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Operating Agreement
(Biosolids Processing)
This Operating Agreement (“Agreement”) is effective as of ___________, 2025 (“Effective Date”) and is between the West County Wastewater District, a sanitary district organized and existing pursuant to the provisions of California Health and Safety Code Sections 6400 et seq. (“WCW”), and the City of Richmond, a municipal corporation (“City”). WCW and Richmond are each referred to as a “Party,” and together as the “Parties.” A. WCW operates the West County Wastewater District Treatment Plant in North Richmond, California (the “WCW Treatment Plant”). The City operates the Richmond Municipal Sewer District Water Pollution Control Plant (the “Richmond Plant”) at Point Richmond. The two plants separately treat wastewater but some elements of the treatment processes are connected; WCW sends treated wastewater effluent to the Richmond Plant for dechlorination and ocean discharge, and the City sends anaerobically digested sludge from the Richmond Plant to the WCW Treatment Plant for treatment and disposal via an approximately five-mile 6” sludge pipeline that is owned and operated by the City.
B. The original solids train consisted of Dissolved Air Flotation (DAF) Thickeners for Waste Activated Sludge, primary sludge pumps for primary clarifier underflow, and anaerobic digesters, with the digested sludge sent to sludge drying beds. The City has sent digested sludge from the Richmond Plant to dedicated sludge drying beds at the WCW Treatment plant pursuant to a Lease Agreement dated January 1, 2010, and amended on January 1, 2017, and January 1, 2025, which provides for the City’s lease of certain property at the WCW Treatment Plant known as the East Site Sludge Lagoons.
C. WCW has developed a new biosolids treatment process that will no longer necessitate the use of the East Site Sludge Lagoons as of approximately August 1, 2025.
D. Under the new treatment process, the DAF Thickeners have been replaced by Rotary Drum Thickeners. The digested sludge streams from the City and WCW will be blended and mixed in tanks 103 and 104 before being dewatered using centrifuges and finally dried to about 80% solids processing through a thermal dryer. The resulting Class A or Class B biosolids will be hauled offsite for landfill disposal or, as available, by land application or other method of beneficial end use. The updated system was developed to meet WCW’s treatment requirements as well as achieve energy savings and reductions in greenhouse gas emissions.
E. Continuous and stably digested sludge from the two treatment facilities are key to achieve successful, efficient and steady state biosolids dewatering and drying operations.
Contingencies for preempting and managing possible sludge quality issues, such as reporting requirements, are important for ensuring the operational relationship succeeds. Interruptions in either sludge supply, changes to blending/mixing ratios and/or changes in sludge characteristics can negatively impact processing and the quality of the end product (Class B and ultimately Class A biosolids). This can also have impacts on the biosolids end use.
F. Because the equipment and polymer selected for the dewatering process (Alfa Laval centrifuges) are highly dependent on stable sludge characteristics, the parties must perform compatibility (sometimes referred to as “fingerprinting”) and jar testing of the digested sludge from both the City and WCW treatment facilities.
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G. The City’s 6” sludge transport pipeline, which allows digested sludge to be sent from the Richmond Plant to WCW Treatment Plant, recently underwent a comprehensive condition assessment. The results of that assessment indicate the pipeline, and its associated vaults and accessories, need rehabilitation. In addition, The City’s two digesters likely will requiring cleaning in the future. The Parties will work to minimize disruptions to the biosolids treatment from these interruptions as provided herein.
H. This Agreement provides the terms and conditions of WCW’s operation of the biosolids treatment process and cost allocation between the Parties, as further described herein.
The Parties therefore agree as follows:
1. Biosolids Treatment Facilities.
1.1 Ownership. The facilities used for processing and treating the combined sludge, regarded as shared assets for purposes of cost allocation, are the blending/storage tanks, the centrifuges, and the thermal dryer (together, the “Treatment Facilities”). Ownership of the Treatment Facilities is vested in WCW.
1.2 City Right to Use. The City shall have a perpetual right to use the Treatment Facilities, and any other facilities necessary for the treatment of its sludge, for the duration and pursuant to the terms of this Agreement.
2. Treatment Facilities Maintenance.
2.1 WCW shall be responsible for operating and maintaining the Treatment Facilities in good repair and according to industry best practices. WCW shall be responsible for performing, or contracting for the performance, of all required inspections, routine maintenance, and repair costs for the Treatment Facilities.
2.2 The Parties shall meet and confer and mutually agree to undertake a permanent (life-extending) repairs to the Treatment Facilities, or make the decision to remove or permanently abandon the Treatment Facilities.
