COUNCIL DOCKET OF ^fa/pi - San Diego...Jul 07, 2007 · COUNCIL DOCKET OF ^fa/pi D Supplemental ·...
134
SO 000011' - il8x COMMITTEE ACTION SHEET COUNCIL DOCKET OF ^fa/pi D Supplemental · Adoption ^.Consent Q Unanimous Consent Rules Committee Consultant Review R- O- Beneficia! Use of Digester Gas (BUDG) Agreement with BOC [X] Reviewed · Initiated By NR&C On 7/18/07 Item No. 2a RECOMMENDATION TO: Approve VOTED YEA; Frye, Hueso, Faulconer VOTED NAY: NOT PRESENT: Maienschein CITY CLERK: Please reference the following reports on the City Council Docket: REPORT TO THE CITY COUNCIL NO. COUNCIL COMMITTEE CONSULTANT ANALYSIS NO. OTHER: Executive Summary Sheet dated July 25, 2007; MWWD's July 18, 2007, PowerPoint COUNCIL COMMITTEE CONSULTANT
Transcript of COUNCIL DOCKET OF ^fa/pi - San Diego...Jul 07, 2007 · COUNCIL DOCKET OF ^fa/pi D Supplemental ·...
SO
000011' -
il8x
COMMITTEE ACTION SHEET
COUNCIL DOCKET OF
^fa/pi
D Supplemental · Adoption ^.Consent Q Unanimous Consent Rules Committee Consultant Review
R-
O -
Beneficia! Use of Digester Gas (BUDG) Agreement with BOC
[X] Reviewed · Initiated By NR&C On 7/18/07 Item No. 2a
RECOMMENDATION TO:
Approve
VOTED YEA; Frye, Hueso, Faulconer
VOTED NAY:
NOT PRESENT: Maienschein
CITY CLERK: Please reference the following reports on the City Council Docket:
REPORT TO THE CITY COUNCIL NO.
COUNCIL COMMITTEE CONSULTANT ANALYSIS NO.
OTHER:
Executive Summary Sheet dated July 25, 2007; MWWD's July 18, 2007, PowerPoint
COUNCIL COMMITTEE CONSULTANT
000013
RR&C JUL 18 zoo? #2 a .
EXEC U TIVE SU MMAR Y SHEET
DATE R EPOR T ISSU ED;
ATTENTION:
OR IGINATING
DEPAR TMENT:
SU BJEC T:
C OU NC IL DISTR IC T(S):
STAFF C ONTAC T:
June 25, 2007
Council President and City C o uncil
Metropolitan Wastewater Department
R EPOR T
NO.:
Beneficial Use o f Digester Gas (BU DG) - Agreements with BOC
Merchant Production, Inc.
All
Thomas R. Alspaugh, Senio r Mechanical Engineer (858) 654-4493
R EQU ESTED AC TION:
Authorizing the Mayor to enter into the Agreement for the Purchase and Sale o f Biogas between the City
of San Diego , C A, U SA and BOC Merchant Production, Inc. (BOC ) and to enter into the asso ciated Flat
Rate Lease for approximately 31,000 square feet of land area at the Po int L oma Wastewater Treatment
Plant (PLWTP). , ·
STAFF R EC OMMENDATION:
Authorize the Mayo r to enter into the Agreement for the Purchase and Sale o f Bio gas between the City of
San Diego , C A, U SA and BOC and to enter into the asso ciated Flat R ate L ease fo r approximately 31,000
square feet o f land area at the PLWTP. '
EXEC U TIVE SU MMAR Y:
The Po int Loma Wastewater Treatment Plant (PLWTP) generates renewable electricity with digester gas
and hydro power fo r iis own use with excess being sold to SDG& E under a renewable energy co ntract.
With the upgrade and expansion o f the PLWTP's digestion system, the plant generally pro duces between
o ne to two millio n standard cubic feet (SC F) per day o f excess digester gas, which is 63% methane. This
excess digested gas is flared by the PLWTP in low emission, temperature controlled, state of the art gas
flares. Due to a number of co nstraints, this renewable fuel can no t be eco nomically used at the PLWTP,
the main reaso n being that the plant's SDG&E power line is at its maximum rated export capacity.
In o rder to determine if this PLWTP excess gas co uld be put to use, in March of 2006, a request for
qualifications was issued for the Beneficial Use o f Digester Gas (BU DG). One o f the most important
restrictio ns MWWD placed on proposed projects was the C ity's right to terminate the arrangement at the
end o f the first five years so it would be coordinated with the PLWTP's EPA waiver interval. A number
o f companies expressed interest.
One firm, BOC Merchant Production, Inc. submitted a statement of qualifications for an innovative
concept to clean and compress the gas to fuel.remotely located fuel cells. This renewable compressed
natural gas (C NG) will be transpo rted with BOC gas trucks that use tanks similar to tho se used by our
regional CNG buses. BOC owned remotely located 1.2 MW fuel cells will pro duce electricity and heat
fo r use by their customers that could include Qualcomm and U niversity of C alifo rnia, San Diego .
BOC will design, permit, install, own, operate and finance the BUDG Facility at the PLWTP and will
lease land at PLWTP for their equipment and to stage and fill their gas trucks. They will operate three 1.2
MW fuel cells at ho st sites under separate contracts. The BOC trucks will make six ro und trips a day to
the PLWTP. VVro i uH^
:i-'i
:
. J j n
\nn u
re; iQiHy 61 "ii'lf iO
00001.
The'BUDG Pro ject will reduce the air emissions of both carbon monoxide (C O) and o xides of nitro gen
(NOx) produced by the gas by 97%. It will reduce the pro ductio n of non-organic carbon dioxide (COj)
Spm fossil fuel power plants by over 7,000 to ns per year. This pro ject will contribute 3.9 MW of
renewable energy to the City's goal o f installing 50 MW o f renewable electricity generatio n by 2013,
including the 300 kW Fuel Cell Energy, Inc. fuel cell that will be installed by BOC at the PLWTP to
provide electricity fo r the BU DG Project.
Additionally, theultra clean fuel cells, who se by-pro ducts will be ho t water and organic C Oi, o perate at
an extrao rdinarily high 47% electrical efficiency and can obtain an o verall "heat and po wer efficiency" of
65%.
BOC will pay MWWD fo r this renewable fuel based o n its energy co ntent. Revenues are expected to be
about S2 50,000/yr or S2 .5 millio n o ver the initial 10 year term of the Agreement.
The Agreement includes two 5 year extension options, for a maximum term o f 20 years. Over 20 years,
revenues can po tentially exceed S5,000,000. Gas flow and perfo rmance incentives can increase or reduce
these revenues. Additio nally, if o btainable, BOC will share air emission offsets revenues and carbo n
credits revenues with the C ity, with percentages depending on where and ho w they are generated.
This pro ject is time sensitive because it is driven by first come, first serve, C alifo rnia Self-Generatio n
Program grants as well as Federal renewable energy tax credits that are set to expire in January 1, 2009.
FISC AL C ONSIDER ATIONS:
Total increase in Metro revenues is approximately S250
J
000/yr. To tal revenues o ver the ten year initial
term o f this agreement are appro ximately S2
;
500,000 depending on vario us incentives. These revenues
will be deposited in the Sewer R evenue Fund # 41508, Revenue Account 78317.
PR EVIOU S C OU NC IL and/or C OMMITTEE AC TION:
This item will be presented at the July Natural R eso urces and C ulture Committee meeting.
C OMMU NITY PAR TIC IPATION AND PU BL IC OU TR EAC H EFFOR TS:
This pro ject has been presented to, and was favorably received by the Peninsula Community Planning
Board's Facility Subcommittee, the Peninsula C ommunity Planning Board and the Metro C ommissio n
Technical Advisory C ommittee.
KEY STAKEHOL DER S & PR OJ EC TED IMPACTS (if applicable):
Stakeholders: Peninsula Community, Wastewater ratepayers
Impacts: 6 ro und trips o f trucks to PLWTP, lower co sts thro ugh increased revenues, cleaner air, reduced
power plant emissio ns, reduced need for additional electrical utility infrastructure.
^ f
—t —^=s>
SSL
·si -
Deputy C lfief/C hief Operating Officer
Summary
n
a y
ty issued
Many companies wth v
^viab
y uti izmq this av
viable conceo
--%m-
av e u Qesiei ydS 0 I '
d and
by
D
his mnovativ
{ a 0 e
cean th
ipt to tra
cells will prov'
air, and«
developed by a tea
avai ao e retjiewaD e a
$250,000/yti in addition
qe mese innovative technolo
1
V
O
i r
ivenui
i C
i
· ^
High Temperature Internal Reforming
Direct FuelCell®
Hydrocarbon Fuel
e.g. Natural Gas
. i
." i #^ 0 Steam
Internal Reforming
+ 2H
5
0 -
2
+ CO2
Anode H, + CO-r -> H,0 + CO, + 2e-
H
2
0
CO,
CATALYST
CATHODE
1
3Jf>
2
+ C0
2
+
Air
Air
"2
ww
2
(Biogenic)
47%
nr-*—>?
\»-
BOC/Linde System Diagra
T^TSS f '^ -f cT^n^
p'
!c
(?>^-,-"-i"-~j i'
1
~..-.'i.
1
' —
i
* '
Blower Sulfur Rem
i
oval
IffiWH
Drying, Chilling,
Purif ication beds
, 2-Sta^e
Compressor
t
Enclosed Membrane
C0
2
Flare C0
2
Removal
3-Sta^e
Compressor 0
· Ftiel ci l l ^ — J
t
&
-
m
IfiR '
B^ i ? i
J T * '
f - ·
i . ^ J - t f c -
The BUDG Traffic
Collaborative including the
^Jj ^NjPoint Loma Good Neighbors,
::)
eninsula Community
Planning Board, and the
PLWTP will work with BOC
on routes and timing of
trucks periodically
OOOUJi l REQUEST FOR COUNCIL ACTtON
^ M
i 0 1
CITY OF SAN DIEGO
CERTIFICATE NUMBER
(FOR AUDITOR'S USE I
5 0
TO:
CITY ATTORNEY
2. FROM (ORIGINATING DEPARTMENT):
Metropolitan Wastewater Department
3. DATE:
06/2 5/2 007
4. SUBJECT:
Beneficial Use of Digester Gas (BUDG) - Agreements with BOC Merchant Pro ductio n, Inc.
5. PRIMARY CONTACT (NAME, PHONE, & MAIL STA.)
Tom Alspaugh 858/654-4493 MS 901A
6. SECONDARY CONTACT (NAME, PHONE. & MAIL STA.)
John Paschall 858/654-42 73
7. CHECK BOX IF REPORT TO COUNCIL IS ATTACHED
·
S.COMPLETE FOR ACCOUNTING PURPOSES
FUND
41508
9. ADDITIONAL INFORMATION / ESTtMATEO COST:
DEPT.
771
ORGANIZATION
REVENUE ACCOUNT
78317
JOB ORDER
C.I.P. NUMBER
AMOUNT
Projected revenues:
FY 09 SI25,000 FY 15 S250.000
FY 10 $250,000 FY 16 $250,000
FY II $250,000 FY 17 $250,000
FY 12 $250,000 FY 18 $250,000
FY 13 $250,000 FY 19 $125,000
FY 14 $250,000
Proj ect Costs:
Approximately $ 150,000 is required for City staff
to implement project, $50,000 maybe reimbursed
hv a CF.C I'rant
10. ROUTING AND APPROVALS
11. PREPARATION OF: Q RESOLUTIONS H ORDINANCE{S) Q AGREEMENT(S) · DEED(S)
Authorize the Mayor to :
1. Enter into an Agreement for the Purchase and Sale o f Bio gas between the City of San Diego, and BOC Merchant Production, Inc.
for an initial term of 10 years. The to tal pro jected revenues associated with the initial terms of this agreement are $2,500,000.
2. Enter into the BUDG Site L ease for appro ximately 31,000 square feet of land area at the Metropolitan Wastewater Department's
(MWWD) Point Loma Wastewater Treatment Plant (PLWTP).
11A. STAFF RECOMMENDATIONS:
Adopt the ordinances
12. SPECIAL CONDITIONS (REFER TO A.R. 3.20 FOR INFORMATION ON COMPLETING THIS SECTION.)
COUNCIL DISTRICTS): 2
COMMUNITY AR EAfS): Peninsula Community Planning Board
ENVIRONMENTAL IMPACT: This activity (Entering into two Agreements with BOC Merchants, Inc.) is no t subject to CEQA pursuant
to State C EQA Guidelines Section 15060(c) (3). The proposed project is Exempt from C EQA pursuant to State CEQA Guidelines
Sections 15301 and 15303.
ATTAC HMENTS: 1. Agreement for the Purchase and Sale o f Bio gas between the City o f San Diego , and the BOC Merchant
Production, Inc.
2. BUDG Site L ease for land at the PLWTP.
CITY C L ER K INSTR U C TIONS: Please forward a co py o f the ordinance to MWWD, attention: Rose Salarda, MS 901
000023
EXEC U TIVE SU MMAR Y SHEET
DATE R EPOR T ISSU ED: June 25, 2007
R EPOR T
NO.:
ATTENTION: Council President and City C o uncil
OR IGINATING Metropolitan Wastewater Department
DEPAR TMENT:
SU BJEC T: Beneficial Use o f Digester Gas (BUDG) - Agreements with BOC
Merchant Production, Inc.
C OU NC IL DISTR IC T(S): All
STAFF C ONTAC T: Thomas R. Alspaugh, Senior Mechanical Engineer (858) 654-4493
R EQU ESTED AC TION:
Authorizing the Mayor to enter into the Agreement fo r the Purchase and Sale o f Bio gas between the C ity
of San Diego , C A, U SA and BOC Merchant Production, Inc. (BOC ) and to enter into the associated Flat
Rate Lease fo r approximately 31,000 square feet o f land area at the Point Loma Wastewater Treatment
Plant (PLWTP).
STAFF R EC OMMENDATION:
Authorize the Mayor to enter into the Agreement for the Purchase and Sale o f Bio gas between the C ity of
San Diego , C A, U SA and BOC and to enter into the asso ciated Flat Rate Lease for approximately 31,000
square feet of land area at the PLWTP.
EXEC U TIVE SU MMAR Y:
The Point Loma Wastewater Treatment Plant (PLWTP) generates renewable electricity with digester gas
and hydro power for its own use witii excess uemg soiu to OJ^VJOCU- unuer a renewable energy contract.
With the upgrade and expansion o f the PLWTP's digestion system, the plant generally pro duces between
one to two millio n standard cubic feet (SC F) per day o f excess digester gas, which is 63% methane. This
excess digested gas is flared by the PLWTP in low emission, temperature controlled, state of the art gas
flares. Due to a number of constraints, this renewable fuel can not be eco nomically used at the PLWTP,
the main reason being that the plant's SDG&E power line is at its maximum rated export capacity.
In order to determine if this.PLWTP excess gas could be put to use, in March of 2 006, a request for
qualifications was issued for the Beneficial Use o f Digester Gas (BUDG). One of the mo st important
restrictions MWWD placed on proposed projects was the City's right to terminate the arrangement at the
end of the first five years so it would be coordinated with the PL WTP's EPA waiver interval. A number
o f companies expressed interest.
One firm, BOC Merchant Production, Inc. submitted a statement of qualifications for an inno vative
concept to clean and compress the gas to fuel remotely located fuel cells. This renewable compressed
natural gas (C NG) will be transpo rted with BOC gas trucks that use tanks similar to tho se used by our
regional CNG buses. BOC owned remotely located 1.2 MW fuel cells will produce electricity and heat
fo r use by their customers that could include Qualcomm and University of C alifo rnia, San Diego.
BOC will design, permit, install, own, operate and finance the BU DG Facility at the PLWTP and will
lease land at PLWTP for their equipment and to stage and fill their gas trucks. They will o perate three 1.2
MW fuel cells at ho st sites under separate contracts. The BOC trucks will make six round trips a day to
the PLWTP.
The'BUDG Project will reduce the air emissions o f bo th carbon monoxide (C O) and oxides of nitrogen
(NOx) pro duced by the gas by 97%. It will reduce the production of non-organic carbon dioxide (CO2)
from fossil fuel power plants by over 7,000 to ns per year. This pro ject will contribute 3.9 MW of
0000J l 4 n ewab l e ene rgy t o the City's goal o f installing 50 MW o f renewable electricity generation by 2013,
including the 300 kW Fuel Cell Energy, Inc. fuel cell that will be installed by BOC at the PLWTP to
provide electricity for the BU DG Project.
Additionally, the ultra clean fuel cells, who se by-pro ducts will be ho t water and organic CO2 , o perate at
an extraordinarily high 47% electrical efficiency and can obtain an overall "heat and po wer efficiency" of
65%.
BOC will pay MWWD fo r this renewable fuel based on its energy content. Revenues are expected to be
about $250,000/yr or $2.5 million o ver the initial 10 year term o f the Agreement.
The Agreement includes two 5 year extension options, for a maximum term of 20 years. Over 20 years,
revenues can po tentially exceed $5,000,000. Gas flow and perfo rmance incentives can increase or reduce
these revenues. Additio nally, if o btainable, BOC will share air emission offsets revenues and carbon
credits revenues with the City, with percentages depending o n where and how they are generated.
This pro ject is time sensitive because it is driven by first come, first serve, C alifo rnia Self-Generatio n
Program grants as well as Federal renewable energy tax credits that are set to expire in J anuary 1, 2009.
FISC AL C ONSIDER ATIONS:
Total increase in Metro revenues is approximately $250.000/yr. Total revenues o ver the ten year initial
term o f this agreement are appro ximately $2,500,000 depending on various incentives. These revenues
will be deposited in the Sewer Revenue Fund #41508, Revenue Account 78317.
PR EVIOU S C OU NC IL and/or C OMMITTEE AC TION:
This item will be presented at the July Natural R eso urces and Culture Committee meeting.
C OMMU NITY PAR TIC IPATION AND PU BL IC OU TR EAC H EFFOR TS:
This pro ject has been presented to , and was favorably received by the Peninsula C ommunity Planning
Board's Facility Subcommittee, the Peninsula Community Planning Board and the Metro C ommissio n
Technical Advisory C ommittee.
KEY STAKEHOL DER S & PR OJ EC TED IMPACTS (if applicable!:
Stakeho lders: Peninsula Community, Wastewater ratepayers
Impacts: 6 ro und trips o f trucks to PLWTP, lo wer co sts thro ugh increased revenues, cleaner air, reduced
power plant emissio ns, reduced need for additional electrical utility infrastructure.
- ^
=2=^5
3-2.
*g*» - '
Deputy Cfefef/Chief Operating Officer
DETER MINATION OF
ENVIRONMENTAL EXEMPTION
Pursuant to the California Environmental Quality Act (CEQA) and State CEQA Guidelines
Agency: C ITY OF SAN DIEGO
Pro ject No .: N/A Date: J U L Y 11, 2 007
Acti o n/Permi t(s): CITY C OU NC IL APPR OVAL
Descripti o n o f Activity: Autho riz ing the Mayo r to enter into an Agreement fo r the Purchase and Sale of Biogas between the City of
San Diego, and BOC Merchant Production, Inc. fo r an initial term o f 10 years; and enter into the BU DG Site Lease fo r appro ximately 31,000
square feet of previo usly graded land within the C ity-o wned Metropolitan Wastewater Department's (MWWD) Point Loma Wastewater
Treatment Plant. This action includes appro val fo r BOC Merchant Pro ductio n, Inc . to construct co ncrete pads on a previo usly
graded piece o f land and install the necessary equipment to facilitate the pro cessing o f excess digester gas from the PL WTP and
transpo rt o ff-site fo r sale to local users. No historical, bio lo gical o r other enviro nmental impacts would result from this activity.
L o cati o n o f Activity: The pro po sed activities would take place within the C ity-o wned Point Loma Wastewater Treatment Plant
within the Peninsula C o mmunity Planning Area in the City and C o unty o f San Diego .
(C HEC K BOXES BEL OW)
1. [X] This activity (Entering into tw o Agreements) is NOT SU BJ EC T TO C EQA pursuant to:
[X] Sectio n 15060(c) (3) o f the State CEQA Guidelines (the activity is no t
a pro ject as defined in Sectio n 15378) .
2 . [X ] This pro ject is EXEMPT FR OM CEQA pursuant to State CEQA Guidelines Sectio n
checked belo w:
Sectio n
[X] 15301
[ ]15302
[X] 15303
[ ]15304
[ ]15305
[ ]15306
[ ]15311
[ ]15312
[ ]15315
[ ]15317
[ '] 15319
[ ]1532 5
[ ] Other
AR TIC L E 19 of GU IDEL INES
C ATEGOR IC AL EXEMPTIONS
(Inco mplete list)
Short Name
Existing Facilities
R eplacement or R eco nstructio n
New C o nstructio n or C o nversio n
of Small Structures
Minor Alteratio ns to L and
Minor Alteratio n in Land U se
Info rmatio n C o llectio n
Accesso ry Structures
Surplus Go vernment Pro perty Sales
Minor Land Divisio ns
Open Space C o ntracts or Easements
Annexatio n of Existing Facilities
and L o ts for Exempt Facilities
Transfer of Ownership of Interest
in Land to Preserve Open Space
Sectio n
[ ]152 61
[ ]152 6 2
[ ] 152 65
[ ]152 68
[ ] 152 69
[ ] Other
AR TIC L E 18 of GU IDEL INES
STATU TOR Y EXEMPTIONS
(Inco mplete list)
Short Name
Ongo ing Pro ject
Feasibility and Planning Studies
Ado ptio n of C o astal Plans and Pro grams
Ministerial Pro jects
Emergency Pro jects
It is hereby certified that the City o f San Diego
has determined the abo ve activity to be exempt:
mmental Analysis Sectio n
Distributio n:
Exemptio n o r Project file
Tom Alspaugh, Project Manager -MWWD (MS 901A)
C:\myfiles\I drive files\MHemnann\City Pro jects\BU DG.do c
000027
U
J
n
- i
U
n
Please find attached excerpts from BOC's Proposal indicating their
commitment to the C ity's Equal Opportunity Contracting Pro gram.
[_p irsubcontractof/Sub-consultant/Major Vendors Documentation
·· -
;
The total gross spend for the Point Loma project (including ail activities described in Sections 3:1,
~] ! 3.2 and 3.3) is estimated to be $24.1 miliion. Approximately $21.9 million of this total spend, or
- T 9lo/o, is for the purchase of specially designed equipment, where existing certified BOC suppliers,
; ·: technology, partners sr\6 in-house engineering resources will be .uses. To ensure that BOC
'"^
!
· maximizes the local spend' portion of-this contract to benefit the' local community, and to ensure
J ' that BOC maximizes the opportunity to diversify and expand its local · subcontractor/sub-
consultant/vendor bas-e, BOC has earmarked the remaining portion otthis spend (a minimurrrof
~1 $2.2 million, or 9% of total) specifically for local contractors, with the goal to proactively solicit
J
J
bids from small,, minority and woman-owned businesses, The breakdown of this local spend is
· i detailed in Appendix 5. . . .
To date, only the primary component equipment suppliers have been identified based on specific
. equipment needs, BOC's past experience with these vendors, and vendors' proprietary
technology, Bid packages for solicitation of subcontractors/sub-consultants/vendors for the
portion of the spend earmarked for local entities have not yet been completed, and therefore
· vendors have, not been selected. A general Subcontractor/Sub-eonsultant/Major Vendor List is
presented in Appendix 13 to illustrate how these bid packages are being-broken down, as well as
what percentage of the spend each package encompasses. The pre-determined equipment spend
has been split out from the targeted local spend for illustrative purposes.
35
THE UHDE GR OUP
000029
Appendix 5: Targeted Spend for Local and Diverse Suppliers
-
Purif ication & ComDresslon Site
Equipment
BDC Engineering/Project Marsgement
A&E Site Engineering
General Contracting .
Site.MechaniGal
SifeEleGtrical . " ' · · " \ .
;
: 1
Ctvils%siieWof=k ,
[
-')
RoDndaticrns . - ' v ;· ···
Rigging
TOTALS .„,:·· '
;
Pre-
.Determined
Spend (US$) ·
$9no
:
,000'
S3.9
I
l';€i0O
· - . . ' · w
,
·
, ,
' ' . ' , · " '
· S i 331 O^n.
Local Spend ·
(uss)
$150,000
$282,00.0
,-., .$200,000.
..
v,:
..··t-gswJt)©.
:="· '"· '· · :$ .7i jm-\
··· ·
:
: · $ 90,000'
/;
··'<! ri72-:-0D0
Total Spend
(US$) , ·
S2X03.,000
i
It
si
Distrlbution/ toadixia/UribadinQ ,
;
· ·
Equlpmenl '' .
TOAiS _; .··.-" '
$2,125,000'
..··'·$2,125jC©0'|
' ; · . · " / ' - ' · · ·
>>'.,.; '/H
" · ' - ..^ I ^ OOO
Pusl-GeiTSites · ····..'»
EqwipmerK .·-.· - ' r '
FCE Engineering/Project Management
Foundations/Concrete
Rigging
Sitedviis
Site Mechanical · ·
Site Electrical
TOTALS
i . · ^ · w - · · · · · - , ··
4iBMmo&
$238,000 '
··
$18,488,000
' ' · ' u .
1
· $2T8,DO0
· $ 54,000
$ 54,000
$363,000
$399,000
$1,088,000 $19 ,576 ,000
GRAND TOTAL $21,944,000.
$2/160,000
$24,104,000
51
\
Appendix 13: Subcontractor/Sub-consultant/Major Vendor List
Name/Address of Sub-
contractor
Type of Work Approx. %
of Pro ject
Cost
MSB, WBE,
DBE, DVBE,
OBE
Where
Certif ied?
Pre-Determined Spend on Specific Equipment (Limited Suppliers,
FuelCell Energy, Inc.
Danbury. CT '
BOC/Linde
Various - limited number of
qualified suppliers
Spend Earmarked for Local S
Not yet bid
Not yet bid
Not yet bid
Not yet bid
Not yet bid
Not yet bid
Not yet bid
LNG Energy, Inc.
Encinitas, CA
BlueScape Environmenta/
San Dieao, CA
DFC fuel eel!
technology ·
Purification
Equipment
Gas storage and
transport vessels,
truck tractor
ubcontractors/S ub-cor
Prime/General
. Gontractinfl.
, Civil/Site. Prep
Foundations/Concrete
Site Mechanical
Site Electrical
Rigging
Architectural and
. Engineering (civil,
. mech., and elect.)
Project Development
& Consulting
Enwronmentai
Consulting
84% '-"
6% .
10%
jsuttanis/Venc
12% ·
16%
8%
26% ·
25%
5%
7%
1%
<1%
Proprietary Technology)
n/a
n/a
n/a
iors
Target MBE, .
WBE
Ta rgetWE ·
Taroet MBE
Target WBE,
DVBE
Target MBE,
' WBE. DVBE
Target WBE, '·
DVBE
Target MBE.
WBE, DVBE
n/a
n/a
n/a
n/a
. n/a .
n/a
n/a
, n/a
n/a
. n / a
n/a
n/a
n/a
n/a
70
000033
(O-2008-2)
CITY ATTORNEY DIGEST
OR DINANC E NUMBER O- (NEW SERIES)
DATE OF FINAL PASSAGE
EFFEC TIVE DATE
AN ORDINANCE OF THE CITY OF SAN DIEGO AU THOR IZING
AN AGREEMENT WITH BOC MERCHANT PR ODU C TION, INC.
FOR THE PU R C HASE AND SALE OF BIOGAS; AU THOR IZING
A SITE LEASE TO BOC MER C HANT PR ODU C TION, INC .;
AUTHORIZING THE DEPOSIT OF FU NDS RECEIVED FOR SU CH
BIOGAS; AND AUTHORIZING A GU AR ANTEE AGREEMENT
WITH BOC GR OU P, INC .
This ordinance authorizes an agreement to sell excess bio gas from the City's Point L oma
Wastewater Treatment Plant to BOC Merchant Production, Inc.; autho riz es a lease agreement
with BOC Merchant Production, Inc. fo r its use o f land at the Po int Loma site; and autho riz es
a Guarantee Agreement with BOC Merchant Production, Inc.'s subsidiary, BOC Gro up, Inc.
This ordinance contains a notice that a full reading of this ordinance is dispensed with
prio r to passage, since a written copy was made available to the City C o uncil and the public
prior to the day o f its passage.
This ordinance shall take effect and be in fo rce on the thirtieth day from and after its final
passage.
A complete copy o f this ordinance is available for inspection in the Office o f the C ity Clerk
o f the City of San Diego , 2nd Floor, City Administration Building, 202 C Street, San Diego , CA.
92101.
FMO:mb
07/12/07
Or.Dept:MWWD
MWD-7107
O-2008-2
- PAGE 1 OF I -
000035
(O-2008-2)
ORDINANCE NU MBER O- (NEW SERIES)
DATE OF FINAL PASSAGE
AN ORDINANCE OF THE CITY OF SAN DIEGO AU THOR IZING
AN AGREEMENT WITH BOC MERCHANT PR ODU C TION, INC.
FOR THE PU R C HASE AND SALE OF BIOGAS; AU THOR IZING
A SITE LEASE TO BOC MERCHANT PR ODU C TION, INC .;
AUTHORIZING THE DEPOSIT OF FU NDS RECEIVED FOR SU C H
BIOGAS; AND AU THOR IZING A GUARANTEE AGREEMENT
WITH THE BOC GROUP, INC.
WHER EAS, the City's Point Loma Wastewater Treatment Plant [PLWTP] pro duces
excess digester biogas which presently is being flared to comply with air emissio ns laws; and
WHEREAS, there are environmental and economic benefits in the pro spect of
beneficially using this excess biogas for the production of electric energy rather than co ntinuing
to waste it by flare combustio n; and
WHER EAS, BOC Merchant Production, Inc., a who lly owned subsidiary o f the BOC
Gro up, Inc., has submitted a statement of qualifications and pro po sal to the City whereby BOC
Merchant Production will design, permit, install, own, operate, and self-finance a biogas
production facility on leased land at the PLWTP, to be known as the Beneficial Use of Digester
Gas [BU DG] project; and
WHER EAS, BOC Merchant Production will purchase the excess bio gas from City and
will avail state incentive funds and possibly renewable energy credits to assist the co nstructio n
and operation o f the BUDG project and will use the gas for generating electric energy from fuel
cells located at facilities in San Diego , thus reducing the emissions of greenhouse gasses from
the PLWTP and increasing renewable electric generation within the City; and
-PAGE 1 OF 3-
000036
(O-2008-2)
WHEREAS, the price to be paid to City for excess biogas will include the reaso nable
value of a Site Lease to be granted by C ity to BOC Merchant Production fo r the BU DG pro ject;
and
WHEREAS, the BOC Group Inc. will guarantee the perfo rmance of its subsidiary BOC
Merchant Production, Inc. by executing a Guarantee Agreement; NOW, THER EFOR E,
BE IT OR DAINED, by the Council o f the C ity o f San Diego , as fo llows:
Section 1. That the Mayo r o r his designee is authorized to execute, fo r and on behalf of
the City, an agreement with BOC Merchant Production, Inc., under the terms and conditions set
forth in the Agreement for Purchase and Sale o f Bio gas, on file in the office of the City Clerk as
Document No . 00 - .
Section 2 . That the Mayo r o r his designee is further authorized and empowered to execute
a site lease with BOC Merchant Production, Inc. under the terms and conditions set forth in the
BUDG Site L ease, on file in the office of the C ity Clerk as Do cument No . 00- .
