitigating factors of the contract that have been mentioned here, the efficiency parameters, the incentives for the efficient use of natural gas, the fact that percent of the gas will be 19 coming from a by-product of the 20 wastewater treatment process, which is 21 what we call digester gas, and the fact 22 that we have carefully looked at the 23 price, at how the price is going to 24 affect the overall economics. We feel 25 that this is a reasonable risk to take 36 6/3/08 - FINANCE - BILLS 080495 and 080498 moving forward with this project.
Madam Chair, my last point on this is that we would like to, since there are some concerns, we would like to hear directly from PGW their assessments on this, especially to confirm current and projected costs and how that affects this whole issue of money and what the City saves. (Audience member yelling.)
As we move through this hearing, we will ask someone from PGW to come and be prepared to testify.
Yes. Thank you, Madam Chair. Good morning. I have a number of questions that are really all over the place. Let's start with what some might 37 6/3/08 - FINANCE - BILLS 080495 and 080498 view is the primary issue around this. On of your testimony under Labor Issues, you mention, and I quote, "All current BRC employees will be transferred to equivalent positions." Define "equivalent." Does that equal equivalent in terms of staff duties or equivalent in terms of salary? What exactly does that mean? DEPUTY COMMISSIONER McCARTY: It means that if you're a heavy equipment operator 1 right now at BRC, you'll be transferred somewhere else in the department as a heavy equipment 1 operator. So you'll keep your same job title, your same responsibilities and you'll be operating heavy equipment that a heavy equipment operator would operate. Yes. So you'll keep your job title and you'll be moved to another job where you would be doing the same sorts of job --
Please. 38 6/3/08 - FINANCE - BILLS 080495 and 080498
That's one of our concerns, because we have been told that there are hires that have never been made and that they're not hiring in many of these same positions. So if they lose their jobs, there's no place to transfer them to since they're not hiring. (Applause.)
That's an important, very important point. DEPUTY COMMISSIONER McCARTY: Well --
If you're not hiring a person doing that job, how will these people be made whole? DEPUTY COMMISSIONER McCARTY: We, like some other departments, struggle with filling our vacancies, and we will be filling our vacancies with some of these folks, as well as continuing to hire and promote from within. There's been no --
That 39 6/3/08 - FINANCE - BILLS 080495 and 080498 does not answer the question. (Applause.) DEPUTY COMMISSIONER McCARTY: We are not eliminating -- COMMISSIONER BRUNWASSER: Councilwoman, can you please repeat the question again?
I think the question came from Councilwoman Brown. Councilwoman Blackwell has a point of order. You want to ask your question again?
Continue with my line of questioning. So equivalence also equals salaries, correct? COMMISSIONER BRUNWASSER: Correct.
You state in your testimony that BRC staff may seek jobs with PBS. Any provisions in any of their proposals that you're going to allow opportunities for training for 40 6/3/08 - FINANCE - BILLS 080495 and 080498 prospective City employees who want the opportunity to be skilled enough to seek these jobs? So the question is, is there any training at all for employees who want to become acquainted with this type of technology?
When we start a new plant, typically what we do is, we would bring in an experienced manager from another facility so that we're sure someone with the technical skills is overseeing, and then we would look to hire local. Some positions require expertise right off the bat; others can be trained from the ground up. And we are certainly looking for local hires. We're more than happy to talk to the folks that are currently working there, would love to have some people that are experienced come on board.
So that is in the body of the proposal? COMMISSIONER BRUNWASSER: Yes. Now, the department has training for 41 6/3/08 - FINANCE - BILLS 080495 and 080498 many -- a lot of trades training, and we certainly would help where we can, but what I'm saying -- what I've told the union -- and I'll go on record as saying this today -- is if any DC 33 employee at the Biosolids Center does choose to go and work for Philadelphia Biosolids, Inc., they have a full year to try it and if they don't like it for any reason, the Water Department guarantees them a job back with them.
Okay. COMMISSIONER BRUNWASSER: With us. (Audience talking.)
You're saying that's on the record. So you're telling me that that is in writing someplace in the text of all this paperwork we have? And I'm speaking purely from my stadium experience in my first year here. If it's not in writing, 42 6/3/08 - FINANCE - BILLS 080495 and 080498 it doesn't exist. So -- (Applause.)
