City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: March 24, 2025
Report #:2409-3501
TITLE
Approval of General Services Contract No. C25192791 with Synagro-WTT, Inc for Sludge Hauling Services for a Term of Three Years in an Amount Not to Exceed $2,584,756, for the Regional Water Quality Control Plant; CEQA Status – Not a Project
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to execute Contract No. C25192791 with Synagro-WTT, Inc for Sludge Hauling Services for the Regional Water Quality Control Plant (RWQCP) for a term of three years, in an amount not to exceed $2,584,756.
EXECUTIVE SUMMARY
Since 2019, the City has relied on contracted services to meet the sludge hauling needs of the RWQCP. The existing sludge hauling services contract, C22183016A, ends on March 31, 2025. A formal solicitation of bids was conducted through a request for quotation. Following this competitive solicitation process, staff recommends that Synagro-WTT, Inc (Synagro) be awarded the contract for sludge hauling services at the RWQCP. This contract is only for hauling sludge from the City to the two different locations that treat the sludge; the RWQCP has two separate contracts for treatment of biosolids.
BACKGROUND
The City Council approved retiring the City’s two 46-year-old sewage sludge incinerators as a measure to reduce carbon dioxide emissions by over 12,000 metric tons annually.1 The incinerators operated from 1972 until their replacement in March 2019 with a new sludge dewatering and truck loadout facility. Since March 2019, the sludge has been hauled to two 1 City Council, December 11, 2017; SR #8487;
https://portal.laserfiche.com/Portal/DocView.aspx?id=50892&repo=r-704298fc&searchid=b39fdc30-2d56-4f1a- 9bd5-8071b932d3e7
different regional treatment facilities. To prepare for hauling and treatment, the City solicited requests for proposals for sludge hauling and treatment services in 2017. Council approved a contract with Denali Water Solutions, LLC (Denali) in an amount not to exceed $2,181,000 for hauling services through March 31, 2022.2 Council approved a second contract with Denali in an amount not to exceed $2,427,084 through March 31, 2025.3 As part of a corporate acquisition, the Denali contract was reassigned to Synagro on September 4, 2024.3 A new contract is needed to begin three more years of hauling services beginning April 1, 2025. Five-year contracts for sludge treatment services with Lystek International Limited (Lystek) and Synagro were originally approved with a term through March 31, 2024.4 The current contracts with Lystek and Synagro on expire March 31, 2029.5
ANALYSIS
Staff recommends award of the sludge hauling contract to Synagro. Hauling unit prices relate to distance and route logistics from RWQCP to the treatment facility (e.g., bridge tolls, weigh stations, traffic, driver start/end location, drive time restrictions per driver, etc.). A breakdown of total contract cost is shown in Table 1.
Table 1: Contract Cost and Estimated Sludge Production Details Dates Cost
Estimated Maximum
Sludge Production Comment
4/1/25 – 3/31/26 $826,735 21,424 1
4/1/26 – 3/31/27 $857,571 22,281 2
4/1/27 – 3/31/28 $900,450 25,089 2, 3
Note 1: 15,624 wet tons * $38.94 / wet ton to Synagro CVC = $608,398.56 5,800 wet tons * $35.92 / wet ton to Lystek International = $208,336.00 safety program expenses in year one only = $10,000
2 City Council, June 18, 2018; SR #8913; https://portal.laserfiche.com/Portal/DocView.aspx?id=134741&repo=r- 704298fc&searchid=9de9f837-42f3-452c-b3ab-23a8a8c93c1b
3 City Council, January 24, 2022; SR #13520; https://portal.laserfiche.com/Portal/DocView.aspx?id=59319&repo=r- 704298fc
3 Fully Executed Reassigned Sludge Hauling Contract, September 4, 2024; www.cityofpaloalto.org//files/assets/public/v/1/public- works/rwqcp/contracts/synagro_denali_aa_fullyexecuted_20250226180956.446_x.pdf 4 City Council, June 18, 2018; SR #8913; https://portal.laserfiche.com/Portal/DocView.aspx?id=134741&repo=r- 704298fc&searchid=9de9f837-42f3-452c-b3ab-23a8a8c93c1b
5 City Council, February 12, 2024; Agenda Item #4, SR#2309-2048; https://portal.laserfiche.com/Portal/DocView.aspx?id=70369&repo=r-704298fc Note 2: Annual increase assumed to be a 5% Consumer Price Index for Urban Wage Earners and Clerical Workers for the San Francisco-Oakland-San Jose Area per Contract Section 6 Note 3: Additional sludge production is expected with upgraded Secondary Treatment system, which is expected to produce an estimated 34% additional waste activated sludge or about 10% additional total sludge production beginning in June 2027 The recommended contract, not to exceed $2,584,756, is based on a combination of the unit prices per wet ton and the annual increase assumed to be 5% per Contract Section 6. Additional sludge production is anticipated in contract year 3. The unit prices from Synagro for hauling to each treatment site are shown in Table 2.