Section 3. That the Mayo r o r his designee is further authorized to execute an agreement
with the BOC Group, Inc., under the terms and conditions set forth in the Guarantee Agreement
on file in the office of the City Clerk as Document No . 00- .
Section 4. That the City Auditor and C omptro ller is autho riz ed and directed to deposit
funds received under the abo ve Bio gas Purchase and Sale Agreement into Sewer R evenue Fund
No . 41508, Revenue Account 78317.
Section 5. That this activity is exempt from the California Environmental Quality Act
pursuant to CEQA Guidelines section 15061(b)(3) because the activity do es no t have the potential
for causing a significant effect on the enviro nment.
-PAGE 2 OF 3-
000037
(O-2 008-2 )
Section 5. That a full reading of this ordinance is dispensed with prior to passage, since a
written co py was made available to the City Council and the public prio r to the day of its passage.
Section 6. That this ordinance shall take effect and be in force on the thirtieth day from
and after its final passage.
APPROVED: MICHAEL J. AGU IR R E, City Atto rney
By
Frederick M. Ortlieb
Deputy City Attorney
FMO:mb
07/12/07
MWD-7107
O-2008-2
at this meeting of
I hereby certify that the foregoing Ordinance was passed by the Council o f the C ity o f San Diego ,
ELIZABETH S. MALAND, City C lerk
By
Deputy City Clerk
Approved:
(date)
JER R Y SANDERS, Mayor
Vetoed:
(date)
JER R Y SANDERS, Mayor
-PAGE 3 OF 3-
TEm^SEIlHSLLSSLiio^
Jiagej j
000039
From:
To:
Date:
Subject:
Inc.
Ramone Lewis
Tom Alspaugh
7/11/2007 10:08:36 AM
RE: No need for Work Force Report with Agreement with BOC Merchant Production,
Hi Tom,
This e-mail serves as a notice to those concerned that the above-mentioned referenced action item
(1472) does not need a Work Force Report because the action does not meet the criteria for such. This
action is exempt because the City is receiving a benefit from selling excess digester gas in this action
rather than expending public funds to an entity for a service or product.
Ramone Lewis
Contract Compliance Officer
Purchasing & Contracting Department
Equal Opportunity Contracting Program
1200 3rd Avenue
Suite 200, MS-56P
Ph- 619-235-5747
FAX- 619-235-5209
CC: Cetia Griffin; Rose Salarda
000041
THE CITY OF SAN DIEGO
JUNE 22, 2007
BUDG Site L ease
000042
LEASE OU TL INE
SEC TION 1: PR EMISES and U SES 6
1.1 Premises 6
1.2 U ses 7
1.3 R elated C o uncil Actio ns 7
1.4 Quiet Po ssessio n - 7
1.5 Easements and R eservatio ns.. « 7
1.6 C o mpetent Management 8
1.7 Operatio n of Facilities 8
1.8 Political Activities 9
SECTION 2: TER M 9
2.1 C o mmencement 9
2 .2 Site Develo pment Perio d ...9
2.3 Lease C o ntingencies 9
2.4 Ho ldo ver 9
2.5 Quitclaim and Surrender of L ESSEE'S Interest 10
2.6 Option to Extend 10
2.7 Surrender of Premises 10
SEC TIONS: PAYMENTS „ 10
3.1 Time and Place of Payment 10
3.2 Payment and Security Depo sit 11
3.3 Delinquent Payment 12
©00043
3.4 Inspectio n of R eco rds 12
3.5 Delinquent Payment 13
SECTION 4: ASSIGNMENT , 13
4.1 Time is of Essence; Pro visio ns Binding on Successo rs « 13
4.2 Assignment and Subletting 13
4.3 Encumbrance 14
4.4 Defaults and R emedies » ...15
4.5 Eminent Do main > 16
4.6 Partnership L iability 17
SEC TIONS: INSU R ANC E R ISKS/SEC U R ITY 17
5.1 Insurance 17
5.2 Indemnificatio n 17
5.3 Waste, Damage, or Destructio n - 18
SECTION 6: IMPR OVEMENTS/AL TER ATIONS/R EPAIR S 18
6.1 Acceptance of Premises ...„ 18
6.2 Entry and Inspectio n 18
6.3 Maintenance 19
6.4 Impro vements/Alteratio ns , 19
6.5 U tilities.. ..19
6.6 L iens 19
6.7 Taxes , 20
6.8 Signs 20
6.9 Ownership o f Impro vements and Perso nal Pro perty 20
6.10 U navo idable Delay 21
6.11 LESSEE Impro vements 21
000044
6.12 Haz ardo us/To xic Waste... 21
SEC TION 7: GENER AL PR OVISIONS ....24
7.1 No tices 24
7.2 C o mpliance with L aw 24
7.3 CITY Appro val 24
7.4 CITY Appro val or No tice 25
7.5 No ndiscriminatio n 25
7.6 C o mpliance with CITY'S Equal Oppo rtunity C o ntracting Pro gram 25
7.7 Partial Invalidity 25
7.8 Legal Fees ~ 26
7.9 Number and Gender 26
7.10 C aptio ns 265
7.11 Entire U nderstanding 26
7.12 CITY Employee Participatio n Po licy. 26
7.13 Drug-free Wo rkplace 27
7.14 Disabled Access C o mpliance. 27
SEC TIONS: SPEC IAL PR OVISIONS .:. 28
8.1 C o rpo rate Autho rity 28
8.2 Planting Strips 28
8.3 Standard of Emplo yees 28
8.4 R elo catio n Payments 28
8.5 R elo catio n of Leased Site(s) .....:. 27
SECTION 9: SAN DIEGO'S FORM OF GOVER NANC E 29
9.1 San Diego's Strong Mayor Form of Go vernance 29
SEC TION 10: SIGNATU R ES 29
4
000045
10.1 Signature Page ....29
EXHIBITS 2
Exhibit A: L eased Premises Legal Descriptio n A-l
A.l Leased Premises A: Exclusive lease area pro vided for the BUDG Pro cessing
Facility includes the BU DG flare lo catio n A-l
A.2 Leased Premises B: Primary No n-exclusive lease area normally used for
truck filling A-l
A.3 Leased Premises C: Secondary No n-exclusive lease area used when L eased
Premises B is unavailable due to Point L o ma Treatment Plant o peratio nal
needs . Area to be used only for limited Truck filling A-l
Exhibit B: Parcel Map(s) B-l
Exhibit C: C o rpo rate Name .C -l
Exhibit D; Schedule of Applicable R ates D-l
Exhibit E: Schedule o f Days and Hours of Operatio n.... « E=l
Attachment A: Bio gas Sales Agreement
CITY OF SAN DIEGO
0 0 0 0 4 6 BUDG SITE LEASE
THIS LEASE AGREEMENT is executed between THE CITY OF SAN. DIEGO, a municipal
co rpo ratio n, hereinafter called "C ITY," and BOC Merchant Production Inc, a who lly owned
subsidiary o f The BOC Group, Inc. hereinafter called "LESSEE", to be effective as o f the date o f
execution by CITY (the "C ommencement Date"), when signed by the parties and approved by
the San Diego C ity.atto rney, as fo llo ws:
SECTION 1: PR EMISES AND U SES
Concurrent with this lease, the parties are entering an Agreement for the Purchase and Sale of
Biogas ('Biogas Sales Agreemenf' or "BSA"). The purpose of this lease is to pro vide LESSEE
pro perty upo n which to perform its BSA pro ject o bligatio ns. The BSA is hereby expressly
incorporated in this lease.
1.1 Premises.
C ITY hereby leases to L ESSEE .under an exclusive lease, and L ESSEE leases from CITY
all o f that certain real property situated in the C ity o f San Diego, County of San Diego,
State of C alifo rnia, described in Exhibit "12 .]" consisting of approximately 16,231
square icct oi lanu area. Attacueu uereto aiiu uy tuis rej-erence mau.e part Oi tuis
agreement, said real property is a portion of the Point L oma Wastewater Treatment Plant
(PLWTP). Said real property is hereinafter called the "L ease A Premises" o r "L eased
Premises A" which shall be the primary lo catio n o f L ESSEE'S bio gas project facilities
and o peratio ns.
C ITY hereby leases to LESSEE under a no n-exclusivelease, and L ESSEE leases from
CITY, all o f that certain real property situated in the City of San Diego , County o f San
Diego, State of C alifo rnia, described in Exhibit "12.2" consisting of appro ximately
12,349 square feet o f land area. Attached hereto and by this reference made part o f this
agreement, said real property is a portion o f the Po int L oma Wastewater Treatment Plant.
Said real property is hereinafter called the "Lease B Premises" o r "L eased Premises B."
During tho se periods when the L ESSEE is excluded from the L ease B Premises due to
the wastewater treatment process and plant maintenance demands, the C ITY hereby
leases to L ESSEE under a no n-exclusive lease, and L ESSEE leases from C ITY, all of
that certain real property situated in the C ity of San Diego, County of San Diego, State o f
California, described in Exhibit "12 .3" consisting o f appro ximately 2,405 square feet o f
land area. Attached hereto and by this reference made part o f this agreement, said real
property is a portion of the PLWTP. Said real property is hereinafter called the "L ease C
Premises" or "Leased Premises C ."
Appurtenant Easements will be granted by the C ITY as required to pro vide utilities
(natural gas, electrical, etc.) to the Lease sites .
1.2 U ses.
It is expressly agreed that the premises are leased to L ESSEE so lely and exclusively for
the purpo ses of collecting, receiving, sto ring, repair, servicing o f equipment, distributing,
and delivering compressed digester gas sold by CITY to L ESSEE, now or in the future,
under the express terms and conditions provided by the BSA. Generation of electrical
power needed in providing services related to L ESSEE'S business is'allo wed, provided
that such electrical generation is in compliance with all applicable laws. Retail sales of
LESSEE'S products is prohibited on the leased premises, except in acco rdance with the
Sco pe o f Wo rk referenced in Section 6.13 hereof, and for such o ther related or incidental
purposes as may be first approved in writing by the C ITY and fo r no o ther purpose
whatsoever.
The use o f the premises for any unauthorized purpose shall constitute a substantial
default and subject this lease to termination at the so le o ptio n o f the CITY.
L ESSEE covenants and agrees to use the premises for the abo ve-specified purposes and
to diligently pursue said purpo ses throughout the term.hereof. Failure to co ntinuo usly
use the premises for said purposes, o r the use thereof fo r purposes not expressly
authorized herein, shall be grounds fo r termination by CITY.
1.3 Related Council Actio ns.
By the granting o f this lease, neither CITY nor the Council of CITYis obligating itself to
any o ther governmental agent, board, commissio n, or agency with regard to any o ther
discretionary actio n relating to development or operation o f the premises. Discretionary
actio n includes but is no t limited to rezonings, variances, environmental clearances, o r.
any other governmental agency approvals, which may be required fo r the development
and operation o f the leased premises .
1.4 Quiet Po ssessio n.
L ESSEE, paying the payments required by this Lease and BSA, and performing the
covenants and agreements'herein, shall at all times during the term peaceably and quietly
have, ho ld, and enjoy the premises. If C ITY for any reaso n except as described in 6.10
herein or Section 11 o f the BSA cannot deliver possession o f the premises to LESSEE at
the commencement o f-the term, o r if during the lease term LESSEE is temporarily
dispossessed through action or claim of a title superior to C ITY'S, then and in either o f
such events, this lease shall not be vo idable nor shall C ITY be liable to LESSEE for any
loss o r damage resulting therefrom, but there shall be determined and stated in writing by
the C ITY a pro po rtio nate reduction o f the minimum payments fo r the.period or periods
during which L ESSEE is prevented from having the quiet possession of all o r a portion of
the premises.
1.5 Easements and R eservatio ns.
jigia. CITY hereby reserves all rights, title, and interest in any and all subsurface
natural gas, oil, minerals, and water on o r within the premises.
b. C ITY reserves the right to grant and use easements o r to establish and use
rights-of-way over, under, along, and across the leased premises for utilities,
tho ro ughfares, or access, as it deems advisable fo r the public go o d.
c C ITY has the right to enter the premises for the purpo se o f o perating or making
repairs to or developing WWTP resources and services.
However, CITY shall not unreasonably o r substantially interfere with LESSEE'S
use o f the premises and will reimburse L ESSEE fo r physical damages, if any, to
the permanent improvements located o n the leased premises resulting from CITY
exercising the rights reserved in this section. Such reimbursement may include a
reduction in the payment pro po rtio nate to the amount o f physical damage as
determined by CITY. C ITY will pay the costs o f maintenance and repair of all
CITY installations made pursuant to these reserved rights.
d. LESSEE acknowledges the leased premises is lo cated contiguous to land
used by a C ITY department. The leased premises will require shareduse
of access, ingress and egress .
e. CITY shall grant to L ESSEE necessary appurtenant easements for utilities
to serve LESSEES facilities o n the leaseho ld premises. Such proposed
easements shall be identified in L ESSEE'S design fo r its facilities prepared
pursuant to the BSA. CITY'S approval of appurtenant easements will be
co nditio ned on non-interference with CITY's facilities and planned
o peratio ns, and will not o therwise be unreaso nably withheld.
1.6 C ompetent Management .
Throughout the term o f this lease agreement, L ESSEE shall pro vide competent
management o f the leased premises to the satisfaction of the C ITY. Fo r the purpo ses of
this paragraph, "competent management" shall mean demonstrated ability in the
management and o peratio n of a Beneficial Use o f Digester Gas (BU DG) pro ductio n
facility and related activities in a clean, safe, maintained, and fiscally responsible manner.
1.7 Operation of Facilities.
A regular schedule of days and hours o f o peratio n shall be established by L ESSEE to best
perform its BSA o bligatio ns as set fo rth in Exhibit C to the BSA, "Sco pe o f Wo rk",
Schedule of Davs and Hours of Operation.. Any changes in this schedule shall be subject
to the prio r written approval o f the CITY or his authorized representative. L ESSEE shall
diligently and in a creditable manner furnish sendees in conformity with all applicable
rules and regulations of the City o f San Diego .
1.8 Political Activities.
The leased premises shall be used exclusively fo r the purpo ses specified in Sectio n 1.2,
U ses, hereof. The premises shall no t be used fo r wo rking o r campaigning for the
nomination or election of any individual to any public o ffice, be it partisan or nonpartisan
SECTION 2: TER M
2.1 C ommencement.
The term of this Lease shall be concurrent with the term provided in Section 13.1 of the
BSA and shall be subject to the termination provisions in Sectio n 13.2 o f the BSA and
o ther terms o f the BSA. This L ease shall commence on the Effective Date o f the BSA
and shall encompass the Develo pment Period under the BSA, provided however, that.the
term "Lease year" as used in this Lease shall be exclusive o f the Develo pment Period,
and shall mean the 12-month period commencing on the first day fo llo wing the Initial
Operation Date of LESSEE'S biogasproduction facilities. After the Initial Operation
Date the-C ITY may terminate this L ease under any applicable co nditio ns described in
the BSA.
2 .2 Site Develo pment Perio d.
Prio r to commencement o f the ten (10) Lease Year o perating term provided in Section
13.1 o f the BSA, LESSEE, o r L ESSEE'S designated agents, shall have the right under
this L ease to enter upo n the L eased Premises during the Pre-Construction Perio d, as
defined inthe BSA, to survey and assess the pro perty fo r feasibility of constructing a
biogas production facility as called for in BSA Exhibit C , "Sco pe o f Work.". The Pre-
C o nstructio n Perio d under this Lease shall terminate four (4) mo nths from the Effective
Date o f the BSArU po n expiration of the Pre-Construction Perio d L ESSEE is granted in
this Lease a C o nstructio n Period not to exceed twelve (12 ) months to construct and
o therwise develo p its facilities. C o nsistent with Section 13 o f the BSA, the ten (10) L ease
Year term shall commence o n the first day after the end o f the C o nstructio n Period,
which shall be the sooner of the Initial Operation Date o r fifteen (15) mo nths from the
Effective-date of the BSA.
2.3 Lease C o ntingencies.
This L ease is contingent upon the contractual terms and conditions o f the BSA. Any
condition requiring or allowing the termination of the BSA by either party shall also be
grounds fo r the terminatio n o f this L ease by either party.
2.4 Ho ldo ver.
Any ho lding o ver by L ESSEE after expiration o r terminatio n shall no t be considered as a
renewal o r extensio n o f this Lease. The o ccupancy o f the premises after the expiratio n o r
termination o f this .agreement constitutes a month-to-month tenancy, and all o ther terms
and conditions o f this agreement shall co ntinue in full force and effect; provided,
0 6 0 0 5 0 however, CITY shall have .the right-to apply a reaso nable adjustment in payment to bring
. l<'- the payment to fair market value and to terminate the ho ldo ver tenancy at will.
2.5 Quitclaim and Surrender of LESSEE'S Interest.
On termination o f this Lease, LESSEE shall deliver.to C ITY a quitclaim deed in
recordable form quitclaiming all its rights in and to the premises. C ITY may reco rd such
deed o nly o n the expiration or earlier termination o f this Lease. In the event that CITY
requires any subsequent quitclaim deed, LESSEE o r its successor in interest shall deliver
the same within five (5) days after receiving written demand.
At the expiration or earlier termination o f this L ease, L ESSEE shall surrender the
premises to C ITY free and clear of all liens and encumbrances, except tho se liens and
encumbrances, which existed on the date of execution hereof, and in a decent, safe, and
sanitary co nditio n. In the case o f terminatio n o f this L ease by C ITY prio r to the end of
the specified lease term, any liens and encumbrances must be approved in writing by the
CITY. ·
2.6 Option to Extend.
Any extension o f the Term o f this Lease, if any, shall be made solely according to the
terms and conditions of the BSA, and on no other basis.
. 2.7. Surrender of Premises .
At termination o f this Lease for any reaso n, L ESSEE shall execute, acknowledge, and
deliver to CITY, within five (5) days after written CITY demand, a valid and reco rdable .
quitclaim deed covering-all o fthepremises.' Thepremises-shall be delivered free and
clearo f all liens and encumbrances and in a decent, safe, and sanitary co nditio n.
If LESSEE fails o r refuses-to deliver'the required deed, C ITY may prepare and reco rd a
notice-reciting LESSEE'S failure to execute this lease pro visio n, and the no tice will be
conclusive evidence o f the terminatio n of this Lease and all LESSEE'S rights to the
premises.
SECTION 3: PAYMENTS
3.1 Time.and Place of Payment.
Increased revenues to CITY from the sale of Excess Biogas shall be deemed to be
consideration paid by LESSEE in lieu of rents fo r purposes o f this L ease. Payments for
ExcessBiogas shall be as per' the BSA.
The place and time o f payment may be changed at any time by C ITY upo n thirty (30)
days written no tice to LESSEE. Mailed payments shall be deemed paid upon the date
such payment is po stmarked by the po stal authorities. If po stmarks are illegible, the
payment shall be deemed paid upon actual receipt by the City Treasurer. LESSEE
10
assumes all risk o f lo ss and respo nsibility for late payment charges if payments are made
OO00S1 by mail
3.2 Payment and Security Depo sit.
· a. . Security Deposit Perio ds. Prio r to the expiration o f the Pre-C o nstructio n Period
o f the BSA, L ESSEE shall pay to CITY $250,000.00 or provide an irrevo cable
letter of credit in same sum ("Security Deposit") in advance o f the C o nstructio n
Period to secure perfo rmance .o f L ESSEE'S pro ject development o bligatio ns as
provided in the BSA. . Upon expiration of the Develo pment Period and upo n the
Initial Operatio n Date, as defined in the BSA, LESSEE'S Security Deposit for
project development shall convert to security for perfo rmance o f L ESSEE'S gas
purchase obligations as pro vided in the BSA.
b. Payments. All payments for Excess Biogas under this L ease shall be as pro vided
under the terms o f the BSA.
c. During the Development Period of the BSA, LESSEE shall obtain all necessary
permits, approvals, and licenses for the pro po sed project at no cost to the
CITY.LESSEE shall notify CITY in writing upon receipt of all permits, licenses,
and approvals and upo n completio n o f the LESSEE Improvements.
d. Utility Service Fees.
Beginning on the first day after the first quarter of the L ease Year following the
Initial Operatio n Date, LESSEE shall fo r water supply services pay to CITY
initially S2 .003.per Hundred Cubic Feet, fo r water pro vided to the L ESSEE by the
C ITY. L ESSEE shall provide at its expense a C ITY appro ved meter to monitor
water consumption. The co nsumptio n data shall be provided quarterly thereafter
with the digester gas purchase statement . The water rate shall be reviewed
quarterly and adjusted to match'the water and sewer rate(s} paid by the C ITY.
Payments shall be submitted along with the digester gas purchase payment
described in 3.1.
Beginning on the first day after the first quarter o f the L ease Year fo llowing the
Initial Operatio n Date and continuing quarterly thereafter to the last day of the
Lease term, L ESSEE shall pay to CITY S16.500 per quarter for Electrical Power
provided to the L ESSEE.by the C ITY from its Gas Utilization Facility (GUF).
L ESSEE shall pro vide a C ITY approved meter to mo nito r electric power
consumption. The consumption data shall be pro vided quarterly with the digester
gas purchase statement. The electrical co nsumptio n rate shall be reviewed
quarterlyand adjustments in quantity made annually to match actual
consumption. The price paid for co nsumptio n from the GU F shall be $0.0756 per
kwh rate thru December 31, 2012 as specified in the Agreement. The volume of
electric energy actually consumed by L ESSEE shall be reconciled with its
$ 16,500 payments on a quarterly tiasis, and adjusted accordingly according to
price, as pro vided in this section. Maximum allowable consumption is 860,000
11
· kWh annually and 250,GOO.kWh in any quarter. In the event that electric energy
0 0 0 0 5 2 is tempo rarily unavailable to LESSEE from the GU F, the charges to L ESSEE for
electricity, shall be equal to the rate paid by the C ITY to the utility (SDG&E) for
the same energy. CITY shall use its best efforts to make 860,000 kWH available
to L ESSEE annually from the GUF o r Hydro . Any co st associated with electrical
supply fo r LESSEE'S production facility that are purchased by CITY from
SDG&E shalhbe charged at the rate paid to SDG&E fo r the energy and services.
Payments shall be submitted along with the digester gas purchase payment
described in 3.1. Inthe event that LESSEE'S electric charges exceed SI6,500fo r
any quarter, LESSEE shall pay the difference to the C ITY within 45 days of
written notice o f the adjustment. If charges to L ESSEE are less than $16,500 for
the quarter, CITY shall apply the difference as credit toward L ESSEE'S payment
in the succeeding quarter
e. L ESSEE shall not intentio nally exceed the annual o r quarterly maximum
electrical co nsumptio n limits to increase its off site revenues by reducing its
production of onsite power generation. The C ITY has the.right to request written
substantiation for any usage above the maximums. If the excesses are proven to
the C ITY Management's satisfaction to be intentio nal o r used to generate
revenue, the CITYhas the right to request reimbursement of any additio nal cost to
C ITY and any additional revenues received by the L ESSEE. Cost adjustments
will be made during the annual reco nciliatio n.
3.3 Delinquent Payment.
If L ESSEE fails to-pay the Paymentprior to the end of the quarter when it is due, unless a
^ ···· delay has been submitted in writing and mutually agreed to , L ESSEE will pay, in
addition to the unpaid payment, annualized rate o f Twenty percent (20%) of the
delinquent payment which is hereby mutually agreed by the parties to be appro priateto
compensate CITY fo r lo ss resulting from payment delinquency, including lost interest,
opportunities, legal costs, and'the cost of servicing the delinquent account.
Notwithstanding the fo rego ing, in no event shall the charge fo r late payments o f payment
be less than Twenty-five Dollars ($2 5).
In the event that the CITY audit, if applicable, discloses that the payment fo r the audited
period has been underpaid in excess of five percent (5%) o f the to tal required payment,
then LESSEE shall pay CITY the cost of the audit plus annualized interest rate o f twenty
percent (20%) per year on the amount by which said payment was underpaid, in addition
to the unpaid payments as shown to be due CITY as compensatio n to CITY for
administrative costs and loss of interest as previously described herein. L ESSEE agrees
to pay such amount and further agrees that the specific late charges represent a fair and
reasonable estimate o f the costs that CITY will incur from LESSEE'S late payment.
Acceptance o f late charges and any portion o f the late payment by CITY shall in no event
constitute a waiver of LESSEE default with respect to late payment, no r prevent CITY
from, exercising any o f the other rights and remedies granted in this Lease.
3.4 Inspection of R eco rds.
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A AAA era LESSEE agrees to make any and all records and acco unts available to CITY for
inspection at all reaso nable times so-that CITY can determine L ESSEE'S compliance
with this Lease. These records and accounts may be maintained at L ESSEE'S offices but
shall be made immediately available to C ITY-in San Diego . Records shall be complete
.and accurate showing all income and receipts from use ofthepremises . L ESSEE'S
failure to keep and maintain such reco rds and make them available fo r inspection by
CITY is a breach o f this Lease and cause for termination. LESSEE shall maintain all
such reco rds and accounts fo r a minimum period o f five (5) years.
LESSEE shall, at all times during the lease term, keep accurate and complete reco rds in
double entry bo o kkeeping form of all financial transactions made po ssible by business
operation on the premises. The reco rds must be suppo rted by so urce documents of
original entry, purchase invo ices, or other pertinent documents.
CITY shall have the discretio n to require the installation o f any additio nal methods or
control it may co nsider necessary.
The cost o f the audit(s) will be bo rne by CITY unless the audit(s) reveal an
underpayment discrepancy o f mo re than five percent (5%) between the payment due, as
reported by L ESSEE in acco rdance with this Lease and the BSA, and payment due as
determined by CITY audit(s).. In the event o f such discrepancy, the co st of the audit(s)
will be bo rne by L ESSEE. Any payment due plus any co sts incurred by C ITY as defined
under Section.
3.5 Delinquent Payment, hereof, shall be paid immediately.
LESSEE'S failure to keep complete and accurate records by means of double entry
bo o kkeeping and make them available for inspection by C ITY is a'breach o f this Lease
and cause for termination.
SECTION 4: ASSIGNMENT
4.1 Time is o f Essence: Pro visio ns Binding on Successo rs.
Time is of the essence o f all o f the terms, covenants, and conditions o f this L ease, and,
except as o therwise pro vided herein, all of the terms, co venants, and conditions of this
Lease shall apply to , benefit, and bind the successors and assigns o f the respective
parties, jo intly and individually.
4.2 Assignment and Subletting,
LESSEE shall no t assign this Lease except to the extent the BSA itself may be assigned.
as pro vided in BSA.
"Assignment" for the purpo ses o f this clause shall include any transfer of any ownership
interest in this L ease by L ESSEE o r by any partners, principals, o r stockholders, as the
13
" y U O S x ^ c a s e may be, from the o riginal LESSEE, its general partners, o r principals.
Except as pro vided in the BSA, approval of any assignment o r sublease shall be
co nditio ned upon the assignee or sub-lessee agreeing in writing that it will assume the ·
rights and obligations thereby assigned or subleasedand that it will keep and perfo rm all
covenants, conditions, and provisions of this agreement which are applicable to the rights
acquired. The C ITY shall require, as a condition to appro val of any sublease o f the
majority portion o f the leasehold or any assignment, that the L ESSEE pay additio nal
consideration to CITY, as set forth in Section 7.15, Additio nal C o nsideratio n to CITY,
hereo f, commencing on the effective date of such pro po sed sublease o f the majo rity
portion o f the leaseho ld or assignment, and may further require that this Lease or the
requested sublease o therwise be revised to comply with standard CITY lease
requirements that are then current. Pursuant to City Charter Section 2 2 5, the C ITY must
review and approve every person or entity, which will have an interest in this L ease as a
sub-lessee or assignee. The CITY's approval will no t be unreaso nably withheld,
provided all such perso ns and entities are of good character and reputatio n in the
community.
4.3 Encumbrance.
Subject to..prior consent by CITY, which shall no t be unreaso nably withheld, LESSEE
may encumber-fhis Lease, its leasehold estate, and-its impro vements thereo n by deed of
trust, mortgage, chattel mortgage, or other security instrument to assure tiiepayTnerit of a
promisso ry.no te o r no tes of LESSEE, upon the express condition that the proceeds of
such loan o r lo ans be devoted exclusivelyto the purpo se'o f developing the leased
premises in acco rdance with Section 6.13, LESSEE Improvements, hereof. However, a
, reasonable portion of the loan proceeds may be disbursed fo r payment of incidental costs .
of construction, including but no tlimited to the fo llowing: off-site improvements for
service o f the premises; o n-site improvements; escrow charges; premiums for hazard
insurance o r o ther insurance o r bo nds required by CITY; titleinsurance premiums;
-...reaso nable lo an costs such as discounts, interest and commissions; and architectural,
engineering, and attorneys' fees and other normal expenses incidental to such
co nstructio n.
Any subsequent encumbrances on the premises or on any permanent impro vements
thereo n must first have the approval in writing o f the C ITY. Such subsequent
encumbrances shall also be.fo r the exclusive purpo se of development o f the premises.
Provided, however, after the premises are fully developed in accordance with said
Development Plan to the satisfaction of the C ITY, pro ceeds from refinancing or from
such subsequent encumbrances may be used to reduce LESSEE'S equity so lo ng as
L ESSEE pays additional co nsideratio n to CITY as set fo rth in Section 7.15, Additio nal
C o nsideratio n to CITY, hereof, and further that L ESSEE understands and specifically
agrees that the C ITY shall have the so le and abso lute discretio n to approve, disapprove,
or condition any such proposed subsequent encumbrance, including but no t limited to
amending the L ease to provide then-current payments and pro visio ns.
In the event any such approved deed o f trust o r mo rtgage o r o ther security-type
14
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5 instrument should at any time be in default and be foreclosed o r transferred in lieu of
foreclosure, C ITY will accept the approved mortgagee o r beneficiary thereof as its new
L ESSEE under this L ease with all the rights, privileges, and duties granted and imposed
in this Lease.
Upon prior written appro val by C ITY, said mortgagee o r beneficiary may assign this
L ease to its nominee, if nominee is a reputable, qualified, and financially responsible
person or entity in the .opinion of CITY. Any deed of trust, mortgage, or other security
instrument shall be subject to all o f the terms, covenants, and conditions o f this-L ease and
shall no t be deemed to amend o r alter any o f the terms, covenants, or conditions hereof.
Pursuant to City Charter Sectio n 2 2 5, the C ITY must review and appro ve every perso n or
entity, which will have a financial interest in this Lease. The C ITY's approval will no t be
unreasonably withheld, provided all such persons and entities are o f go o d character and,
reputation in the community.
4.4 Defaults and R emedies.
a. Default. In the event that:
1. L ESSEE shall default in the perfo rmance of any co venant or co nditio n
required by this L ease to be performed by LESSEE and shall fail to cure
said default within thirty (30) days following written no tice thereof from
CITY; o r if any such default is not curable within thirty. (30) days, and
L ESSEE shall fail to commence to cure the default(s) within said
thirty-day perio d and diligently pursue such cure to completion; or
2. L ESSEE shall vo luntarily file o r have invo luntarily filed against it any
petition under any bankruptcy o r inso lvency act o r law; or
.:··..;· 3, ···.', LES
,
SEE.shaIl.i)e;adjudicated..avbankrupt; or
v
'
:
4..'.; "·''. L ESSEE
:
shall make a general-assignment.fo r the benefit of creditors;
then CITY may, at its option, without further no tice o r demand upon LESSEE or
upon any perso n claiming rights thro ugh L ESSEE, immediately terminate this
Lease and all rights o f L ESSEE and of all perso ns claiming rights through
LESSEE to the premises o r to po ssessio n thereof; and C ITY may enter and take
possession of the premises. Provided, however, in the event that any default
described in Section 13.2 .2 o f the BSA, hereinabove is no t curable within thirty
(30) days after notice to L ESSEE, CITY shall no t terminate this L ease pursuant to
the default if L ESSEE immediately commences to cure the default and diligently
pursues such cure to completio n.