So -- COMMISSIONER BRUNWASSER: I will be glad to put it in writing today.
All right. Let me continue, Madam Chair. (Audience talking.)
Let the Councilwoman continue her line of questioning, please.
On this you talked about the digested gas, that that will be used. Can you just share briefly how that will be used, this term called "digester gas," please.
Right. Digester gas is produced as part of the wastewater treatment process. There's giant vessels that actually act like a stomach and break down the material into smaller components, and just like a stomach, that process produces gas. This is methane gas that is compatible with the process 43 6/3/08 - FINANCE - BILLS 080495 and 080498 we're using. Right now it's just being burnt off in a flare and the energy from that is not being used or captured and -- well, a portion of it. A portion of it is used to preheat the digesters and some heat at the wastewater treatment plant, but there's excess amount of gas available. We're going to build a pipeline over from the wastewater treatment plant to the BRC and use that gas as part of the process.
Finally for this round, you talk about MBE/WBE enterprises, or at least opportunities for MBE/WBE enterprises. Elaborate on that. What does that mean?
Well, Philadelphia Biosolids Services is made up of three companies. So right from the get-go, the entity that holds the contract is 30 percent minority owned. With us, McKissack and McKissack and Len Parker Associates. So they're an equity participant in the project. 44 6/3/08 - FINANCE - BILLS 080495 and 080498
In addition, both the construction portion of the work, which we expect to be in that $70 million range, will have minimum minority and woman business participation requirements. They range, depending on the category, from five to 30 percent. Like disadvantaged may be five, women may be ten and minority, 20. And then the long-term operating agreement has the same requirements. So the fulfillment of this contract and the carrying out over years does have mandatory required participation goals for the life of the contract.
That's it for this round, Madam Chair, because there may be other questions.
Let me just go back to one question that both Councilwoman Brown and Councilwoman Blackwell raised, and certainly 45 6/3/08 - FINANCE - BILLS 080495 and 080498 Councilwoman Blackwell may have some more input on this issue. There are 60 employees presently involved with this process at the plant currently now, and your statement is that these employees will not lose their jobs. They would be transferred someplace else. Now, did you calculate the -- I guess at the end of the day, you have the cost of running the plant over here and suppose none of the 60 decide to go with this company. What is the impact and do you get the savings if you have to continue to keep 60 employees? COMMISSIONER BRUNWASSER: Well, what we are, in effect, doing is filling vacancies that we have appropriated funds for. So the dollar amount that we spend does not immediately go down, but what it does, it gets transferred to the operations that we want to fill positions in anyway. So what we're doing is, we're using our appropriation power in these 46 6/3/08 - FINANCE - BILLS 080495 and 080498 other units to fill positions.
But the question I have, if you have these positions that you have wanted to fill, what has been the delay in filling the positions? COMMISSIONER BRUNWASSER: Well, a lot of it is the process itself, and you know, it's gotten a lot of -- the Mayor has gone on record as saying he was not pleased with the speed of filling of positions within the City. I know we now have a new Personnel Director and I think he's been given a mandate to improve the process of filling positions. And this is a way -- I mean, we are filling positions that we have appropriated money for and are approved in our budget. What we're doing is, the BRC process is just as we've outlined here. On the other part -- in the other part of the utility, we're actually filling vacancies. That's all we're doing. And so we will be spending more money than we 47 6/3/08 - FINANCE - BILLS 080495 and 080498 otherwise would in wastewater treatment, water treatment, distribution, sewer maintenance and like cleaning all these other areas of the Water Department. We actually will be spending the money closer to the way Council allowed us to appropriate the money so that we will be able to perform these tasks.
Now, will these employees be qualified for some of the positions that you have open and at the level of status that they currently have? COMMISSIONER BRUNWASSER: Absolutely. Absolutely.
When we dealt with the reorganization of the Redevelopment Authority, it seemed to me that a lot of those people were not satisfied as we were told they would be. (Applause.)
And while we're concerned with the overall economic condition of the City, we do have 60 48 6/3/08 - FINANCE - BILLS 080495 and 080498 people who contribute to the fiber of this City and are employees and pay taxes and purchase and shop. So they're 60 important people to us in this City and don't want to see them out of work. COMMISSIONER BRUNWASSER: Councilwoman, one of the ordinances before you actually has language in there that embodies exactly this fact, that we will not lay anyone off and that they will be offered positions within the Water Department.