3. Cost Allocation.
3.1 WCW shall account for all costs associated with the Treatment Facilities that are necessary for the treatment and disposal of the combined sludge products, including capital costs, operation and maintenance costs, and disposal costs (“Joint Expenses”). These costs are described and allocated in more detail in the Biosolids and Leachate Treatment Cost of Service and Maintenance Agreements Cost Analysis (the “Cost of Service Analysis”) prepared by Carollo Engineers, Inc. (“Carollo”), attached hereto as Exhibit A and incorporated by reference.
3.2 Capital Costs. WCW and the City will share the capital cost of the Treatment Facilities, amortized over 20 years. WCW will be responsible for 60% and the City will be responsible for 40% of the Capital Costs. The Parties will be responsible for Capital Costs regardless of volume of sludge treatment. Capital costs will be paid by the Parties based on the Cost of Service Analysis and the Biosolids Treatment: Disposal/End-Use Cost Estimate prepared by Carollo (the “Cost Estimate”), attached hereto as Exhibit B.
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3.3 Operation & Maintenance Costs. Operation and Maintenance (O&M) Costs include the following categories: power; polymer; natural gas; labor; sampling; equipment maintenance. The Parties will be responsible for fixed O&M costs regardless of volume of sludge treatment.
A. WCW will be responsible for 60% and the City will be responsible for 40% of the O&M Costs, as described in the Cost Estimate and Cost of Service Analysis.
3.4 Disposal Costs.
A. WCW and the City will share the actual cost for disposal of the biosolids produced. WCW will be responsible for 60% and the City will be responsible for 40% of the Disposal Costs. WCW will bill the City for its share of actual hauling costs after the initial start-up year, after which Disposal Costs will become part of the City’s budget as outlined in Section 4.
B. If the biosolids are able to be beneficially reused through land application or other purpose, any credits will be applied to the City’s Joint Expenses owed to WCW according to the 60/40 ratio.
4. Joint Expenses Payment Process
4.1 On or before April 1 of each year, WCW will submit to the City a budget for the upcoming fiscal year, outlining the City’s share of the Joint Expenses. WCW and the City will meet and confer on the estimated costs in the event of any disputes.
4.2 WCW will invoice the City by July 15 of each year for the annual payment.
The City will pay the invoice within 30 days.
4.3 WCW will monitor various elements of the Operations and Maintenance categories described in the Cost of Service Analysis and Cost Estimate (power; polymer; natural gas; labor; sampling; equipment maintenance) and the parties may confer if actual costs for these categories are significantly higher or lower than those described in Exhibits A and B, and adjust the annual budgets as necessary.
4.4 If adjustments to the annual budgeted amounts are necessary, WCW will request additional funding from the City to ensure adequate funding of the Joint Expenses.
5. General Provisions
A. During year five of the biosolids operation (beginning August 2029), WCW will look ahead and develop a budget for major repair, maintenance or upgrades needed between years 5 and 10. If non-routine costs are expected to exceed $100,000, the Parties will to meet and confer prior to making the expenditures and timetable for same.
B. If one or both Parties believe an expense should not be considered a Joint Expense, or that expenses should be allocated in a different ratio than provided in this Section, the Parties will meet and confer to resolve the matter.
6. Duties of the Parties.
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6.1 The Parties, including relevant contractors, will meet monthly to discuss the progress of the new treatment process, costs, and any other issues identified by one or both Parties for discussion, until the Parties agree on a change in meeting frequency. These meetings will include the City’s contract operator or plant operations staff.
6.2 The City’s contract operator shall deliver to WCW a monthly report, in a format and containing data as determined by WCW, summarizing digested sludge volume and quality. The City and/or its contractor shall timely respond to requests from WCW regarding sludge monitoring and reporting to ensure the effective operation of the treatment process.
6.3 Absent emergency situations, the City’s contract operator or the City shall make best efforts to deliver to WCW a minimum of 60 days’ advance notice of any interruptions or shut-downs of the City’s 6” sludge line or its digester tanks. The City’s contract operator will work with WCW on a contingency plan for any shut down periods, and provide a tentative schedule for any repair or replacement projects.
6.4 WCW shall share periodic reports relating to treatment costs and Joint Expenses as requested by the City.
6.5 Both Parties shall retain responsibility for their own digested sludge monitoring/sampling as required by the applicable NPDES permit. WCW may, in its sole discretion, require additional monitoring beyond that required in the NPDES permit. The cost of this additional monitoring will be borne by the individual parties (if monitoring only that party’s single waste stream) or a shared cost (if monitoring is for the sludge after it has been blended).
6.6 Both Parties shall maintain records relating to the Treatment Facilities and shall make all records available for review by the other Party upon request.
6.7 Both Parties shall carry adequate insurance to perform all acts and obligations under this Agreement.
7. Remedies
7.1 WCW Remedies. If the City’s digested sludge quality does not meet the requirements of the City’s permits, WCW’s discharge requirements, applicable laws, or otherwise is of a quality that results in the interference of WCW’s treatment process, the Parties will meet and confer to resolve any issues. WCW reserves the right to terminate or suspend treatment of the City’s sludge if quality issues significantly interfere with WCW’s treatment process. The City may be responsible for any additional costs incurred by WCW to accommodate, treat, or dispose of sludge that fails to meet WCW’s treatment criteria, which criteria WCW may set and enforce from time to time in its sole discretion.
7.2 Either Party may perform temporary or emergency repairs to the Treatment Facilities reasonably necessary to prevent harm to the facilities, third parties, or the environment, with prior written notice to the other Party. If time does not permit advanced notice, the Party engaging in the work will provide notice as soon as possible after the emergency situation has abated.
7.3 Third Party Liability. WCW shall require any contractor performing wok on the Treatment Facilities to name the City as an additional insured, and include indemnity and
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liability provisions protecting Richmond and WCW, as well as their employees, directors, and agents.
8. Indemnity. Each party will indemnify, defend, and hold harmless the other from and against any and all demands, claims, legal or administrative proceedings, losses, costs, penalties, fines, liens, judgments, damages and liabilities of any kind (collectively, “Losses”): (1) to the extent arising out of the indemnifying party’s negligence or willful misconduct in the operation or maintenance of the Treatment Facilities, except to the extent of Losses are caused by the indemnified party’s negligence or willful misconduct; and (2) each Party’s share of any claims that arise while the Party is a co-permittee under the NPDES permit and that are shared liabilities deemed the responsibility of all permittees.
9. Dispute Resolution. In the event of any dispute, the Parties will promptly meet and confer, first at a staff level and then elevated to the Parties’ governing bodies, in a good faith attempt to resolve the dispute. In connection with such negotiations, the Party asserting the dispute must provide the other with a written description of the nature of the dispute, along with reasonable supporting documentation. If a dispute cannot be resolved by the parties independently, they may agree to submit such dispute to non-binding mediation by a mutually agreed-upon neutral third party with offices in the west Contra Costa area. The cost of mediation will be shared equally. In the alternative, a Party may choose to resolve questions or disputes arising under this Agreement through arbitration or judicial determination.
10. Term; Termination.
10.1 This Agreement is effective as of the Effective Date and will continue until terminated.
10.2 Either Party may terminate this Agreement:
A. with twelve (12) months’ prior written notice to the other Party; or B. with thirty (60) days’ written notice in the event of breach, so long as the breach is not cured within thirty (30) days of notice by the non-breaching party.
11. Miscellaneous.
11.1 Integration, Governing Law, Amendment. This Agreement represents the entire understanding of the Parties as to their interests and obligations relating to the Joint Facilities. To the extent that it contradicts or varies from this Agreement, no prior oral or written understanding will be of any force or effect with respect to the matters covered by this Agreement. This Agreement is governed by the laws of the State of California and will be construed as if drafted by all Parties. This Agreement may not be modified except in writing, approved and executed by the Parties.
11.2 Third Parties. This Agreement does not create any third-party beneficiary or any rights in any person or party other than the Parties.
11.3 Signing Authority. Each Party represents and warrants that each person or persons executing this Agreement on its behalf is duly authorized to do so by the respective Party and that this Agreement binds the Parties.
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11.4 Notices. Any written notice required by this Agreement will be made by U.S. mail or by reliable overnight courier and delivered to the following address, together with a courtesy copy by email:
To WCW: West County Wastewater District
2910 Hilltop Drive
Richmond, CA 94806
Attn: General Manager
To the City: City of Richmond
450 Civic Center Plaza
Richmond, CA 94804
Attn: City Manager
Either party may, by written notice to the other, designate a different address or addressee, which will be substituted immediately for that specified above.
11.5 Severability. If any provision of this Agreement, for any reason, is held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provision of this Agreement, but this Agreement will be construed as if the invalid, illegal, or unenforceable provision had never been set forth herein, and the remainder will be enforceable to the fullest extent permitted by law.
11.6 Successors & Assigns. The terms of this Agreement are binding upon and will inure to the benefit of and be enforceable by the respective successors and assigns of the Parties.
11.7 Counterparts. This Agreement may be executed in counterparts, each of which is an original, but all of which together will constitute one and the same instrument.
The Parties are signing this Agreement as of the Effective Date.
WEST COUNTY WASTEWATER DISTRICT
Dated: ______________________ By:
Name
Title
Approved as to Form:
Hanson Bridgett, LLP
By: ________________________
District Counsel
THE CITY OF RICHMOND
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Dated: ______________________ By:
Name
Title
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EXHIBIT A
Carollo Treatment Cost of Service Analysis
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EXHIBIT B
Cost Allocation Spreadsheet