In the event there is a deed o f trust o r mo rtgage on the leaseho ld interest, CITY
shall give the mo rtgagee o r beneficiary written notice o f the default(s) complained
of, and the same mo rtgagee o r beneficiary shall have thirty (30) days from such
no tice to cure the default(s) o r, if any such default is no t curable within thirty (30)
15
days, to commence to cure the .default(s) and diligently pursue such cure to
completio n. The thirty-day perio d may be extended during such time as
mortgagee o r beneficiary pursues said cure with reaso nable diligence.
b. Remedies of Lender. Should the default(s) be no ncurable by LESSEE, then any
lender ho lding a beneficial interest in the leasehold, whose qualificatio ns as an
assignee have been approved by CITY, shall have the abso lute right to substitute
itself to the estate o f L ESSEE hereunder and to commence perfo rmance of this
L ease. If such mo rtgagee or beneficiary shall give no tice in writing o f its election
to so substitute itself within the thirty-day perio d after receiving written, no tice by
CITY o f the default, and the default, if curable, is cured by such mortgagee or
beneficiary, then this Lease shall not terminate pursuant to the default. In that
event, CITY expressly consents to the substitution and autho riz es the mortgagee
o r beneficiary to perform under this Lease with all the rights, privileges, and
o bligatio ns o f L ESSEE, subject to cure ofthe default, if po ssible, by mo rtgagee or
beneficiary. LESSEE expressly agrees to assignall its interest in and to its
leasehold estate to mortgagee ox beneficiary in that event.
c. Abando nmentby LESSEE. Even though L ESSEE has breached the L ease and
abandoned the pro perty, this Lease shall co ntinue in effect for so lo ng as CITY
does not terminate this Lease, and C ITY may enfo rce all its rights and remedies
hereunder, including but not limited to the right to reco ver payments as they
Decome uuc, pius u-smagss. .
"i- Waiver. Any CITY waivero f a default is no t a waiver o f any other default. Any
waivero f a default must be in writing and be executed by the CITY in o rder to
constitute a valid and binding waiver . CITYdelay or failure to exercise'a'remedy
or right is no t a waiver of that o r any other remedy or right under this Lease. The
use of o ne remedy or right for any default do es no t waive the use o f another
remedy or rightfo rthe same default or for another o r later default. C ITY'S
acceptance of any payments is no t a waiver of any default preceding the payment.
CITY and L ESSEE specifically agree that the pro perty constituting the premises
is CITY-owned and held in trust for the benefit o f the citiz ens o f the City of San
Diego and that any failure by the C ITY o r C ITY staff to disco ver a default o r take
prompt action to require the cure o f any default shall no t result in an equitable
estoppel, but C ITY shall at all times, have the legal right to require the cure of any
default when and as such defaults are discovered o r when and as the City C ouncil
directs the C ITY to take action or require the cure o f any default after such default
is bro ught to the attention ofthe City Council by the C ITY o r by any concerned
citiz en.
4-5 Eminent Domain.
If all o r part ofthe premises are taken through condemnation proceedings o r under threat
of condemnation by any public autho rity with the power o f eminent domain, the interests
of CITY and L ESSEE (o r beneficiary o r mortgagee) will be as fo llo ws:
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b.
c.
e.
In the event the entire premises are taken, this L ease shall terminate on the date o f
the transfer o f title or possession t o the co ndemning autho rity, whichever first
o ccurs.
In the event of a partial taking, if, in the o pinio n of C ITY, the remaining part of
the premises is unsuitable for the L ease operation, this L ease shall terminate on
the date ofthe transfer o f title o r po ssessio n to the co ndemning authority,
whichever first o ccurs.
Inthe event of a partial taking, if, inthe opinion of CITY, the remaining part of
·the premises is suitable fo r continued L ease o peratio n, this L ease shall terminate
in regard to the po rtio n taken on the date, o fthe transfer o f title o r po ssessio n to
the condemning authority, whichever first o ccurs, but shall continue for the
portion not taken.
Transfer. C ITY has the right to transfer CITY'S interests in the premises in lieu
of condemnation to any autho rity entitled to exercise the power of eminent
domain. If a transfer occurs, LESSEE shall retain whatever interest it may have
in the fair market value o f any impro vements placed by it o n the premises in
accordance with this Lease.
No Inverse C o ndemnatio n. The exercise o f any C ITY right under this L ease shall
no t be interpreted as an exercise of the power of eminent- domain and shall not
impose any liability upo n C ITY for inverse condemnation.
f. R eco very of costs. L ESSEE shall reserve the right to reco ver its cost of
improvements and any o ther pro ject value from any co ndemnatio n pro ceeding.
4.6 Partnership L iability.
Each general partner of L ESSEE shall jo intly and severally perfo rm and be respo nsible
fo r each and every term, covenant, and co nditio n, and each general partner is jointly and
severally liable for performance under this L ease.
SEC TIONS: INSU R ANC E R ISKS/SEC U R ITY
5.1 Insurance.
As requested by the CITY, LESSEE shall deliver to CITY all- current certificate of
insurance required under provisions ofthe BSA.
5.2 Indemnificatio n.
LICENSEE shall protect, defend, indemnify, and hold C ITY, its elected officials,
officers, representatives, agents and emplo yees, harmless from and against any and. all
claims asserted or liability established to the same extent and in the same manner as
provided between the parties in the BSA.
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8
Waste . Damage, or Destructio n.
LESSEE agrees to give no tice to C ITY..o f any fire o r o ther damage that may occur on the
leased premises within twenty four (2 4) ho urs of such fire o r damage. LESSEE agrees
not to commit or suffer to be committed any waste o r injury o r any public or private
nuisance, to keep the premises clean and clear o f refuse and o bstructio ns, and to dispose
of all garbage, trash, and rubbish in a manner satisfactory to C ITY. If the leased
premises shall be damaged by any cause which puts the premises into a condition which
is not decent, safe, healthy, and sanitary, LESSEE agrees to make or cause to-be made
full repair of said damage and to resto re the premises to the co nditio n which existed prior
to said damage; or, at C ITY'S option, LESSEE agrees to clear and remo ve from the
leased premises all debris resulting from said damage and rebuild the premises in
accordance with plans and specifications previously submitted to CITY and approved in
writing in order to replace in kind and sco pe the operation which existed prior to such
damage, using for either purpose the insurance proceeds as set fo rth in Section 5.1,
Insurance, hereo f.
LESSEE agrees that preliminary steps toward performing repairs, restoration, or
replacement of the premises shall be commenced by LESSEE within seventy two (72)
hours, and the required repairs, resto ratio n, o r replacement shall be completed within a
reasonable time thereafter.
SECTION 6: IMPR OVEMENTS/AL TER ATIONS/R EPAIR S
6.1 Acceptance of Premises.
LESSEE represents and warrants that it has independently inspected the premises and
made all tests, investigations, and observations necessary to satisfy itself of the co nditio n
o f the premises, o r shall perform such inspectio n during the Preconstruction phase o f the
Development Period. L ESSEE agrees it is relying so lely on such independent inspection,
tests, investigations, and observations in making this Lease. LESSEE further
acknowledges that the premises are in the condition called for by this Lease, except as
otherwise provided in the BSA.
6.2 Entry and Inspectio n.
CITY reserves and shall always have the right, but not the obligation, to enter said
premises for the.purpose o f viewing and ascertaining the conditionof the same, or to
protect its interests in the premises, o r to inspect the operations conducted thereo n. In the
event that such entry o r inspectio n by CITY discloses that said premises are no t in a
decent, safe, healthy, and sanitary co nditio n, CITY shall have the right, after ten-(10)
days written no tice to L ESSEE, to have any necessary maintenance work done at the
expense of LESSEE, and L ESSEE hereby agrees to pay promptly any and all costs
incurred by CITY in having such necessary maintenance wo rk do ne, in o rder to keep said
premises in a decent, safe, healthy, and sanitary co nditio n. Further, if at any time C ITY
determines that said premises are no t in a decent, safe, healthy, and sanitary co nditio n,
18
000059
C ITY may at its sole option, without additional no tice, require LESSEE to file with CITY
a faithful performance bond to assure pro mpt correction o f any co nditio n which is not
decent, safe, healthy, and sanitary. Said bo nd shall be in an amount adequate in the
opinion of CITY to correct the said unsatisfactory co nditio n. LESSEE shall pay the cost
o f said bond. The rights reserved in this section shall not create any o bligatio ns on CITY
or increase o bligatio ns elsewhere in this -Lease imposed on CITY.
6.3 Maintenance.
a. Except as hereinafter provided, LESSEE agrees to assume full responsibility and
cost for the operation and maintenance ofthe premises thro ugho ut the term.
LESSEE will perform all such repairs and replacements necessary to maintain and
preserve the premises in a decent, safe, healthy, and sanitary condition
satisfactory to CITY and in compliance with all applicable laws. All applicable
codes and standards of CITY, state, and federal agencies shall be o bserved in all
maintenance, repairs, and replacements on the.premises.
b. LESSEE shall no t be responsible for any damage do ne by the C ITY or its agents
when the CITY temporarily occupies the Premises A site fo r digester cleaning,
and reciprocally, the C ITY shall no t be liable fo r damages caused by LESSEE
o r its agents to:the non exclusive Lease areas (L eased Premises B and C ).
6.4 Impro vements/Alteratio ns.
No impro vements, structures, or installations shall-be co nstructed on, in, around, or under
the premises, and may not be altered by L ESSEE except as autho riz ed in the BSA Exhibit
"C ", Sco pe o f Work.
6.5 U tilities.
L ESSEE agrees to o rder, obtain, and pay for all natural gas and communication utilities
and service and installation charges in connection with the develo pment and operation of
the.leased premises. All utilities will be installed underground. The C ITY shall grant to
L ESSEE appurtenant easements for such utilities, pro vided that L ESSEE'S facility
design is"to be developed under the BSA and reaso nably requires, grants of such right(s)
o f way, and pro vided further that such designed utility lo catio ns are acceptable to the
C ITY and do no t unreasonably interfere with the CITY's operations o r plant uses.
6.6 Liens.
L ESSEE shall at all times save C ITY free and harmless and indemnify C ITY against all
claims for labor o r materials in connection with operations, improvements, alterations or
repairs o n o r to the premises and the co sts o f defending against such claims, including
reasonable attorney's fees.
19
ceooso
If impro vements, alterations o r repairs are made to the premises by L ESSEE or by any
party o ther than CITY, and a lien o r no tice o f lien is filed, L ESSEE shall within five (5)
days of such filing either;
a. Take all actions necessary to record a valid release of lien, or
b. File with CITY'a bond, cash or other security acceptable to CITY sufficient to
pay in full all claims of all perso ns seeking relief under the lien.
6.7 Taxes.
L ESSEE agrees to pay, befo re delinquency, all taxes, assessments, and fees assessed or
levied upon LESSEE o r the premises, land, and any buildings, structures, machines,
equipment, appliances or other improvements o r pro perty of any nature whatso ever
erected, installed, o r maintained by LESSEE o r levied by reaso n ofthe business o r o ther
LESSEE activities related to the leased"premises, including any licenses or permits.
L ESSEE recognizes and agrees that this L ease may create a possessory interest subject to
property taxation, and that L ESSEE may be subject to the payment o f taxes levied on
such interest, and that L ESSEE shall pay all such po ssesso ry interest taxes, pro vided
" however, that CITY shall reimburse LESSEE for any taxes on the land itself that are
exclusive ofthe improvements thereon. In the event that C ITY is to reimburse LESSEE
for taxes o n the land, such reimbursement shall be effected through a credit on the next
ensuing payment fo r biogas under the BSA
6.8 Signs.
LESSEE agrees not to erect o r display any banners, pennants, flags, posters, signs,
decorations, marquees, awnings o r similar devices o r advertising witho ut the prio r written
· consent of CITY. If any such unauthorized item is found on the premises, LESSEE
agrees to remo ve the item at its expense within 24 ho urs notice thereof by CITY o r C ITY
may thereupo n remove the item at L ESSEE'S cost.
6.9 Ownership of Improvements and Personal Property.
a. Any and all improvements, excluding L ESSEE owned improvements as further
defined in Exhibit "C" ofthe BSA, structures, and installations or additio ns to the
premises now existing or constructed o n the premises by LESSEE shall at L ease
expiration o r terminatio n be deemed to be part ofthe premises and shall become,
at CITY'S option, CITY'S property free of all liens and claims, except as
. otherwise provided in this Lease.
b. CITY shall notify L ESSEE thirty (30) days prio r to terminatio n or o ne hundred
eighty (180) days prio r to expiration, and'LESSEE-shall remove all
improvements, structures and installations as required-by section 2.7 ofthe BSA
at LESSEE'S sole cost on o r befo re Lease expiration or termination. If LESSEE
fails to remo ve any above o r "below ground improvements, structures, and
20
000061
installations as directed, LESSEE agrees to pay C ITY the full co st o f any
remo val.
c. LESSEE-owned machines, appliances, equipment (o ther than trade fixtures), and
o ther items o f perso nal pro perty shall be removed by L ESSEE by the date of the
expiration or termination o f this Lease. Any said items, which LESSEE fails to .
remo ve, will be co nsidered abandoned and become C ITY'S pro perty free o f all
claims and liens, or C ITY may, at its o ptio n, remo ve said items at LESSEE'S
expense,
d. If any remo val o f such perso nal pro perty by L ESSEE results in damage to the
remaining improvements on the premises, L ESSEE agrees to repair all such
damage.
e. Notwithstanding any ofthe foregoing, in the event L ESSEE desires to dispo se of
any o f its personal pro perty used in the o peratio n o f said premises upon expiration
o r terminatio n o f this L ease, then CITY shall have the first right to acquire o r
purchase said personal pro perty.
6.10 Unavoidable Delay.
If the perfo rmance o f any act required o f C ITY o r L ESSEE is directly prevented or
delaj'ed by reason of strikes,-lockouts, labo r disputes, unusual governmental delays, acts
of Go d, fire, flo o ds, epidemics, freight embargoes, o r o ther causes beyo nd the reaso nable
control ofthe party required to perfo rm an act, said party shall be excused from
performing that act fo r the perio d equal to the perio d ofthe preventio n^o r delay.
Pro vided, however, this provision shall no t apply to o bligatio ns to make payments as
required pursuant to this Lease. In the event L ESSEE o r C ITY claims the existence of
such a delay, the party claiming the delay shall no tify the o ther party in writing o f such
fact within ten (10) days after the beginning o f any such claimed delay.
6.11 Lessee Improvements.
L ESSEE plans to impro ve the leased premises as a bio gas production facility in
accordance with appro vals by the CITY and receipt of all applicable go verning Permits
as described in Exhibit "C" ofthe BSA. The CITY o r its designee shall have the
autho rity to authorize changes to the BSA pro vided that the basic co ncept may not be
modified without City Council approval and a do cument evidencing any appro ved
changes shall be filed in the Office ofthe City Clerk. Failure by L ESSEE to comply with
the requirements ofthe BSA shall constitute a major default and subject this L ease to
terminatio n by CITY. The C ITY, in its sole discretio n, may appro ve an extensio n to the
date specified for completion in the Agreement o f up to six(6) mo nths without further
City Council approval.
6.12 Hazardous/Toxic Waste.
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L ESSEE will not allow release o f haz ardo us substances in, on, under, o r from the -
premises. For the purposes of this provision, a release shall include but no t be limited to
any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leeching, dumping, or otherwise disposing o f hazardous substances.
"Hazardous substances" shall mean tho se hazardous substances listed by the
Environmental Protection Agency in regularly released repo rts and any o ther substances
incorporated into the State's list o fhaz ardo us substances. A co py of the presently
effective EPA and the State-lists is o n file in the Office of the C ity Clerk as Document
769704 and by this reference is incorporated herein.
In the event of any release of a hazardous substance caused by L ESEE, LESSEE shall be
responsible for all costs of remediation and removal of such substances in acco rdance
with all applicable rules and regulations of governmental authorities.
L ESSEE agrees to assume the defense of, indemnify, and ho ld C ITY harmless from any
and all claims, costs, and expenses related to environmental liabilities resulting from
LESSEE'S operations on the premises, including but no t limited to co sts of
environmental assessments, costs of remediation and remo val, any necessary respo nse
costs, damages for injury to natural resources o r the public, and co sts o f any health
assessment o r health effect studies.
If L ESSEE kno ws o r has reasonable cause to believe that any haz ardo us substance has
been released on or beneath the premises, L ESSEE shall give wnttcn no tice to the C ITY
within ten (10) days o f receipt o f such kno wledge or cause for belief. Provided, however,
if L ESSEE knows or has reasonable cause to believe that such substance is an imminent
and substantial danger to public health and safety, L ESSEE shall no tify the CITY
immediately upon receipt o f this kno wledge o r belief and shall take all actions necessary
to alleviate such danger. L ESSEE will notify the C ITY immediately o f any no tice o f
violation received or initiation of environmental actions o r private suits relative to the
premises. In addition, LESSEE and LESSEE'S sub-lessees shall no t utiliz e or sell any
hazardous substance on the pro perty without the prio r written consent of CITY.
At any time within the twelve (12 ) mo nths before the expiration or earlier termination of
this L ease, L ESSEE, at C ITY'S sole option,.,shall cause an environmental assessment o f
the premises to be completed by a pro fessio nal environmental consultant registered with
the State o f C alifo rnia as a Pro fessio nal Engineer, Certified Engineering Geologist or
Registered Civil Engineer. Said environmental assessment shall be o btained at the so le
cost and expense of LESSEE and shall establish what, if any, haz ardo us substances exist
on, in o r under the premises, in what quantities, and from what origins. If any additional
hazardous substances exist, in quantities greater than that allowed by CITY, county, state
o r federal laws, statutes, ordinances, o r regulations, then said environmental assessment
shall include a discussio n of these substances with recommendatio ns fo r remediation and
removal necessary to effect compliance with those laws or statutes and estimates o fthe
cost of such remediatio n or removal. LESSEE shall cause the remediatio n and/or
removal ofthe hazardous substances caused by its operations recommended in the
environmental assessment such that compliance with environmental law is achieved and
22
000063
shall be solely responsible for all co sts and expenses incurred for the remediatio n and/or
removal o fhaz ardo us substances caused b y its operations.
Notwithstanding anything to the contrary in this Lease, C ITY and L ESSEE acknowledge
and agree that LESSEE'S respo nsibilities with respect to the presence of any haz ardo us
substance disposed of or otherwise placed on o r beneath the Premises, o r inco rpo rated or
migrating into or beneath the Premises, shall be limited to those arising from co nditio ns
caused by LESSEE'S action or inactio n during the term of this Lease, or by actions or
inactions o f third parties hired, contracted, or otherwise controlled by L ESSEE, and in no
event shall L ESSEE be responsible for the action or inaction of the CITY, other lessees
o r third parties under control of C ity with respect to such co nditio ns.
To the best of CITY's knowledge only, City represents that the surrounding areas have
not been used for the storage, manufacture or disposal of any hazardous substance,
haz ardo us waste, po llutants or co ntaminants, as such terms are used and defined by
federal, state o rlo cal environmental laws, rules, regulations or ordinances, and there are
no proceedings pending or, to the best of CITY's knowledge, threatened, in which such
sto rage, manufacture o r dispo sal is alleged. CITY further represents that to the best of its
knowledge, there have been-no spills o r releases into the air, soil, groundwater or surface
waters emanating from a source lo cated on the Premises whether such source was
controlled by CITY, a prior owner of the Premises or an occupant of the Premises and
that there are no underground storage tanks located on the'Premises which contain or
have in the past contained hazardous materials including but not limited to petroleum
.products.
LESSEE shall have the right to investigate and co nfirmthe representations made in this
Section by City according to the to best of City's knowledge. Sections 2.9 o fthe BSA
("Excused Performance") shall be expressly applicable during the Pre-C o nstructio n
Period o fthe BSA, and LESSEE shall have the right to terminate this L ease prio r to the
expiration ofthe Pre-C o nstructio n Period for any valid reaso n pro vided therein, including
·but not limited to the discovery of Pollutants or Hazardous Materials at or in the Leased
Premises which were not generated or released by L ESSEE. In the event that LESSEE'S
investigations during the BSA Pre-C o nstructio n Period reveal the presence of Pollutants
o r Haz ardo us Materials for which C ity is respo nsible under this sectio n, LESSEE ma}', as
an alternative to terminating the BSA and this Lease without liability, propose to City
that City perform timely remediation of the site ofthe Pollutants or Hazardous Materials
at City's sole expense, and City shall in good faith evaluate the proposal and determine
whether it has a duty to pro ceed immediately with remediation and whether the estimated
expense of the remediation warrants acceptance of the proposal. In the event that City
determines · that it has no legal duty to perform the remediation and the costs of such
remediatio n o utweigh benefits to C ity, City may decline LESSEE'S pro po sal and
L ESSEE shall have the right to immediately terminate this L ease witho ut liability.
CITY agrees to assume the defense of, indemnify, and ho ld L ESSEE harmless from any
and all claims, costs, and expenses related to environmental liabilities resulting from
23
000064
CITY's or other party's operations on the premises prior to commencement o fthe Lease
or adjacent operations, including but not limited to co sts of environmental assessments,
costs of remediation and removal, any necessary response co sts, damages fo r injury to
natural resources or the public, and costs of any health assessment o r health effect
studies.
SECTION 7: GENER AL PR OVISIONS
7.1 No tices.
a. Any no tice required o r permitted to be given hereunder shall be in writing and
may be served personally o r by U nited States mail, po stage prepaid, addressed to
LESSEE at the leased premises or at such other address designated in writing by
LESSEE; and to CITY as fo llo ws:
CITY:
Attention; Metropolitan Wastewater Department
City Administration Building
202 "C" Street, M.S. 51A
San Diego, CA 92101-4155
Attention: The BOC Group, Inc.
575 Mountain Avenue
Murray Hill, NJ 07974
o r to any mo rtgagee, trustee, o r beneficiary, as applicable, at such
appropriate address designated in writing by the respective party.
b. Any party entitled o r required to receive notice under this L ease may by like
notice designate a different address to which no tices shall be sent.
7.2 Compliance with L aw.
LESSEE shall at all times in the construction, maintenance, occupancy, and operation of
the premises comply with all applicable laws, statutes, ordinances, and regulatio ns of
.C ITY, county, state, and federal governments at L ESSEE'S.so le cost and expense. In
addition, L ESSEE shall comply with any and all no tices issued by the C ity Mayo r o r his
authorized representative under the authority of any such law, statute, ordinance, or
regulatio n.
7-3 CITY Approval.
24
n n 0 0 6 5 The approval or consent of CITY, wherever required in this L ease, shall mean the written
approval or co nsent, o f the C ity Mayo r or his representative unless otherwise specified,
witho ut need for further reso lutio n by the C ity C o uncil.
7.4 CITY Approval or Notice.
The approval o r co nsent of CITY or notice to C ITY, wherever requiredin this Lease,
shall mean the written approval or consent of, o r no tice to , the C ity Mayo r or his
authorized representative unless otherwise specified, witho ut need for further reso lutio n
by the City C o uncil. "Authorized representative" shall mean the Directo r o f the R eal
Estate Assets'Department or any other individual designated by the C ITY in written
notice to LESSEE.
7.5 No ndi scriminati on.
L ESSEE agrees no t to discriminate in any manner against any person o r perso ns on
account of race, color, religion, gender, sexual o rientatio n, medical status, national origin,
age, marital status o r physical disability in LESSEE'S use o fthe premises, including but
not limited to the pro viding of go o ds, services, facilities, privileges, advantages, and
accommo datio ns, and the o btaining and ho lding of employment.
7.6 Compliance with CITY'S Equal Opportunity Contracting Program.
a. Equal Opportunity C o ntracting. LESSEE acknowledges-and agrees that it is
aware of, and will comply with, the CITY's Equal Opportunity C o ntracting
program as defined in the BSA.
b. Local Business and Emplo yment. L ESSEE acknowledges that the C ity of San
Diego seeks to promote employment and business opportunities fo r local residents
and firms in all CITY contracts. LESSEE will, to the extent legally possible,
solicit applications for employment, and bids and pro po sals for subcontracts, for
work associated with this L ease agreement from lo cal residents and firms as
opportunities occur, LESSEE agrees to hire qualified lo cal residents and firms
whenever feasible.
c. Failure to C omply. LESSEE understands that failure to comply with the abo ve
requirements and/or submitting false information in respo nse to these
requirements may result in terminatio n ofthe BSA, this L ease agreement and
debarment from participating in C ITY co ntracts for a period o f no t less than one
(1) year.
7.7 Partial InvalidJtv.
If any term, covenant, condition, or provision o f this L ease is found invalid, vo id or
unenforceable by a co urt of competent jurisdiction, the remaining pro visio ns will remain
in full force and effect.
25
000^6
Legal Fees.
In the event of any litigation regarding this L ease, the prevailing party shall be entitled to
an award o f reaso nable legal costs, including court and attorneys' fees.
7.9 Number and Gender.
Words o f any gender used in this Lease shall include any o ther gender, and words in the
singular number shall include the plural, when the tense requires.
7.10 C aptio ns.
The Lease Outline, section headings, and captions fo r various articles and paragraphs
shall no t be held to define, limit, augment, or describe the scope, content, o r intent o f any
or all parts o f this L ease. The numbers of the paragraphs and pages of this L ease may not
be co nsecutive. Such lack of consecutive numbers is intentional and shall have no effect
o n the enforceability o f this Lease. '
7.11 Entire U nderstanding.
This L ease, the BSA and its Exhibits, including Exhibit "C" ofthe BSA (the Sco pe of
Work) and the Parent C o mpany Guarantee ofthe BSA, contains the entire understanding
ofthe parties. L ESSEE, by signing these documents, agrees that there is no other written
or oral understanding between the parties with respect to the leased premises. Each party
has relied o n its own examination ofthe premises, advice from its own attorneys, and the
warranties, representations, and covenants ofthe documents themselves. Each o fthe
parties in this Lease agrees that no o ther party, agent, or attorney of any o ther party has
made any promise, representation o r warranty whatso ever which is no t contained in this
L ease.
The failure o r refusal of any party to read the L ease o r o ther documents, inspect the
premises, and obtain legal or other advice relevant to this transactio n constitutes a waiver
o f any objection, co ntentio n, or claim that might have been based on these actions. No
mo dificatio n, amendment, or alteration o f this L ease will be valid unless it is in writing
and signed by all parties.
7.12 CITY Employee Participation Po licy.
It is the policy of CITY that all CITY contracts, agreements, o r leases with consultants,
vendors, or L ESSEES shall include a co nditio n that the co ntract, agreement o r Lease
may, at the sole option of C ITY, be unilaterally.and immediately terminated by the C ITY
if L ESSEE knowingly employs an individual who , within the twelve mo nths immediately
preceding such employment, did in his/her capacity as a C ITY officer or employee
participate in negotiations with or o therwise have an influence on the recommendatio n
made to the City Council in connection with the selectio n ofthe LESSEE. It is no t the
intent o f this po licy that these provisions apply to members o fthe C ity C o uncil.
2 6
7.13 Drug-free Wo rkplace.
000067
LESSEE shall be required to abide by the omnibus drug legislatio n passed by Congress
on November 18, 1988, by adopting and enforcing a po licy to maintain a drug-free
wo rkplace by doing all ofthe fo llowing:
a. Publish a statement notifying employees that the unlawful manufacture,
distribution, dispensation, possession o r use o f co ntro lled substances are
prohibited on the leaseho ld and specifying the actio ns that will be taken against
employees fo r violations ofthe pro hibitio n.
b. Establishing a drug-free awareness program to info rm employees about all ofthe
fo llo wing:
. 1. The dangers o f drug abuse in the workplace.
2. The LESSEE'S policy o f maintaining a drug-free workplace.
3. Any available drug counseling rehabilitation, and employees assistance
programs
4. The penalties that may be impo sed upon employees' for drug abuse
vio latio ns.
c. LESSEE shall include in each sublease agreement language, which indicates the
sublessee's agreement to abide by the pro visio ns of a drug-free workplace.
LESSEE and sublessees shall be individually respo nsible fo r their own drug-free
workplace programs.
7.14 Disabled Access C ompliance.
LESSEE agrees to comply with the C alifo rnia Government Code, Sections 11135-
11139.5; the Federal R ehabilitatio n Act of 1973, Section 504, Title V; the Americans
with Disabilities Act of 1990 (ADA); and any other applicable state and federal laws and
regulatio ns hereafter enacted protecting the rights o f peo ple with disabilities. LESSEE'S
compliance shall include but no t necessarily be limited to the fo llowing:
a. LESSEE shall no t discriminate against qualified perso ns with disabilities in any
aspects of employment, including recruitment, hiring, promotions, conditions and
privileges o f emplo yment, training, compensation, benefits, discipline, layoffs,
and terminatio n of emplo yment.
b. No qualified individual with a disability may be excluded on the basis of
disability from participatio n in, o r be denied the benefits of, services, pro grams or
activities of LESSEE.
c. L ESSEE shall post a statement addressing the requirements ofthe ADA in a
prominent place at the wo rk site.
27
0 0 0 0 6 - 8 ^
d
- Where required by law, LESSEE shall comply with CITY'S disabled.access
requirements by bringing up to code and making accessible any areas o fthe
premises, which deny access .to disabled persons. All such impro vements and
alterations shall be at the sole cost of LESSEE.
e. L ESSEE shall include language in each sublease agreement, which indicates the
sublessee's agreement to abide by the foregoing pro visio ns. L ESSEE and
sublessee's shall be individually responsible fo r their own ADA emplo yment
pro grams.
f. L ESSEE understands that failure to comply with the abo ve requirements and/or
submitting false info rmatio n in respo nse to these requirements shall constitute a
default under this L ease.
SECTION 8: SPEC IAL PR OVISIONS
8.1 C o rpo rate Autho rity. ,
Each individual executing this Lease on behalf o f L ESSEE represents and warrants that
he/she is duly authorized to execute and deliver this Lease on behalf of said co rpo ratio n,
in accordance with a duly adopted reso lutio n ofthe Board of Directo rs ofthe co rpo ratio n
or in accordance with the bylaws ofthe co rpo ratio n, and that this L ease is binding upon
the co rpo ratio n in accordance with its terms, and that L ESSEE is a duly qualified
co rpo ratio n and all steps have been taken prio r to the date hereo f to qualify L ESSEE to
do business in the state where the.premises are situated.
8.2 Planting Strips.
LESSEE shall, at its sole co st, maintain the leased premises including weed abatement
and planting landscaping for erosion prevention if required and fire preventio n.
8.3 Standard of Employees.
LESSEE and its employees shall at all times conduct themselves and the operations on
the leased premises in a creditable, social, and temperate manner. CITY shall have the
·right to demand that L ESSEE permanently remove intemperate perso nnel from the leased
premises upon good cause.