And that's real broad, because if I'm doing one job and other offerings come available, do I qualify? See, will they qualify for the positions that you have available to fill? That is the other issue. I mean, we vote for this and the 60 people decide they don't want to be employed with this company, don't want to work on this and you have 60 slots to fill, how do we fill them with the -- do the skill sets match the employees who 49 6/3/08 - FINANCE - BILLS 080495 and 080498 are being removed to the positions that you have waiting to be filled? COMMISSIONER BRUNWASSER: The skill set that many of the employees; in fact, most, if not at all, the employees have at BRC are the same types of skill sets that we employ in other sections of the Water Department. Again, people move in and out of various units of the Water Department all the time by getting promoted or even through transfer. Now, these are City employees. They're part of the civil service system. They are also eligible to be hired by places like the Streets Department or L&I and other areas. But we are not counting on anyone else. We are saying that we have sufficient positions of the type that these folks are qualified for, well qualified for, within our own organization. So we have the ability to keep and hold on to each one of them. They are valuable employees to us, and we understand that, believe me. 50 6/3/08 - FINANCE - BILLS 080495 and 080498 The one key thing in this whole process from the time it started five or six years ago was, this was a non-starter if there would be any layoffs at all. This would have been a non-starter with us in the Water Department. We are here to transfer and keep these employees, offer them additional training with our own staff and --
Point of information. COMMISSIONER BRUNWASSER: -- help them make the change. Change is difficult. Change is difficult for anybody, and we understand that, but we want to hold on to these employees. We want them to be gainfully employed within the Water Department. We have a lot of pride in the Water Department, all of us do, and this -- there shouldn't be any major concern about this. I understand at first it's difficult, but we'll see this thing through, and we look to work 51 6/3/08 - FINANCE - BILLS 080495 and 080498 with the DC 33 leadership in the best way to manage this changeover. We had composting people. We have people --
Point of information. COMMISSIONER BRUNWASSER: When the composting process stopped at the plant last year, we worked very closely with DC 33 and our HR people in shifting those people to positions that they wanted. We wanted to work very closely with DC 33 on it, and we always want to work closely with DC 33 on all our issues.
There are two points of information, one from Councilwoman Blackwell and a point of information from Councilman Goode. Councilwoman Blackwell.
Thank you. Thank you. But, Commissioner, some people who have worked with the City for many years are overqualified. They don't have 52 6/3/08 - FINANCE - BILLS 080495 and 080498 jobs for which -- even in our union leadership, they don't have those positions available with this other new operation. So what happens to them? We have some people even are overqualified and who have been in the City many, many years. What about them? (Applause.)
And I might add that we went through some eight hearings with the housing reorganization, and we know those people -- I still have people coming to my office with degrees who were not hired. And not only did it hurt the employee, everybody at this table knows for several years we haven't had our projects move in housing. And now with this NTI debacle, it's worse. (Applause.)
Everybody suffers. The employees suffer, the City suffers and the people we are elected to represent. Everybody suffers, because everything stops. 53 6/3/08 - FINANCE - BILLS 080495 and 080498 (Applause.) COMMISSIONER BRUNWASSER: Councilwoman, we were successful in transferring the folks who worked in composting at that site. We believe we'll be successful going forward.
Thank you, Madam Chair. Commissioner, in response to Councilwoman Reynolds Brown, you said you'd be willing to put something in writing; is that correct? COMMISSIONER BRUNWASSER: Correct.
And in response to Councilwoman Tasco, you said it was already contained within the legislation. COMMISSIONER BRUNWASSER: No. 23 There were two separate --
I don't believe they were. You can explain how 54 6/3/08 - FINANCE - BILLS 080495 and 080498 they were two separate issues. COMMISSIONER BRUNWASSER: Okay. In the ordinance itself, we have committed -- the City has committed that there will be no layoffs.
Where in the ordinance does it say that? COMMISSIONER BRUNWASSER: Councilman, the no layoff, no demotion is in the "whereas" clause of Bill 080498.
And what does it say? COMMISSIONER BRUNWASSER: "Whereas, the City, acting through the Water Department, has committed to the collective bargaining representative" --
Commissioner, that's before it says "the Council of the City of Philadelphia hereby ordains"; is that correct? COMMISSIONER BRUNWASSER: I'm not sure.
