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Home My WebLink About2013-06-26 Work Session Minutes Minutes of Board of Commissioners’ Work Session Wednesday, June 26, 2013 Page 1 of 10 Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org MINUTES OF WORK SESSION DESCHUTES COUNTY BOARD OF COMMISSIONERS WEDNESDAY, JUNE 26, 2013 ___________________________ Present were Commissioners Alan Unger, Tammy Baney and Anthony DeBone. Also present were Tom Anderson, County Administrator; Erik Kropp, Deputy County Administrator; and, for a portion of the meeting, Marty Wynne, Finance; Timm Schimke and Chad Centola, Solid Waste; Nick Lelack and Peter Gutowsky, Community Development; Chris Doty, Road Department; Laurie Craghead, County Counsel; Anna Johnson, Communications; David Givans, Internal Auditor; Judith Ure, Administration; and seven other citizens. Chair Unger opened the meeting at 1:30 p.m. ___________________________ 1. Finance/Tax Update. Mr. Wynne stated that the yield dropped a little bit but consistent with previous months, at 0.55. The most important part is year-end projections in relation to beginning net working capital for FY 2013-14. Revenue will be a little higher than anticipated, and Community Development is doing well. Most numbers are very close. One problem area is a negative in the Fair & Expo fund, but they will get some help from the adjustment made with transient room taxes. Most of this was a problem with events not materializing, but this should change as the economy improves. There is not much to report on most capital projects, but the jail remodel is on track. The Board complimented Mr. Wynne on his retirement and relocation to Arizona, and thanked him for all he has done for the County over the past 17 years. Under his guidance, the County has remained viable and thrived when other entities were struggling or failing. Minutes of Board of Commissioners’ Work Session Wednesday, June 26, 2013 Page 2 of 10 2. Discussion of Proposed Landfill Stabilization Project. Timm Schimke: spoke about the HBR Inc. review of Waste Energy Group’s proposal. It was a good report, and critical. The biggest concern is that the volume of gas will not be produced as was projected. The WEG response was because they have a patented project, there are landfills that inject liquid, the basis of comparison. They stand by this. HDR was concerned about projected revenue based on letters of intent to purchase gas in the pipeline. This is coming on strong and the price has gone down. They need to get the price and the amount of gas that they anticipated for the project to be viable. The County would be well protected financially, as it has no stake in this and there is a bond requirement to deal with unforeseen issues. No Solid Waste funding has been pledged. Waste Energy Group has been working on other avenues to market the gas and may want to turn it into a liquid fuel. This is more lucrative than putting it in the pipeline. There is no financial risk to the County and no environmental risk any more than the landfill itself. Most of the landfill is constructed with a system to deal with this kind of waste. DEQ Air and Solid Waste had no major concerns, and they are the regulating agency. WEG has to go through a lot of hoops with various entities. From an operational standard, HGR was concerned about this. The project would address a four-acre area at first, then move to another area. HGR was concerned about leaving the collection system behind. The company will have to be in compliance with all DEQ rules. WEG was able to respond to most concerns. HGR said that if the contracts can address the questions adequately, they would withdraw their concerns. There are probably no other companies interested in this because this is a small-scale project. Mr. Schimke stated he had been working with Benson previously on another project, and will work with him again if Waste Energy Group does not pan out. Commissioner DeBone wanted to know if Mr. Schimke is looking for a decision at this time. Mr. Schimke stated that he is always concerned about the Board’s comfort level. There may be a downside to giving someone a shot a something and having it fail. The potential outweighs this, however. Minutes of Board of Commissioners’ Work Session Wednesday, June 26, 2013 Page 3 of 10 The landfill provides an anchor if this can work financially, and it is attractive to help stabilize the landfill. They are already dealing with green waste from the fire fuels reduction program. Chair Unger said he does not feel there is risk to the County. Commissioner Baney was concerned about it being such a long contract. Mr. Schimke stated that the contract is legal and protects the County, and there are a lot of up-front costs to the contractor so a longer-term agreement is needed. It is a better way to manage gas at the landfill than what is being done now. Commissioner Baney asked if they should put it out to bid. Mr. Schimke said there are about 700 gas utilization projects across the country, and 25 are high end. This one is on the smaller side. A lot of companies are going after the gas market, and size and magnitude matters. If there is a patented product or process, a bid process is difficult. The experience and history of companies is variable because it is all relatively new. Some may have no track record at all. They would have a significant up-front investment. If they don’t make their projections, it is their finances at risk. The County would have a beneficial use and income. The Board asked that HDR meet with them to answer concerns and questions. This should occur within a few weeks. 