8.4 R elo catio n Payments.
L ESSEE understands and agrees that it shall no t be entitled to any relo catio n payment
whatsoever upon termination of this Lease o r in transferring o peratio ns between Lease
Premise B and L ease Premise C.
8.5 R elo catio n of Leased Sitefsl.
Within the terms of this L ease, CITY may direct L ESSEE to relo cate to ano ther plant site
location on the PLWTP site at the CITY's expense, including lo st revenues or cost of
28
C\ n n f l OS
131111
"^ £
as
· CITY shall the give L ESSEE o ne year written notice. LESSEE will have six
v (6) mo nths to begin the relocation site wo rk and an additional six (6) mo nths to complete
the mo ve with extensions po ssible fo r permitting and approval processes.
SECTION 9: SAN DIEGO'S FORM OF GOVER NANC E
9.1 San Diego 's Strong Mayor Form of Go vernance.
The C ITY began o perating under a mayo r-co uncil form o f go vernance on January 1,
2006 (commonly referred to as 'stro ng mayo r') pursuant to article XV o fthe City o f San
Diego City Charter. All references to "CITY" in this L ease and any subsequent
amendments to this Lease shall be deemed to refer to "Mayor". This pro visio n shall
remain in effect for the period o f time that CITY o perates under the mayo r-co uncil form
of governance.
SECTION 10: SIGNATU R ES
10.1 Signature Page.
IN WITNESS WHEREOF, this Lease agreement i s executed by C ITY, acting by and thro ugh its
MAYOR, and by L ESSEE, acting by and thro ugh its lawfully authorized officers.
THE CITY OF SAN DIEGO
Date B y
Jerry Sanders, Mayor
BOC MERCHANT PRODUCTION INC.: a
DeiawarevC o rpo ratio n
v j oW i > zoo^-
Date X J ^ v - ? ' J - ^ / By y c~J> *~^ [ s j ^ r z - c
APPROVED as to form and legality this day o f , 20__.
MICHAEL AGU IR R E, CITY ATTORNEY
By
29
000070
A.l
Exhibit A
Leased Premises Legal Descriptio n;
L eased Premises A; Exclusive lease area pro vided fo r the BU DG Pro cessing
Facility, includes the BU DG flare
lo catio n(s).
·PRIMARY LEASE PR EMISE 'A'
' '' -"POirNT LOMA WASTEWATER TR EATMENT f LANT"
Thfit po rtian. of liw Point Loms Wastewater Treatmco t Planu m the Cauniy of Son Dbgo,
State arCaliibrnia. as fo llo ws:
C ommcndng st'the C hy af San Die-go borizontal Control StatkmGPS 1123, having A
owrditmte-- value of North 1829403 .^'.Easi 625463 L 30 based nn the No rth Atncncan Daium
o f S 9S5 (HAD E3), BS shown on Record' o f Survey No. 14491 filed in- the office of the
·C o unij' R eco rder o f the abo ve said San Diego CflHnTJ
r
ort3/3]/19^4::thsncc South U IV I T
East IS3£.73 fscr to ofSnn'CHcgD^horizonial C oniro l ·Staiion GPS I J2-fi. having a ctictrdiraH
· value o f No rth 1B376O1J0 East £2 54996,02 , as BJioicm.on above-said/Record of Sun-'cyNo.
(44=32; thence South. I^ SZWEsm 155,4^ feetto the Poinlof Begsftning;: rncnreNo rih
E2
n
54\^4"East 153.76 feet to a point which, hears SpnitMe*^?^" East 2.0! 1.77feetfra-tn
said hprnnmai Control. Smtian OPS n2 3;thsnce & o tiihfi
B
2 2
!
4r'Eaa!46..4I feet.lo the
beginning o f a curve co ncavenorthwasiarly, hauingaradimo fM-M feet: thence soulhcriy
aio ng the arc cf said curve lli)0.57 teat through 8 ccntiai aiigi&or9
|
C>
fi,
tC
,
tlO"; thence. South
£3
C
'39'2T' West 57^2 feet to tlie begimiing.of a citn'e, co nrave Bo rthcasteriy, haviiig a
radius o f 2 9.00 feet; thsnee Tftrsrarly alo ng the arc o f said carve 44.16'feci tbrough a cemral
angleo fEnS'OI"; jhenccMonh 9
c
W10
T
'
,
Wsst60^49fect-to thehegirmmg o f acrn^'E,
·concave easterly, having & radius"of 6& 7.0C
,
ieet: thence noribErSy alo ng the arc o f said curve
18..93 feet throughfc,.c«iumlangle af 1
0
33'2 3" lo an-intersmio c v ith a HOD-tangent.iintv to
which a radial'bears South Sl ^ ? *!:^ West; thence aianE said non-tangent line. North
7
Q
12 '2 6'
,
West 1.50 feet to the po int o f beginning.
R effiarviiiE-w:c^.:fijrin^r«sB.«id efpeas.to raairaain.re p a i r ,replace any utility within the
Icass described abo ve.
.Above dsscribsd. iease parcc] o f land comainB 1553831 Square Feet, 0.7567 Acres.
Ejdiibij 'B* attached,afld by this rsfctemce niadc-a po fihcrco f.
r
KonakLJ. DadidE,P.L^. No. 5-7.71
Senior Land SurveyBi. Bekf Enginiearmg
C itv'o fSan Oxego
MyR egistraiio n Expjret 6/30/2008
KA
000071
APDITIONAL L EASE-FlR EMfSE
J
A-J
T
"POINT LOMA WASTEWATER TREATMENT PLAWT^
That fraition o fthe- Po int L oma Wastewater Trcatmco i Plant, id the County of SHE LHcga.
Slate o fC alifomhs, as fo ikws:
C ommencing a. ihs C ity o f San Diego horizontoJ C onteat Station GPS 1123, having s
cao rdinme value o f No rth 182W03.49 East 62546"313-0 based on the North .- imsricim. Datum
of 19E3 (KAIJSr*), asdio \vno n-R ix«r^(iifSijrv
r
c!j
,
No. 14492,filisdin the office of' the
C ounty R cixnder of theabove said San Diagev C ountj-' cm 3iG1/l99<;tiiaace'So uthTl°2fi*27"
East !S38.73fsttt to o f San Diego harixantd Control Ststio n GPS 1126', having:a co o rdinaE:
valite o fWo ni lS27fi013DE«s(K!549QfiJ}2
1
BSBhowa on above said R ecord afSurveyKo .
14492; thence No rth €9
B
55
y
2X" East 23J.64 fen; u*The Po inc »f Beghanhas; Thance"Nonii
WSPSB" Em 2QM feet to s fwiai which hears South J $
ft
34 '5T
;
East I.80D52 fca irom
said ho riz o ntal Controt Statiaii GPS 1323: thence Soulh SSWCM* East 10.00 feci: thenct
South 34
&
59'56" West 20.00feet:thi=n=e North SSWW" West 10 .00 feet to the .po int of
begmni.n ,
R sssnTnfi acc«£ fo r ingress and egress to roaimain, repair, rcplaae any ulilhy wiihem the
leas* .described above-
Above dsscribec iiaase parcel o f isnd contains 200.00 Square Feet, 0DD46 Acres.
Bmbit 'B" anachad- and by this tefensiue made a part bsrsof.
'RonakS J-.. Dadds., P.L .S. No , 5771
Senio r Land Sitfvcyo r. Field Engineering
C ity o i'San Disgo
Mj' R sgi'StratiDn E-Kphes GROHQOti
A-2
000072
APPmONAL LEASE WKEMISE 'AT
"-POINT hOMA WASTEWATER TRKAJTmNT PLANT"
That, portion o f .the'Poml Loma Wastewater Tteairo nn; Plant in the- C ounty of San Diego ,, "
' Slate o f C& i£bmia,B£-'£bJlows'. ·'
C ommencing, at the C ity o f San. Diego bori7x>nial C ontro l Siaiion GPS .1123, havrng-a
coordinaK
1
vajus o fNo rtb I K29403.49 Hast 625463) .30 based on the No rth AjBeriom Datian
o f 19B3 (HAD S3), asshwwu.an Record of Survs)'No> 114492,f i led in the office erf the.
C omntr R ecardar o fthe- shove said San DtBg&Coumy on S^l/lW^; ihcnuc Sou& 1. i* m T
Essl IS3-fi.73 feet to o f San Diego horizontal Comrol Station GPS 1126. hsving & co o rdinate-
value o f Noithi IS27601.30 Eaai 6254996.02, as dio vm an above, ssad R ecord, of Survey No.
14492; thsnee North. 59^46 'S T East 272.40 feet to the Posnl of Beganning; Thsmse Nortb
34
6,
20" ] T East \7.00 feet toapoim which bears South 29"1GW East 1,760.03fo ffL from
said boriaonlaJ C ontro ] Statics GPS U 2 3; thBOCc Smi&.55
0
39*43
,,
EKl 29,00fo sc;thence
Sooth 34
!?
30
,
] 7" West 17,00 feet: thence North 55
0
39
,
43" West 29.00 fo st to the poim of
beginning.
R eserving access for iagress-and egress xoraaifltain.repair, iBpiaccany U tility .within the
lease dflssrihed aho vz .
Above describsd-lease pared at land co ntains 493.00 Square Feet, 0.0113 Acres.
Exhibit 'fir attached, and b):
r
this reference made a part hereo f.
R onald J . Dodd^, P.L .S. No . 5771
Senio r Land Surveyor,..Field En.gmffim.ng
C isy o f San Diego
My R cgistratio rt Expirss 6i.'3O/2008
A-3
(I n 0 0 7 3 ^-2 Leased Premises B: Primary No n-exclusive lease area no rmally used for truck
filling.
-LEASE: PR EMISE 'IT
"POINT LOMA WASTEWATER .TR EATMENT PLANT*
Thai po rtio n of .the F-uini LOIHB Vi-'astewatsr TrsBamoit Piaot kt the C oumv' o f San Diego,
Siatt orCaEforaia, as foliows:
C ommencing at the Qyj
1
o f San Diego honsanuJ. Contcal StatioBi GPS 1.123. having a
coordinate .value o fNo rlh I S294(B.49 East £254631.30 based
1
m the NorthAmccican Datum
of 1 53 fNAD S3-)., as sbo uii on R eco rd o fSurvey"No. J:4492. filed ha the office o fthe
C o imtv Recorder of the-abo ve said San. Diego C ount)' oil SiWlWW; Ihence So irth I ] °2B'2T
Easr rS3&.73fe e tlo o f San Diego ho tizontaE Commil Siatian GPS-112B, harving acaardhtate
·aJTie o f North 1827601-30 East: 6254996.02, as shown on above said Record of Survey No,
14492; thence South l?
o
S2
,
40" East 155,44 feel to the Print o f Beguaine: Thence Nonh
S2
i:
54
,i
3 '"Hasi 153,76 fo et to a.po int which hsars- Snulh 1£
I
'TT42 " East 2.1111.77 feci from
. suit! horizontai C o o tral Stso oD GPS 1.123: thence North e^O'jtT West SfcOO feer; Ihence
Sou^i S2
D
54"34'
1
West 154.96.feel; thence South 7*12*26*" East, m m feet to the pDtm of
beginning.
R sserviag access fo r iaigrfias and egress- w mamaasL repair, raplaee tag uiiiin-
1
within' the
lease described abo ve.
Above described Isasc parse] o fland comjEins 13$4t j€2 '.Sqizsre Feet, 0.2835 Acres.
Exhibit 'B* attached ami M' ahis reference made e patt hereof.
· - / ' it* ^ U, L U U
Ronald J. Dcdds,' PXJS. No . 5771
Ssnio r L and Surveyo r, FieSdEnaiKeering'
Cn>
r
of San DaciMi
Mr R egisoBUDii. EspijeK & 3(}/20C)lS
A-4
000074
A.3 L eased Premi ses C: Sec o ndary No n-exc l usi ve lease area used when
L eased Premi ses B is unavai l ab l e due to Po int L o ma Treatment Plant o perati o nal
needs. Area to b e used o nly for l im i ted Truck
filling.
L EASE PR EMISE *€ '
M
POINTL OMA WASTEWATER TR EATMENT P L A N T
Tharportion o f thcPo mlL o ma Wastefwatsr Treatment Piant. in the Count)
1
of San Diego ,
State o f C alifo mk, as fo liows:
Ctinmiendng at the City of.San Diego- ho rimiiuil ConUrol Sto kw. GPS 1123, having a
co o rdinnte vaiuc o f North tE294.0
i
3.49 East 62 54631,30 based on the No rth American Datum
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B-I
000077
Exhibit C
BOC MERCHANT PR ODU C TION. INC.
C OR POR ATE NAME
I, Robert Wowk. certify that I am the Chief Financial Officer ofthe corporation named in the
attached agreement; that Stanley P. Borowiec . who signed this agreement on behalf of the
co rpo ratio n, was then Vice President of said co rpo ratio n; that said agreement was duly signed for
and o n behalf o f said corporation by autho rity o f its go verning bo dy, pursuant to a resolution
duly adopted by its Board o f Directo rs on March 1. 2 007. and is within the sco pe o f its corporate
po wers; and that set out below are the names ofthe officers and directo rs of said co rpo ratio n.
By ^ ^ < ^ ^ ^ r -
C OR POR ATE SEAL
Name Patrick F, Murphv - CEO & President
Title
Name R o bert Wowk - C FO
Title
Name John J. Brull - Vice President
Title
Name Stanley P. Bo rowiec - Vice President
Title
C-l
0,00079
Exhibit D
Schedule of Annlicable R ates.
The fo llo wing documents are used to determine the applicable rates which apply to this
L ease:
SDG& E
1. C urrent Master Purchase and Sales Agreement fo r PLWTP Generatio n
2. Tariff Schedule PA-T-1
3. Tariff Schedule EEC C
4. Tariff Schedules
Water & Wastewater Billing statement, Account number U 19-00804-2 1 -0
D-l
000080
Exhibit E
Schedule of Days and Hours of Operatio n.
During the normal course o f o peratio ns, the expected manning schedule
and days and hours of operations are as fo llo ws:
Plant Operatio ns: Monday through Sunday, 24 hours per day, with remote
mo nito ring from Linde/BOC's R emo te Operatio ns C enter.
Plant Staf£Operatio ns: Monday through Friday, 7am to 4pm.
Distribution Operations: Monday through Sunday, 6am to 10pm, 6 truck
movements per day during that perio d (in and o ut).
Support Operations (maintenance, deliveries, etc.): Monday through
Friday, 7am to 4pm.
Staff may be on site other than the previously listed hours as required to meet emergency and
o peratio nal commitments.
Truck ro uting and travel ho urs may be adjusted as needed to comply with the C o mmunity's
issues.
All hours are fo r reference only and will be adjusted as required by the MOU.
E-l
000081
Attachment A
Biogas Sales Agreement
Proprietary & Confidential
The BOC Group, Inc.
000083
AGR EEMENT FOR THE PU R C HASE AND SALE OF BIOGAS
BETWEEN
THE CITY OF SAN DIEGO
AND
BOC MER C HANT PR ODU C TION INC .
- A WHOL L Y OWNED SU BSIDIAR Y OF
THE BOC GR OU P, INC .
DATED AS OF JUNE 22, 2007
i
Proprietary & C o nfidential © The BOC Gro up, Inc.
000084
TABLE OF CONTENTS
1. DEFINITIONS 1
2. C ONSTR U C TION OF BU YER 'S PLANT 4
3. BIOGAS SU PPL Y 8
4. METER ING & TESTING OF BIOGAS 8
5. PR IC E AND PAYMENT TER MS 10
6. R EC OR DS AND AU DIT 11
7. TAXES ^ 12
8. R EPR ESENTATIONS AND WAR R ANTIES..... 12
9. C L AIMS 13
10. R ISK OF LOSS 13
11. FOR C E MAJEU R E 14
12. LIABILITY, INSU R ANC E & INDEMNITY 14
13. TERM AND TER MINATION 19
14. ASSIGNMENT 21
15. CONFIDENTIALITY & INTEL L EC TU AL PR OPER TY 21
ii · (
Proprietary & . C o nfidential © The BOC Gro up, Inc.
000085
16. AUTHORIZED R EPR ESENTATIVES & NOTIC ES 22
17. DISPU TE R ESOL U TION 24
18. ADDITIONAL PR OVISIONS 24
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
in
Proprietary & C o nfidential © The BOC Gro up, Inc.
ooooae
AGR EEMENT FOR THE PU R C HASE AND SALE OF BIOGAS
THIS AGREEMENT FOR THE PU R C HASE AND SALE OF BIOGAS (the
"Agreement") is made and entered into by and between BOC MERCHANT PR ODU C TION
INC ., a Delaware co rpo ratio n and a who lly owned subsidiary of THE BOC GROUP, INC ., also
a Delaware co rpo ratio n ("Buyer") and the C ITY OF SAN DIEGO, CALIFORNIA, USA, a
municipal co rpo ratio n ("Seller").
WHEREAS, Seller owns and operates the Point Loma Waste Water Treatment Plant
located in San Diego, C alifo rnia ("Seller's Plant"); and
WHER EAS, methane biogas ("Biogas") is a by-pro duct of Seller's operations at the
Seller's Plant; and
WHER EAS, methane biogas is a greenho use gas that may be contributing to glo bal
warming such that beneficial use o f methane biogas has both ecological and economic benefits;
and
WHER EAS, the Seller currently uses some ofthe methane bio gas produced at Seller's
Plant for power co -generatio n which provides eco lo gical and economical benefits to the Seller
and larger community; and
WHEREAS, however, excess methane Biogas produced at Seller's Plant is currently
being burned and is available for other beneficial uses;
WHER EAS, Buyer is engaged in the business o f purifying and pro cessing such Bio gas as
a renewable and alternative fuel and energy source for commercial sale to others; and
WHEREAS, Buyer is desirous o f purchasing from Seller and Seller is desirous of selling
the excess Biogas from Seller's Plant under the terms and conditions o f this Agreement;
NOW THER EFOR E, and in co nsideratio n of the promises hereinafter contained,
Seller and Buyer hereby agree as fo llo ws:
1. - DEFINITIONS
Unless defined elsewhere in this Agreement, the capitaliz ed terms used in this Agreement shall
have the meanings set forth in this Section. The terms defined below o r used elsewhere in this
Agreement shall be deemed to refer to the singular o r plural as the context requires.
1.1 "Authorized R epresentative" shall have the meaning ascribed in Section 16.1.
1.2 "Base Price" shall mean the price that the Buyer pays to Seller for each million British
Thermal Units (MMBTU o r mmbtu) o f Bio gas used by Buyer to pro duce Pro duct which
shall be measured and computed as pro vided in Articles 4 and 5 o f this Agreement.
1.3 "Bureau of Labor Statistics" or "BL S" shall mean the U.S. Department of L abo r's
Bureau of Labor Statistics.
1.4 "Buyer's Plant" shall mean the building and .apparatus required for the
pro cessing of the Biogas into Product, including all future additions,
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Proprietary & C o nfidential © The BOC Gro up, Inc.
00008?
changes, or alteratio ns thereto , as Buyer may make, in its reaso nable
discretion, and which is to be installed, owned, maintained and operated
by Buyer on Buyer's Plant Site, pro vided that any such additions, changes
or alterations which impact Seller's Plant, Seller's Property or Seller's
operations at such site shall be subject to Seller's prior written approval
which will not be unreasonably withheld or denied.
1.5 "Buyer's Plant Design Capacity" shall mean 1.6 MMSCF o f Net Biogas Delivered per
day based on a methane content of 63%.
1.6 "Buyer's Plant Site" shall mean that certain +/- 30,985 square feet o f rentable space
located on Seller's Property, as shown on the site plan attached hereto as Exhibit A and
made a part hereof, which is described in detail and shall be leased by Seller to Buyer
pursuant to the separate written Lease and on which Buyer's Plant and o ther related or
future facilities and improvements will be located, along with access, egress, utilities and
o ther appurtenant rights as set forth in the L ease.
1.7 "Biogas" shall have the meaning assigned to such term in the seco nd recital clause o f this
Agreement and mean the raw digester, gas produced from the sludge digesters at Seller's
Plant.
1.8 "Biogas Metering System" shall have the meaning ascribed in Section 4.2.
1.9 "C o nfidential Information shall have the meaning ascribed in Sectio n 15.1
1.10 "C o nstructio n Period" shall mean that portion ofthe Development period following the
Pre-C o nstructio n Perio d."
1.11 "Contract Year" shall mean a twelve (12 ) mo nth period beginning at 12 :00:01 A.M.o n
the earlier of: a) Initial Operation Date o r b) fifteen mo nths after the Effective Date, or
any subsequent anniversary thereo f.
1.12 "Deliver," "Delivery" or "Delivered" shall mean, with respect to Bio gas, the po int and
time at which the Biogas stream is diverted from Seller's Plant and enters the Buyer's
Delivery Point.
1.13 "Delivery Point" shall mean the po int of connection and its adjacent Buyer's Plant
isolation valve the Buyer installs o n the Seller's low pressure digester gas header, as
described in Exhibit C (the Scope of Work).
1.14 "Development Period" shall mean the perio d from execution o f this Agreement until the
Initial Operation Date and include the Pre-Construction Perio d and the C o nstructio n
Period.
1.15 "Disclosing Party" shall have the meaning ascribed in Sectio n 15.1.
1.16 "Disruption in Bio gas Supply" shall mean any event which causes the availability of
excess Biogas to increase or decrease significantly for any perio d over 4 ho urs,
1.17 "Effective Date" shall mean the date upon which this Agreement has been fully executed
by bo th Parties. - ·- . . . _ - . . . .
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Proprietary & C o nfidential © The BOC Gro up, Inc.
000088
1.18 "Excess Bio gas" shall mean the excess raw Biogas produced from the sludge digesters at
Seller's Plant that is no t needed by Seller for the Existing Biogas Uses that can occur in
the Seller's installed equipment as ofthe Execution Date.
1.19 "Existing Biogas Uses" shall have the meaning ascribed in Section 3.1
1.20 "Fo rce Majeure" shall have the meaning ascribed in Section 11.1.
1.21 "Index" U .S. Department of Labor's Bureau of Labor Statistic's Consumer Price Index
for the San Diego Metro Service Area (See Appendix F for the use ofthe Index and
additional definitions as they apply to the use ofthe Index)
1.22 "Initial Operation Date" shall mean the first day fo llo wing establishment ofthe initial
Maximum Operating Capacity pursuant to the perfo rmance and operational testing upon
substantial completion of Buyer's Plant as mo re fully described in Exhibit C (the Scope
of Work, Sectio n 15); prior to which, the Buyer may only conduct operations and
delivery o f pro duct which are reaso nably required for start-up, commissio ning and the
aforementioned performance and operational testing, or as approved by Seller.
1.23 "Lease" shall mean the Lease Agreement between Seller and Buyer concerning Buyer's
occupancy and use of Buyer's Plant Site.
1.24 "Maximum Operating Capacity" shall mean the operating capacity o f Buyer's plant
measured in MMSC F per day o f Excess Biogas Delivered as established initially and
from time to time thereafter pursuant to the perfo rmance and operational testing
described in Exhibit C (Scope o f Wo rk, Section 15).
1.25 "Million standard cubic feet" or "MMSCF" or "mmscf' shall mean millions of standard
cubic feet of gas under standard conditions (Dry, 0% moisture/relative humidity, 60
o
F,
14.73 psia) determined pursuant to the standards ofthe American Gas Asso ciatio n.
1.26 "MMBTU Testing" shall have the meaning ascribed in Section 4.3.
1.27 "Net Bio gas Delivered" shall mean Excess Biogas Delivered less any Bio gas diverted
before or after the Delivery Point to maintain proper function of Buyers flare as
described in Section 4.2 .
1.28 "Notice o f C ompletio n" or "NOC " shall mean the date the Buyer has met the
performance and testing requirements as described in Exhibit C (the Scope of Work,
Section 15) necessary to begin full commercial operations at the initial Maximum
Operating Capacity and the Seller's issuance of a written Notice of C ompletio n in that
regard, which will not be unreasonably withheld or delayed.
1.29 "Pre-C o nstructio n Period" shall mean the 120 day perio d commencing upon the next
business day after full execution o f this Agreement by bo th Parties.
1.30 "Product" shall mean the purified and pro cessed biogas manufactured by Buyer at
Buyer's Plant, from Biogas, of a quality that is suitable to the Buyer.
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o#
8
*
· 1 "R eceiving Party" shall have the meaning ascribed in Sectio n 15.1.
1.32 "R eco rds" shall have the meaning ascribed in Sectio n 6.1.
1.33 "Scope o f Wo rk" or "SOW" shall mean the Scope o f Wo rk set forth in Exhibit C to this
Agreement.
1.34 "Seller's Plant" shall have the meaning ascribed in the recitals and mean the Seller's
Point L oma Waste Water Treatment Plant facility located on Seller's Property.
1.35 "Seller's Property" shall mean the parcel of land owned and/o r leased by Seller lo cated in
San Diego, California USA upon which Seller's Plant and o ther related facilities and
improvements are located.
2. C ONSTR U C TION OF BU YER 'S PL ANT
2.1 C o nstructio n o f Buyer's Plant. Buyer will commence construction o f Buyer's Plant
with reasonable promptness and diligence and according to the timeframes set forth in the
project schedule attached hereto as Exhibit D and made a part hereof, except as such
timeframes may be extended up to a maximum o f twelve (12 ) mo nths by causes beyond
Buyer's reasonable co ntro l. If such extensions exceed twelve (12 ) months, Seller may
terminate this Agreement pursuant to the Fo rce Majeure provisions in Sectio n 11.3.
Buyer shall construct, install and maintain Buyer's Plant at its own expense. Buyer
agrees that Buyer's Plant shall not affect or impair the operations of Seller's Plant except
as expressly contemplated by this Agreement. Seller shall cooperate with Buyer in
connection with the scheduling o fthe construction and installation o f Buyer's Plant.
Seller will pro vide Buyer with a co py of Seller's safety regulations prior to commencing
construction and operations at Buyer's Plant Site, and Buyer shall comply with all of
such safety regulatio ns.
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Proprietary & C o nfidential © The BOC Gro up, Inc.
oooqQO
Ownership o f Buyer's Plant. Buyer's Plant will at all times, during and after the
termination or expiration of this Agreement, be and remain, the sole and exclusive
property ofthe Buyer. Seller shall take no action inconsistent with Buyer's ownership.
Buyer's Plant includes proprietary info rmatio n and Seller shall no t permit third parties to
inspect Buyer's Plant or info rmatio n concerning its operation without Buyer's prio r
written consent.
2.3 Security Deposit and Damages for Failure to Construct & Operate Plant.
2 .3.1 Prior to expiration o f the Preco nstructio n Period, Buyer has the right to terminate
this Agreement without liability if Buyer determines at Buyer's so le discretio n that
the conditions in Section 2.9 (Excused Performance) cannot be reaso nably satisfied
in a timely and eco no mic manner to allow Buyer to fulfill its obligations under this
Agreement and notifies the Seller of same in writing. If Buyer do es no t terminate
this Agreement under the co nditio ns of Section 2 .9 prio r to expiration ofthe Pre-
C o nstructio n Period, then Buyer shall provide Seller with an irrevo cable letter of
credit in the amount of Two Hundred and Fifty Thousand Dollars ($250,000)
which shall be referred to hereinafter as Buyer's Security Deposit. Any letter of
credit furnished to fulfill the requirements o f this Section shall be irrevo cable for
the perio ds provided in subsections 2 .3.2 .
2 .3.2 If, after expiration ofthe Pre-C o nstructio n Period, Buyer abandons the Buyer's
Plant Site prior to Initial Operation without completing Buyer's Plant as required
by this Agreement, except as may be excused herein, o r terminates this Agreement
without cause prio r to the No tice Of C ompletio n, Seller shall be entitled to the
Security Deposit amount as stipulated damages provided however, that Buyer shall
in addition still retain the responsibility o f remo ving any facilities it has placed on
the L eased site pursuant to Section 2.7, and if Buyer fails to perfo rm those removal
obligations, the Seller shall in addition to the Security Deposit be entitled to the
reasonable cost of removal o f Buyer's Plant, or any and all portions thereo f. These
terms shall represent Seller's exclusive remedy and Buyer's so le liability for such
failure to complete its plant, or termination without cause as pro vided herein.
2 .3.3 Upon completion o f Buyer's plant and within forty-five (45) days after the Initial
Operatio n Date, the Security Deposit shall be converted from an irrevo cable letter
o f credit to a cash deposit to secure initial performance of operations and
purchasing by Buyer, and this deposit shall be termed the Pre-Payment Amount.,
Buyer shall tender to Seller the Pre-Payment amount in exchange for the fo rego ing
letter of credit, and the Pre-Payment Amount shall be applied to amounts payable
by Buyer to Seller under Section 5 of this Agreement and the Lease as and when
they become due. When the Pre-Payment Amo unt has been exhausted through
Buyer's purchasing of Excess Biogas, the Security Deposit shall be deemed
discharged.
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Proprietary & C o nfidential © The BOC Gro up, Inc.
000091
2.3. 4 If, after the Initial Operation Date, Buyer wrongfully terminates this Agreement
without cause or witho ut applicable excuse pro vided in this agreement fails to
purchase Excess Biogas as pro vided in this agreement, Seller's exclusive remedy,
and Buyer's sole liability, shall be Buyer's forfeiture, and Seller's assumption of
title to , the then current balance ofthe Pre-Payment amo unt, if any, plus, additional
amounts to the extent the then current balance is no t sufficient fo r the amo unts
owed at the time o f terminatio n for Net Biogas Delivered and the reaso nable cost
o f remo val o f Buyer's Plant if Buyer fails to do so as required in Section 2.7 o f this
Agreement.
2.4 Payment Bond. Buyer shall provide a payment bond from a surety authorized in the State
of C alifo rnia to secure payment for all material, labo r and services in the construction of
Buyer's Plant to the extent required by and complying with California Civil Code § 3247
,(2007). Such bo nd shall have a penal sum of S2 millio n and shall be released when
Buyer has pro vided evidence (in the form of lien waivers, releases and certifications) that
all persons pro viding material, labor and services for the construction Buyer's Plant have
been paid in full.
2.5 Access to and Use of Seller's Property. Buyer shall have the right to o ccupy and use, in
connection with the perfo rmance of this Agreement, tho se parts of Seller's Property asset
forth in the Lease and this Agreement. Buyer's rights o f o ccupancy and use shall be
limited to tho se purpo ses and activities provided for in the L ease and this Agreement.
Seller shall provide access to Buyer's Plant Site via common roadways and entryways for
Buyer's emplo yees, its customers and its agents as well as fo r trucks involved in
construction o f Buyer's Plant and shipping of Product reasonably sufficient to permit
Buyer to fulfill its obligations under.this Agreement. Buyer shall have the right to access
tho se parts ofthe Seller's Plant as reaso nably needed to permit Buyer to construct and
operate Buyer's Plant. Except as otherwise set forth in the L ease o r herein, Buyer shall
no t have access to any area on Seller's Property without Seller's permissio n, no t to be
unreasonably denied.
2.6 Existing C o nditio ns. Seller is solely responsible for and shall ho ld Buyer harmless from
any existing pollution conditions, ground co ntaminatio ns o r o ther enviro nmental
conditions existing at the Buyer's Plant Site o r no t resulting from the o peratio ns o fthe
Buyer, provided, however, that Seller makes no representatio n to the Buyer relative to the
suitability ofthe Leased Site fo r the purpo ses ofthe Buyer's concept, the construction of
the Buyer's Plant and its operations. Buyer shall hold Seller harmless from any
environmental conditions resulting from Buyer's o peratio ns.
·2.7 R emo val o f Buyer's Plant. Buyer shall have o ne hundred eighty (180) days after
termination, expiration or cancellation o f this Agreement to complete remo val of Buyer's
Plant from the Buyer's Plant Site. Buyer shall have no o bligatio n, however, to remove
any pilings, foundations or other such in-gro und installations (except to the extent agreed
in writing as a co nditio n of Seller's approval ofthe design and construction of Buyer's
Plant pursuant to the design approval process set forth in the Scope of Wo rk). In the
event that Buyer's Plant has no t been fully removed by Buyer within the aforesaid time
period, Seller may remo ve Buyer's Plant, and invoice Buyer fo r the reaso nable costs for
6
Proprietary & C o nfidential © The BOC Group, be .
000092
the removal. In the event Buyer has not removed Buyer's Plant from the Plant Site after
two-hundred forty (2 40) days, Seller may take possession ofthe Buyer's Plant and all
associated equipment located at the Plant Site.
2.8 Utilities and Equipment. Except for the equipment and the utilities described in Exhibit
C, attached hereto and made a part hereo f, which shall be pro vided by Seller or as
otherwise set forth in the Lease, Buyer shall pro vide itself, and be solely responsible for
(i) such facilities, equipment, employees and personnel, and (ii) permits, licenses and
other forms of clearance from governmental o r regulato ry agencies, as are necessary for
the conduct o f Buyer's business operations in accordance with this Agreement.
2.9 Excused Performance. Buyer shall no t be obligated to commence or complete the
construction of, or continue operation of, Buyer's Plant and may terminate this
Agreement without prejudice or further liability to Seller, other than tho se contemplated
in Section 2 .3 herein if, or to the extent that:
2 .9.1 Seller fails to pro vide the Buyer's Plant Site o r access as required to o perate
Buyer's Plant.
2 .9.2 Despite diligent, good faith and reaso nable efforts, Buyer cannot obtain permits
required for the co nstructio n and operation o f Buyer's Plant o r the co nditio ns
imposed upon such permits make the construction or operation o f Buyer's Plant
technically or eco nomically unfeasible.
2 .9.3 Material and unforeseen site co nditio ns are disco vered that make construction or
operation o f Buyer's Plant technically or economically unfeasible.
2 .9.4 Despite diligent, good faith and reaso nable efforts, Buyer does not execute the
necessary agreements with offsite retail energy fuel cell or gas customers or
receive the required SGIP grant reservatio ns.
2.10 Microstation Format. Buyer agrees to provide Seller the fo llo wing drawings in
Microstation drawing format:
2.10.1 Underground utilities and foundations for Buyer's Plant; and
2.10.2 Interconnections between Buyer provided components o f Buyer's Plant
and Seller's Plant.
2.11 Permits and R egulato ry C ompliance. The Buyer will be solely responsible for all and
any permits including operational permits and any and all regulato ry compliance
including, but not limited to , building permits, environmental permits, coastal permits,
California Accidental Release Prevention Program (C AL -AR P) compliance, 19 C C R
Division 2 sections 2736 through 2785 CAL-OSHA compliance, 8 CCR for fuel gases as
well as Divisio n 4 section 5189, Pro cess Safety Management o f Acutely Haz ardo us
Materials, 40 CFR Part 68 (Federal ARP) and 24 CFR section 1910, 119 Federal OSHA
PSM for Buyer's Plant and any existing systems that may be effected by installatio n of
Buyer's Plant, with the exception o f tho se activities to be carried o ut by the Seller as
listed in Exhibit C, Scope of Work.
7
Proprietary & C o nfidential © The BOC Gro up, Inc.
oooq?
2
3
Seller's Facilities. The Seller shall have the right to approve any required o r requested
mo dificatio n to the Seller's existing Plant or future facilities or systems. Such approval
shall no t be unreaso nably withheld if the total projected revenues or the bio gas sales price
payable to Seller do es no t decrease. If, as a result o f said required of requested
mo dificatio ns to the Seller's Plant, facilities or system, causes a decrease in either total
revenues o r base price by more than 2 0%, then the Seller will have the right to cancel the
Agreement.
3. BIOGAS SU PPL Y
3.1 Available Biogas Supplied Exclusively to Buyer. Seller will Deliver to o r have available
for Delivery to Buyer all available Bio gas, up to the Buyer's Plant Design Capacity, that
is in excess o f that currently used o r required to be used in Seller's existing biogas
utilitizing equipment installed as ofthe Effective Date ("Existing Biogas Uses") .
Because ofthe variability in the Biogas generated by the Seller at Seller's Plant for
reasons beyond its control, Seller cannot guarantee the delivery o f specific amounts of
Biogas. However, Seller agrees that Buyer shall have the right to all Biogas pro duced at
the Seller's Plant in excess o f Existing Biogas Uses and shall use its best efforts to supply
as much Excess Biogas as po ssible up to the Buyer's Plant Design C apacity.
3.2 Notice o f Disruptio n o f Bio gas Supply. Seller shall keep Buyer info rmed of all planned
Disruptions o f Bio gas Supply due to planned maintenance, planned downtime or any
other events that are known in advance. In the case o f unfo reseen and unplanned
Disruptions in Biogas Supply, Seller shall notify Buyer as soon as practically po ssible as
to the nature ofthe disruption and the expected duration ofthe disruptio n.
3.3 Biogas C ompo sitio n. Seller shall use best efforts to maintain the methane content o fthe
Biogas at appro ximately 63% and the level o f hydro gen sulfide at less than 60 parts per
million by volume. Seller shall not be liable to the Buyer if these qualitative Biogas
characteristic levels cannot be maintained at all times, and Seller makes no representation
o r warranty that these levels will be maintained in the Excess Bio gas. Seller shall be
obligated to use its best efforts only. Seller is permitted to increase the level of hydrogen
sulfide as its permits limits are increased, but Buyer shall be entitled to a credit against
amounts o therwise payable to Seller fo r the actual and reasonable increased costs
associated with limits in excess of 60 parts per million by volume.
4. METER ING & TESTING OF BIOGAS
Proprietary & C o nfidential © The BOC Gro up, Inc.
(\ n Off 4 ^-
ccurac
'V- All meters, quality and quantity measurements used or perfo rmed by either
y
party pursuant to this Agreement shall be in accordance with the standards and guidelines
ofthe American Gas Association and Instrument Society of America.
4.2 Meter Measurement . Buyer will install and maintain a vo lumetric meter system that will
separately measure the gross Biogas Delivered "to Buyer's Plant and the gro ss Bio gas that
is required by the Buyer to functionally keep the Buyer's flare functioning to meet permit
requirements o r to meet the operational requirements ofthe Buyer's Plant. A net
metering arrangement may only be used to establish Net Biogas Delivered for billing
purposes, and such arrangements and systems shall be appro ved by Seller, which
approval shall not be unreaso nably withheld. Measurements shall be made in MMSCF
as described in Exhibit E attached hereto and made a part hereof ("Biogas Metering
System"). The Bio gas Metering System will be used to determine the to tal volume of
Net Biogas Delivered in MMSC F. These measurements shall be made available to Seller
and/or witnessed by Seller at Seller's sole discretio n. The meterfs) will be calibrated by
Buyer at Buyer's expense initially and then at least once each C o ntract Year beginning
with the second Contract Year. Seller will be no tified of and have the right to witness the
calibratio n. Seller may request recalibration ofthe meter(s) within the same year upon
good cause as pro vided for in Exhibit E.
4.3 Testing and C o nversio n to MMBTU. Buyer shall sample and test (using an independent
laboratory) the Biogas at the metering po int to determine the MMBTU content o fthe
Biogas ("MMBTU Testing") as described in Exhibit E. Seller will be no tified of and
have the right to witness the sampling and tests. The test results shall be made available
to Seller. The MMBTU Testing results shall establish the MMBTU co ntent per volume
(MMSCF) o f Bio gas which forms the basis ofthe unit Base Price Buyer must pay Seller
for Bio gas.. , Such testing shall be performed quarterly. Payment and billing will be
based on a rolling average ofthe results from the previo us four quarters (or available
results in the case ofthe first three quarters). Seller can request additional testing
provided Seller bears the cost.
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5. PR IC E AND PAYMENT TER MS
5.1 Price. Buyer shall pay Seller the unit Base Price for each MMBTU unit o f Net Bio gas
Delivered to Buyer.
5.1.1 The Base Price for the first five contract years shall be One do llar and ten cents
($1.10) per MMBTU.
5.1.2 In addition, Buyer shall pay Seller a premium o f twenty-five cents (£0.2 5) per
MMBTU for that portion of and to the extent the Net Bio gas Delivered in a given
Contract Year exceeds an annual average of 1.1 MMSC F per day fo r 365 days.
Any such premium payment shall be computed and paid within forty-five (45)
days after the reconciliation meeting which shall o ccur within sixty (60) days after
the end ofthe Contract Year.
5.1.3 Beginning in July 1 o f Contract Year six(6) and annually thereafter, the Base
Price and premium shall be adjusted as described in Appendix F. This adjustment
will only apply when adjustment leads to a price higher than the previous year. If
the adjustment leads to a lo wer price than the previo us year, no adjustment will be
made and the previo us price will be carried forward.
5.2 " Payment. On o r befo re fifteen (15) days after the end o f each calendar quarter fo llowing
the Initial Operation Date, Buyer shall submit an accounting o f its measurements o fthe
Net Biogas Delivered, MMBTU computatio n, Base Price, credits and the pro po sed
corresponding net payment therefore to Buyer for the amount due under this Article 5 for
such quarter. Buyer shall remit payment ofthe agreed amount to Seller within forty-five
(45) days after receipt of an email approval of Seller's concurrence. Unless the Seller
requests otherwise, payments shall be made by check made payable to the City Treasurer
and mailed to the Office ofthe C ity Treasurer, City of San Diego , P.O. Bo x 122289, San
Diego, California 92112-4165, or delivered to the Office of the C ity Treasurer, C ivic
Center Plaza, 1200 Third Avenue, First Flo o r, San Diego , California. The place and time
o f payment may be changed at any time by Seller upon thirty (30) days written notice to
Buyer. Mailed payments shall be deemed paid upon the date such payment is
postmarked by the po stal autho rities. If po stmarks are illegible, the payment shall be
deemed paid upon actual receipt by the City Treasurer. Buyer assumes all risk of lo ss
and responsibility fo r late payment charges if payments are made by mail.
5.3 Emission Credits. During the term of this Agreement, any emissio ns credits associated
with the Excess Biogas Delivered to and used by Buyer at the Buyer's Plant Site shall be:
i) divided evenly up to $1 millio n accumulative over the duratio n o f this Agreement; and
ii) divided 3/4 to the Seller and 1/4 to the Buyer for any amounts over $1 millio n
accumulative o ver the duratio n o f this Agreement. This do es no t include, and Buyer shall
be entitled to , emissio n credits associated with Product that is shipped from and used off
Buyer's Plant Site except that Buyer agrees to pay seller an amount equivalent to 10% of
any emissions credits in excess of S1.5 millio n received by Buyer over the duratio n of
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this Agreement that are associated with the offsite use o fthe Excess Biogas in Buyer's
offsite facilities.
5.4 CEC Grant. Seller shall be entitled to ten percent (10%) of any grant moneys received by
Buyer from the C alifo rnia Energy C ommissio n associated with the February 6, 2007
grant application net of any co rrespo nding reduction to the SGIP funds on account o fthe
CEC Grant.
5.5 California Self-Generation Incentive Program (SGIP1 Funds. Buyer shall be so lely
entitled to all financial co nsideratio ns associated with the C alifo rnia Self-Generation
Incentive Pro gram Fund and the installation of fuel cell technology o n the Buyer's sites,
both on and off the Seller's site.
5.6 Other C redits. Grants. Alternative Energy Subsidies o r Tax Credits. Except as expressly
provided, Buyer shall be solely entitled to all other financial co nsideratio n associated
with the sale o r use ofthe Excess Biogas including but not limited to any other credits,
grants, subsidies o r tax credits associated with the Biogas, Pro duct or fuel cell energy
production including, section 45 tax credits .
5.7 Other Products. In the event that Buyer develops additional commercial markets for
product streams recovered from the Excess Biogas other than tho se methane based
Products contemplated herein (for example, sale o f purified C02 based products), Buyer
agrees to share a portion ofthe value generated from these new pro duct streams with
Seller at a percentage to be nego tiated in the future, and Seller agrees to work in go o d
faith to enable Buyer to recover and remove these new product streams from Buyer's
Plant Site. In no way will Seller be obligated to consent to the remo val of these new
product steams if Seller determines, in Seller's sole discretio n, that the reco very or
removal o f these new pro duct streams would negatively impact Seller's Plant or
associated o peratio ns.
6. R EC OR DS AND AU DIT
6.1 R eco rds. Buyer and Seller will each establish and keep at all times, true and accurate
books, records and accounts relating to the perfo rmance o f their obligations under this
Agreement following generally accepted accounting principles (the "Records") and make
such Records available for audit by the o ther party as set forth herein. All Records and
any information contained therein and to the extent applicable to a party's performance of
its obligations under this Agreement, including, but not limited to information concerning
prices and payments made under this Agreement, are, to the extent applicable, subject to
the California Public R eco rds Act.
6-2 Audit. The Seller retains the right to review and audit, and the reaso nable right of
access to Buyer's and any subco ntracto r's premises to review and audit the Buyer's
Records which are relevant to compliance with the pro visio ns o f this Agreement. The
Seller retains the right to inspect and pho to co py same, and to retain copies, outside o fthe
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0 0 0 0 9 7 Buyer's premises, of any and all such Records with appro priate safeguards, if such
retention is deemed necessary by the Seller in its sole discretio n. This info rmatio n shall
be kept by the Seller in the strictest confidence allowed by law.,
6.3 Cost Audit. If there is a claim for additional compensation by either Party, the o ther Party
shall be permitted to examine books, records, documents, and any and all other evidence
and accounting procedures and practices that are reaso nably necessary to disco ver and
verify all direct and indirect co sts, o f whatever nature, which are claimed to have been
incurred, or anticipated to be incurred.
6.5 Time. The rights and obligations under this Section shall co ntinue thro ugho ut the term of
this Agreement and for o ne year fo llo wing its terminatio n.
7. TAXES
7.1 Real and Personal Property. Buyer shall pay all pro perty taxes impo sed on Buyer's Plant
as pro vided in the Lease.
7.2 Sales o r U se Taxes. Seller shall credit Buyer for any sales o r use taxes Buyer is required
to pay on account of its purchase ofthe Biogas from Seller.
8. R EPR ESENTATIONS AND WAR R ANTIES
,1 Seller represents and warrants to Buyer and covenants to Buyer at all times during the
term o f this Agreement as fo llows:
8.1.1 Seller has title.to all Biogas Delivered to Buyer under this Agreement, and Seller
has the right to sell the Biogas to Buyer, which is Delivered free from any liens
' and encumbrances; and
8.1.2 Seller covenants that Seller will pro cure and maintain in force all licenses,
consents, permits and approvals required for Seller's pro ductio n and sale o fthe
Biogas from Seller to Buyer.
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8.2 Buyer represents and warrants to Seller and covenants to Seller at all times during the
term of this Agreement as fo llo ws:
8.2 .1 Buyer has the right to purchase the Biogas from Seller, and to Produce the
Product; and
8.2 .2 Buyer co venants that Buyer will pro cure and maintain in force all licenses,
consents, permits and approvals required for Buyer's pro ductio n and sale o fthe
Product.
9. C L AIMS
Any claims fo r breach o f this Agreement or the representations o r warranties set forth
herein, must be made promptly after a party discovers grounds therefo r, but in no event later than
one year after the cause of action has occurred, and the party upo n whom claim is made shall
have thirty (30) days to investigate any such claim before the claimant may reso rt to any other
remedy provided in this Agreement.
10. RISK OF LOSS
Title to , and risk o f lo ss of, Biogas shall pass to Buyer when the Bio gas is Delivered to Buyer's
Plant. Buyer assumes all risk o f lo ss of Buyer's Plant except to the extent such lo ss may be
caused by the negligence ofthe Seller.
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11. FOR C E MAJ EU R E
11.1 Force Majeure. Other than in respect of a payment of money due, neither party shall
have any liability to the other for failure to perform its o bligatio ns, delay, or loss
o ccasio ned by any circumstance, event or occurrence beyond the reasonable co ntro l of
the affected party ("Force Majeure"). Force Majeure events may include any event or
circumstance arising or occurring beyo nd the reasonable control of Seller or Buyer,
which prevent it from performing its o bligatio ns under this Agreement including without
limiting the generality of the fo rego ing: (1) any acts of God, including, but without
restricting the generality thereof, lightning, earthquakes, storms, epidemics, landslides,
flo o ds, fires, explo sio ns or washo uts; (2) any strikes, lo cko uts or other industrial
disturbances; (3) any acts of the enemies of the state, sabotage, wars, blo ckades,
insurrections, riots, civil disturbances, arrests or restraints; (4) any freezing, explo sio ns,
craterings, breakage of equipment, forced maintenance shutdown or inability to obtain
materials or equipment which by the exercise of due diligence, such party could not have
prevented or is unable to overcome; (5) any orders of any co urt or government authority,
which physically limit the pro ductio n or transpo rtatio n of or alter the specifications of
Gas or Product, respectively; or (6) any acts or omissio ns (including failure to take
Product) of a transporter or carrier of Pro duct, which are caused by any event or
occurrence ofthe nature described in this Article.
11.2 Effect of No n-Perfo rmance. If a party is unable to perform any o bligatio n in this
Agreement because of Force Majeure, then the o bligatio ns of that party shall be
suspended to the extent and for the period of such Force Majeure co nditio n, provided
that: (1) the suspension of performance is of no greater scope and of no longer duration
than is required by the Force Majeure event; (2) the affected party uses reaso nable
endeavors to avoid and reduce the effects of the -Fo rce Majeure event, and to resume
performance of its o bligatio ns; and (3) the affected party gives prompt written notice to
the other party setting out the nature of the event of Force Majeure, the impact it will
have on performance, and its expected duration, and provides status updates whenever
there is any significant change.
11.3 Termination for Force Majeure. In the event that Force Majeure shall continue for a
period of twelve (12 ) months from the date the party claiming relief under this Article
gives the other party notice, Buyer and Seller shall have the right to terminate this
Agreement by furnishing written notice to the other party, with terminatio n effective
upon the expiration date of such twelve (12) month period. Upon such termination, each
party shall be relieved from its respective o bligatio ns, except for obligations for payment
o f mo netary sums which aro se prio r to the event o f Fo rce Majeure.
12. L IABIL ITY, INSU R ANC E & INDEMNITY.
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12.1 C o nsequential and Direct Damages
r v QO ^ O " In no event shall either party be liable to the other for any indirect, incidental, special or
consequential damages, including, but not limited to, lost profits, loss of use or business
interruptions, under any circumstances, caused by or arising out of, in whole or in part,
any negligent act or omissio n, even if advised of the possibility of such damages, unless
and except as may be expressly set forth belo w:
12.1.1 Fines imposed on a party and that are caused by the, other party's breach of this
Agreement o r its negligence.
12 .1.2 Net cost of utility purchased electricity and lost revenue from interruptions to the
Gas Utilization Facility sales to utility
A party's direct damages may include, but is not necessarily limited to, its internal or
contracted direct labor, equipment, and material co sts reaso nably and necessarily incurred
to overcome or mitigate the other party's breach or negligence.
12 .2 Indemnity.
12.2.1 To the fullest extent.permitted by law (including, without limitation, C alifo rnia
Civil Code Section 2 782 .8), Buyer shall defend (with legal counsel reasonably acceptable
to Seller), indemnify and hold harmless Seller and its officers, agents, departments,
officials, representatives and employees from and against all claims, lo sses, co sts,
damages, injuries (including, without limitation, injury to o r death of an emplo yee of a
party o r its subcontractors), expense and liability of every kind, nature and descriptio n
(including, without limitation, court costs, attorney's fees, litigation expenses and fees of
expert consultants o r expert witnesses incurred in connection therewith and costs of
investigation) that arise out of, pertain to, or relate to , directly o r indirectly, in whole o r in
part, and to the extent caused by, the negligence, recklessness, o r willful misconduct of
Buyer, its subcontractors, anyone directly or indirectly employed by them, o r anyo ne that
they control, provided however, that upon completion of defense by Buyer o f actio ns or
claims against Seller, its agents, officers, employees, o r representatives, Buyer shall have
no duty to indemnify Seller, its agents, officers, employees, o r representatives for costs,
damages, injuries (including, without limitation, injury to o r death o f an employee o f a
party o r its subcontractors), expense and liability of every kind arising from the
established comparative negligence of Seller, its agents, o fficers, or employees or
representatives.
12 .2 .2 The pro visio ns o f this Section 12.2 are no t limited by the pro visio ns of Section
12 .3 Buyer's Insurance.
12 .2 .3 Each party agrees to pay any and all costs the other party incurs enforcing the
indemnity and defense pro visio ns set forth in Section 12.1,1.
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12.3 Buyer's Insurance
12.3.1 Policies and Procedures - Buyer shall, at it o r its subcontractor's so le co st and
expense, pro cure insurance against claims for loss including injuries to perso ns or
damage to property, which may arise out of or in co nnectio n, with the
performance hereunder by the Buyer, Buyer's agents, representatives, o fficers,
employees. Buyer agrees to require any subcontractors retained for the
performance o f this Agreement to maintain all required insurance under this
section, or such type and limit o f co verage that may be commercially reaso nable
for the type and sco pe o f wo rk to be performed by such subcontractor. Buyer shall
maintain this insurance for the duratio n o f this Agreement. Buyer's liabilities,
including but not limited to Buyer's indemnity o bligatio ns, under this C o ntract
shall no t be deemed limited in any way to the insurance co verage required herein.
Buyer shall no t begin any construction work at the Plant Site under this
Agreement until it has pro vided and the Seller has approved all required
insurance. Except as pro vided fo r under C alifo rnia law, all po licies of insurance
required hereunder must pro vide that the Seller is entitled to thirty (30) days prio r
written notice (10 days for cancellation due to no n-payment o f premium) of
cancellation o r no n-renewal ofthe policy or policies. Maintenance of specified
insurance coverage is a material element o f this Agreement and Buyer's failure to
maintain o r renew coverage o r to pro vide evidence o f renewal during the term of
this Agreement may be treated as a material breach o f co ntract by Seller.
12.3.2 Types of Insurance -
12.3.2.1 C ommercial General L iability Insurance - Buyer shall provide at its
expense a policy or po licies of C ommercial General L iability (CGL)
Insurance which shall co ver liability arising from premises and
o peratio ns, XC U (explo sio ns, undergro und, · and collapse) independent
co ntracto rs, pro ducts/completed o peratio ns, perso nal injury and
advertising injury, property damage, and liability assumed under an
insured's contract (including the tort liability of another assumed in a
business contract). Buyer shall maintain the same or equivalent CGL
Insurance as described herein fo r at least two (2) years fo llowing
termination ofthe Agreement. Po licy coverage, shall in liability limits of
not less than the fo llowing:
Limits of L iability
General Liability L imit
· (Except Pro ducts/C ompleted
Operatio ns) each occurrence/annual aggregate $3,000,000
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Pro ducts/C ompl eted
Operations Aggregate L imit S3,000,000
Personal Injury L imit $2,000,000
Each Occurrence $2,000,000
12 .3.2 .2 C ommercial Automo bile L iability Insurance - Buyer shall provide at its
expense a po licy o r po licies o f C ommercial Automo bile L iability
Insurance pro viding co verage at least as bro ad in the amo unt of
$2,000,000 combined single limit per accident, covering bo dily injury
and pro perty damage fo r owned, no n-owned and hired automo biles
("Any Auto"),
12 .3.2 .3 Workers' C ompensatio n Insurance And Employers Liability Insurance -
Buyer shall provide at its expense Workers' C ompensatio n Insurance
and Employers L iability Insurance to protect the Buyer against all
claims under applicable state workers compensation laws. The Seller, its
elected officials, and employees will no t be respo nsible for any claims in
law or equity occasioned by the failure of the Buyer to comply with the
requirements of this section. Limits for this insurance shall be not less
than the fo llowing:
Workers' C ompensatio n Statutory
Employers L iability
Bodily Injury by Accident $1,000,000 each accident
Bodily Injury by Disease $ 1,000,000 each emplo yee
Bodily Injury by Disease $1,000,000 po licy limit
By executing this Agreement, Buyer certifies to the fo llowing:
"I am aware of the provisions of Section 3700 of the Labor C o de
which requires every employer to be insured against liability for
wo rker's compensatio n o r to undertake self-insurance, in
accordance with the pro visio ns of that code, and I will comply
with such pro visio ns before commencing the performance o fthe
work ofthe C o ntract."
12.3.3 R ating R equirements - Except for the State C ompensatio n Insurance Fund, all
-insurance required by this Agreement as described herein shall be carried only by
respo nsible insurance companies with a rating of, or equivalent to, at least "A-,
VI" by A.M. Best C ompany, that are autho riz ed by the C alifo rnia Insurance
C ommissio ner to do business in the State of C alifo rnia, and that have been
approved by the Seller.
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12.3.3.1 No n-Admitted Carriers - The Seller will accept insurance provided by
no n-admitted, "surplus lines" carriers only if the carrier is authorized to
do business in the State of C alifo rnia and is included on the List of
Eligible Surplus L ines Insurers (L ESL I list).
All po licies of insurance carried by no n-admitted carriers shall be
subject to all of the requirements for policies of insurance provided by
admitted carriers described herein.
12.3.4 Evidence o f Insurance - The Buyer shall furnish to the Seller do cuments,
including but no t limited to certificates of insurance and endo rsements, or
equivalent of certificates, as evidence for the insurance required herein. In this
regard, Buyer shall pro vide Seller with access to the website maintained by
Buyer's insurance broker which includes memoranda of insurance coverage for
Buyer.
12.3.5 Policy Endo rsements
12.3.5.1 C ommercial General Liability Insurance
12.3.5.1.1 Additional Insured - The po licy o r policies must be endorsed
or otherwise structured to include as an additional insured the City of
San Diego and its respective elected o fficials, o fficers, employees,
agents, and representatives but only to the extent of Buyer's indemnity
and performance o bligatio ns under this Agreement. The coverage shall
include defense and liability arising out of: (a) Ongoing o peratio ns
performed by Buyer or on its behalf, (b) Buyer's products, (c) Buyer's
wo rk, including but no t limited to Buyer completed o peratio ns
perfo rmed by Buyer or on its behalf, or (d) premises owned, leased,
co ntro lled, o r used by Buyer. These endorsements shall no t pro vide any
duty of indemnity coverage for the established negligence of the Seller
o r its respective elected o fficials, o fficers, emplo yees, agents,
subco ntracto rs and representatives.
12.3.5.2 C ommercial Automobile Liability Insurance - The Commercial General
Auto mo bile Policy required under Section 12 .3.2 .2 shall contain an
endo rsement on Industry Form MCS-90 for both Buyer and Seller for
hazardous material transportation and po llutio n liability
12 .3.5.2 .1 Additional Insured - The policy or policies under Section
12.3.2.2 must be endorsed to include as an additional insured the Seller
and its respective elected o fficials, o fficers, employees, agents, and
representatives, with respect -to defense and liability arising out of
auto mo biles owned, leased, hired or borrowed by or on behalf of the
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Buyer; Except provided that this endorsement shall not provide any duty
0 0 0 X 0 4 of indemnity coverage for the established negligence o fthe Seller or its
respective elected o fficials, officers, employees, agents, subco ntracto rs
and representatives.
12.3.5.3 Waiver Of Subro gatio n - The policy or policies must be endorsed to
provide that the insurer will waive all rights of subrogation against the
Seller, and its respective elected officials, officers, employees, agents,
and representatives for losses paid under the terms of the policy or
policies and which arise from work performed by the Buyer pursuant to
this agreement.
12 .3.6 Deductibles/Self-Insured R etentio ns - Buyer shall be respo nsible for the payment
of all deductibles and self-insured retentio ns.
12.3.7 Notice Of Changes To Insurance - Buyer shall notify the Seller 30 days prior to
any material change to the po licies of insurance provided under this Agreement.
12.3.8 R estrictio n on Start of Site Wo rk - The Buyer shall no t perfo rm any co nstructio n
work at the Plant Site wo rk unless the Buyer has in full force and effect all
required insurance. The Buyer shall not allow any subconsultant and
subco ntracto r, supplier, or other o rganiz atio n to perfo rm work at the Plant Site
unless the wo rker's compensation requirements have been met.
12.3.9 Additional Insurance
12.3.9.1 Wo rkers' C ompensatio n Insurance For Work In, Over, Or Alo ngside
Navigable Waters -
In addition to the Workers' C ompensatio n Insurance required under this
Agreement, Buyer shall pro vide additio nal insurance co verage for
claims bro ught under the L o ngsho re and Harbo r Wo rkers'
C ompensatio n Act, the Jones Act, general maritime law, and any other
federal or state laws, resulting from C o ntracto r's work in, over, or.
alongside navigable waters.
13. TERM AND TER MINATION
13.1 Term. Unless terminated earlier pursuant to this Article 13 or Article 2 herein, this
Agreement shall be effective on the Effective Date and shall remain in full force and
effect for an initial term ending on the tenth (10th) anniversary ofthe e_arlier ofthe (i)
Initial Operations Date; or (2 ) fifteen (15) months~after the'Effective Date. The Parties
may by written agreement extend this Agreement for o ne, five o r ten years.'
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13.2 Termination. Notwithstanding anything herein contained, this Agreement may be
terminated by either party without compensation to the o ther upo n written no tice:
13.2.1 By Seller at no expense to Seller at any time after the end of the fifth C o ntract
Year if in Seller's sole discretio n, Seller determines that such termination is in
Seller's best interest for any ofthe following reasons:
. 1 regulatory compliance;
.2 o peratio nal efficiencies and/or constraints on its pro cesses;
.3 space constraints; or
.4 the Seller's actual costs of continuing as shown by reasonable evidence
exceed the revenues received from the Bio gas Sales;
Buyer expressly acknowledges: (a) that Seller's wastewater plant operations are
cost-sensitive, regulated activities, (b) that the regulation of Seller's wastewater
plant o peratio ns is o ngo ing and subject to change, and (c) that Seller expressly
reserves prerogatives in the future, at least five years from the Initial Operation
Date, as to how Seller will maintain bo th regulato ry compliance and cost-effective
operations ofthe wastewater plant. Buyer accordingly agrees that Seller's right to
terminate under this subsection shall be in Seller's sole and absolute discretio n
and witho ut reco urse by Buyer. Section 2.7 of this agreement shall remain
applicable if Seller exercises its right of termination under this subsection. If
Seller exercises its rights to terminate under this subsection, Seller shall pro vide
Buyer written no tice o f no t less than 180 days befo re effective date o f terminatio n
13.2.2 By either party in the event the o ther party commits a material breach of any of its
o bligatio ns hereunder and fails to cure such breach within thirty (30) days
fo llowing receipt of a notice from the non-breaching party (which notice must
specify in reasonable detail the breach complained of unless such breach cannot
be cured within such thirty (30) day period and the defaulting party is diligently
pursuing such curative action until the breach is cured);
13.2.3 U po n terminatio n of the Lease or by either party if there occurs an event of
default under the Lease and such default continues beyond any applicable cure
- period;
13.2.4 By either party if the other party becomes the subject of any bankruptcy,
insolvency or similar proceedings, or makes a general assignment for the benefit
o f credito rs; or
13.2.5 By either party if any legislation, regulations, or decision of a Federal, State or
Municipal go vernment or of any agency thereof are implemented, repealed or
altered in such a way as to significantly prevent either party from lawfully
exercising or performing its obligations hereunder.
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14. ASSIGNMENT
14.1 This Agreement is not assignable by either Seller or Buyer except with the written
co nsent o f the o ther party; pro vided, however, that such co nsent shall no t be
unreasonably withheld or delayed; and pro vided further, that upon written notice (1)
either party may assign this Agreement, without the consent ofthe other party, to a party
acquiring all or substantially all of its business or operations with respect to which this
Agreement relates or (2 ) Buyer may assign this Agreement or any of its rights hereunder
to any affiliate. No such sale, assignment or other transfer of any rights of a party
hereunder shall be effective unless the purchaser, assignee or transferee assumes such
party's obligations under this Agreement.
14.2 Intent to Assign. This Agreement involves improvement to pro perty owned by the Seller
(Metro po litan Wastewater Department), said pro perty being a compo nent of the
Metro po litan Sewerage System owned and operated by the Seller. Present ownership
no twithstanding, the State of C alifo rnia established a new public agency, the SAN
DIEGO AREA WASTEWATER MANAGEMENT DISTRICT ("DISTRICT"), which is
intended to take and assume from the Seller the rights, title, and interest in the
Metropolitan Sewerage System, and to accept and honor all duties with respect to same,
including the rights and respo nsibility described in this Agreement. Therefore the Buyer
is hereby notified, and by execution of tins Agreement expressly agrees, that upon the
condition that the DISTR IC T is established, and upon written notice to the Buyer the
Seller shall have the unilateral right to assign all its rights an delegate all its duties under
this Agreement to the DISTRICT, which in such event, will immediately assume the role
of Seller and shall thereafter bear all of the Seller's rights and responsibilities under this
Agreement, and the C ity o f San Diego ("C ITY") shall then be fully and forever
discharged from same. Such right to assignment shall be effective for any and all claims
which may be made by the Buyer, whether such claims be made before or after the date
of assignment. Nothing in this pro visio n shall be construed to impose upon the Seller a
duty to assign this Agreement if the DISTR IC T is established; such assignment may be
made at the CITY's sole discretio n.
15. C ONFIDENTIAL ITY & INTEL L EC TU AL PR OPER TY.
15.1 Confidential Info rmatio n. To the fullest extent permitted by law, recognizing that Seller
is a public entity and subject to certain requirements regarding public disclosure of non-
propriety information, the parties agrees to ho ld and treat as secret and co nfidential
throughout the term o f this Agreement any and all proprietary and confidential
information disclosed by the o ther party (the "Disclosing Party") to the o ther party (the
"Receiving Party") including, but not limited to, know-how, procedures, o perating
techniques, customer lists o r identities, equipment specifications, analytical
specifications, process designs, drawings, prints, technical information and data,
business, financial, pricing o r o ther trade info rmatio n ("C o nfidential Information") in
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o o o io ?
writing, or, if disclo sed orally, confirmed in writing to be confidential, using with respect
to such C o nfidential Information the same standards and pro cedures which R eceiving
Party applies to its own confidential info rmatio n. Notwithstanding the fo rego ing,
"C o nfidential Info rmatio n" shall not include information which: (i) at the time o fthe
disclosure, is a part ofthe public domain; (ii) subsequently becomes a part ofthe public
domain by publication or otherwise through no fault ofthe party disclo sing the
information; (iii) the Receiving Party can show was contained in writing in its possession
at the time of disclosure, which info rmatio n had no t been wrongfully acquired, directly or
indirectly, from the Disclo sing Party and with respect to which no obligation of
confidentiality exists; (iv) is substantially disclosed to R eceiving Party by a third party
not in violation of any rights of, or o bligatio ns to , the Disclo sing Party hereto ; o r (v) is
required to be disclosed by law, including but not limited to the C alifo rnia Public
Records Act; provided that, for each ofthe foregoing exceptions, the R eceiving Party
pro vides the Disclo sing Party with written documentation evidencing the same upo n
request ofthe Disclosing Party.
15.2 Legally required disclo sure. The fo rego ing to the co ntrary notwithstanding, if disclosure
of any C o nfidential Information o f the Disclo sing Party is legally required to be made by
the R eceiving Party in or pursuant to a judicial, administrative o r governmental
proceeding or order or similar proceeding or order of a self-regulatory o rganiz atio n, the
Receiving Party may make such disclosure but only to the extent required to comply with
the law; provided, however, that if required, Receiving Party will cooperate if Disclo sing
Party seeks a pro tective order or other legal action to resist such disclo sure and shall limit
such disclo sure to the minimum required.
15.3 Intellectual Property. Buyer shall be the so le owner-o f, and Seller shall acquire no rights
in, any and all intellectual property associated with Buyer's Plant and its o peratio ns.
Seller shall not have the right to use or reproduce any of Buyer's equipment, pro cesses,
operations or systems without the written consent o f Buyer.
16. AU THOR IZED R EPR ESENTATIVES & NOTIC ES
16.1 Authorized R epresentatives. Until otherwise notified, the fo llowing shall be the
Authorized Representatives o f their respective parties with full autho rity to act o n their
behalf:
.1 Seller's Authorized R epresentative:
Name Director of San Diego Metropolitan Wastewater Department
Address 9192 Topaz Way, San Diego, CA 92123
Telephone (858)2 92 -6401
Facsimile (858) 2 92 -6420. ·
E-mail tbertch@sandiego .go v
.2 Buyer's Authorized R epresentative;
2 2
Proprietary & C o nfidential © The BOC Gro up, Inc.
000108
Name Steven Eckhardt, Vice President New Business Develo pment
Address 575 Mountain Avenue, Murray Hill, NJ 07974
Telepho ne (908)771-1151
Facsimile (908)771-4838
E-mail Steve.Eckhardt@bo c.com
16.2 Notices. Unless otherwise specifically provided fo r herein, all notices, co nsents,
requests, demands and other communicatio ns required o r permitted to be given pursuant
to this Agreement shall be deemed to have been duly given upon receipt if delivered
personally or sent by telex, telecopy, facsimile transmission, or certified mail (postage
prepaid, return receipt requested) to the fo llo wing, until another address or addressee
shall be furnished in writing by either party, notices shall be given in duplicate, addressed
as fo llows:
If to Seller: Seller Authorized Representative per 16.1.1
With a co py to :
A<- + f l .« ^ r t « . T U n ^ n c ; "D A 1 r..-. o i , rVU ^-1^»+^-rt«r^^·i·tQ« \ \ 7 n d i
Address: 9192 Topaz Way, San Diego , CA 9212 3
Telephone: (858) 654-4493
Facsimile: (858) 2 92 -6310
Proprietary & C o nfidential
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The BOC Gro up, Inc.
000109
If to Buyer: Buyer Authorized R epresentative per 16.1.2
With a co py to : The BOG Group, Inc.
575 Mo untain Avenue
Murray Hill, NJ 07974
Attentio n: Law Department
Telephone: (908) 464-8100
Facsimile: (908) 771-1375
17. DISPUTE R ESOL U TION
17.1 Mediation & L itigatio n. Any controversy or claim arising out o f o r relating to this
Agreement, o r to the perfo rmance by Buyer or Seller o f their respective duties and
obligations hereunder which canno t be otherwise resolved between the parties, shall be
resolved first by mediation in accordance with the commercial mediation and arbitration
rules ofthe American Arbitration Asso ciatio n and then by reco urse to the courts o fthe
State of California commercial mediation and California law.
17.2 Continued Performance of Agreement. During the existence o f any dispute under this
Agreement (including during any arbitratio n pro ceedings related thereto) each party shall
co ntinue to perfo rm its obligations under this Agreement and neither party shall exercise
any o ther remedy under this Agreement arising by virtue ofthe matters in dispute.
18. ADDITIONAL PR OVISIONS
18.1 Amendments. No amendment, mo dificatio n, change, waiver o r discharge of any
provision o f this Agreement, or any additio n hereto , shall be effective unless the same is
in writing and is signed or otherwise assented to in writing by an autho riz ed individual on
behalf of each party, and unless such writing specifically states that the same constitutes
such an amendment, mo dificatio n, change, waiver or discharge o f o ne or more provisions
o f this Agreement or any additio n hereto.
18.2 C o unterparts. This Agreement may be executed in any number of counterparts with the
same effect as. if all parties to this Agreement had signed the same document and all
counterparts will be construed together and constituted o ne and the same instrument.
18.3 Costs Borne By Each Party. Except as otherwise provided herein, each o fthe parties
herein shall pay its own costs and expenses incurred in the negotiation, preparation and
execution of this Agreement and of all documents referred to in it and in carrying o ut the
transactions contemplated hereby and thereby.
18.4 Cumulative R emedies. Unless otherwise specifically provided herein, the rights, powers,
and remedies of each of the parties provided herein are cumulative and the exercise of
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Proprietary & C o nfidential © The BOC Gro up, Inc.
ft A Q1 J
i
O
an
y right, power or remedy hereunder do not affect any other right, power o r remedy that
may be available to either party hereunder or otherwise at law or in equity.
18.5 Entire Agreement. This Agreement, including the attached Exhibits, together with the
Lease: 1) sets forth the entire agreement between Buyer and Seller with respect to the
purchase and sale of Biogas for Delivery to Buyer's Plant; and 2) supersedes and cancels
all prio r and co ntempo raneo us agreements and understandings between the parties,
whether oral or written, relating to the purchase and sale of Biogas for Delivery to
Buyer's Plant. In the event and to the extent of any conflict o r inco nsistency between this
Agreement, the Lease, the Scope of Work, and other exhibits to the agreements the order
of precedence shall be this Agreement, the Lease, the Scope of Work, and any other
attachments to the agreements.
18.6 Faithful Perfo rmance. The parties shall faithfully perform and discharge their respective
o bligatio ns in this Agreement and endeavor in good faith to negotiate and settle all
matters arising during the perfo rmance o f this Agreement not specifically provided for.
18.7 Governing L aw. The parties agree that this Agreement will be governed by the laws of
the State of California without regard to its conflicts o f law rules.
18.8 Independent C o ntracto rs. At no time shall Seller be an agent of Buyer nor shall Buyer
oe an agent oi Seuer. This Agreeirient shall not create a joint enterprise or create in any
respect a partnership between the parties. In all of their respective operations hereunder
each party shall act as an independent contractor. In no event shall Buyer attempt to bind
Seller with any representatio n, guarantee or warranty concerning any Product produced
by Buyer hereunder.
18.9 Non-Waiver of Future Default. No waiver by either party of any default by the other
party in the performance of any of the pro visio ns of this Agreement will operate or be
construed as a waiver of any other or future default or defaults, whether of a like or of a
different character.
18.10 Severability. Any pro visio n of this Agreement which is or becomes prohibited or
unenforceable in any jurisdiction shall not invalidate or impair the remaining pro visio ns
of this Agreement which shall be deemed severable from the pro hibited or unenforceable
pro visio ns and any pro hibitio n or unenfo rceability in any jurisdiction shall not invalidate
o r render unenfo rceable that provision in any other jurisdiction.
18.11 Equal Opportunity C o ntracting Program. Buyer shall comply with the City of San
Diego 's No ndiscriminatio n in C o ntracting Ordinance, San Diego Municipal C ode
Sections 22.3501 through 2 2 .3517. Buyer and all subcontractors for Buyer shall comply
with the City of San Diego 's Equal Emplo yment Opportunity Outreach Program, San
Diego Municipal Code Sections 22.2701 through 2 2 .2 707. Buyer shall not discriminate
on the basis of race, gender, religion, national origin, ethnicity, sexual orientation, age, or
. disability in the so licitatio n, selection, hiring, or treatment of subcontractors, vendors, or
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Proprietary & C o nfidential © The BOC Gro up, Inc.
000111
suppliers. Buyer shall provide equal o ppo rtunity for subcontractors to participate in
subcontracting o ppo rtunities. Buyer understands and agrees that violation of this clause
shall be co nsidered a material breach o f the contract and may result in contract
termination, debarment, o r o ther sanctio ns.
18.12 Drug Free Wo rkplace. Buyer shall have in place a drug-free workplace program that
complies with the requirements of the San Diego City Council Policy Number 100-17
regarding Drug-Free Workplace and shall ensure that each subcontract agreement having
to do with the design, construction and operations ofthe Buyer's Plant contains language
which indicates the subco ntracto rs' agreement to abide by the pro visio ns of the above
referenced po licy. .
18.13 Parent Guarantee. Upon execution of this Agreement by the Seller, Buyer shall provide
the Parent Guarantee from The BOC Group, Inc. as pro vided in Exhibit B.
18.14 Proposal for Fuel Cell Projects. Seller understands that Buyer is using the Excess Biogas
in fuel cells located in the San Diego region and has pending agreements for all biogas
the Buyer currently projects will be available. However, in due co nsideratio n or this
transaction, if biogas becomes available for possible fuel cells to be located at a Seller's
facilities excluding Miramar Landfills, the Buyer will notify the Seller in writing and the
Seller may request a pro po sal from the Buyer within sixty (60) days from no tificatio n.
18.15 Excess Landfill Gas Owned bv the City of San Diego CCITY). The CITY has issued
public requests for proposals previously for their excess landfill gas and no pro jects were
developed except at the CITY's Miramar Landfill. The C ITY may request proposals for
the use of this gas, excluding the CITY's Miramar Landfill, during the first five years of
this contract without a public so licitatio n. Any requested pro po sal shall be submitted
within one hundred twenty (120) days of the request. A request for proposal under this
section does not give the Buyer any rights to this gas nor do es it preclude the C ITY from
requesting other so licitatio ns. .Any proposal submitted by the Buyer will be good for one
hundred eighty (180) days. If a pro po sal is requested and received and written records of
active negotiations are not produced for 180 days after receipt of proposal, the Buyer and
C ITY shall relinquish any rights under this sectio n.
[signature page fo llows]
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Proprietary & C o nfidential © The BOC Gro up, Inc.
000112
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as ofthe last date set
forth belo w.
BOC MER C HANT PR PDU C TION, INC.
By>
-/£-C O-<-u^
Name
Title:
Date:
"tn^w .7
(
^o7
THE CITY OF SAN DIEGO, C AL IFOR NIA
By:_
Name:
Title:
Date:
Proprietary & C o nfidential
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The BOC Gro up, Inc.
000113
EXHIBIT A
Site Plan
See Exhibit "C", Scope o f Work, Attachment Al
EXHIBITS
000114
GUAR ANTEE AGREEMENT
From
THE BOC GR OUP, INCORPORATED
i O
THE C ITY OF SAN DIEGO
C o ncerning
POINT LOMA BENEFIC IAL USE OF DIGESTER GAS PR OJECT
GAS PU R CHASE AND SALE AGR EEMENT AND SITE LEASE
Copyright 2007: The BOC Group, Inc., all rights reserved. B - 1
This form o f co ntract includes pro prietai-y info rmatio n belonging to BOC, Except to the extent it is required to be made public as part of
execution of this Agreement, the tenns and co nditio ns of this Agreement are considered co nfidential
oooU
Guarantee Agreement
s
ts Guarantee Agreement is made and dated J une 2 2 , 2 007, between The BOC Group
Incorporated, a Delaware co rpo ratio n ("BOC Group" o r "Parent Guarantor"), and the C ity of San
Diego, a C alifo rnia municipal co rpo ratio n and charter city ("City").
R ecitals
A. The City and BOC Merchant Production, Inc., a Delaware co rpo ratio n, concurrently
herewith enter into : (1) a Bio gas Purchase and Sale Agreement and (2 ) a BU DG Site Lease
whereby C ompany has agreed to develop, install, and operate a Beneficial Use o f Digester Gas
biogas production facility on a leased site adjacent to sewage sludge digesters at C ity's Point
Loma Wastewater Treatment Plant, and whereby C ity has agreed to sell, and Company has
agreed to purchase, excess bio gas conveyed by C ity from said digesters ("BUDG Project
Agreements").
B. The C ompany is a direct o r indirect wholly owned subsidiary o f Parent Guarantor.
C. The City will enter into the BUDG Pro ject Agreements with Company only if the Parent
Guarantor guarantees the perfo rmance by the C ompany o f all C ompany's responsibilities and
o bligatio ns under the BU DG Project Agreements as set forth in this Guarantee Agreement (the
"Guarantee") .
D. In order to induce the execution and delivery ofthe BU DG Pro ject Agreements by the City
and in co nsideratio n thereof, Parent Guarantor agrees as fo llows;
Guarantee
1. R epresentatio ns and Warranties ofthe Parent Guarantor: The Parent Guaranto r hereby
represents and warrants as fo llo ws:
(a) Existence and Powers. The Parent Guarantor is a duly organized and validly existing
as a co rpo ratio n under the laws of Delaware, with full legal right, power, and
autho rity to enter into and perform its o bligatio ns under this Guarantee.
(b) Due Autho riz atio n and Binding Obligation. The Parent Guaranto r has duly authorized
the execution and delivery of this Guarantee, and this Guarantee has been duly
executed and delivered by the Parent Guarantor and constitutes its legal, valid, and
binding obligation ofthe Parent Guarantor, enforceable against the Guaranto r in
acco rdance with its terms except insofar as the enforcement may be affected by
bankruptcy, insolvency, moratorium, or by general equity principles of reo rganiz atio n
o r o ther equitable principles affecting creditor's rights.
(c) No C o nflict: Neither the execution or delivery by the Parent Guarantor of this
Guarantee no r the perfo rmance by the Parent Guaranto r o f its obligations hereunder
(i) to the Parent Guarantor's knowledge conflicts with, vio lates, o r results in the
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Pro prietary &. C o nfidential © The BOC Gro up, Inc.
000116
breach of any law or governmental regulation applicable to Parent Guarantor, (ii)
conflicts with, violates, o r results in a breach of any term or condition of Parent
Guarantor's corporate charter o r by-laws o r any judgment, decree, agreement, or
instrument to which Parent Guarantor is a party o r by which Parent Guarantor o r any
o f its pro perty or assets are bo und, or constitutes a default under any such judgment,
decree, agreement, or instrument, or (iii) to the Parent Guarantor's knowledge will
result in the creation or imposition of any material encumbrance of any nature
whatsoever upon any ofthe properties or assets o fthe Parent Guarantor, except as
provided herein o r in the BU DG Project Agreements.
2. Guarantee to the City: The Parent Guarantor hereby abso lutely, presently, irrevocably, and
unco nditio nally guarantees to the C ity fo r the benefit ofthe City (i) the full and prompt
payment when due o f each and all o f the payments required to be credited o r made by the
C ompany under the BU DG Project Agreements (including all amendments and
supplements thereto) to , o r for the account of, the City, when same shall become due and
payable pursuant to this Guarantee, and (ii) the full and prompt performance and
observance of each and all ofthe C o mpany's Obligatio ns under the BU DG Project
Agreements ("Obligatio ns"). Notwithstanding the unconditional nature ofthe Parent
Guarantor's o bligatio ns as set forth herein, the Parent Guarantor shall have the right to
assert the defenses provided in Section 2 (c) hereof against claims made under this
Guaranty.
(a) Right of C ity to Proceed Against Parent Guaranto r. This Guarantee shall co nstitute a
guarantee o f payment and of performance and no t of collection and the Parent
Guarantor specifically agrees that in the event of a failure by the Company to pay or
perform any obligation guaranteed hereunder, the City shall have the right to proceed
· first and directly against the Parent Guaranto r under this Guarantee and witho ut
proceeding against the Company or exhausting any o ther remedies against the
Company which the City may have. Witho ut limiting the fo rego ing, the Parent
Guarantor agrees that it shall no t be necessary, and that the Parent Guarantor shall no t
be entitled to require, as a co nditio n of enforcing the liability ofthe Parent Guarantor
hereunder, that the City (i) file suit o r pro ceed to obtain a perso nal judgment against
the Company or any o ther perso n that may be liable fo r the obligations o r any part of
the Obligations; (ii) make any other effort to obtain payment or performance o fthe
Obligations from the Company other than providing the Company with any no tice o f
such payment o r performance as may be required by the terms ofthe BUDG Project
Agreements o r required to be given to the C ompany under applicable law; (iii)
foreclose against or seek to realiz e upo n any security fo r the Obligatio ns; o r (iv)
exercise any other right o r remedy to which the C ity is o r may be entitled in
connection with the Obligations or any security therefore or any other guarantee
thereof, except to the extent that any such exercise o f such o ther right o r remedy may
be a co nditio n to the Obligations ofthe Company o r to the enfo rcement of remedies
under the BUDG Project Agreements. Upon any unexcused failure by the C ompany
in the payment or performance of any obligation and the giving o f such notice or
demand, if any, to the Company and Parent Guarantor as may be required in
connection with such Obligations and this Guarantee, the liability ofthe Parent
Proprietary & C o nfidential © The BOC Gro up, Inc.
n A Q J_ ^ 7 Guarantor shall be effective and shall immediately be paid or performed.
Notwithstanding the City's right to proceed directly against the Parent Guaranto r, the
City (o r any successor) shall no t be entitled to mo re than a single full performance of
the obligations in regard to any breach or nonperformance thereo f, and shall be
subject to the pro visio ns of Section 2(i) hereof.
(b) Guarantee Abso lute and U nco nditio nal. The o bligatio ns ofthe Parent Guarantor
hereunder are abso lute, present, irrevocable, and unco nditio nal and shall remain in
full force and effect until the Company shall have fully discharged the Obligations in
acco rdance with their respective terms, and except as pro vided in Section 2(c) hereof,
shall no t be subject to any co unterclaim, set-off, deduction, o r defense (o ther than full
and strict compliance with, o r release, discharge, or satisfaction of, such Obligations)
based on any claim that the Parent Guarantor may have against the Company, the
City, or any o ther perso n. Without limiting the foregoing, the obligations of the
Parent Guaranto r hereunder shall no t be released, discharged, o r in any way modified
by reaso n of any o fthe fo llo wing (whether with o r witho ut no tice to , knowledge by,
or further consent o f the Parent Guarantor):
(1) the extensio n o r renewal o f this Guarantee o r the BUDG Project Agreements up
to the specified Terms of each agreement;
(2 ) any exercise o r failure, omission, or delay by the C ity in the exercise o f any
right, power, o r remedy conferred on the C ity with respect to this Guarantee or
the BU DG Pro ject Agreements except to the extent such failure, omission, or
delay gives rise to an applicable statute o f limitatio ns defense with respect to a
specific claim;
(3) any permitted transfer or assignment o f rights o r o bligatio ns under the BUDG
Project Agreements by any party thereto , o r any permitted assignment,
conveyance, o r o ther transfer of any o f interests in the BU DG facility;
(4) any renewal, amendment, change, or modification in respect of any o fthe
Obligations o r terms or conditions ofthe BU DG Pro ject Agreements;
(5) any failure o f title with respect to all or any part ofthe respective interests of
any perso n in the Site or the Facility;
(6) the vo luntary or involuntary liquidation, dissolution, sale, o r o ther disposition of
all or substantially all the assets, marshalling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment fo r the benefit of creditors,
reorganization, mo rato rium, arrangement, composition with creditors or
readjustment of, or other similar pro ceedings against the C ompany or the Parent
Guaranto r, or any ofthe property of either of them, or any allegation or contest
ofthe validity o f this Guarantee or the BU DG Pro ject Agreements in any such
proceeding (it is specifically understood, consented and agreed to that, to the
extent permitted by law, this Guarantee shall remain and continue in full force
and effect and shall be enforceable against the Parent Guarantor to the same
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Propnetary & C o nfidential © The BOC Gro up, Inc.
000118
extent and with the same fo rce and effect as if any such pro ceeding had not been
instituted and as if no rejectio n, stay, termination, assumption, or mo dificatio n
has occurred as a result thereo f, it being the intent and purpo se of this Guarantee
that the Parent Guarantor shall and do es hereby waive all rights and benefits
which might accrue to it by reaso n of any such pro ceeding);
(7) except as permitted by Section 3 hereof, any sale o r o ther transfer by the Parent
Guarantor or any Affiliate of any ofthe capital stock or other interest o fthe
Parent Guarantor or any Affiliate ofthe Company now o r hereafter owned,
directly o r indirectly, by the Parent Guaranto r or any Affiliate, or any change in
compo sitio n ofthe interest in the C ompany;
(8) any failure on the part ofthe Company for any reaso n to perfo rm or comply
with any agreement with the Parent Guarantor;
(9) the failure o n the part ofthe City to pro vide any no tice to the Parent Guarantor
which is no t required to be given to the Parent Guaranto r pursuant to this
Guaranty and to the Company as a co nditio n to the enforcement of Obligations
pursuant to the BUDG Project Agreements.
(10) subject to Section 2 (c) belo w, any failure o f any party to the BUDG Project
Agreements to mitigate damages resulting from any default by the Company or
A.I_„ n * n *— ,,« . ,4™. +T— -DTrrv/n TI- · + A ,~.~~~,™+r, .
(11) the merger o r co nso lidatio n of any party to the BU DG Project Agreements into
o r with any other person, or any sale, lease, transfer, abandonment, or other
disposition o f any or all ofthe property o f any ofthe foregoing to any person;
(12) any legal disability or incapacity of any party to the BU DG Project Agreements;
or
(13) the fact that entering into any BU DG Pro ject Agreements by the Company or
the Parent Guarantor was invalid o r in excess ofthe powers of such party.
Should any mo ney due or owing under this Guarantee no t be reco verable from the
Parent Guarantor due to any ofthe matters specified in subparagraphs (1) thro ugh
(13) abo ve, then in any such case, such money, together with all additional sums due
hereunder, shall nevertheless be recoverable from the Parent Guarantor as tho ugh the
Parent Guaranto r were principal obligor in place ofthe C ompany pursuant to the
terms ofthe BUDG Project Agreements, and not merely a guaranto r, and shall be
paid by the Parent Guarantor forthwith subject to the terms o f this Guarantee.
Notwithstanding anything to the contrary expressed in this Guarantee, nothing in this
Guarantee shall be deemed to amend, modify, clarify, expand, o r reduce the
Company's rights, benefits, duties, or obligations under the BUDG Project
Agreements. To the extent that any ofthe matters specified in subparagraphs (1)
through (6) and (8) thro ugh (14) would provide a defense to , release, discharge, o r
Proprietary & C o nfidential
The BOC Gro up, Inc.
AQO l ^ " otherwise affect the C ompany's Obligations, the Parent Guarantor's obligations under
this Guarantee shall be treated the same.
(c) Defenses. Set-Offs. and C o unterclaims: Notwithstanding any provision contained
herein to the co ntrary, the Parent Guarantor shall be entitled to exercise or assert any
and all legal or equitable rights or defenses which the.C ompany may have under the
BUDG Project Agreements, o r under Applicable Law (o ther than bankruptcy or
insolvency ofthe Company and other than any defense which the Company has
expressly waived in the BU DG Project Agreements o r the Parent Guarantor has
expressly waived in Section 2 (d) hereof or elsewhere hereunder), and the obligations
ofthe Parent Guaranto r hereunder are subject to such counterclaims, set-offs, or
deductions which the Company is permitted to assert pursuant to the BUDG Project
Agreement, if any.
(d) Waivers bv the Parent Guarantor: The Parent Guaranto r hereby unco nditio nally and
irrevocably waives:
(1) no tice from the C ity o f its acceptance o f this Guarantee;
(2 ) notice of any o f the events referred to in Section 2 (h) hereo f except to the extent
that notice is required to be given as a co nditio n to the enforcement of
Obligatio ns;
(3) to the fullest extent lawfully possible, all no tices which may be required by
statute, rule o f law, or otherwise to preserve intact any rights against the Parent
Guarantor, except any no tice to the C ompany required pursuant to the BUDG
Project Agreements or applicable law as a co nditio n to the perfo rmance o f any
Obligatio n;
(4) to the fullest extent lawfully possible, any statute o f limitatio ns defense based
on a statute o f limitatio ns period which may be applicable to guarantors (or
' parties in similar relationships) which would be sho rter than the applicable
statute of limitations period fo r the underlying claim;
(5) any right to require a pro ceeding first against the C ompany;
(6) any right to require a pro ceeding first against any perso n or the security
provided by o r under the BUDG Project Agreements to the extent such
Agreements specifically require a pro ceeding first against any perso n (except
the Company) or security;
(7) any requirement that the Company be joined as a party to any pro ceeding for the
enforcement of any term of the BU DG Project Agreements;
(8) the requirement of, o r no tice of, the filing o f claims by the C ity in the event of
the receivership o r bankruptcy of the Company; and
6
Proprietary & C o nfidential © The BOC Gro up, Inc.
(9) all demands upon the Company or any o ther perso n and all other formalities the
ftftO't^O omission o f which, or delay in perfo rmance of which, might but for the
provisions of this Section, by rule o f law or otherwise, constitute grounds for
relieving or discharging the Parent Guarantor in who le o r in part from its
abso lute, present, irrevocable, unco nditio nal, and continuing o bligatio ns
hereunder.
(e) Payment of Costs and Expenses: The Parent Guarantor agrees to pay the City on
demand all reaso nable costs and expenses, legal or otherwise (including co unsel
fees), incurred by or o n behalf of the City in successfully enforcing by Legal
Proceeding observance o fthe covenants, agreements, and obligations contained in
this Guarantee against the Parent Guarantor, other than the costs and expenses that the
City incurs in perfo rming any o f its obligations under the BU DG Project Agreements
where such obligations are a condition o f perfo rmance by the Company of its
Obligatio ns.
(f) Subordination of R ights: The Parent Guarantor agrees that any right o f subro gatio n
or contribution which it may have against the Company as a result of any payment o r
performance hereunder is hereby fully subordinated to the rights ofthe C ity
hereunder and that the Parent Guarantor shall no t reco ver or seek to recover any
payment made by it hereunder from the Company and the Company and the Parent
Guaranto r have fully and satisfactorily paid o r perfo rmed and discharged the
Obligations giving rise to a claim under this Guarantee.
(g) Separate Obligations: R einstatement: The obligations ofthe Parent Guarantor to
make any payment o r to perfo rm and discharge any other duties, agreements,
co venants, undertakings, or o bligatio ns hereunder shall (i) to the extent permitted by
applicable law, constitute separate and independent obligations ofthe Parent
Guaranto r from its other o bligatio ns under this Guarantee; (ii) give rise to separate
and independent causes of action against the Parent Guarantor; and (iii) apply
irrespective of any indulgence granted from time to time by the C ity. The Parent
Guarantor agrees that this Guarantee shall be automatically reinstated if and to the
extent that for any reaso n any payment o r perfo rmance by o r o n behalf of the
Company is rescinded o r must be otherwise resto red by the C ity, whether as a result
of any pro ceedings in bankruptcy, reo rganiz atio n, o r similar pro ceeding, unless such
rescission or restoration is pursuant to the terms o fthe BUDG Project Agreements,
o r the C ompany's enforcement of such terms under applicable law.
(h) Term: This Guarantee shall remain in full force and effect from the date of execution
and delivery hereo f until all ofthe Obligations ofthe C ompany have been fully paid
and performed.
(i) Disputes relating to BUDG Project Agreements: In the event of any dispute under the
BU DG Pro ject Agreements that relates to claim under this Guarantee, which dispute
is submitted to dispute resolution as pro vided in the BUDG Project Agreements, the
obligations o f this Guarantee shall be suspended pending the o utcome o f such dispute
7
Proprietary & C o nfidential © The BOC Gro up, Inc.
A n n 1 2 1 reso lutio n after which, however, Parent Guarantor shall be o bligated under this
U U U J- Guarantee for any award o r judgment that may be assessed against the C ompany.
3. Miscellaneo us.
(a) C o nso lidatio n. Merger. Sale, o r Transfer: The Parent Guaranto r covenants that
during the terms o f this Guarantee it will maintain its corporate existence, will not
dissolve o r o therwise dispose of all or substantially all o f its assets, and will not
consolidate with o r merge into another entity o r permit one o r mo re other entities to
consolidate with o r merge into it unless the successor is the Parent Guarantor;
provided, however, that the Parent Guarantor may consolidate with o r merge into
another entity, o r permit o ne o r mo re o ther entities to co nso lidate with o r merge into
it, or sell or otherwise transfer to another entity all o r substantially all o r any of its
assets and thereafter dissolve, o r no t, if the successor entity (o ther than the Parent
Guarantor): (i) assumes in writing all o bligatio ns ofthe Parent Guarantor hereunder
and, if required by law, is duly qualified to do business in the State of California; and
(ii) has adequate financial assets under United States Generally Accepted Accounting
Principles to meet the obligations ofthe Parent Guaranto r hereunder.
(b) C o ntinuance of Obligatio ns: If a consolidation, merger, o r sale o r o ther transfer is
made as permitted by this Section, the provisions o f this Sectio n shall continue in full
force and effect and no further co nso lidatio n, merger, o r sale o r o ther transfer shall be
made except in compliance with the provisions of this Sectio n. No such
co nso lidatio n, merger, or sale o r o ther transfer shall have the effect o f releasing the
j Guarantor from its liability hereunder unless a successo r entity has assumed
respo nsibility fo r this Guarantee as pro vided in this Section.
(c) Assignment: Without the prio r written consent ofthe C ity, this Guarantee may no t be
assigned by the Parent Guarantor, except pursuant to Sectio n 3(a) hereof.
(d) Qualification in C alifo rnia. The Parent Guarantor agrees that, so lo ng as this
Guarantee is in effect, if required by law, the Parent Guaranto r will be duly qualified .
to do business in the State o f C alifo rnia.
(e) Consent to Jurisdiction. The Parent Guarantor irrevocably: (i) agrees that any legal
proceeding arising out of this Guarantee shall be bro ught in the state or federal courts
in San Diego County, California, having appro priate jurisdictio n; (ii) consents to the
jurisdictio n of such court any such legal pro ceeding; (iii) waives any objection which
it may have to the laying o f the jurisdiction of any such legal proceeding in any of
such co urts.
(f) Binding Effect. This Guarantee shall inure to the benefit ofthe C ity and its permitted
successors and assigns and shall be binding upo n the Parent Guarantor and its
successors and assigns.
Proprietary & C o nfidential © The BOC Gro up, Inc.
',
:
(g) Amendments. Changes, and Mo dificatio ns. This Guarantee may no t be amended,
changed, modified, or terminated and none o f its pro visio ns may be waived, except
H H H1 ? 2 wifo the prio r written consent ofthe City and ofthe Parent Guarantor.
(h) L iability. It is understo o d and agreed to by the C ity that no thing contained herein
shall create any obligation of or right to look to any directo r, officer, employee, or
stockholder ofthe Parent Guarantor (or any Affiliate thereof) fo r the satisfactio n of
any obligations hereunder, and no judgment, order, o r executio n with respect to o r in
connection with this Guarantee shall be taken against any such director, officer,
employee, or sto ckho lder.
(i) No tices. All notices, demands, requests, and other communications hereunder shall
be deemed sufficient and properly given if in writing and delivered in perso n to the
fo llo wing addresses or sent by first class mail and facsimile. To such addressee:
If to the Parent Guarantor:
Name General C o unsel
The BOC Group, Inc.
Address 575 Mountain Avenue, Murray Hill, NJ 07974
Facsimile (908)771-4775
Name Director of San Diego Metropolitan Wastewater Department
Address 9192 Topaz Way, San Diego , CA 92123
Telepho ne (858)2 92 -6401
Facsimile (858)2 92 -642 0 .
E-mail tbertch@sandiego .go v
Either party may, by like no tice, designate further or different addresses to which subsequent
notices shall be sent. Any no tice hereunder signed o n behalf o f the no tifying party by a duly
authorized attorney at law shall be valid and effective to the same extent as if signed on behalf of
such party by a duly authorized officer or employee. Notices and communicatio ns given by mail
hereunder shall be deemed to have been given five days after the date o f dispatch; all other
notices shall be deemed to have been given upon receipt .
IN WITNESS WHER EOF, the Parent Guarantor has caused this Guaranty to be executed in its
name and on its behalf by its duly autho riz ed officer as o fthe date first written above.
Accepted and Agreed to by:
CITY OF SAN DIEGO THE BOC GROUP, INC.
By: By: ^ f t ^ ^ W
Printed Name: Printed Name: tS^o b ^Ar \ N D V J V -
Title: Title: 0 ^ V\<MXKel(XX 6 ^ ^
9
Proprietary & C o nfidential © The BOC Gro up, Inc.
000123
Approved as to form and legality
on this day of , 2007.
MICHAEL J. AGU IR R E, City Attorney
By :
Title: Deputy City Attorney
10
Proprietary & C o nfidential © The BOC Gro up, Inc.
000124
* EXHIBIT C
Scope o f Work
000125
EXHIBIT C
SC OPE OF WOR K
POINT LOMA WASTEWATER TREATMENT
PLANT
BENEFICIAL U SE OF DIGESTER GAS
PS 64 Valve and Piping R eplacement Metropolitan Wastewater Department
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DETAILED SCOPE OF WORK FOR THE
BENEFIC IAL USE OF DIGESTER GAS AT THE
POINT LOMA WASTEWATER PLANT
Table of C o ntents
GENER AL .
SECTION 1: PR OJEC T DESC R IPTION
1.1 BU YER fSyS GENER AL R ESPONBIIL ITIES 3
.1.1 Project Background 3
.1.2 Genera! Description 3
.1.3 Site Descriptio n 4
.1.4 Process Descriptio n 4
.1.5 Power Supply 5
.1.6 Air Pollution C o ntro l Systems Descriptio n 6
.1.7 Services Provided by the PLWTP 6
1.2 INTERFACE WITH PLWTP FAC IL ITIES 6
SEC TION 2: SEL L ER f'S) MANAGEMENT SU PPOR T
2.0 INTR ODU C TION 7
2.1 SC HEDU L E 7
2 .2 PR OJEC T OCKOFF, PARTNERING PR OGR ESS MEETINGS AND R EPOR TS 8
SEC TIONS NOT USED 8
SECTION 4: ENVIR ONMENTAL DOC U MENTS 9
SEC TION 5: DESIGN AND OPER ATIONS C R ITER IA AND DESIGN INVESTIGATIONS
5.0 DESIGN AND OPER ATIONS C R ITER IA 9
5.0.1 Planning and Permitting 9
5.0.1.1 Air Quality 9
5.0.1.2 Gas Emissio ns 10
5.0.1.3 Health and Safety 10
DETAIL ED SCOPE OF WORK FOR j
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5.0.1.4 Haz ardo us Materials and Wastes 11
5.0.1.5 Navy / C abrillo National Mo nument and Bureau of Land Mgmt
R equirements 11
5.0.1.6 Enviro nmental Issues 11
5.0.1.6.1 CAL ARP and CAL OSHA 11
5,0,2 Site-Specific Environmental Issues 12
5,0.2.1 Noise Abatement 12
5.0.3 · Use of On Site R eso urces 13
5.0.4 Process Design 13
5.0.4.1 U tilities 13
5.0.4.2 Parallel Operatio n on Electrical System 13
5.0.4.3 Electric Po wer 15
5.0.4.4 Architectural and L andscaping Issues 15
5.0.4.5 Excavatio n and R etaining Wall 15
5.0.4.6 Ho riz o ntal Site L imits 15
5.0.4.7 U ndergro und C o nditio ns 15
5.0.4.8 C hemicals 16
5.0.4.9 Metering, Data, DCS C o nnectio ns 16
5.0.5 Use ofthe MWW
7
D Clean Water Program (CWP) Guidelines 16
5,1 ADDITIONAL INVESTIGATIONS 17
5.1.1 Geotechnical Investigation 17
5.1.2 Surveying 17
SEC TION 6: DESIGN DEVELOPMENT
6.1 DESIGN : : 17
6.1.1 30% Design 18
6.1.2 100 % C o generatio n Facility Design 18
6.1.3 Design Submittal Deliverables & Additio nal Design R equirements 18
DETAIL ED SCOPE OF WOR K FOR ii
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6.1.3.1 C ivil/Site/Structure 18
6.1.3.2 L andscaping and Architectural 19
6.1.3.3 Mechanical 19
6.1.3.4 Electrical 19
6.1.3.5 Digester Gas 20
6.2 SAFETY 21
6.2.1 Safety and Emergency Plan 21
6.3 DESIGN AND COMMENT R ESOL U TION MEETINGS 21
SEC TION? : FINAL DESIGN
7.0 FINAL DESIGN PR EPAR ATION 2 2
7.1 FINAL DESIGN SU BMITTAL 2 2
SECTION 8: OPER ATIONS AND MAINTENANCE MANU AL
8.1 OPERATIONS MANU AL 23
8.2 OPERATIONS PLAN 24
SECTION 9: DESIGN R EVIEWS AND APPR OVAL S
9.1 SEL L ER ('S)R EVEIW 24
SECTION 10: PL ANNING AND PER MITS
10.0 PLANNING AND PERMITS 25
10.1 PERMIT APPLICATIONS AND TEC HNIC AL BAC K-U P 25
SECTION 11: C ONSTR U C TION, STAR T-U P AND OPER ATIONS
11.0 C ONSTR U C TION COORDINATION 26
11.1 C ONSTR U C TION 26
11.1.1 · State and Local L icense R equirements 26
11.1.2 General R equirements 26
11.2 INTER FAC E WITH OTHER AGENCIES ;2 7
SEC TION 12: ATTEND C ONSTR U C TION MEETINGS
12.1 PR EC ONSTR U C TION MEETINGS 27
12.2 SAFETY MEETING 27
12.3 C ONSTR U C TION COORDINATION MEETING 27
SECTION 13: INSPEC TIONS
13.1 PR OJEC T R EPR ESENTATION 27
SECTION 14; PR EPAR ATION OF R EC OR D DR AWINGS/R EPOR TS
14.1 SAFETY 28
DETAIL ED SC OPE OF WORK FOR jij
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14.2 AS-BUILT DR AWINGS 28
SECTION 15: PLANT STAR T-U P AND AC C EPTANC E
15.0 GENERAL CONDITIONS - START-UP AND ACCEPTANCE 29
15.1.1 Intent 29
15.1.2 Definitio ns 29
15.1.2.1 Startup 29
15.1.2 .2 , Initial Acceptance Tests 30
15.1.2 .3 Final Acceptance Tests 30
15.1.3 R equirements and Prio r C o nditio ns 30
15.2 STAR TU P '
15.2 .1 Mechanical C ompletio n 31
15.2 .2 Operational R eadiness 32
15.2 .3 Punch L ist 32
15.2 .4 Capacity Demo nstratio n 32
15.2 .5 Utility Perfo rmance 32
15.2 .6 Truck Movement Test 32
15.2 .7 Truck Loading Test ·. 32
15.3 INITIAL AC C EPTANC E TEST 33
15.3.1 Extended Run Test '. 33
15.3.2 Maximum Capacity (throughput) test 34
15.3.3 Emissions and Flair Test 34
15.3.4 Noise Emission Test 34
15.3.5 Truck Movement Test 34
15.3.6 Initial Acceptance Test R epo rt 35
15.3.7 Acceptance Standard , 35
15.4 FINAL AC C EPTANC E 36
ATTACHMENT Al; SITE PLAN AND R EFER ENC E DRAWINGS
ATTACHMENT A2: GENERAL PR OJEC T R EQU IR EMENTS
DETAILED SCOPE OF WOR K FOR i
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DETAILED SCOPE FOR THE BENEFIC IAL USE OF DIGESTER GAS (BUDG) AT
THE POINT LOMA TR EATMENT PLANT
GENER AL
The Beneficial Use of Digester.Gas (BU DG) project at the Po int L oma Treatment Plant
(PLWTP) Scope of Work (SOW) consists ofthe design, construction, financing, ownership and
operations (Privatization) ofthe beneficial use ofthe excess digester gas pro duced by the
PLWTP. The fo llo wing describes the Buyer's SOW for the,detailed design, permitting,
construction, testing, startup, operation, maintenance, and financing ofthe system.
The Buyer shall be solely responsible fo r the perfo rmance, operation, and timely completion of
the system.
Throughout this SOW, various abbreviations, terms, and acronyms are used. Terms are defined
in the Agreement or are used here as generally used in the wastewater, natural gas or electrical
industries. Abbreviations and acronyms are listed in Table A.l
Table A. 1
ABBREVIATIONS, TER MS, AND AC R ONYMS
APCD
APSB
Biogas
Btu
Btu/hr
BUDG
CAL -EPA
CEQA
CF
C FR
CITY
CNTP
COMNET
County Health
CWP
CWP Guidelines
DBA
DCS
DHS
Digester Gas
ED
San Diego County Air Pollution C o ntro l District
Agreement fo r the Purchase and Sale of Biogas
Methane gas mixture pro duced by biological decompo sitio n (Digester gas)
British terminal unit
British thermal units per ho ur
Beneficial Use o f Digester Gas Project
State of California Environmental Protection Agency
C alifo rnia Environmental Quality Act
Cubic Feet
Code o f Federal R egulatio ns
City of San Diego
C o nstructio n No tice to Proceed
Wastewater Operations Network
San Diego County Department of Environmental Health Services
Clean Water Program for Greater San Diego (see MWWD)
Guidelines prepared by the C ity of San Diego for Design and C o nstructio n
Decibels Abso lute
Distributed C o ntro l System
State Department of Health Services
Methane gas pro duced by anaero bic decompo sitio n of wastewater organic
materials
Environmental Do cumentatio n
DETAILED SCOPE OF WOR K FOR 1
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EPA
ESD
GUF
ISA
MGD
MMBTU
MWWD
NEPA
NTP
MMSCF
MMSCFD
PLWTP
P.O.C.
POT
Buyer(s)
R WQC B
SDAPCD
SWR C B
Scfh
SOW
s i
WEO
WWTP
Environmental Protection Agency
Environmental Services Department
Gas U tiliz atio n Facility
Job Safety Analysis (Project Safety R eview)
million gallons per day
Miliion British Thermal U nits
Metropolitan Wastewater Department (formerly CWP)
National Environmental Policy Act
Notice to Pro ceed with C o ntract
Million Standard Cubic Feet
Million Standard Cubic Feet Per Day
Point Loma Wastewater Treatment Plant
Point o f C o nnectio n (fo r on-site utilities)
A recognized sound testing/inspection procedure
Designer/Builder/Owner/Operato r
Regional Water Quality C o ntro l Board
San Diego Air Pollution C o ntro l District
State Water R eso urces C o ntro l Board
Standard cubic feet per ho ur
Sco pe o f Work
Stainless Steel
A reco gniz ed sound testing/inspection procedure
Wastewater Treatment Plant
DETAILED SCOPE OF WOR K FOR
THE BENEFICIAL U SE OF DIGESTER
July 2007
000132
SEC TION 1 PR OJ EC T DESC R IPTION
1.1 BU YER 'S GENER AL R ESPONSIBIL ITIES
The BU DG will be located at the PLWTP on the leased site, as illustrated in Attachment Al and
described in the BUDG L ease. Its purpo se is to beneficially utilize the PLWTP's excess digester
gas now being flared, without disruption to the PLWTP and to pro vide significant revenue to the
Sewer Fund.
The Buyer will cooperate with the Seller by supplying all required system design, co nstructio n,
startup, and operation's info rmatio n required by the Seller to obtain any necessary appro vals.
The Buyer will be respo nsible for obtaining and complying with all federal, state, and lo cal
permits affecting the facility. Upon specific request, the Seller will supply the Buyer with any
existing PLWTP drawings as needed for the design and construction ofthe project. Additional
Buyer responsibilities are described in the General Requirements in Attachment A2.
1.1.1 Project Backgro und
The PLWTP is located in San Diego , on City o f San Diego Property adjacent to the Po int
L oma Naval R eserve. It treats approximately 80% ofthe metro po litan Wastewater
System flows and 85% ofthe system's so lids. Seven (7) digesters process advanced
primary wastewater solids producing approximately 3,000,000 cu ft. o f digester gas per
day at just over 600 BTU /ft
3
. Approximately 2 ,000,000 cu ft/day are utiliz ed by an onsite
power generation facility called the Gas Utilization Facility (GUF).
1.1.2 . General Descriptio n
The Beneficial Use of Digester Gas pro ject (BU DG) consists ofthe design, co nstructio n
on remo vable skids, financing, ownership and operation of a pro cess at the PLWTP to
generate revenue for the Buyer by beneficially utilizing the available digester gas. The
PLWTP will pro vide appro ximately 1,100,000 cu ft o f digester gas per day with a
methane content of appro ximately 63% with less than 60 ppm H2S. The quantity and
quality of gas deliveries will be regular and reaso nably predicable, but not guaranteed.
The Buyer will be responsible for all costs, including permitting and compliance with site
issues, unless specified otherwise in the Agreement, Lease or SOW.
The BUDG project is to receive the excess PLWTP digester gas at the location indicated
by the Seller, and utilize removable equipment to pro cess, compress and load the gas into
sto rage trailers for transport off-site, where it will be utilized as fuel for fuel cell power
generation systems
1.1.3 Site Descriptio n
The BUDG pro ject shall be located in the area south o f Digester 8 indicated in the
Attachment A and the BUDG L ease. The skid mounted equipment shall be mo unted on
DETAILED SCOPE OF WORK FOR 3 ~ ~" '
THE BENEFIC IAL USE OF DIGESTER July 2007
000133
concrete slabs. Areas no t covered with concrete shall be paved with asphalt, gravel or
planted to match the existing PLWTP landscaping plan. The site shall have adequate
lighting to allow fo r safe night time o peratio ns. The driveway to and from the site shall
match the lo ad bearing and appearance specifications for the plant ro ad they are
connecting to .
1.1.4 Process Descriptio n
The Buyer will receive the raw, saturated digester gas at a point within the existing
PLWTP digester gas low pressure piping system. The Buyer will install skid-mounted
equipment on the leased site described in Section 1.1.3 to pro cess, compress, dry, clean,
and filter this gas prio r to loading it into tube trailers fo r transport off-site. The purified
gas will be. used in fuel cells at remo te sites for renewable power generation. The Seller
will no t have any respo nsibility for or interaction with activities associated with these off-
site fuel cell installatio ns.
The BU DG system will be sized to take a minimum of 0.62 MMSCFD and a maximum
of 1.6 MMSCFD o f excess digester gas pro duced by the PLWTP. The feed gas will go
through a low-pressure blo wer and an initial purification step to remo ve H2S, followed
by compression to approximately 170 psig. The compressed gas will then go through
process steps to remo ve water, VOC's, and other objectionable compounds, before
entering a step to remo ve excess carbon dio xide. The resulting pro duct gas will then
either be used as fuel for an on-site 300 kw fuel cell to generate power for the pro cess, or
compressed to approximately 2600 psig for storage and/o r transport. The storage and
lo ading into tube trailers will be handled via a gas manifo ld system, which will allow
loading and isolation o f individual trailers.for connection and disconnection for transport.
When full, the individual tube trailers will be transported to lo cal industrial or
commercial sites where-.power,generation systems will be installed, and the tube trailers
will be connected to another gas manifold for offloading at the generatio n site.'
Each remote generation site will consist of a 1.2 MW fuel cell installatio n, utilizing Fuel
Cell Energy's molten carbonate fuel cell technology. The fuel cell will utilize the
methane/carbon dio xide purified biogas as fuel, and will pro vide base lo ad power to the
industrial customer(s), as well as heat for the generation of steam, refrigeration, etc. Each
generation site will be run independently, and will have natural gas grid back-up to the
biogas fuel. In additio n, the generation site(s) will have electrical grid backup to maintain
reliability and flexibility. The generation sites will have separate contracts with the Buyer
and will have no relationship legally to the Seller. The tube trailers, when empty, will be
transported back to the PLWTP site and reco nnected to the lo ading manifo ld system for
filling. Six vehicle mo vements per day are expected. One vehicle mo vement consists of
the delivery of an empty trailer to the PLWTP site, and the remo val of a full trailer from
the site.
Equipment on site at the PLWTP will consist of a pre-pro cess blower, H2S removal bed,
1-stage compressor, co ndensers, PSA system for the remo val o f water vapo r and some
VOC's, refrigerated absorption bed, membrane C02 removal unit, multi-stage
DETAILED SCOPE OF WORK FOR 4~ ' ' ~ ~
THE BENEFIC IAL USE OF DIGESTER July 2007
000134
compressor, tube trailer loading manifold system, and po ssibly a product storage tank.
Support.equipment will include heat exchangers, refrigeration systems, co ntro ls,
electrical distribution, safety purge gas system, a 300 kw fuel cell for generating
operating power, and miscellaneous support items. There will also be a waste gas
disposal flare system to treat the BUDG gaseous byproducts from the purification steps.
The equipment footprint will fit within the area leased under an exclusive lease to the
Buyer by the PLWTP, including the BUDG flare. Two other areas, bo th leased under
non-exclusive leases, will be made available for the staging o f tube trailers for lo ading.
The first no n-exclusive lease area, directly adjacent to the no rth edge ofthe exclusive
BUDG leasehold, will be the primary site to be used fo r trailer loading. When this site is
not available, a seco ndary no n-exclusive lease site on the west side of Gatchell Road will
be made available for trailer lo ading. The Buyer will provide a removable manifo ld
system to be mo ved between these lo catio ns as needed.
The technologies utilized in this pro cess are to be well known by the Buyer, with
established performance and characteristics. They are to be the type of equipment and
processes the Buyer operates on a daily basis.
All waste materials generated by the Buyer will be pro perly and legally disposed o f by
the Buyer. Waste materials generated will be limited to : general trash, spent compresso r
on, spent ausorption ueu matenais, conuensate noni the punficatio n system and fuel cell
condensate and wastes, and all gas byproducts. Excess digester gas which cannot be used
by the Buyer (i.e. do es no t go through the Buyer's system) will remain the respo nsibility
ofthe PLWTP.
The Buyer is to have no more than 4 trailer drop spaces; three are necessary to allow for
continuous filling operations over a full shift which is no t serviced by trailer transport
exchanges. The fo urth space is to have a place to drop off an empty trailer before picking
up a full o ne, thereby eliminating the need for a separate trailer staging area and multiple
tractor hookup and unho o k operations for each trailer mo vement. Tractor(s) and traiier(s)
not in use will no t be parked at the PLWTP site. Any o ffsite parking or staging of
vehicles shall be at appropriate sites fo r this use and shall have pro per approvals and
z o ning.
1.1.5 Power Supply
The Buyer will install and permit a fuel cell on its site to pro duce its own electricity as
part ofthe process equipment. The remainder o f power required for the BU DG will be
provided via the PLWTP electrical system at co sts and limitations as described in the
BUDG Lease. Electricity from the GU F will be made available as follows: The BUDG
will be the GU F's third priority customer with the PLWTP priority one and the PLWTP's
Master Purchase and Sales Agreement with SDG&E as prio rity two .
Buyer shall connect to the PLWTP electrical system on the feeder that supplies power
center 9. The associated co nnectio ns, interfaces, relays, electrical designs and safety
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systems shall meet SDG&E's Rule 21 interco nnectio n requirements. The design will
also address the safety issues are a result that the fuel cell will be generating po wer on the
PLWTP Grid and. certain power centers or breakers could be back fed. The Buyer shall
provide a utility grade, billing quality approved electric meter that will show imports and
exports to and from the Buyer.
1.1.6 Air Pollution C o ntro l Systems Descriptio n
The Buyer is solely responsible for the air pollution permits, associated offsets, and any
mo dificatio ns to existing equipment that are required to meet the SDAPCD requirements
at all times and under all flow conditions for the activities and pro cesses associated with
the BUDG.
1.1.7 Services Provided by the PLWTP
Unless specified in this SOW o r related document, the Buyer is respo nsible for pro viding
and purchasing all services required for their facility and perso nnel including but not
limited to electrical, telecommunicatio ns, water, wastewater, trash dispo sal, restro oms,
break ro oms, weather protection, communicatio ns, work space, etc. The Buyer may use
the existing trailer's sewer line to dispose of liquids meeting their industrial waste
discharge permit requirements if the Buyer agrees to maintain the asso ciated lift station
near power station 9. The financial arrangements between the Buyer and Seller relative
to these utilities and services are described in the BU DG Lease.
1.2 INTER FAC E WITH PLWTP FAC IL ITY OPER ATIONS
The PLWTP is currently in operation and large construction projects are o ngo ing and planned for
the future. The Buyer shall cooperate fully with the PLWTP plant staff and the Seller's
C o nstructio n Manager. Interruptions to the WWTP operations will no t be to lerated without
written advance no tice and approval. Any outages of equipment o r pro cesses that will affect the
WWTP will be scheduled o ne week in advance. C o o rdinatio n with construction projects will be
required.
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SECTION 2
SEL L ER 'S MANAGEMENT SU PPOR T
2.0 INTR ODU C TION
The Buyer shall provide management and technical support to the Seller for the planning,
approval, acceptance and mo nito ring of the BU DG project by attending meetings as requested by
the Seller, coordinating the attendance o f team members, and pro viding suppo rt material as
required. C o o rdinatio n respo nsibilities shall consist of, but not be limited to:
· Planning, Permitting, Design, C o nstructio n Management and facility startup
· Equal Employment Opportunity Pro gram-Vo luntary Commitment Program
· Project Scheduling
· C o o rdinatio n with the Seller's projects at PLWTP
C o o rdinatio n With Other Projects
The pro jects listed below will be co-located with, or adjacent to , this privatiz atio n pro ject. The
Buyer may be required to coordinate design, co nstructio n, and startup activities with the
fo llo wing anticipated pro jects:
· Grit (GIP)
· Digester cleaning
2.1 SC HEDU L E
Fo r the purpose of contract requirements, the parties have established the following milesto nes
for the Project.
The Buyer will pro vide for the Seller's review and approval a final schedule 10 days after the
Notice to Pro ceed (NTP). The perfo rmance o fthe tasks associated with any o ne o r mo re of these
milestones can be moved in time with the mutual agreement ofthe parties, with the exception of
the end ofthe Preconstruction perio d.
Notice to Proceed 0
Submit Project Schedule 10
Submit 30% Design : 60
Selier('s) Comment R eso lutio n Meeting 67
Submit 100%,Pro ject Design 120
Preconstruction period ends 120
Seller('s) Comment R eso lutio n Meeting 134
Submit Final Project Design for Plan Check and SEL L ER C S) Back check 135
Notice to Pro ceed for Project C o nstructio n 165
Project Startup begins 300
Complete C o nstructio n of Project 330
Complete Initial Acceptance Testing 360
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Preliminary Operation/Maintenance Notice to Proceed 365
Final Acceptance Testing 540
Operation/Maintenance Notice to Proceed 545
2 .2 PR OJ EC T KICKOFF, PAR TNER ING, PR OGR ESS MEETINGS AND R EPOR TS
Approximately 5 days after the NTP, the Buyer, its lead design engineers, and pro ject managers
will attend a 3 ho ur partnering session followed by a 2 ho ur kick off meeting.
At the start o f design and at least once a month during the design phase, the Buyer shall attend a
scheduled 1 Vi hour meeting with the Engineering and Program Management Division, O& M
Division and other interested parties to discuss technical and planning issues. .
Meeting topics will include:
Safety Issues
Design issues and concepts
Project status
Schedule
Technical Issues
Permits
Deliverable status
Submitted deliverables
Scheduled deliverables
Pro ject issues and recommended so lutio ns
C o o rdinatio n with other Seller 's pro jects.
During construction there will be weekly, on-site meetings to discuss the issues above and 4
week and 1 week look ahead schedules.
SECTION 3 NOT USED
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SECTION 4
ENVIR ONMENTAL DOC U MENTS
To comply with the City of San Diego's requirement that a site-specific Environmental
Document (ED) be prepared and certified by City Council prio r to C o uncil's approval o fthe
co nstructio n ofthe BUDG, a site-specific ED will be prepared by the Seller. The enviro nmental
impacts and technical data will be supplied and/or confirmed by the Buyer. The Buyer shall
provide all technical info rmatio n and drawings necessary to prepare the ED's in a timely manner.
The remaining planning requirements, excluding community outreach, but including respo nding
to questions or concerns during the pro ject design, permitting and the construction, start-up and
operation ofthe Facility will be the responsibility ofthe Buyer. The Buyer shall comply with the
ED.
SECTION 5
DESIGN AND OPER ATIONS C R ITER IA AND DESIGN INVESTIGATIONS
5.0 DESIGN AND OPER ATIONS C R ITER IA
This section sets forth the criteria under which the plant will be designed and operated. The
Buyer will be solely responsible for all and any nermits. including operational permits, and any
and all regulatory compliance, as well as the requirements discussed in this SOW, unless
specified otherwise in the Agreement, the Lease or this SOW.
5.0.1 Planning and Permitting
The Buyer shall be responsible for all planning and permitting requirements, unless
specified otherwise in the Agreement, the Lease o r this SOW. The Seller will be
responsible fo r presenting the pro ject to lo cal planning groups for an approval and other
interested community gro ups. The Buyer is responsible for any mo dificatio ns or changes
that are the result ofthe BUDG process or resulting permits as further described in the
Agreement, the L ease o r this SOW. The Buyer's responsibility will include but not be
limited to the fo llo wing:
5.0.1.1 Air Quality
With respect to air quality, the Buyer is responsible fo r the fo llowing:
· ' Obtaining and paying for any air po llutio n offsets necessary to permit the
BUDG pro ject;
· Obtaining required APCD permits and/o r Title V permits for the BUDG
pro cess;..
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· Maintaining and operating the BU DG facility and its relatio nship with
PLWTP flares in compliance with all APC D requirements;
· Not affecting the PLWTP air permit in a negative manner and being
responsible for any necessary changes to any PLWTP permits or
equipment resulting from installation, operation and/o r maintenance o fthe
BUDG facility.
· Seller shall be respo nsible for the operation and maintenance of Seller's
flares and control systems.
The Buyer shall be responsible for complying with lo cal, state, and Federal
regulatio ns pertaining to air pollution, including toxicants.
If requested by the Seller, the Buyer shall pro vide the Seller with emissions data
from the Facility.
5.0.1.2 Gas Emissio ns
The Buyer will be respo nsible to design gas emission systems, whether
new or existing, to comply with all APC D and Title V requirements. All
the gas emissions, and gas wasting systems and gas flaring systems
associated with the BUDG and the PLWTP gas supply and gas wasting
systems shall work automatically and seamlessly with the PLWTP process
co ntro ls. The Seller remains responsible for all existing PLWTP gas
emissions, gas wasting systems and gas flaring systems operations and
controls not specifically associated with the BUDG facility operations or
the modifications made fo r the BUDG facility.