In the body of the bill, that comes before it says 55 6/3/08 - FINANCE - BILLS 080495 and 080498 "the Council of the City of Philadelphia hereby ordains." That's actually not in the -- that actually would not go inside the Code. COMMISSIONER BRUNWASSER: We would be glad to -- if someone would amend -- would offer an amendment to put it in -- (Audience yelling.) COMMISSIONER BRUNWASSER: We would be glad for a Councilperson to --
But I'm still waiting for you to explain to me how your two answers were related to two separate issues. Councilwoman Reynolds Brown asked you a question. You said you'd be willing to put something in writing. What was that you were willing to put in writing? COMMISSIONER BRUNWASSER: Councilwoman Reynolds Brown, I believe, asked about the provision for the Water Department to take back any worker who had gone over to work for the PBS 56 6/3/08 - FINANCE - BILLS 080495 and 080498 contractor within one year.
So you didn't assume that she wanted all the labor issues put in writing? COMMISSIONER BRUNWASSER: Yes.
So you did assume she wanted all the labor issues put in writing? COMMISSIONER BRUNWASSER: Yes. I'll be glad to do that.
But then in response to Councilwoman Tasco, you said it was already in the ordinance, and it is not. COMMISSIONER BRUNWASSER: That was -- well, in the ordinance it's no 18 layoffs, no demotions.
That is not in the bill. COMMISSIONER BRUNWASSER: Okay. Well --
In terms of what would actually go in the Code. It's simply in the "whereases." That's not 57 6/3/08 - FINANCE - BILLS 080495 and 080498 what would go in the Code. It would not become law. It's not what this Council would ordain in passing the bill, and you are aware of that. I'm sure you're aware of it because you responded to Councilwoman Tasco second by saying it was already there, but before that, you said you're willing to put something in writing, which means you knew it was not already in writing. COMMISSIONER BRUNWASSER: The -- (Applause.) COMMISSIONER BRUNWASSER: The second point. We'll be glad to put everything in writing to the satisfaction of City Council.
So it was not already in legislation. It was not already legally taken care of. COMMISSIONER BRUNWASSER: We believed that it was, yes.
And how is it legally taken care of if it doesn't go 58 6/3/08 - FINANCE - BILLS 080495 and 080498 in the portion of the bill that actually becomes law? COMMISSIONER BRUNWASSER: I'm not --
See, you chose to first say that you would put it in writing. Then you chose to try to slip in there it's already in the bill, which is not true. COMMISSIONER BRUNWASSER: No. 12 There are two different issues, Councilman.
No. What this Council, in particularly this Committee, would require is that all the labor issues be put in writing in something that is attached to the bill 19 that actually will become law. COMMISSIONER BRUNWASSER: Okay.
Thank you, Madam Chair. 59 6/3/08 - FINANCE - BILLS 080495 and 080498 (Applause.)
Thank you, Madam Chair. Deputy Commissioner McCarty, I can't find in your testimony, but somewhere I heard you mention or referring to this PowerPoint that the technologies have been in place for only five years compared to this pellet technology, which is older. Do you recall -- DEPUTY COMMISSIONER McCARTY: That was in the --
When you were comparing technologies. DEPUTY COMMISSIONER McCARTY: Well, I said that was part of the qualifications for someone to be allowed to bid on the project, had to have operated the technology for five years. Whatever they submitted to say, Hey, I'm going to -- I'll do this for you, 60 6/3/08 - FINANCE - BILLS 080495 and 080498 Philadelphia, and this is what I'm going to use, I'm going to use heat dryer. Well, that company had to have operated and maintained heat drying for at least five years.
But those were qualifications for the two technologies that were identified by Mr. Donovan. They weren't general qualifications for any technology that was available; is that correct? In other words, the RFQ and RFP were limited to two specific technologies, which basically were a single source for Synagro; is that correct or not? (Applause.) DEPUTY COMMISSIONER McCARTY: The proposer could only bid in vessel composting or thermal drying on site. If they wanted to submit something for off site, I believe Mr. Donovan's testimony said that they could, but, again, part of the qualification would be that they had to have done it for five years. 61 6/3/08 - FINANCE - BILLS 080495 and 080498
So, Mr. Donovan, in your testimony you said that -- and I'm paraphrasing because I probably can't recall exactly, but you said that of all the other technologies that you looked at in this entire process, there is not one that currently has an operating plant. In fact, I think you say in your testimony that it's currently -- there's only currently one new facility under construction for a new technology and so, therefore, it didn't meet the RFP/RFQ criteria. Is that correct? Is that your testimony?
I did not say that. What I said is, of the Local 394 proposal, they basically proposed three technologies: composting, tried and true, the department did it for many years; a slurry carb technique, which, as you know, that facility is presently under construction; and a lime stabilization technique. Both of those two technologies do not have long-term 62 6/3/08 - FINANCE - BILLS 080495 and 080498 experience.
Okay. And so why were -- is the one you mentioned plasma arc? Are you familiar with that technology?
And was that technology one of the three mentioned by 394?
And so why did we not have an RFQ that just said, Hey, propose any kind of solution to us and we'll look at it, rather than narrowing it down in the beginning of the process? (Applause.)
Sir, that is an excellent question and it's the question that we were asked in 2003, and we were asked again recently about that question, and it all relates to this particular site. This site when the facility was put in in the mid '80s, it was a good 63 6/3/08 - FINANCE - BILLS 080495 and 080498 technology, and what the City found is that they could not control odors. The City went to a land application scheme and a landfill scheme, and just because of trucking and seasonal nature of those projects, they had to start stockpiling thousands of yards of product outside to the detriment of the neighborhood.
No. I'm getting to the question. So the charge that we were given is, what technologies is the City going to be able to live with and be able to tell the public that they're not going to have odor problems at BRC, and the two technologies we came up with is, you can build composting there and enclose it or you can build thermal drying. And as I said earlier, if a proposal came in from a site other than BRC, we said we would evaluate that. But at BRC we wanted to 64 6/3/08 - FINANCE - BILLS 080495 and 080498 make sure that that was done in a way to satisfy the neighbors.
I'm not satisfied that you've answered my question. Why was it limited to those two technologies as opposed to just saying, Hey, here's our problem, every company out there in the business, if you're interested, give us a proposal on how you would solve this problem, and letting the marketplace tell us what technologies are out there and getting all the information possible rather than narrowing it down to the point where really only one company was going to be able to -- (Applause.)
Well, certainly you understand that we made a judgment to narrow it.
Yes. And again 65 6/3/08 - FINANCE - BILLS 080495 and 080498 when we looked at it recently, we came to the same conclusion. There are scores of technologies out there, sludge to oil, been used all around the country. There are many, many facilities which have failed, Los Angeles, Camden County, right up the road in Trenton. And so the Department charged us with make sure if they're going to spend $50, $60, $70 million, if they're going to get somebody in for a 25-year term, to make sure it worked.
I'm confused. I understand the Department to be saving a hundred million dollars, not spending any money as a result of us entering in this contract, so --
I understand that over the term of this contract the City 66 6/3/08 - FINANCE - BILLS 080495 and 080498 saves nearly 200,000.
Not according to the City Controller. It saves a hundred million dollars over the course of this contract. So I'm going to rely on the Controller rather than the Water Department as to what the savings are. (Applause.)
I'm sorry. I couldn't hear what you just whispered to Mr. Donovan that caused him to laugh. Would you please say it out loud? COMMISSIONER BRUNWASSER: We do disagree with the Controller's analysis, but still in all, if you agree with the Controller, it's still a very significant amount of money.
There's nothing funny about a hundred million dollars, sir. 67 6/3/08 - FINANCE - BILLS 080495 and 080498
If you have something to say, please say it for the record rather than whispers resulting in chuckles. That's inappropriate. You're before this body, City Council. Please show us the due respect that we deserve. (Applause.)
Councilman, could I also add to the answer on the last question?
Thank you. As described about our company, Synagro is not a company that has just one technology. We offer all proven commercially operating type biosolids management. In fact, we've been providing Class B services to Philadelphia for over 15 years. And every time there's a new technology that comes out, the first place that those people with the new technology come is to Synagro to say, Hey, are you interested in buying our technology, are you 68 6/3/08 - FINANCE - BILLS 080495 and 080498 interested in partnering with us, because they know we have a 600 municipal base, customer base, and that we have credibility with the customers and that we've performed. What we see across the country, not just in Philadelphia, is that particularly on a large project like this, which is 200,000 tons -- I mean, this is one of the top sized projects 12 in the country. Trying something new 13 typically isn't done unless you get grant 14 money from the EPA. A lot of the 15 projects Mr. Donovan referred to were 16 innovative technologies that the EPA used 17 to give out millions and millions of 18 dollars, and they're now with EPA grant 19 money dolled out taxpayer dollars of 50, 20 80 million and they never worked. And so this city, along with many other cities, when they're doing a big project, wants to avoid something that doesn't have a track record. Usually as new things come, they start 69 6/3/08 - FINANCE - BILLS 080495 and 080498 smaller and then they work up from there. And that was really the mindset that I see not only here, but at many other places across the country.