3. Discussion of Economic Development Loan Criteria and Requests. Nate LiaBraaten of EDCO gave an update on the current outstanding County business loans. He said that in part because of this, 512 jobs have been created so far. Eight companies have completed their obligations or are tracking with the number of required new jobs; one company, Geospatial Solutions, was not able to get to the numbers yet. GL Solutions paid back in full, and GT Solutions has paid back about half to the County. Tom Anderson asked if they could add a column showing the loan amount to their report. Chair Unger feels this is a good resource and tool to help the County and companies. Mr. Lee said it is not a fit for every company but is appropriate in some cases. This program is unique in the region and the state. Minutes of Board of Commissioners’ Work Session Wednesday, June 26, 2013 Page 4 of 10 Jon Stark said that most have fulfilled their requirements and will need to carry the jobs forward. Consumer Cellular has created more jobs that anticipated and plan to add about thirty more jobs per month after July. He presented Vantage Clinical Solutions’ application. He had a few questions about some of the medical services or equipment providers and how they are positioning themselves in this changing market. They are growing and expect to continue in any case. Funds would be used for computer systems tied to the next phase of growth. The software is very specialized and this requires a lot of oversight. They are asking $10,000 each for five jobs. Bruce Barrett stated that this company seems to be the expert in that niche. They are conservative and publicly announced expansion plans. This will help that happen. They have survived some very tough times. Mr. LiaBraaten added that they are using some of their space to help entrepreneurs as well. These are early stage businesses that need support. Jon Stark went over the briefing paper for LMH Industries, a military and medical device manufacturing company. They grew to 94 employees in two years. There is an experienced group of principals helping to direct this growth , and they want to expand their current facilities. They purchased property in Redmond, but cash flow became important at that time. EDCO has been watching them for a year. He’d like to see a personal guarantee from one of the principals. It is important to them to seek this loan out. They feel they can hire forty more people in the next year or so. They are pursuing a benefit package and hope to add one this year. There is not a lot of turnover and they are very progressive. Mr. Barrett added that they made a big investment in equipment, and put a lot of work into this. Cash flow has increased steadily and they seem to have a good client base. Local management is not as experienced as some, but the principals are. Commissioner DeBone asked why they want $1,000 per job and not $2,000. Mr. Stark said that the benefits piece is not there yet. They also are looking at the balance of the fund itself, and the threshold. They did not want to go for the maximum award, as there are some other projects in the pipeline. Minutes of Board of Commissioners’ Work Session Wednesday, June 26, 2013 Page 5 of 10 Commissioner Baney noted that if it makes sense and is the right thing to do, the Board has the option to increase the loan fund. Mr. Kropp said that the Resolution relating to the $25,000 guarantee program for American Airlines and the Redmond Airport needs some changes. They could very narrowly change this and not the criteria for the whole program. Chair Unger suggested that they give the go-ahead on this small change, and maybe at some point reexamine the entire program if the funds are dwindling, and feel that more funding is appropriate. DEBONE: Direct staff to approve these loan amounts as discussed. BANEY: Second. VOTE: DEBONE: Yes. BANEY: Yes. UNGER: Chair votes yes. Mr. Lee spoke about the retirement of Lee Smith, who was involved in LIGI; and Lori Hancock is leaving the EDCO board. This leaves two vacancies that the Board of Commissioners need to appoint. Mr. Kropp said that the auditor recommended the members be tied directly to Deschutes County. Mr. Lee stated that it is valuable to have a County Administrator or Commissioner on the board. There needs to be a strong connection back to staff. 4. Discussion/Approval of EPA Grant Documents. Peter Gutowsky spoke about the: notice of an award last month. He has been working with the City of Bend, and looking at integrating the west side of Bend for land use, including OSU Cascades campus. The TGM grant may run parallel to the EPA brownfields grant. The deadline to submit is next Wednesday. The work plan and budget were developed to the satisfaction of the EPA. They grant $200,000 for petroleum-polluted sites or hazardous sites in the County. This could go towards an inventory of brownfields sites, which are prioritized and could be developed or remediated quickly. Minutes of Board of Commissioners’ Work Session Wednesday, June 26, 2013 Page 6 of 10 The grant provides resources to engage stakeholders and neighborhoods in the effort. It could be called brownfields land use planning, infrastructure planning and other preparation. It allows them to leverage State and Federal grants to clean up the sites for the end user. He is preparing a document for next week’s meeting. The grant would be awarded in October and it is a three-year program. Much will go to consultants to help with the technical aspects. The County can provide some in-kind resources. Community Development would be the grant overseer, and Mr. Gutowsky would be the coordinator. They have been and will continue to work with Property & Facilities to move this forward. Chair Unger asked if they are focusing on OSU Cascades only. He asked about the Redmond shooting range or the dicolite mine. Mr. Gutowsky stated that they could work on any site that is identified as a priority, as long as there is a determination it is a brownfields site. There are County-owned properties that could be a priority. 