Table 2: Comparison of Unit Prices in $/Wet Ton in Current and New Contract Current Contract New Contract
Exhibit C Rates 4/1/24 - 3/31/25 4/1/25 - 3/31/26
To Lystek $32.62 $35.92
To Synagro $36.67 $38.94
The hauling services involve three years of daily loadouts and hauling commencing April 1, 2025, one day after the end of the term of the existing contract with Synagro on March 31, 2025. Pricing reflects current market conditions as they relate to inflation, diesel prices, and prices for truck drivers, including rising costs for diesel fuel and drivers that commenced during the last contract term.
Solicitation Process
On October 24, 2024, a request for quotation (RFQ) for Sludge Hauling Services was posted on OpenGov, the City’s eProcurement platform. The bidding period was 40 calendar days. Quotes were received from three contractors on December 3, 2024.
Table 3: Summary of Request for Quotations
Project Bid Name/Number
Sludge Hauling Services for the Regional Water Quality Control Plant/RFQ192791
Proposed Length of Project 36 Months
Number of Bidders Notified 3346
Number of Bid Packages Downloaded 28
Public Link to Solicitation https://procurement.opengov.com/portal/palo-alto- ca/projects/123220
Total Days to Respond to Bid 40 days
Mandatory Pre-bid Meeting Tuesday, November 13, 2024 at 9:00 a.m. PST Number of Providers at Pre-bid Meeting Five
Number of Bids Received Three
Base Bid Price Range $810,000 to $1,026,506.80
Staff reviewed the bids submitted and initially recommended Burton and Son Trucking LLC because they were the lowest bid with a Year One total of $810,000. On January 9, 2025, Burton and Son Trucking formally requested to withdraw their bid for unknown reasons. The second lowest bidder, Synagro-WWT, Inc. was issued a notice of intent to award on January 21, 2025.
Contingency for Force Majeure Situations
A force majeure may limit sludge disposal options (e.g., damaged roadways, earthquake damage, process breakdowns, new regulatory constraints, etc.). In using multiple treatment contracts with Synagro and Lystek, Palo Alto is benefiting from diversified disposal options, as well as two landfill sites identified by Burton and Son Trucking LLC. In the event sludge deliveries must be suddenly increased to one of the two treatment facilities, notification timelines for each agency are constrained. The RWQCP’s 24/7 production of sludge requires a disposal option to be activated and available within one to two days, depending on RWQCP’s available onsite storage. The contracted hauler, Synagro, can deliver sludge to two landfills as an emergency backup should the two treatment facilities be unavailable. Since the commencement of hauling services in 2019, emergency use of a landfill has not been required, with both Lystek and Synagro providing reliable daily treatment services. Synagro and Lystek’s reliability is expected to continue during the term of the hauling contract. In the event of a potential future emergency requiring use of a landfill, every effort will be made to limit landfill use. Use of landfills is problematic because it conflicts with City zero waste policies; landfill disposal prices are not guaranteed; there are operational and regulatory constraints against using a landfill for sludge disposal; and the landfill would only consider sludge disposal acceptable in short-term emergency situations due to limited ongoing capacity and regulatory limitations to landfilling biosolids.