Is there a project this size that uses this technology currently?
Yes. In Nashville, Tennessee and Louisville, Kentucky and then there's many over in Europe.
So I'm still really not satisfied that we have the answer to the question that I first posed to Mr. Donovan, and I just want to make sure that there are no conflicts of interest here. Mr. Donovan, does your company advise other municipalities in areas on matters such as this? Are you primarily a consulting company?
And have you recommended different technologies other 70 6/3/08 - FINANCE - BILLS 080495 and 080498 than a Synagro-type solution to other municipalities?
Of all the people trying to solve the problem we have, have you ever recommended a different company or a different technology?
We've recommended incineration in some instances. We've recommended landfilling when there's no 18 capital available for further processing and there's inexpensive and capacity landfills available. We've recommended land application, composting, lime stabilization. We serve literally thousands of municipalities throughout the country. We have 4,000 employees. We've served -- 71 6/3/08 - FINANCE - BILLS 080495 and 080498 I'm working right now with the City of New York. They are very concerned about their biosolids disposal techniques, because they're transporting biosolids halfway across the country. So they're looking for advice on how to be more sustainable.
We haven't got to a recommendation yet, but it probably will be a combination of improving the thermal drying they have now as well as perhaps eliminating their Class B program.
Haven't got a recommendation yet for them. They have 14 wastewater treatment facilities. They process biosolids by various means, including hauling Class B material as far as Colorado. And they know they're in a difficult position with the gas prices 72 6/3/08 - FINANCE - BILLS 080495 and 080498 and everything else, and the trend we're seeing, and Pam touched on it, is every city the size of Philadelphia has the same dilemma, and I think, to reiterate, that this thermal dryer is a good solution for the City.
I'd just like to get a couple things on the record so we're clear. Has your company ever been paid by Synagro?
Less than one percent in any one year. We've done two small projects for them where we've installed equipment in facilities that they operate. And we serve all of their major competitors as well. We're a full-service company.
Okay. I just think it's important to have those conflicts reflected. 73 6/3/08 - FINANCE - BILLS 080495 and 080498
I would like for the record to know what the City's energy costs are capped at? There was a statement made earlier that the City's energy costs are capped. What number are they capped at and how does that compare to the model that you've shown us?
The energy usage for the facility, according to the contract, is capped at 85 therms per dry ton.
That's a different statement than our costs are capped, because what you're saying is they'll just stop burning gas once they've reached 85 therms and then we'll have sludge mess.
Are the costs capped or is the amount of gas used capped?
Well, I'm addressing the amount of use now. 74 6/3/08 - FINANCE - BILLS 080495 and 080498 Anything over 85 therms would be paid for by Synagro as a deduct from their service fee.
Well, we wanted to make sure that they weren't inefficient in their process, so we felt that we needed to have --
So really the City is paying for all the gas that Synagro is expected to use. It is not capped, as you were earlier implying or as was earlier implied; is that correct? I mean, let's get these things correctly on the record so that we understand.
That's right. Thank you. 75 6/3/08 - FINANCE - BILLS 080495 and 080498 (Applause.)
May I add a comment, please? I just want to state for the record that all of the energy costs are included in the figures that are provided in our economic analysis.
It's probably about $11 per million BTU. We did a sensitivity analysis and looked at the gas prices up to $30 per million BTU, and the prices would have to increase over the next three years --
Now change that to a hundred million savings, not 200 million. In other words, the figures you're quoting, they'd have to triple in order for us to not break even here, but 76 6/3/08 - FINANCE - BILLS 080495 and 080498 the fact of the matter is, the City Controller says you're only saving net present value $42 million with these savings or about a hundred million over the 20-year life versus the 200 million over the 20-year life you're saying. So you've only got net present value 42 million of savings that you're playing with. So I just want you to be very, very clear so that when we vote on this, we know exactly what we're voting on, because so far, I haven't gotten clear answers to questions.