5. Discussion of Proposed Events Code Amendments. Mr. Lelack said in 1994 there were a series of updates regarding farm use events. One was a definition of horse events. This is still in Code today, and it is very broad, including rodeos as an outright use. The County has interpreted that if there is a horse event, no permits are needed. The definition of horse events had been acknowledged by the State. In particular, there are Cline Falls Road events, which are sanctioned and competitive events, and resultant Code complaints. An attorney provided compelling evidence that State law has narrowed this to exclude sanctioned events (national horse associations). LCDC was asked, for the appropriate path. There are a number of options, some of which are in conjunction with farm use. He has spoken with the property owners already. Minutes of Board of Commissioners’ Work Session Wednesday, June 26, 2013 Page 7 of 10 The best path forward is probably to allow this under the new limited use permit, SB 960, as adopted, which allows six events a year. Agri-tourism may not allow this. The Commissioner said that they want to mirror State law in this case. If they change the definition, allowing the big events, they would have to elaborate on what a horse show is. It could be simple and straightforward to comply with State law. If agri- tourism is amended, it may allow them anyway, through limited use events. Commissioner Baney asked if another allowed use would be moto-cross or motorcycle races, or a dirt bike track. Mr. Craghead said that some might be allowed as a private park. Chair Unger said you could do any of those things if you don’t charge for it. Commissioner Baney asked whether it applies to J Bar J and others. Mr. Lelack said they operate under a conditional use permit. There are limits to the number of people and the number of days. Chair Unger asked how they move forward with this, and the process for public involvement. Mr. Lelack stated that they would issue a text amendment. Partly it would be to comply with State law. Property owners in the area would be notified. There would be a public hearing. He has not thought through it beyond that. The issue is fairly narrow. Mr. Anderson said he worries about unintended consequences. There are a lot of horse-related activities in the County and not all charge admission. There is Healing Reins doing demonstrations, for instance. He wants to be sure this is limited as appropriate. They need to make the distinction between commercial- type activities and private and semi-private activities that don’t rise to that level. If those questions come up, the County will need a basis to respond. Mr. Lelack said he just wants to be sure that what is now happening is legal under Code. 6. Other Items. There is a meeting with the City of Redmond Council meeting July 11. Minutes of Board of Commissioners’ Work Session Wednesday, June 26, 2013 Page 8 of 10 There is a meeting with the Sisters City Council soon. Agenda items would be a 9-1-1 update, and the partnership with Community Development. Chair Unger said he wants to know the challenges Sisters is facing. There is a lot going on there such as an economic development plan and airport development. Mr. Anderson added that they are going through a UGB amendment annexation. Perhaps they should talk about the Cyrus bill, specifically the process. ___________________________ Mr. Kropp stated that AFSCME withdrew a couple of the pending ULPs. One was an unfair labor practice filing regarding temporary clerical help for filing. They hired a student without recruitment, AFSCME filed a ULP, but then withdrew it. Some have not been very strong cases. Labor negotiations start up again in Jan or Feb. ___________________________ In regard to SDC’s, there has been one refund request from a person who got a permit two days before the Board decided to grant some relief. Mr. Anderson said he thought it was a legitimate case. The person would have waited had he known. There will be more requests, from the date the meeting was advertised. Refunding is legitimate, but how far do you go back. Sometime s contractors get the permit. It starts getting more complicated the farther you go back. The Board contacted Chris Doty by phone to talk about the Tetherow SDC ’s and the reduction in general. The County allows for payment of this at any time prior to occupancy. People can also defer SDC’s during the process. During the course of this update, he assumes people will catch on and want a refund. At one point, it had not yet circulated in the development community. The Tetherow amounts are more significant. So far, there has been only one request. He feels bad that they were not advised so they could hold off and see how it went. The question is how to process other requests or be proactive in reaching out; and if so, for how long back. Would this be for 90 days or when the first notice was published. Minutes of Board of Commissioners’ Work Session Wednesday, June 26, 2013 Page 9 of 10 Mr. Doty said that there was 90 days’ notice to all on the SDC list on March 5. There was no date published for the hearing until about a week before the board meeting. There was about $200,000 collected in SDC’s since March 5, and this makes about a $50,000 difference. If they went back to May 30, there would be about ten permits. Commissioner DeBone said that when considering the 90 days, PILT payments, and secure rural schools, it makes it hard. He does not mind backtracking. Commissioner Baney stated she wants government to do the right thing. Some people wanted to beat the season and get things going. Mr. Doty said that he assumes that once they started down the track, people would not choose to defer SDC’s. They did not want to disrupt the flow of development. Normally they get their permit and fees are locked in that da y. If the fees increase overall, these would not as of that date. Normally fees do not go down. Looking back, it appears open-ended. If they had waited, they would have had to pay less. He does not know how many are out there. Mr. Anderson noted that permits are good for six months, or longer if progress is being made. It is a moving target. Mr. Doty stated that going back 90 days would mean turning back $50,000 of the $215,000 collected during that timeframe. Mr. Anderson asked if the Board wants to wait for people to contact the County. This would include Tetherow and others in the rural County. Alternatively, would the Board