Ongoing Regulatory Concerns
The City has participated in regional studies6 to analyze pollutants in the sludge, including Per- and Poly- Fluoralkyl Substances (PFAS), a family of chemicals found in consumer and industrial products that are known as “forever chemicals”. PFAS in biosolids are a concern because they are used as an agricultural soil amendment. California has no regulatory limits for PFAS in biosolids, and PFAS levels monitored in RWQCP biosolids are below the lowest regulatory limits 6 Bay Area Clean Water Agencies PFAS Documents; bacwa.org/pfas-links/. set by Michigan, New York, Wisconsin, and Colorado. In addition, Palo Alto’s biosolids are applied only to land used for rangeland, not edible, crops.
Long Range Facilities Plan Update to Look at Future Options for RWQCP Biosolids Treatment Lystek and Synagro continue to provide an efficient and cost-effective solution for biosolids treatment; however, there may be other future options to better serve the City. A long-term biosolids treatment solution was established with the October 2014 Biosolids Facilities Plan.
That plan was re-evaluated in a Biosolids Facilities Plan Update in October 2019, which was completed six months after startup of the new sludge dewatering and truck loadout facility.7 The 2019 Biosolids Facilities Plan update continued to show that offsite treatment was the best option in the interim.
The Long Range Facilities Plan8 (LRFP) was approved in 2012.9 The RWQCP is in the process of updating the LRFP. City Council approved a contract with Carollo Engineers for an LRFP Update including an update to the Biosolids Facilities Plan.10 The LRFP Update includes a task to develop an updated Biosolids Facility Plan. Development of the draft Plan and review by a Council committee is one of the Council Priority Objectives for 2025, with approval of the Plan expected in early 2026. The results of the evaluation will inform the future efficiency, environmental benefit, and cost effectiveness of sludge hauling and offsite sludge treatment services. As requested by City Council at the August 21, 2023 meeting on property acquisition adjacent to the RWQCP, the evaluation will include an analysis of the need for the Measure “E” site adjacent to the RWQCP.11
FISCAL/RESOURCE IMPACT
Funding for April through June 2025 of this contract is available in the Wastewater Treatment Fund Fiscal Year 2025 Adopted Operating Budget. The last nine months of the first year of the contract and the first three months of second year of the contract are included in the FY 2026 Proposed Operating Budget, and the remaining funding for the contract will be subject to Council approval as part of the annual budget development process. 7 Palo Alto Regional Water Quality Control Plant Biosolids Facility Plan Update; https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/water-quality-control-plant/sludge- dewatering-building/finaldraft_palo_alto_bfp_update.pdf?t=47012.05 8 The Long Range Facilities Plan for the Regional Water Quality Control Plant Final Report https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/water-quality-control-plant/lrfp-final-report- 08-2012.pdf
9 City Council, July 2, 2012; SR #2914; https://portal.laserfiche.com/Portal/DocView.aspx?id=108061&repo=r- 704298fc
10 City Council, June 10, 2024; Agenda Item #6, SR #2405-2993 https://portal.laserfiche.com/Portal/DocView.aspx?id=72805&repo=r-704298fc 11 City Council, August 21, 2023; Agenda Item #7, #SR 2304-1389; https://portal.laserfiche.com/Portal/DocView.aspx?id=67189&repo=r-704298fc&searchid=28067f0a-bccb-4497- 8a7a-f5ca48147ac6
Palo Alto RWQCP treats the combined wastewater from Palo Alto, Los Altos, Los Altos Hills, Mountain View, Stanford University, and the East Palo Alto Sanitary District. Palo Alto’s cost share is approximately 37% and the other five agencies’ share is approximately 63%.
STAKEHOLDER ENGAGEMENT
This service is part of the RWQCP’s operating budget funded by Palo Alto and the five partner agencies who use the RWQCP for wastewater treatment. The five partner agencies are regularly updated on the need for wastewater treatment services. Updates are provided each year at an annual meeting and at other periodic meetings, as needed. With respect to Palo Alto itself, the open meetings on the budget process serve as the main vehicle for engaging the community on both projects and services, and the associated rate impacts.
ENVIRONMENTAL REVIEW
Council action on this item is categorically exempt from review under the California Environmental Quality Act (CEQA) in that awarding a contract for sludge hauling services review involves the operation of an existing facility with negligible or no expansion of use. CEQA Guidelines section 15301.
ATTACHMENTS
Attachment A: Synagro Contract C25192791
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer