How Smelly Sludge Turned Non-odorous

I happened to find this list of Case studies "100 Projects Selected Public-Private Partnerships Across Canada" and was interested to see what Windsor's contributions were. After sifting through a lot of garbage, and it was messy, a number of questions arose that Administration needs to answer about one of the projects.

One of the projects mentioned for Windsor was #18 Essex-Windsor Regional Landfill: ooooooooooops that did not work out too well for us: "MFP Financial Services Ltd., a private financial solutions advisor, won the RFP and set up an Investment Trust." How many tens millions of dollars extra did that cost us over what we expected to pay out when that deal turned sour.

Then there was one right above it, #17 that I had not heard about before. Apparently "Canadian Council for Public-Private Partnerships gave a silver award to Prism Berlie for its arrangement made with the city". I hoped that this project would not wind up in the same fashion as MFP, costing us more than we thought.

• "Windsor Biosolids Processing Facility
  
  The City of Windsor, Ont. contracted with Prism Berlie (now Azurix) to build, finance, own and operate a biosolids processing facility for 20 years. The facility was completed in the spring of 1999 and uses heat drying to convert sewage sludge (biosolids) from Windsor's two sewage treatment plants into marketable fertilizer pellets. The City is responsible for providing a minimum of 30,000 wet tonnes per year to Azurix. The company is responsible for transportation from the City plants, all facility operations, permits and marketing the pellets to end-users. The original capital cost of the project, financed by then-Prism Berlie, was $10 million."

So I decided to look into it since it was described as a $60 million deal over its life. That's big money in any league. I read a very interesting document prepared by the City describing the deal. One comment jumped out at me "The private company's incentive under BOOT [build, own, operate,transfer] is to make as much money as possible during its period of ownership." Ownership transfers to the City after 20 years.

It appears that sludge smells. Not only smells but stinks, badly. Getting rid of sludge can also pay well if you do it right.

The odours from "the open method of stabilizing and then storing biosolids, sometimes for periods exceeding six months, have upset both domestic and industrial residents in the west end of Windsor." Council decided in 1997 to plan for a "more effective non-odorous method of stabilizing and recycling the biosolids from" the two pollution control plants. Moreover, as the Star reported "Michigan Democrat lawmakers don't want stinky, blood smeared trucks carrying biohazards and bodily waste -- including treated sewage sludge from Windsor -- rolling through Michigan streets. "

After an extensive RFP proposal that is set out ad nauseum in the Administration Report, Prism-Berlie won the job with their technology. Of course it was picked since it was "state of the art" and would "operate with no offending odour." We in Windsor have to be the pace-setters right.

In an article I found, I saw that

• "Azurix Corp is a holding company formed in 1998 with the majority of stock split evenly between Enron Corp and Marlin Water Trust. (Public shareholders own the rest. It is traded on the New York Stock Exchange, listed under the short form AZRX. Azurix companies are located around the world, among them Wessex Water Services Ltd. in the United Kingdom, and there are water treatment facilities in Argentina as well."

One of its "purchase in Ontario was Prism Berlie, which operates a state-of-the-art biosolid pelletizing plant in Windsor." In April 2001, Enron announced it would break up Azurix and sell its assets.

The contract was signed in 1997 to start, after construction, in 1999. There was a 2 year period when the former contract ended and the new plant was operating so a tender went out for hauling sludge to a landfill and Prism-Berlie won that tender at a price of $27 per ton. [Remember that number]

The plant opened. I am not sure if someone confirmed that the plant met its specs at the time and was able to process all of the sludge. I believe that, in fact, the plant may not have done so and therefore some amount of sludge still had to be hauled away. That should be an easy figure to obtain.

Another interesting Star story in June 1999 said

• "Windsor's much-vaunted high-tech and environmentally friendly solution to dealing with its sewage has, according to this story, turned into very expensive garbage. It cost city taxpayers $40 a tonne a few months ago to landfill city sewage. The $19-million state-of-the-art Prism-Berlie biosolids recycling plant which opened Thursday with much fanfare turns that sewage into $84 a tonne fetilizer pellets for commercial sale. The pellets, however, are being trucked straight to the landfill. Agriculture Canada still hasn't granted a licence so the pellets can be sold as fertilizer."

The Star reported that "The plant was plagued by fires following its March 1999 opening and closed in October 2002 when an explosion destroyed equipment, blew holes in walls and caused $5 million in damage." Obviously from that time until re-opening, sludge had to be shipped away. The Star reported that it was actually a good deal for the City since we were being charged $60 to send the sludge to the landfill and not paying the amount of $90 under the contract for the sludge to be processed.

No matter the optimistic Administration reports to Council that set out the new opening dates (September 2003, then March 2005, then June 2005), it took around 4 years to rebuild the plant. During all of that time, sludge was hauled to landfills in Ontario and Michigan by Prism-Berlie at $60 per ton it appears.

In going through this series of events, I had a number of questions:

1. Did anyone in the past confirm and can anyone confirm now that the old plant and now the new one meets specs and can process what it is supposed to process. Is the plant in compliance and what tests were run to prove it
2. If not, what will the City do about it?
3. During the period while the plant was operating, what percentage of the sludge was processed? For the balance, what happened to it. If it was shipped to a landfill, what price did the City pay---$27, $40, $60 or $90
4. During the 4 years after the explosion, did the City pay $60 for hauling and not $27 and if so, why? It was said that the city "saved" money....In fact, did the City pay out too much ["Shuttering the plant saved the city money. It's been paying $60 per ton of sludge to haul 2,500 tons of waste per month to Michigan for disposal in a landfill. It costs $90 per ton for the recycled process. "It's cheaper to put it in a landfill, but it's not environmentally viable or an appropriate thing to do," [Kit] Woods said."]
5. How was the $60 calculated and did it go out for tender?
6. Will the City get a plant of value when the contract expires
7. "The city signed a 20-year contract." Given the downtime, will the contract be extended?

Depending on what the facts are, money may be owing to the City if we overpaid for getting rid of sludge. If money is owing to the City, how much is it? I assume that the City will go out and collect it.

Why didn't the sharp-eyed, line-by-line, eagle-eyed Coucillor Budget and the Budgeteers catch this?

Easy---Just so you know, "biosolids processing is financed through the Sanitary Sewer Surcharge which is a self-financing reserve fund and cannot be used for other municipal purposes." In other words, no one would really notice anything about it or care. It's just a few pennies. But those pennies multiplied by millions of gallons of water add up quickly!