prefer the County go to them. Commissioner DeBone said this should be effective as of the date of notification. DEBONE: Direct Road and CDD to proceed with this activity. BANEY: Second. VOTE: DEBONE: Yes. BANEY: Yes. UNGER: Chair votes yes. Chair Unger pointed out that PIL T and Rural Schools are locked together, so if they get one, they don't get the other. He would like Mr. Doty to talk to the Board about the ramifications of this; the purpose of each and how they work. They need to support the Road Department's work, plus weeds and forest management. Commissioner Baney said that Title III eliminated a lot of things like Search & Rescue and equipment purchases. This will be discussed at a later date. Being no further items addressed, the work session ended at 4:1 0 p .m. DATED this I ~'!'f Day of ~ 2013 for the Deschutes County Board of Commissioners Alan Unger, Chair T ~ ATTEST: Anthony DeB one, Commissioner ~~ Recording Secretary Minutes of Board of Commissioners' Work Session Wednesday, June 26, 2013 Page 10 of 10 Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 -Fax (541) 385-3202 -www.deschutes.org WORK SESSION AGENDA DESCHUTES COUNTY BOARD OF COMMISSIONERS 1:30 P.M., WEDNESDAY, JUNE 26,2013 1. FinancelTax Update -Marty Wynne 2. Discussion of Proposed Landfill Stabilization Project -Timm Schimke 3. Discussion of Economic Development Loan Criteria and Requests -Judith Ure, Erik Kropp & EDCO I I 4. Discussion! Approval of EPA Grant Documents -Peter Gutowsky I I I I i 5. Discussion of Proposed Events Code Amendments -Nick Lelack i ! I 6. Other Items I ~ I! I II PLEASE NOTE: At any time during this meeting. an executive session could be called to address issues relating to ORS 192.660(2) (e), rea) property negotiations; ORS 192.660(2) (h), litigation; ORS 192.660(2)( d). labor negotiations; or ORS 192.660(2) (b), personnel issues. Meeting dates. times and discussion items are subject to change. All meetings are conducted in the Board ofCommissioners' meeting rooms at 1300 NW Wall St., Bend. unless otherwise indicated. lfyou have questions regarding a meeting. please call 388-6571. Deschutes County meeting locations are wheelchair accessible. Deschutes County provides reasonable accommodations for persons with disabilities. For deaf, hearing impaired or speech disabled, dial 7-1-1 to access the state transfer relay service for TTY. Please call (541) 388-6571 regarding alternative formats or for further information. CV'I . 0 N \{) N Q) c :J ..... "0 Q) ~ '" ('" OJ , s... ~ "'0 ~"'0 10 , " Q 10 iE I \t;OJ -4 Jo=I:t: ...... OJ f\ C I 0 ~ .c. "' c.. ..J I .... ~ ...,) r3t \...., " I' \l" ~:v t " E~ -4'-.i \;, ~ ~;:I ~ . ~ ~ ".,... ::::: C\", \"':1 I" '1\ ~' I' , '" \ '--...... ~ \ ..1"\ ~ ~ -~ ~ .\l\. ..:::t~ rf\ r"" ~ ~ ~::r---~ ~\A -C) )I ~I CD I '" t,... "' \.J' I I I I-1-j-+----+-----+--t---+----i ~ I w VI Q) CO c.. 4o '-'It.: OJ CO 0. Monthly Meeting with Board of Commissioners Finance Director/Treasurer AGENDA June 26, 2013 (1) Monthly Investment Report (2) May 2013 Financials Deschutes County Municipal Debt Corporate Notes Time Certificates U. S. Treasuries Federal Agencies Bankers' Acceptances LGIP/BOTC Total Investments $ 632,083 10,267,718 7,231,675 105,334,935 $ 123,466,412 Total Portfolio: By Investment Types Corporate TimeNotes Certificates8%Municipal 6% Debt LGIP/BOTC 85% 0.51% 8.32% 5.86% 0.00% 0.00% 0.00% 85.31% 100.00% Investments By County Function General $ 123,466,412 $ Investment Income Fiscal Year 2012-13 May-13 I I Y-T-O 59,932 $ 665,128 -- Total Investments $ 123,466,412 Total Investment Income Less Fee: 5% of Invest. Income Investment Income -Net 1$ 59,932 (2,997} 56,935 665,128 (33,256~ $ 631,872 Yield Percentages -~.~BOTC I LGIP ~ 0.53% 0.54% Investments ~ 0.71% 0.78% Average ~ 0.55% 0.57% Category Maximums: U.S. Treasuries '-ILGIP ~Federal Agencies Banker's Acceptances Time Certificates Municipal Debt Commercial Paper Term Maximums: 0-18 Months 19 -24 Months 100% 100% 75% 25% 25% 25% 20% 100%l- 30% C t 3 Month Treas. ~ 0.04% 12 Month Treas. ~ 0.14% 3 Month C P ~ 0.13% Months to Maturity 18 Months 91 % 24 Months 9% .j Memorandum Date: June 24, 2013 To: Board of County Commissioners Tom Anderson, County Administrator From: Marty Wynne, Finance Director RE: Monthly Financial Reports Attached please find May 2013 financial reports for the following funds: General (001), Community Justice -Juvenile (230), Sheriff's (255, 101, 102), Public Health (259), Behavioral Health (215), Community Development (295), Road (325), Community Justice -Adult (355)' Commission on Children & Families (310-399), Solid Waste (610), Insurance Fund (610), 9-1-1 (105), Health Benefits Trust (615)' and Fair & Expo Center (618). The projected information has been reviewed and updated, where appropriate, by the respective departments. Cc: All Department Heads GENERAL FUND Statement of Financial Operating Data Eleven Months Ended May 31, 2013 RESOURCES: Beg. Net Working Capital Revenues Tax Revenues -Current Tax Revenues -Prior Gen. Rev. -excl. Taxes Assessor County Clerk BOPTA District Attorney FinancefT ax Veterans Property Management Grant Projects Year to Date Actual Variance $ 8,700,000 $ 18,508,930 623,333 2,188,387 686,241 1,265,021 11,365 169,303 182,325 62,700 90,974 1,833 9,059,394 $ 359,394 100% 20,685,261 2,176,331 92% 1,065,574 442,241 92% 2,434,033 245,646 92% 835,506 149,265 92% 1,470,286 205,265 92% 16,419 5,054 92% 153,572 (15,731 ) 92% 251,876 69,551 92% 55,911 (6,789) 92% 86,390 (4,584) 92% 1,833 ° 92% 104% 102% 157% 102% a) 112% b) 107% 132% b) 83% 127% b) 82% c) 87% 92% $ Variance $8,700,000 $9,059,394 20,191,560 20,800,000 680,000 1,125,000 2,387,331 2,687,331 748,626 835,506 1,380,023 1,620,023 12,398 16,419 184,694 184,694 198,900 291,876 68,400 68,400 99,244 99,244 2,000 2,000 $ 359,394 608,440 445,000 300,000 86,880 240,000 4,021 92,976 Total Revenues 23,790,412 27,056,663 3,266,251 92% 104% 25,953,176 27,730,494 1,777,318 TOTAL RESOURCES 32,490,412 36,116,057 3,625,645 92% 104% 34,653,176 36,789,888 2,136,712 REQUIREMENTS: 1 Exp. %1 Expenditures Assessor 3,270,439 3,132,228 138,211 92% 88% 3,567,752 3,467,752 100,000 County Clerk 1,345,335 1,197,084 148,251 92% 82% 1,467,638 1,361,638 106,000 BOPTA 66,353 54,268 12,085 92% 75% 72,385 72,385 District Attorney 4,835,111 4,576.155 258,956 92% 87% 5,274,667 5.074,667 200,000 FinancefT ax 764,376 712.372 52.004 92% 85% 833,865 833,865 Veterans 239,243 228,852 10,391 92% 88% 260,992 260,992 Property Management 249,358 252.151 (2,793) 92% 93% 272,027 272,027 Grant Projects 112.520 112.197 323 92% 91% 122,749 122,749 Non-Departmental 1,571,782 943,045 628,737 92% 55% d) 1,714,671 1,284,671 430,000 Contingency 4,658,617 4,658,617 92% nla 5,082,128 5,082,128 17,113,134 11,208,352 5,904,782 92% 60% 18,668,874 12,750,746 5,918,128 Transfers Out 12,739,514 12,671,299 68,215 92% 91% 13,897,652 13,897,652 TOTAL REQUIREMENTS 29,852,648 23,879,651 5,972,997 92% 73% 32,566.526 26,648,398 5,918,128 NET (Resources -Requirements) 2,637,765 12,236,407 9,598,643 e) 2,086,650 10,141,490 8,054,840 Beginning Net Working Capital per Approved Budget 9,500,000 I a) Includes annual payments: PILT $730,983. FY 2012 PILTwas $471,723 b) A & T Grant received quarterly. YTD includes four quarters -July, October, January and April c) State payment received quarterly. YTD includes three quarters d) Budget includes $576,736 payment to LED#2. Will not be expended until June 2013 and is projected to be $430,000 less than budgeted due to available Transient Room Tax revenues e) Appropriation Transfers (authority to expend): County School Fund $360,000, Grant Fund $10,000, RV Park $22,000, Campus Improvement $150,000, Jail Project $800,000, Funds 160/170 $744,650. Page 1 COMM JUSTICE..JUVENILE Statement of Financial Operating Data Eleven Months Ended May 31, 2013 RESOURCES: Beg. Net Working Capital Revenues Federal Grants SB #1065-Court Assess. Jail Funding HB #2712 Discovery Fee Food Subsidy OVA Basic & Diversion Inmate/Prisoner Housing Inmate Commissary Fees Contract Payments Miscellaneous Program Fees MIP Diversion Fees Interest on Investments Leases Grants -Private CFC Interfund Grant Interfund Grant -Gen Fund Budget $1,010,415 5,500 3,545 11,917 19,250 344,068 55,000 92 111,833 183 46 917 7.333 1.100 458 115.189 18,333 Year to Date Actual I VarianceI $ 995,051 7,434 36,991 8,668 22,568 285,112 111,360 231 82,737 259 300 5,791 1.100 1.586 91.856 15.000 $ (15,364) (5,500) 3,889 36,991 (3,250) 3.318 (58,956) 56.360 139 (29.096) 76 (46) (617) (1,542) 1,128 (23.333) {3.333l IFY% I Coli. % 100% 98% 92% 0% 92% 192% 92% 80% 92% 67% 92% 107% 92% 76% 92% 186% 92% 231% 92% 68% 92% 130% 92% 0% 92% 30% 92% 72% 92% 92% 92% 317% 92% 73% 92% 75% a) b) b) c) d) c) e) c) 1) d) FY2013 YearEnd Budget Projection Variance $1,010,415 $ 995,051 $ (15,364) 6.000 6.000 3.867 7,750 3.883 46.133 37.000 (9,133) 13,000 9,450 (3,550) 21,000 26,000 5,000 375,347 350.000 (25,347) 60.000 125.000 65,000 100 250 150 122.000 95,000 (27,000) 200 275 75 50 (50) 1,000 375 (625) 8.000 6.300 (1.700) 1,200 1.200 500 1.625 1.125 125,661 125.661 20,000 20,000 Total Revenues 694,764 670,992 (23,772) 92% 83% 804,058 811,886 7,828 Transfers In-General Fund 4.899.147 4,899.147 92% 92% 5,344.523 5,344,523 TOTAL RESOURCES 6,604,326 6,565,190 (39,136) 92% 92% 7,158,996 7,151,460 (7.536) REQUIREMENTS: I EXP·%I Expenditures Community Justlce..Juvenile Personnel Services 4,652,099 4,479,887 172,212 92% 88% g) 5,075,017 4,900,000 175,017 Materials and Services 1,094,463 975,457 119,006 92% 82% g) 1,193,960 1,065,000 128,960 Capital Outlay 92 92 92% 0% 100 100 Transfers Out 46,200 37,800 8,400 92% 75% h) 50,400 50,400 Contingency 769,559 769,559 92% nla 839,519 839,519 TOTAL REQUIREMENTS 6,562,413 5,493,144 1,069,269 92% 77% 7,158.996 6,015,400 1,143,596 NET (Resources -Requirements) 41,913 1,072,047 1,030,134 1,136,060 1,136,060 Beginning Net Working Capital per Approved Budget 1,125,000 I a) Grant payment antiCipated in last quarter, pending completion of project b) HB #2712 replaced SB #1065 effective January 1. 2012 c) Revenues trending higher than anticipated -$2,400 billing outstanding d) Payments received quarterly e) Contract payment reimbursement request submitted monthly, received 1-2 months in arrears 1) Grant payments are generated by program activity during the school year and are received quarterly in arrears g) Expenditures trending lower than anticipated. Currently 6.8 unfilled FTE: Eliminating 4.8 FTE h) Transfers out recorded quarterly Page 2 SHERIFF -Fund 255 Statement of Financial Operating Data Eleven Months Ended May 31, 2013 Year to Date Actual Variance Variance RESOURCES: Beg. Net Working Capital $ $ $ 100"10 nfa $ $ $ Revenues Law Enf Dist Countywide 92"10 75"10 * 92"10 77"10 * Total Revenues 33,919,709 28,115,230 (5,804,479) 92"10 76"10 TOTAL RESOURCES 33,919,709 28,115,230 (5,804,479) 92% 76"10 37,003,318 31,029,928 (5,973,390) REQUIREMENTS: Exp. "101 EXPENDITURES & TRANSFERS Sheriffs Division 2,120,828 2,070,621 50,207 92% 89% a) 2,313,630 2,263,630 50,000 Civil 741,573 660,065 81,508 92% 82% b) 808,989 724,889 84,100 Automotive/Communications 1,661,413 1,670,600 (9,187) 92% 92% c) 1,812,450 1,854,418 (41,968) Investigations/Evidence 1,400,832 1,310,274 90,558 92% 86% b) 1,528,180 1,448,080 80,100 PatrollCivillComm Supp 7,630,662 7,458,006 172,656 92% 90% b) 8,324,358 8,137,497 186,861 Records 657,816 629,694 28,122 92% 88% b) 717,617 687,517 30,100 Adult Jail 10,028,363 9,323,913 704,450 92% 85% d) 10,940,032 10,302,009 638,023 Court Security 277,751 273,914 3,837 92% 90% 303,001 302 ,901 100 Emergency Services 178,322 170,389 7,933 92% 88% 194,533 194,433 100 Special Services Division 1,270,534 1,103,182 167,352 92% 80"10 1,386,037 1,308,069 77,968 Regional Work Center 2,441,155 2,326,402 114,753 92% 87% e) 2,663,078 2,543,978 119,100 T raining Division 467,454 424,326 43,128 92% 83% 509,950 493,850 16,100 Other Law Enforcement Svcs 635,712 615,695 20,017 92% 89% f) 693,504 683,404 10,100 Non-Departmental 78,149 78,149 0 92"10 92% 85,253 85 ,253 Contingency 4,329,147 4,329,147 92% nfa 4 ,722,706 4,722,706 31,029,928 TOTAL REQUIREMENTS 