Well, I think that the Water Department disagrees with the Controller's analysis. The Controller estimated that we would only have to spend a very minimal amount on an annual basis for the renewal and replacement of equipment at the Biosolids Recycling facility, and the Water Department does not agree with that and --
Since the 77 6/3/08 - FINANCE - BILLS 080495 and 080498 Controller issued his report -- I checked with him this morning -- he's received no 4 new information from the Water Department that would challenge it or refute it, and basically he stands by it.
Madam Chair, if I might make a point of order on that issue. Not only does the -- not only -- the Controller's report figures and savings are also those that the union agrees with we can make. So you may not agree, but we have the Controller of our City and the union who agree we can make these cost savings as is. (Applause.) DEPUTY COMMISSIONER McCARTY: If I may.
And that's without firing all these people. We can maintain that savings and keep the union people employed. 78 6/3/08 - FINANCE - BILLS 080495 and 080498 (Applause.) DEPUTY COMMISSIONER McCARTY: If I may, no one will be fired. That's not the intent of this. But to get back to what Councilman Green was saying, we did not go into this project because of the cost savings. The cost savings was an added benefit. We went into it because we needed a Class A product and we need a tried and true technology. Cost savings is an added benefit and it's something that we can't ignore.
The testimony is focusing on cost savings and technology and -- (Applause.)
-- and the number one priority that people are focusing on here is eliminating odor as one of the reasons that Synagro -- I'll get it right eventually -- one of the reasons that Synagro's technology was one of only two we could use in terms of solving this problem, was because of the 79 6/3/08 - FINANCE - BILLS 080495 and 080498 odor problem. DEPUTY COMMISSIONER McCARTY: Right. That's a very important part of this whole project.
Has the Water Department in terms of sustainability, which was also mentioned as a goal, has the Water Department compared the effect on replacing VOCs with greenhouse gas emissions from burning 85 therms of natural gas in Southwest Philadelphia and the impact that's going to have on the local community and compared the greenhouse gas emissions that will be burned versus the trucking costs? If maybe Synagro can answer that question.
We absolutely did that analysis, and it is by far less greenhouse gas emitting to move forward with the process.
When you say "by far," can you provide specific information? 80 6/3/08 - FINANCE - BILLS 080495 and 080498
I have a chart that I'd be happy to provide you afterwards from one of my folks where we --
Could you please provide that to the Chair so it's part of the record?
-- when we went through the Council. Sure. But you have to remember that if the material isn't being processed on site, it's going to be trucked off site and it's going to be applied to farm fields and put in the landfills. Landfills are pretty big emitters of greenhouse gases because they produce a lot of methane. Methane has times the 18 impact on greenhouse gas emissions as CO2 19 does. 20
Unless it's 21 captured like the Philadelphia Water Department's plant or this facility currently captures methane, and you can burn it and use it.
That's assuming a 81 6/3/08 - FINANCE - BILLS 080495 and 080498 landfill that has methane capture. Because even if you have methane capture -- I'm talking about the landfill, not at the wastewater treatment plant.
Because no matter what you do with biosolids, you use fossil fuels in every option. So you have to add together the fossil fuel impact of driving it away --
John, I'm not familiar with plasma arc. But plasma arc isn't operating anywhere in the world with biosolids. It's not a proven technology.
Yes, your 82 6/3/08 - FINANCE - BILLS 080495 and 080498 time is up. You can come back. The Chair recognizes Councilman Greenlee.
Thank you, Madam Chair. Just a little bit on the same lines of Councilman Green's, particularly his earlier questions. Mr. Donovan, just so I'm clear for the record, I know you said you looked at this in, what, 2003 originally?
And then you said was it this year or the end of last year did you say? I'm sorry.
And during that time, your testimony is really nothing changed as far as what could be done, in your opinion, at this site?
And so 83 6/3/08 - FINANCE - BILLS 080495 and 080498 these other technologies, none of them grew enough, in your opinion, or there was no proof that any of them worked?
There were many reasons, sir. Grew is a good term. They weren't run at the scale of this facility. Some of them were in demonstration. But we did look at various methods, and we could not identify a single new one that met all of the criteria we had established in 2003.