The Contract debate in a nutshell

By Michael Di Giorgio

Reasoning for the board's decision and documents to back up the reasoning

Contracting out the Startup of the new plant: Your board voted unanimously to negotiate a contract with Veolia Water for five years on July 27th. The contract has been signed and Veolia is now on site. It is over 100 pages. Highlights: · Guaranteed to meet Government discharge standards, Veolia pays fine if it doesn't. · Guaranteed cost. $15+ mil. Adjusted each year for inflation. · Power usage incentive- Range of KW's and pays for going over. Splits difference if Veolia saves energy. · Affected employees retain union and sonority, guaranteed job at Novato plant for 3 years at same wages and comparable benefits. Rehired by NSD if contract canceled. · District (NSD) retains ownership · NSD retains control of rates · NSD Retains Laboratory for testing. · NSD will have new scada and maintenance program and software for warrantee compliance for new plan in 6 weeks. NSD retains data if the two parties part ways. · Cancellation of contract at sole discretion of NSD. Veolia charges $500k cancellation fee reduced by $100 per year to cover up front costs. · Veolia will get plant certified · Emergency response time to remain the same at 30 mins. In addition Board formed a Committee to monitor contract. Will have citizen participation.

How did NSD do due diligence? · Board and staff visited 9 plants. Some were city run and went to contractor, some were contractor operated and went back to city, some were always city, some were always contractor operated. Talked to staff, management and elected officials to ferret out problem areas. · Had a prestigious firm in the field do an analysis of the start up and come up with plan and costs of tasks involved, training and costs. involved. See Eisenhardt report

Go to next Page

· Had Eisenhardt report peer reviewed by two independent firms knowledgeable in the field to verify tasks and Dollars · Came up with two options, bring in experts to train staff, or hire a company to effect start up. · Sent out RFQ and RFP's to companies. · Decided on Veolia. For other Docs to review such as: One page Comparison document Treatment Plant Management options EIR addendum RFP Package

Go to - http://www.studioefx.com/nsd/documents.htm Questions, email me!!!