33,919,711 28,115,230 5,804,481 92"10 76"10 37,003,318 31,029,928 5,973,390 NET (Resources -Requirements) * Revenues from LED #1 & LED #2 adjusted monthly to equal actual expenditures a) Projected variance due to lower expenses for Personnel, travel , and supplies for the year b) Projected variance due to Personnel expenditures projected to be less than budgeted due to open positions and overtime c) Fuel (gasoline) will be higher than planned for the year. Appropriation Transfer is being processed d) Personnel budget was increased for the annual cost of six Correction Technicians. Technicians will be hired in March, resulting in projected difference between actual and budget of $428,000. Also, $76,417 budgeted for Capital Outlay will not be expended e) Personnel and Materials & Services expenditures projected to be less than budgeted due to timing of filling positions and savings in the cost of inmates' meals f) Projected variance due to extra help and additional overtime for CHL, Street Crimes and CODE activities Page 3 Fund 701 LED-Countywide Statement of Fi nancial Operating Data Eleven Months Ended May 31 , 2013 RESOURCES: Beg. Net Working Capital $4,507,352 $ 5,883,963 $ 1,376,611 100% 131 % $ 4,507,352 $5,883,963 $ 1,376,611 Tax Revenues -Curren t 14 ,103,595 15 ,775 ,830 1,672 ,235 92 % 103% a) 15 ,385 ,740 15,850,830 465,090 Tax Revenues -Pr ior 403,333 782 ,080 378 ,747 92% 178 % 440,000 822 ,080 382 ,080 Federal Grants & Reimb 27 ,500 24 ,510 (2 ,990) 92% 82 % b) 30,000 24,510 (5,490) State Grant 67,833 125,537 57,704 92 % 170% c) 74 ,000 140,448 66 ,448 Jail Funding HB 2712 36 ,991 36 ,991 92% nfa d 46 ,133 46 ,133 Transp . of State Wards SB 1145 4 ,583 1.356 .658 3 ,289 1,479 ,991 (1 ,294) 123,333 92 % 92 % 66 % 100 % 5 ,000 1,479,991 5,000 1,479,991 0 Prisoner Housing 45 .833 185,538 139,705 92% 371 % e) 50,000 185,538 135 ,538 Des . Cty Video Lottery Grant Grants 4 ,583 5 ,000 17,640 417 17,640 92% 92% 100 % nfa 5 ,000 5.000 17 ,640 17 .640 Des Cty Court Security 220.917 77,731 (143 .187) 92% 32 % f) 241 ,000 116 .597 (124,403) Des Cly Juvenile Contract 3 ,832 8 ,905 5 .073 92 % 213 % 4 ,180 8 .905 4 ,725 Tille III Reimbursement Transport Other 458 3,208 37 ,768 2,348 7 ,288 37,768 1.890 4,080 92 % 92 % 92% nfa 470 % 208 % g) 500 3 ,500 39 ,916 2.348 7.288 39 ,916 1,848 3,788 DC Fair & Expo Center 3,667 756 (2 ,911 ) 92 % 19 % 4 ,000 4,000 Inmate Commissary Fees 9 .167 21 ,301 12.134 92% 213 % 10,000 23,000 13 ,000 Work Center Work Crews 45 ,833 39 ,159 (6 .674) 92 % 78 % 50 .000 50,000 Concealed Handgun Classes 3.208 8 ,050 4 .842 92 % 230 % 3 ,500 9,000 5.500 Inmate Telephone Fee 73,333 78 .337 5.004 92% 98 % 80 .000 80,000 Soc Sec Incentive-Fed 4 ,583 13,000 8,417 92% 260 % 5,000 13,000 8 ,000 Miscellaneous 4 ,583 6 ,631 2 ,048 92 % 133% 5,000 7,000 2 ,000 Oregon Mentors 917 (917) 92 % 0% 1,000 1.000 Debit Card Fee 92 502 410 92% 502 % 100 550 450 Medical Services Reimb 11 ,917 14.417 2,500 92% 111 % 13 .000 15,000 2 ,000 Restitution 4 ,583 (4 .583) 92 % 0% 5 .000 5,000 Sheriff Fees 229 .167 287.395 58 .228 92% 115% h) 250 ,000 300,000 50 ,000 Interest 25,972 39,747 13 .775 92 % 140 % 28 .333 42 ,000 13,667 Interest on Unsegregated 3,239 1,469 (1 ,770) 92 % 42 % 3 ,533 3,533 Grants 3,000 3,000 92% nfa 3,000 3,000 Donations -"Shop with a Cop " 47 ,572 55,290 7 ,718 92 % 107 % 51 ,897 55.290 3 ,393 Land Sale Revenue Sale of Reportable Assets 4 ,583 3 ,309 574 3 ,309 (4 ,009) 92% 92 % nfa 11 'I, 5 ,000 3,309 5,000 3 .309 Total Revenues 16,714,749 19,143,382 2,428,633 92 % 105% 18,234,274 19,371 ,906 1,137,632 TOTAL RESOURCES 21,222,101 25,027,344 3,805 ,243 92% 110% 22 ,741,626 25,255 ,869 2,514,243 REQUIREMENTS: 1 Exp %1 Fund 255 Departments : Sheriff's Services 1,979,941 1.933,070 46.871 92% 89% 2.159 ,936 2,113,257 46,679 Civil 741 ,573 660,065 81 .508 92% 82% 808 ,989 724 .889 84 ,100 AutofComm 612 ,646 616 .034 (3 ,388) 92% 92% 668,341 683.817 (15,476) Adult Jail 10 ,028,363 9,323,913 704 ,450 92 % 85% 10.940 ,032 10,302,009 638 ,023 Court Security 277 ,751 273,914 3,837 92% 90% 303 .001 302,901 100 Emergency Services 178 ,322 170,389 7.933 92% 88% 194.533 194,433 100 Special Services 879 ,133 763,335 115 .798 92% 80% 959 ,054 905,105 53 ,949 Work Center 2,441 ,155 2 ,326,402 114,753 92% 87% 2,663,078 2 ,543,978 119 .100 Training 285 ,755 259 ,391 26 ,364 92% 83% 311 ,732 301 ,891 9 .842 Other (CODE, Forensic ) 635 ,712 615 ,695 20,017 92% 89% 693 .504 683,404 10.100 Non Dept -ISF Charges 39 .152 39,152 (0) 92% 92% 42 .712 42 ,712 Contingency 2 ,581 ,988 2 ,581 ,988 92% nfa 2,816,714 2,816,714 Total to Fund 255 20,681.491 16,981 ,359 3 ,700,131 22 ,561.626 18,798,395 3 ,763.231 Transfer to Reserve Fund (703) 91 ,667 100,000 (8 ,333) 92% 100% 100.000 100.000 Non Dept -Comm System Res 73 ,333 80,000 (6 ,667) 92% 100% 80,000 80,000 Total Requirements 20,846,491 17,161 ,359 3.685,130 92% 75% 22,741 .626 18 ,978,395 3,763 .231 Net 375.611 7,865.985 7,490,374 6 ,277 ,473 6 ,277 ,473 Beginning Net Working Capital per Approved Budget 5 ,541 ,699 1 a) Current year taxes due November, February and May b) Less than planned BOJ Crim inal Alien Assistance (SCAAP) reimbursement c) Unplanned Homeland Security Grant for Engineering Communication System Study d) Unplanned changes at the State level i n Circuit Court revenue distribution e) Reimbursement from the State will exceed plan due to higher number of SB 395 inmates f) Changes made at State level in d istribution of Circuit Court revenue g) Approved carryover of prior year Title III funds Page 4 h) Civil fees will exceed plan for the year • Payment to Sheriff's Fund adjusted monthly to equal actual expenditures attributable to countywide services Fund 702 LED Rural Statement of F i nanci al Operating Data Eleven Months Ended May 31 , 2013 RESOURCES: Beg. Net Working Capital $2,859,915 $3,244,571 $ 384,656 100 % 113% $2,859,915 $3,244,571 $ 384,656 Revenues Tax Revenues -Current 6 ,920 ,833 7,680,466 759 ,633 92 % 102 % a) 7,550,000 7 ,710,466 160,466 Tax Revenues -Prior 210,833 387,423 176,590 92 % 168% 230,000 407,423 