Disposal o f high carbon dio xide mixtures shall be do ne via a flare. Any
use o r interface with Seller's equipment will be addressed in detail for the
Seller's co nsideratio ns. Any PLWTP flare system DCS modificatio ns
shall be approved by the Seller and fallback to existing controls systems,
and shall be made by the Seller and paid for by the Buyer. Seller shall
ensure that mo dificatio n made are adequate to pro tect the PLWTP waste
gas co ntro ls.
5.0.1.3 Health and Safety
The Buyer shall be respo nsible fo r being info rmed and complying with
any lo cal, state, and federal health and safety regulations. Health and
Safety plans and Job Safety Analysis (JSAs) (Pro ject Safety Reviews) for
the construction and initial operation ofthe Facility shall be submitted to
the Seller for co o rdinatio n and approval.
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5.0.1.4 Hazardous Materials and Wastes
The Buyer shall be info rmed and adhere to all federal, state, and lo cal
laws, regulations, and rules that pertain to haz ardo us materials and
hazardous wastes. This includes, but is not limited to all building codes,
Fire Department regulations, County Health Department regulatio ns,
Clean Air Act Title III, Federal Executive Order 12 856, and MWWD
Industrial Waste Discharge permit requirements.
5.0.1.5 Navy / Cabrillo National Monument, Bureau of Land
Management, Fort R o secrans National Cemetery Point L o ma
Naval Station and Coast Guard C o o rdinatio n
The PLWTP site is in on land leased from the Bureau of Land
Management and is adjacent to the Cabrillo National Monument and the
Navy's Point Loma Submarine Base and other government facilities.
The Buyer will need to be cognizant of and comply with all restrictio ns
and existing permits including, but not limited to , lighting, odor co ntro l,
height, etc. The Seller will use its best effort to info rm the Buyer of any
restrictio ns. The Buyer will be invited to participate in the areas "Go o d
Neighbors" meetings to facilitate positive co o rdinatio n with these
facilities. If required by the Bureau of Land Management, the Seller
agrees to cooperate with the Buyer to secure a Special Use Permit ("SUP")
to allow Buyer to utiliz e the roadways in the Cabrillo National Monument
to transpo rt the purified biogas product away from the BU DG site.
5.0.1.6 Environmental Issues
The Buyer shall be respo nsible for complying with all federal, state, and
local environmental laws and requirements, including but not limited to,
Cal EPA, U W. EPA, NEPA, California Coastal C ommissio n
requirements and San Diego Air Pollution Control District (SDAPCD).
5.0.1.6.1 CAL ARP and CAL OSHA
The Buyer will be responsible for compliance and all associated
costs with California Accidental Release Prevention Program
(C AL -AR P) compliance, 19 CCR Division 2 sections 2735
through 2785 CAL-OSHA compliance, 8 CCR for fuel gases as
well as Divisio n 4 sectio n 5189, Process Safety Management of
Acutely Hazardous Materials, 40 C FR Part 68 (Federal ARP) and
24 CFR section 1910, 119 Federal OSHA PSM, etc. for the new
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000141
· and existing systems as affected bv the BU DG pro iect directly or
indirectly or as a part ofthe permitting process.
5.0.2 Site-Specific Environmental Issues
5.0.2.1 No ise Abatement
Engineers experienced in noise abatement design will implement the fo llowing
noise abatement strategy. The sound requirement for this pro ject is a o ne hour
weighted average sound level o f no mo re than 75dBa measured at the fo llowing
po ints:
· Two po ints in the plant (one at the middle o f intersectio n of Gatchal R oad
and 3 Street adjacent to the site and the second at the center of Gatchal
Road at the north end ofthe site);
· One at the Natio nal Cemetery; and
· One at o ne ofthe Cabrillo National Monument o verlo o ks.
A backgro und no ise level will be checked by WEO and POT inspectio n. The
Buyer will determine the background noise levels at the po ints indicated before
and after the installatio n.
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The Buyer will use no ise abatement devices and will insulate the compresso r
A QO 1 4 3 enclosures for sound attenuation, i f necessary. Sound readings will be confirmed
during the acceptance test.
5.0.3 Use of On Site R eso urces
All utilities and Seller supplied resources supplied by the PLWTP will be paid for as
stipulated in the BUDG Lease.
5.0.4 Process Design and U tilities
5.0.4.1 U tilities
Utility co st arrangements are discussed in the BUDG Lease.
5.0.4.1.1 Water Effluent Streams
Buyer may return sewage digester gas and fuel cell co ndensate and other-
waste water flows that comply with Buyer's industrial waste discharge
permit to the PLWTP sewer system. Sto rm water is to be collected and
discharged to the PL WTP's existing Sto rm Water Collection system
. which discharges to the ocean. Proposed locations, quantities and qualities
shall be pro vided with the 30% design submittal. If the sewer lift station in
the area of PC-9 is not used by Buyer, a new lift station will be required,
unless o ther arrangements are made in the L ease and/o r approved prior to
the finial 30% Design R eso lutio n. Whichever lift station option is selected,
lift station maintenance will be assumed by the Buyer.
5.0.4.1.2 Telecommunicatio ns
Seller will cooperate with Buyer to establish dedicated
telecommunicatio ns to Buyer's Plant.
5.0.4.1.3 Water Supply
Seller will pro vide Buyer access to a Seller potable water supply for
Buyer's Plant. Seller will provide Buyer access to an industrial water
supply for Buyer's Plant which may also be used for fire pro tectio n.
Buyer will pro vide pro po sed location of connections and quantities
required with the 30% design submittal.
5.0.4.1.4 Natural Gas Supply
Seller will allow the installation of a natural gas supply line from
SDG&E's utility supply po int (to be determined by SDG&E) to the
Buyer's Site.
5.0.4.1.5 C o ntro ls interface
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Buyer is to design and be responsible for all controls, installation and
startup except tho se required to be perfo rmed by the Seller's DCS co ntro ls
group. Those services provided by the Seller's DCS C o ntro ls group will
· be pro vided at the Seller's costs and paid fo r by the Buyer.
I/C data, loop diagrams, SAMA logic and Modbus registers submitted by
the Buyer will meet the Sellers CWP Guideline submittal requirements.
See sectio n 6.0 for more details .
Seamless sequencing ofthe flare and digester gas system and their
operations in general are critical to this pro ject and the WWTP.
Buyer will design and install controls and connection points and signals
and Seller will provide access, as necessary to allow coordinated o peratio n
o f bo th Seller's and Buyer's facilities safely, smoothly and witho ut
interruption or any effects to the WWTP. Buyer will design Buyer's
system to provide for controls to revert to no rmal operation of Seller's
WWTP in the event o f Buyer's system malfunctio n.
Seller shall identify which panel to connect the fiber optic co nduit.
Buyer shall provide all communicatio n equipment necessary to
communicate with the Seller's control system. Buyer shall provide a
complete I/O list including alarm prio rities. Buyer will follow chapter D6
ofthe MWWD (Seller's).design guidelines.
a. Analog points shall contain ranges, engineering units, and high and
low alarm set po ints.
b. Set and reset info rmatio n shall be pro vided fo r discrete signals.
c. Point Descriptions are limited up to thirty characters.
Buyer shall provide detail control strategies per chapter D6 of MWWD
(Seller's) design guidelines for Seller to review.
If a data link is required, the Buyer's control system shall support Modbus
slave protocol for communicating with the Seller's C o ntro l System.
5.0.4.2. Parallel Operation on Electrical System
The new power generation equipment must operate in parallel with the PLWTP
and SDG&E's electrical systems. Its electrical interface must conform with
SDG&E's requirements for parallel operation and R ule 21. It must be able to
synchronize, connect and disconnect from the PLWTP grid automatically with no
interruption to the PLWTP electrical service.
The Buyer is responsible for any additio nal upgrades the PLWTP electric gear,
for the system's safe parallel o peratio n.
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5.0.4.3 Electric Power
Seller will provide a co nnectio n at the 4.16 kw, 3 phase with a minimum capacity
of 550 kw. C o nnectio n shall be at the underground line in Gatchall Road running
adjacent to the site. The Buyer shall provide all electrical systems, pro tective
relays, electric mo to rs, including any necessary modifications to the existing
systems to make their concept work without interruption to the PLWTP electrical
system. Transfers ofthe loads to and from the PLWTP grid shall not cause
interruptions ofthe PLWTP or its pro cesses.
5.0.4.3.1 Electrical C o nduit
R idgid metal electrical conduit running above gro und is to be coated,
unless specific applications are approved prio r to the 30% finial design
resolution meeting.
5.0.4.4 Architectural and Landscaping Issues
Visual and sound attenuating barriers constructed as apart of this pro ject shall
conform to the architectural and landscaping concept for the PLWTP. The Buyer
shall coordinate all o f its facilities and visible equipment with the existing site
architectural and landscaping theme .
5,0.4.5 Excavation and R etaining Wall
All excavations and retaining walls required for construction ofthe Buyer's
facilities shall be lo cated and the wo rk performed so as to no t adversely impact
any structure, pavement, or utilities adjoining the privatiz ed facilities.
All excess excavatio n material shall be remo ved from the site. Excavated
material suitable and needed for backfill may be sto red near the site in an area
designated by the Seller.
5.0.4.6 Ho riz o ntal Site L imits
Attachment Al indicates the site that can be allocated fo r the privatiz ed facility.
The land is to be leased to the Buyer by the Seller. All components ofthe Buyer's
project with the exceptio n ofthe truck loading manifold are to be lo cated within
the specified leased areas with the exception ofthe extension o f utilities to their
points of connection which will be do ne via easments.
5.0.4.7 Underground C o nditio ns
Detailed geotechnical studies have no t been prepared for the pro po sed areas
facility. The Geo technical Reports for the PLWTP and Digester 8 are available
fo r reference in the Seller's library and will be made available by Seller.
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The information presented in these reports is fo r information only. The Buyer
A flO 14 v shall conduct any necessary separate geotechnical investigations to support their
final design. See Section 5.1.
5.0.4.7.1 U ndergro und Gas Pipe
Soils at the PLWTP can be acid. Underground gas piping is to be 316 SS
with concrete slurry to pro tect if from the so il conditions. While the
PLWTP Senior Civil Engineer may consider deviations prior to the finial
30% design reso lutio n, this will be a strict requirement in and around
. Third Street and off the Buyer's Lease
5.0.4.8 C hemicals
The Buyer shall provide all the chemicals necessary for Buyer's pro cess. Any
affects such chemicals have o n the PLWTP's permits, safety plans or business
plan shall be the respo nsibility ofthe Buyer.
5.0.4.9 Metering, Data, DCS C o nnectio ns
Billing quality (Utility grade) metering shall be pro vided on all utilities,
feedstock, and services provided from and to the PLWTP. If a utility grade meter
is no t available, alternative meters will be selected and agreed to by bo th parties.
Flow and accumulative flows will be pro vided to the PLWTP from all such
meters. Date will be supplied to the PLWTP via mo dbus link (ie R S 432 po rt).
The data link(s) shall be a fiber optic line in conduit. The data links will be
·defined via the CWP Guidelines register identification term. Mo dificatio ns to the
PLWTP will be perfo rmed by Seller and paid fo r by the Buyer. The o nly control
' that PLWTP anticipates needing is a BU DG emergency shut down butto n.
5.0.5 Use ofthe Seller's Clean Water Program (CWP) Guidelines
Clean Water Guidelines
The CWP Guidelines will apply unless otherwise directed to all work potentially left
behind at the end ofthe lease. This includes all connections to PLWTP systems, all
underground systems to the po int of convenient disconnection above grade, co ncrete
slabs, etc. The purpo se ofthe CWP Guidelines is to present preferred design approaches
and criteria for use in designing facilities. The guidelines are intended to pro vide some
uniformity in key concepts, processes, equipment types, and construction materials or
facilities built fo r the Seller. The design guidelines are no t intended to limit the
respo nsibility ofthe Buyer to design pro fessio nally sound, efficient and wo rkable
facilities. Not all aspects of design are addressed in these guidelines. In areas which are
not addressed, the Buyer should use good engineering judgment and pro ven practices.
Deviation from the Guidelines for the areas discussed abo ve, during the term o fthe
Agreement, shall be appro ved by the PLWTP Senior Civil Engineer.
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OQOl ** ' 5.0.5.1 Seller require strict adherence to the CWP Guidelines CADD and
C o ntro ls standards as partially defined in this SOW. See Sectio ns 5.0.4.1.5 and
6.1.3 for more details.
5.1 ADDITIONAL INVESTIGATIONS
Information provided and/o r requested under this section represents investigations that are either
required, o r may be necessary fo r the Buyer to complete its design and co nstructio n.
5.1.1 Geotechnical Investigations
Geotechnical investigations have been performed as a part ofthe design ofthe PLWTP
facilities. A copy of the final geo technical report may be purchased from the Seller by
contacting the Project Manager. Recent grading activities may have o ccurred at these
sites. If additional information is necessary, the Buyer shall perfo rm such additio nal
investigations, as required. The Buyer shall perform any seismic evaluations or so il
boring as required to suppo rt the structural design.
5.1.2 Surveying
The Seller shall provide a survey o fthe Facility site lease bo undary. The Buyer shall
review this survey information to determine if additional site surveying will be necessary
to establish necessary controls fo r the design and construction of this project. If soil
borings are needed, survey control for geotechnical borings will be pro vided by the
Buyer.
SECTION 6
DESIGN DEVEL OPMENT
6.1 DESIGN
Ail engineering design drawings shall be signed and stamped by a registered pro fessio nal
engineer practicing in the specialty. Other registratio ns may be required by the State or the
City's Development Services Department.
6.1.1 Thirty Percent Design Submittal
The 30% design submittal shall be sufficient for the Seller to evaluate the Buyer's Site
Layout, Equipment Layout, site grading design, as well as the new equipment package's
visual exposure from the C abrillo National Monument, the Ocean, the entrance ro ad and
the Administration Buildings main entrance. Major equipment shall be selected at the
30% design level . Site elevatio n views will be pro vided and will be adequate for
preliminary architectural reviews. Drawings ofthe location and size of all po ints of
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0 0 0 l 4 8 o nnec t i o n to all PLWTP systems will be pro vided. Piping and conduits routing outside
the leased or licensed sites shall be shown. Gas flare design, selection and controls will
be provided as part o fthe 30% design. Within seven .(7) days o f receipt ofthe 30%
design the Seller shall ho ld a table to p review meeting with the Buyer and resilient
reviewers. Notes o f this meeting with official comments o n the 30% design will be
issued via e-mail within seven (7) days of this meeting.
6.1.2 One Hundred Percent Design Submittal
The o ne hundred percent design is expected to be the Buyer's proposed 100% design
except for inco rpo ratio n ofthe Seller's review comments prio r to submission for building
permits. The Buyer will incorporate the Seller's agreed to 100% design comments into
the 100% design before submission for building permits. Shop drawings for points of
co nnectio n to all PLWTP systems will be pro vided. Exterio r plan views and elevations
for all major equipment will also be provided. Gas disposal systems specifications and
detail submittals including controls, logic diagrams and sequence of operations shall be
provided at this design level.
6.1.3 Design Submittal Deliverables & Additional Design R equirements
Buyer will provide appropriately developed (30% o r 100%) drawings, specificatio ns
and/or e^ui^ment data sheets for all majo r enui-nment fo r review bv the Seller. This level
o f detail will not apply to pro cess equipment located on the BUDG Lease site unless
specifically required by the Seller for safety and design reaso ns, with the exceptions of
the flares, truck lo ading header, filling system, associated connection system and the H2S
removal bed system.
Specificatio ns. The deliverables of this task shall be pro vided as ten (10) hard
copies o f each specification sectio n. Equipment data sheets or shop drawings
may be provided in lieu of equipment specifications as appropriate.
· Drawings. Drawing size will be 11" x 17". Drawings related to WWTP site
mo dificatio ns that are o utside the leased or licensed sites will be prepared in the
Micro Station fo rmat meeting Seller's Guidelines.
6.1.3.1 C ivil/Site/Structural
The Buyer will provide Seller with the fo llowing:
Overall site plan showing all utilities o utside the leased sites and lo catio n
o f interfaces with all Seller utilities, site boundaries, site entrances,
packaged units and associated equipment
Details o f interfaces with any Seller utilities.
Roads, driveways, and equipment pads
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Design for site sto rm water management
Site earth work and retaining walls design and sectio ns .
6.1.3.2. Landscaping And Architectural
A landscaping Plan shall be develo ped in accordance with the PLWTP
Landscaping Theme. It will show types o f plant and sprinkler systems. C rushed
rock or gravel will be the minimum acceptable non-pavement finish for the flat
areas of the project.
Buyer will provide Seller with elevations ofthe site lo o king east and no rth
including equipment cross sections, and site lighting.
6.1.3.3 Mechanical
Buyer will provide Seller with the fo llo wing:
Mechanical equipment layout with interconnecting piping
Packaged units outside general dimensions, and connection po ints. (May
be manufacture's drawings and data sheets)
Process diagrams of all majo r pro cesses.
6.1.3.4 Electrical
Buyer will provide Seller with the fo llo wing:
Electrical Site Plan
NFPA AND CALOSHA electrical hazard classes clearly indicated for all areas.
The Digester Cleaning areas and its operations canno t be affected by NFPA or
CALOSHA or other electrical hazard class restrictions o r any o ther hazard
restrictio ns when the cleaning operations are o ngo ing.
, One Line Diagrams
All protection and paralleling details as per SDG&E requirements. Any
necessary interface with and/or modifications to the existing plant switch
gear.
Plan Showing Location o f new and existing Switch Gear and MCCs and
required PLWTP co nnectio ns.
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OQU *** · Power monitoring concepts and location o f kWh meter(s)
Facility elevations showing elevations o f switch gear and MC C s (maybe
manufacture's drawings and data sheets)
PVC co ated rigid metal conduit will be required for above gro und
applicatio ns
DCS control interface info rmatio n control lo gic changer and I/O data for:
flare control mo dificatio ns, emergency sto ps, general alarm warning to the
PLWTP operator, all motor data required by the Seller, and electrical
satellites and majo r breaker status.
6.1.3.5 - Digester Gas
Buyer will provide Seller with the fo llo wing;
Layout o f undergro und pipes, connections to PLWTP's system, and the
Buyer's equipment
Condensate collection and disposal systems and pro po sed co nnectio ns to
PLWTP
New flare system design, location and elevation
Digester gas filter systems and filter maintenance systems, as appro priate.
Wastewater disposal
Gas disposal (flare) systems (the Buyer's flare located in the space
provided fo r in the lease, in the area just southwest ofthe flares).
A valved and capped co nnectio n on the BUDG site so the pressure swing
adsorption unit's reject and back flush gases maybe returned to the
WWTP at sometime in the future, if bo th parties decide this is beneficial.
Gas metering details (the gas meter with which the Buyer will use to pay
the Seller will meter all digester gas that the Buyer requires and takes for
the Buyer pro cess with the exceptio no f digester gas the Buyer uses to
maintain stable flare operations in the Buyer's gas dispo sal (flare) system).
6.2 SAFETY
6.2.1 Safety and Emergency Plan
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The Buyershall prepare and submit a "SafetyPlan" describing the vario ussafety
elements o fthefacility construction and its o peratio n.The Buyer.shallinclude a
narrative describing any previo us incidents involving "safety issues" that have o ccurred
in similar facilities operated by Buyer. The "Safety Plan" should describe the fo llo wing:
a. The C ompanies Safety Po licy
b. Safety engineering measures including but no t limited to the fo llo wing:
1. Equipment safety features and ergonomic design;
2. Odor and no ise co ntro l
3. Fire and explosion prevention and control features;
4. Adequate enclosure ventilation; and
5. Required personal pro tective equipment.
6. Trucking pro cedures
7. Gas transfer pro cedures
8. Gas storage systems
9. Filter maintenance pro cedures
c. Definition of responsibilities and identification of a safety chain o f
command
d. Identification o f how the safety plan meets all lo cal, state, and federal
safety regulatio ns
If a particular risk is present (i.e., fire o r explo sio n po tential), metho ds to pro vide a safe
environment shall be described. The plan would be incorporated as a part ofthe facility
O&M manual. The Buyer shall pro vide the Seller with Job Safety Analysis (ISA)
(Pro ject Safety Review) and comply with the Seller's Safety Requirements during
construction o f this Facility.
6.3 DESIGN AND C OMMENT R ESOL U TION MEETINGS
Once the Seller's comments on the 100% design submittal are received, the Buyer shall plan to
attend o ne 2 ho ur comment resolution meeting. This meeting shall discuss the Facility design
submittal and trucking procedures. Attendees shall include at least the project manager and
project engineer to resolve issues raised. Buyers and the Sellers shall mutually reso lve all
Seller's comments prior to subsequent submittals.
SECTION 7
FINAL DESIGN
7.0 FINAL DESIGN PR EPAR ATION
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Final design shall include preparation and submittal of construction drawings and specificatio ns,
draft Safety Manual, draft Operation and Maintenance Manual, permits, Equal Oppo rtunity
Compliance, insurance documents and o ther required submittals information fo r the Seller's
review and appro val.
The Buyer will provide standard drawings and details as appro priate and discussed in Sectio n
5.0.5.1 in an electronic media format (Microstation) in accordance with the CWP Guidelines.
All written submittals shall be in hard copy and shall also be pro vided on MSWo rd files.
7.1 FINAL DESIGN SU BMITTAL
Prior to submission for plan check, the Seller's will perform a back check review ofthe final
design submittal for co nfo rmance with agreed to 100% review comments. If required by the
Seller, the Buyer shall resubmit revised drawings and Specifications prior to submission for plan
check.
The Buyer shall incorporate the City's Development Services Department's plan check
comments and the Seller's comments into the approved plans for construction and submit five
(5) sets to the Seller with on original plan check etc.
DEL IVER ABL ES.
C o nstructio n drawings, specifications shop drawings (as appropriate) and
equipment data sheets (15 copies each)
· Copies of all required permits, licenses and approvals to start construction, as
defined by the Seller. (2 copies)
All construction information required for evaluation o f Equal Emplo yment
Opportunity C ompliance efforts. (2 copies)
Insurance do cumentatio n
Draft Facility start up protocol
Draft Facility Test pro to co l
Draft Safety Manual (5 copies)
Initial JSAs (Project Safety R eviews)
Emergency R espo nse Plan (5 co pies) (PLWTP Business Plan Amendments)
Draft invoicing systems and format.
DETAILED SCOPE OF WORK FOR 2 2
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Draft Memorandum Of U nderstanding (MOU ) for the o peratio nal procedures and
Contract interpretation, with provisions for annual site and system inspectio ns by
Seller and regularly scheduled meetings between Seller and Buyer to discuss site
logistics and other project related issues .
Draft Operations and Maintenance Manual (5 copies). See Sectio n 8.
Specifications shall be pro vided on Word files. Database shall be pro vided as one
hard copy and also on electronic media
Request for necessary appurtenant easements for utilities to serve Buyer owned
facilities with suggested easements delineated. Final surveys will be co nfirmed by
Seller.
SECTION 8
PR EPAR E OPER ATIONS AND MAINTENANC E MANU AL S
8.1 OPERATIONS MANU AL
The Buyer shall prepare an operations manual for the Seller's review and approval. It is to
include the pro cess description, control and the safety sections including all figures and tables.
Additionally, the Operatio n Manual shall include the fo llowing:
a. Description of any po licies and pro cedures specific to the facility, updated as
needed, and made available at the facility for regulatory inspection. It sho uld
include any and all information that enables supervisory and operating personnel
to determine sequence of operations, routine maintenance schedules, plans,
policies, and legal requirements that must be adhered to.
b. Operation o f new facility equipment shall conform to manufacturer/vendor
specificatio ns. These specifications are to be included in the Operation's Manual.
c. The substantially complete draft o f this manual will be submitted as part o fthe
Final Design Package.
d. A facility-specific o perato r's Training Manual shall be develo ped for appro val as
part ofthe final design and made available to each emplo yee.
e. A facility specific truck driver's Training Manual.
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f. Truck movement schedule and pro cedures to modify the transpo rt/delivery
schedule.
8.2 OPER ATIONS PL AN
The Buyer shall prepare an Operations Plan for the expanded facility containing the fo llo wing
info rmatio n:
a. designation of persons responsible for operation, co ntro l, and maintenance of
facility;
b. methods to minimize, manage, and mo nito r odors, noise and air emissio ns
c. litter control measures;
d. contingency operations plan (in the event of equipment failure, power o utages,
natural disasters, fire)
e. Standard operating procedures for co o rdinating with the PLWTP and its staff.
f. Truck drivers' standard operating pro cedure.
SECTION 9
DESIGN REVIEWS AND APPR OVAL S
9.1 SEL L ER 'S R EVIEW
Design products shall be submitted to Seller fo r review. Seller will co llect review comments,
will resolve internal review conflicts, and will pro vide one (1) hard copy and one (I) electro nic
copy of all review comments. Seller's review comments will be summarized in standard text
with a space pro vided for the Buyer's responses regarding action taken on the review comment.
The Buyer shall provide their written responses to comments before the scheduled comment
resolution meeting.. The Buyer and Seller shall resolve review comments and the Buyer shall
incorporate accepted review comments. Seller shall provide minutes of all comment reso lutio n
meetings to document agreements made during the meeting. These will be submitted in
comment table fo rmat do cumenting agreed-upon actions in the Buyer's response co lumn.
SECTION 10
PLANNING AND PER MITS
10.0 PLANNING AND PER MITS
DETAILED SCOPE OF WORK FOR 2 4
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The Buyer shall obtain all required permits, unless otherwise specified in the Agreement, the
Lease and this SOW. The Buyer is respo nsible for suppo rting the Seller's Planning Pro cess
including presenting information in perso n to meetings of interested parties and presenting to
community planning groups to obtain their appro vals.
10.1 PERMIT APPL IC ATIONS AND TEC HNIC AL BAC K-U P
The Buyer shall prepare, apply for, pay permitting fees for and obtain all permits and approvals
unless otherwise specified in the Agreement, the Lease and this SOW.
Buyer shall develo p plans and information which will be used for the planning design,
permitting, construction, and operations ofthe facility. These plans may include an Air Quality
C o ntro l Plan, No ise Abatement Plan, Hazardous Material Management Plan, and Risk
Management and Prevention Plan, as required.
A revised Hazardous Materials Management Plan may be necessary and is to be prepared
consistent with the NFPA, C alifo rnia Titles 8 and 2 2 , the U BC and the California Health and
Safety C o de, Federal Executive Order 12856 and shall be coordinated with the requirements of a
Risk Management and Prevention Plan required by Chapter 6.95 ofthe California Health and
Safety C o de. As requested by the Seller's Project Manager and described in this SOW, all plans
and permits shall be submitted to the Seller's Project Manager for the Seller's review prio r to
submitting them directly to the appropriate agencies. Flans and permits submitted to the Seller's
Project Manager will be reviewed and comments returned to the Buyer within three (3) complete
working days after receipt.
Special attention sho uld be given to the Sto rm Water co ntro l permit requirements.
10.2 C OOR DINATION AND AGENCY INTER FAC E
The Buyer shall conduct discussions and interface with any agencies necessary to complete this
project, and shall follow any application submittals progress. Agencies include, but are no t
limited to : San Diego Coastal C ommissio n, San Diego Air Pollution Control District, San Diego
Gas and Electric and the California Independent System Operation, (if additional onsite electrical
generation is to be pro vided).
SECTION 11
C ONSTR U C TION, STAR T-U P AND OPER ATIONS
11.0 C ONSTR U C TION C OOR DINATION
Upon receipt ofthe Seller's C NTP, the Buyer may implement construction co ntracts and begin
co nstructio n. The Buyer shall co o rdinate with the onsite Seller's C o nstructio n Manager. The
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Buyer shall attend weekly job site meetings as requested by the Seller or Site C o nstructio n
Manager and coordinate attendance by the o ther team members or subcontractors, as required.
C o o rdinatio n respo nsibilities shall consist of:
Following procedures and work plans established at the site.
C o o rdinatio n with other Buyers and pro jects at the site
Keeping up-to -date record do cuments
Pro ject meetings
Site visits
Tho se discussed in the General Requirements (Attachment A2)
Obtaining and complying with all permits
11.1 C ONSTR U C TION
Prior to the start of co nstructio n, all design drawings, permits and Equal Employment
Opportunity guidelines and insurance do cuments must be approved by the Seller. Upon the
Seller's issuance of a C NTP, the construction can begin,
11.1.1 State and Local License R equirements
Buyer o r Buyer's general contractor shall be a C lass "A" contractor certified in the State
of California, and meet all necessary State and local license requirements.
11.1.2 General R equirements
See Attachment A2 for additional and specific construction related requirements
11.2 INTER FAC E WITH OTHER AGENC IES
As required, the Buyer will meet with regulato ry agencies, utility companies, PLWTP and other
City departments to complete co nstructio n services during the construction and start-up phases.
The Seller shall be info rmed and invited to participate with agency contacts where important
project issues may be discussed.
SECTION 12
ATTEND C ONSTR U C TION MEETINGS
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PR EC ONSTR U C TION MEETINGS
The Buyer is to pro vide attendance of appropriate design and construction team members to
respond to the Seller's C o nstructio n Manager's questions for a two ho ur meeting. The agenda
shall include site access, final schedule, co o rdinatio n with PLWTP, and other related issues.
12 .2 SAFETY MEETING
Prio r to the start o f construction, the Buyer's site construction personnel shall attend the Seller's
standard construction Safety Program orientation training.
12.3 C ONSTR U C TION C OOR DINATION MEETING
Plan and attend a weekly meeting to coordinate construction ofthe Facility with the wo rk o fthe
PLWTP operations and maintenance staff and other contractors on the site and to pro vide the
Seller's staff will regular status updates. Meeting agenda will include:
Safety · Expected deliveries
Schedule Status · Status of JSAs
Four week look ahead schedule · Status o f planned outages
Status o f required submittals · Review o f As-Built drawings
SECTION 13
INSPEC TIONS
13.1 PR OJ EC T R EPR ESENTATION
The Buyer should have at least one (1) project representative on site to implement the Buyer's
co nstructio n QA/QC and safety pro gram. The Buyer will provide the Seller's C o nstructio n
Manager with a co py o f all inspectio n test results, as needed, to verify conformance with overall
site quality requirements. In additio n, the Buyer shall have at least o ne (1) onsite person
designated as the perso n in charge of construction management who is to be present during
co nstructio n activities. The duties ofthe project representative will include review of work
progress for conformance with contract documents, attending coordination meetings with the
Seller's C o nstructio n Manager and coordinating work with o ther Seller's projects which
interface with the Buyer's work.
SECTION 14
PR EPAR ATION OF R EC OR D DR AWING/R EPOR TS
14.1 SAFETY
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The Buyer shall pro vide Seller's C o nstructio n Manager with Job Safety Analysis CJSAs)(Project
Safety Reviews) as required by the Seller's pro cedures.
14.2 AS-BU IL T DR AWINGS
All as-built drawings for appropriate points of connection, rights o f way and equipment to
remain will be supplied to the Seller in the fo rmat discussed in Section 6.0. Revisions to the
submitted design drawings will be incorporated, based on as-built conditions on a weekly basis.
The as-built design deliverables shall be submitted prio r to final acceptance as o ne updated
reproducible mylar.each and also on electro nic media in accordance with the Section 6.0.
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