177,423 Federal Grants & Reimb 13,750 39,151 25,401 92 % 261 % b) 15,000 39,151 24 ,151 Federal Grants-BLM 23,833 17,872 (5 ,961) 92 % 69 % 26 ,000 26 ,000 US Forest Service 68,750 78,750 10,000 92 % 105% 75 ,000 78 ,750 3,750 Bureau of Reclamation 23 ,833 29,080 5 ,247 92 % 112 % 26 ,000 26 ,000 State Grant 173,428 224,591 51 ,163 92 % 119 % c) 189,194 262 ,800 73,606 SB #1065 Court Assessment 50,417 7,434 (42,983) 92 % 14 % d) 55,000 7,434 (47,566) Marine Board license Fee 130,250 57,765 (72 ,485) 92 % 41 % 142,091 142 ,091 Des Cty General Fund Grant 528,674 (528 ,674) 92 % 0% e) 576 ,735 576,735 Des Cty Transient Room Tax 1,900,493 1,900,493 (0) 92 % 92 % 2 ,073,265 2 ,073 ,265 Des Cty Tax Office Contract 458 540 82 92 % 108 % 500 540 40 Asset Forfeiture 11 ,760 11 ,760 92 % n/a 11 ,760 11,760 City of Sisters 428 ,963 429 ,063 100 92 % 92 % 467,960 467,960 Des Cty COD Contract 49,836 49,836 (0) 92 % 92 % 54 ,366 54 ,366 Des Cty Solid Waste Contr 49,836 49 ,836 (0) 92 % 92 % 54 ,366 54,366 Des Cty Clerk/Election 917 1,068 151 92 % 107% 1,000 1,400 400 School Districts 36 ,667 31 ,742 (4 ,925) 92 % 79 % 40,000 40,000 Claims Reimbursement 860 860 92 % n/a 860 860 Security & Traffic Reimb 4 ,583 (4 ,583) 92% 0% 5,000 5 ,000 Seat Belt Program 9,167 4 ,900 (4 ,267) 92 % 49 % 10,000 10,000 Miscellaneous 5 ,500 9 ,585 4 ,085 92 % 160% 6 ,000 10,000 4.000 False Alarm Fees 1,833 3 ,500 1,667 92 % 175% 2 ,000 4 ,000 2,000 Restitution 4 ,583 1,369 (3 ,214) 92 % 27 % 5,000 5,000 Sheriff Fees 9 ,167 8 ,807 (360) 92% 88 % 10,000 10,000 Court Fines & Fees 110,000 112,926 2,926 92 % 94 % 120,000 120,000 Impound Fees 3 ,667 4 ,226 559 92 % 106% 4 ,000 4 ,226 226 Restitution -Street Crimes 458 (458) 92 % 0% 500 500 Seizure/Forfeiture 917 140 (777) 92 % 14% 1,000 1,000 Interest 9,167 18,721 9,554 92 % 187% 10,000 20 ,000 10,000 Interest on Unsegregated 1,650 717 (933) 92% 40% 1,800 1,800 Grants-Private 6 ,500 6 ,500 92 % nla 6 ,500 6 ,500 Donations 9 ,150 9 ,150 92 % nla 9 ,150 9 ,150 Land Sale Revenue 1,611 1,611 92 % nla 1 ,611 1,611 Sale of Equip & Material 9 ,167 3 ,706 (5,461 ) 92 % 37 % 10,000 5,000 (5 ,000) Sale of Reportable Assets 36 ,667 12,167 (24 ,500) 92% 30% f ) 40 ,000 20,000 (20,000) Total Revenues 10,818,298 11,195,756 377,459 50 % 95% 11,801 777 12,215,155 413,378z TOTAL RESOURCES 13,678,213 14,440,326 762,115 50% 98% 14,661,692 15,459,725 798,033 REQUIREMENTS: Fund 255 Departments : Sheriff's Services Auto/Comm Investigations Patrol Records Special Services Training Non Dept -ISF Charges Contin enc 140,887 1,048,767 1,400,832 7,630,662 657,816 391,401 181 ,699 38 ,996 1,747,159 137,551 1 ,054,567 1 ,310,274 7,458,006 629,694 339,846 164,936 38,996 3,335 (5 ,800) 90 ,558 172,655 28,121 51 ,555 16,764 (0) 1,747,159 1 Exp . %1 92 % 89% 92 % 92% 92 % 86% 92 % 90% 92 % 88% 92 % 80% 92 % 83% 92% 92% 92% n/a 153,694 1,144,109 1,528,180 8 ,324 ,358 717,617 426 ,983 198,218 42,541 1,905,992 150 ,373 1 ,170,601 1,448,080 8 ,137,497 687,517 402 ,964 191 ,959 42,541 3 ,322 (26 ,492) 80,100 186,861 30,100 24,019 6 ,258 1,905,992 Transfer to Reserve Fund (704) Non Dept -Comm System Res Total Requirements 91 ,667 110,000 13,439,884 100,000 120,000 11 ,353 ,871 (8,333) (10,000) 2,086,014 92% 100% 92% 100% 92% 77% 100,000 120,000 14 ,661 ,692 100,000 120,000 12,451 ,533 2,210,159 Net 238 ,328 3,086,456 2,848 ,128 3,008,192 3 ,008 ,192 Beginning Net Working Capital per Approved Budget a) Current year taxes due November, February and May b) JAG grant for 800 MHz radios c) Homeland Security grant Communication System Engineering Study d) Changes made at State level in distribution of Circuit Court revenue e) Will be received June 2013 f) Less than planned revenue from sale of surplus vehicles 2 ,620,213 I Page 5 • Payment to Sheriff's Fund adjusted monthly to equal actual expenditures attri butable to rural services PUBLIC HEALTH Statement of Financial Operating Data Eleven Months Ended May 31.2013 FY2013Vearlo Date YearEnd III Budget Projection VarianceActual Variance RESOURCES: Beg. Net Working Capital $1.336.051 $ 1,327,199 $ (8,852) 100% 99% $1.336.051 $1.327,199 $ (8.852) Revenues Medicare Reimbursement 917 68 (850) 92% 7% 1,000 100 (900) Federal Grant 9,000 9,000 92% nfa 9.000 9.000 Federal Grant (ARRA) 183,333 212,500 29,167 92% 106% 200,000 212.500 12,500 State Grant 2,671,487 2,461,868 (209,619) 92% 84% 2,914,349 2.854,103 (60.246) Child Dev & Rehab Center 36,308 20.039 (16,269) 92% 51% a) 39,609 39.609 State Miscellaneous 123,512 149,002 25,490 92% 111% a) 134,740 199.530 64,790 OMAP 575,289 509,112 (66,177) 92% 81% 627,588 570.000 (57.588) Title 19 323 (323) 92% 0% 352 (352) Family Planning Exp Proj 504,167 434,271 (69,896) 92% 79% 550,000 525,000 (25,000) Local Grants 44,000 35,000 (9.000) 92% 73% 48,000 40,150 (7,850) Environmental Health-Water 84,517 63,088 (21,429) 92% 68% 92,200 92,200 Contract Payments 95,159 138.317 43,158 92% 133% 103.810 173,404 69,594 Miscellaneous 2.172 2,172 92% nfa 3,000 3,000 Patient Insurance Fees 177.100 202,736 25.636 92% 105% 193,200 220,000 26,800 Health DeptlPatient Fees 94,508 87,795 (6.713) 92% 85% 103,100 98,000 (5,100) Vital Records-Birth 37.583 30,120 (7,463) 92% 73% 41.000 32,000 (9.000) Vital Records-Death 91.667 102,545 10,878 92% 103% 100,000 112,545 12,545 Environmental Health-Lie Fae 660,046 730,877 70,831 92% 102% b) 720,050 740,050 20,000 NSF Fee 30 30 92°k nfa 30 30 Interest on Investments 11.000 5,679 (5.321) 92% 47% 12,000 6,200 (5,800) Grants-private 15.470 33.753 18.283 92% 200% 16,876 34,000 17,124 Donations 4.858 19,358 14.500 92% 365% 5,300 22,277 16,977 Interfund Contract 145,410 122,949 (22,461) 92% 78% 158.629 164,000 5,371 Administrative Fee 733 733 0 92% 92% 800 800 ------~------------------~ Total Revenues 5,557,387 5,371,012 (186,375) 92% 89% 6,062,603 6,148,498 85,895 Transfers In-General Fund 2.153,580 2,153,580 92% 92% 2,349.357 2,349.357 Transfers In-PH Res Fund 55,125 45,102 (10,023) 92% 75% 60,136 60.136 Transfers In-Gen. Fund Other 59,675 48,825 (10.850) 92% 75% 65,100 65,100 TOTAL RESOURCES 9,161,818 8,945,718 (216,100) 92% 91% 9.873,247 9,950,290 77,043 REQUIREMENTS: I EXP.%I Expenditures Personnel Services 5,916,813 5,800,325 116,488 92% 90% 6,454,705 6,325,000 129,705 Materials and Services 2,034,888 1,775,622 259,266 92% 80% 2,219,878 2,136,883 82.995 Capital Outlay 59,583 59,583 92% 00/0 c) 65,000 65,000 Transfers Out 144.100 117,900 26.200 92% 75% 157,200 157,200 Contingency 895,092 895.092 92% nla 976,464 976.464 --~~~~----------~~~~ ---~~~------------~~--- TOTAL REQUIREMENTS 9,050,476 7,693.846 1,356,630 92% 78% 9,873.247 8,619,083 1,254,164 NET (Resources -Requirements) 111,342 1,251,872 1,140,530 1,331,207 1,331,207 Beginning Net Working Capital per Approved Budget 1.385,592 I a) Received quarterly in arrears b) Restaurant and Pool/Spa fees are due annually and received in Dec/Jan Page 6 c) OCHIN System expenditure made in FY 2012 BEHAVIORAL HEALTH Statement of Financial Operating Data Eleven Months Ended May 31, 2013 Actual Variance Variance Year to Date RESOURCES: Beg. Net Working Capital $3,320,968 $ 3,113,095 $ (207,873) 100% 940/_ $3,320,968 $3,113,095 $ (207,873) Revenues Marriage Licenses 5,958 4,890 (1,068) 92% 75% 6,500 5,500 (1,000) Divorce Filing Fees 146,667 112,733 (33,934) 92% 70% 160,000 125,000 (35,000) Domestic Partnership Fee 41 95 54 92% 211% 45 100 55 Federal Grants 231,320 200,378 (30,942) 92% 79% a) 252,349 252,349 Federal Grant (ARRA) 58,438 63,750 5,312 92% 100% 63,750 63,750 State Grants 7,145,966 6,833,859 (312,107) 92% 88% b) 7,795,599 7,883.477 87,878 State Miscellaneous 56,705 31,461 (25.244) 92% 51% 61.860 61,860 Adult Mental Health Initiative 183,333 229.038 45.705 92% 115% 200,000 230,000 30,000 Title 19 246,992 100,475 (146,517) 92% 37% 269,446 125,000 (144,446) Liquor Revenue 129,708 120,463 (9,245) 92% 85% 141,500 130,000 (11,500) School Districts 63,250 18,150 (45.100) 92% 26% c) 69,000 21,900 (47,100) Contract Payments 34 34 92% nla 100 100 Miscellaneous 16,044 16,044 92% nla 17,000 17,000 Patient Insurance Fees 80,238 95,801 15,563 92% 109% 87,532 106,000 18,468 Patient Fees 871 1.295 424 92% 136% 950 1,500 550 Interest on Investments 22,917 18,376 (4,541) 92% 74% 25,000 20,500 (4,500) Rentals 16,958 12,875 (4,083) 92% 70% 18,500 18,500 Forfeitures 1,118 1,118 92% nla 1,118 1,118 Administrative Fee 4,851.483 4,782.575 (68,908) 92% 90% 5,292,527 5.292,527 Intertund Contract-Gen Fund 116,417 78,084 {38.333} 92% 61% a) 127,000 127,000 Total Revenues 13,357,262 12,721,492 (635,770) 92"11. 87% 14,571,558 14,483,181 (88,377) Transfers In-General Fund 1.198,805 1,198,805 92% 92% 1,307,787 1,307,787 Transfers In-OHP-CDO 444,120 444,120 92% 92% 484,494 484,494 Transfers In-Acute Care Svcs 242,583 242,583 92% 92% 264.631 264,631 Transfers In-ABHA 480,370 480,370 -92% 92% 524,039 524,039 TOTAL RESOURCES 19,044,107 18,200,465 (843,643) 92"11. 89% 20,473,477 20,177,227 (296,250) REQUIREMENTS: Exp. %1 Expenditures Personnel Services 10.597,310 9,979,776 617,534 92% 86% 11,560,702 10,885,000 675,702 Materials and Services 6,052,709 5,033,346 1,019,363 92% 76% 6,602,955 5,550,000 1,052,955 Capital Outlay 45,925 19,645 26,280 92% 39% 50,100 30,000 20,100 Transfers Out 187,000 153,000 34,000 92% 75% 204,000 204,000 Contingency 1,884,410 1,884,410 92% nla 2,055,720 2,055.720 TOTAL REQUIREMENTS 18,767,354 15,185,767 3,581,587 92% 74% 20,473,477 16,669,000 3,804,477 NET (Resources -Requirements) 276,753 3,014,698 2,737,945 Beginning Net Working Capital per Approved Budget a) Received quarterly. in arrears b) Oregon Health Authority grant projected at amended contract amount c) Contract for services to school districts terminated by mutual agreement 3,508,227 3,508,227 3,461,651 I Page 7 COMMUNITY DEVELOPMENT Statement of Financial Operating Data Eleven Months Ended May 31.2013 FY2013 Year End Budget Projection Variance Year to Date Budget I Actual I Variance I FY%I Coli. % RESOURCES: Beg. Net Working Capital $ Revenues Admin-Operations Admin-GIS Admin-Code Enforcement Building Safety Electrical Contract Services Env Health-On Site prog Planning-Current Planning-Long Range Total Revenues Transfers In General Fund -Gen Ops General Fund -LlR Planning A&T Reserve (DIS assistance) Other TOTAL RESOURCES REQUIREMENTS: EXPENDITURES & TRANSFERS Admin-Operations Admin-GIS Admin-Code Enforcement Building Safety Electrical Contract Services Env Health-On Site Pgm Planning-Current Planning-Long Range Transfers Out (DIS Fund) Contingency 10,000 20,249 1.146 152,350 1,167.444 234.667 102,300 286,890 584,238 207.553 2,756,837 783,629 454,080 82.112 92 4,086,750 1,240,423 107,963 209.848 569.330 186.295 129,933 146,333 588,789 424,784 164,225 317,995 192,482 $ 182,482 28,029 7,780 543 (604) 213,949 61.599 1.397.628 230,184 301,317 66,650 129.246 26.946 306.651 19,761 687,981 103.743 305,561 98,008 100% 92% 92% 92% 92% 92% 92% 92% 92% 92% 3,370,903 614,066 92% 783.629 92% 454.080 92% 89,577 7,465 92% {92 l 92% 4,890,671 803,921 1,201,004 39,419 108.275 (312) 191,039 18,809 550,001 19.329 182,824 3,471 145,500 (15,567) 144,550 1.783 530,428 58.361 332,249 92,535 179.155 (14,930) 317.995 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 1925% 127% 43% 129% 110% 118% 116% 98% 108% 135% 112% 92% 92% 100% 0% 110% a) Exp. %1 89% b) 92% 83% b) 89% 90% 103% c) 91% 83% d) 72%d,e) 100% nla $ 10,000 22,090 1,250 166,200 1,273,575 256,000 111,600 312.971 637.350 226,421 $ 192,482 182,482 30,577 8,487 592 (658) 233.399 67,199 1.524,685 251.110 328.709 72.709 140,995 29,395 334,528 21,557 750,524 113,174 333.339 106,918 3,007,457 3,677,348 669,891 854,872 854,872 495,360 495.360 89.577 89,577 100 POOl 4,457,366 1,353,189 117,778 228.925 621,087 203,231 141,745 159,636 642,315 463,401 179,155 346,904 5,309,639 852,273 1,310.186 43.003 118,118 (340) 208,406 20,519 600.001 21,086 199,444 3.787 158,728 (16.983) 157,690 1,946 578,649 63,666 362,453 100,948 179,155 346,904 TOTAL REQUIREMENTS 4,085,918 3,565,025 520,893 92% 80% 4,457,366 3,872,830 584,536 NET (Resources -Requirements) 832 1,325,647 1,324,815 Beginning Net Working Capital per Approved Budget Revenues 3,370.903 Expenditures 3,565,025 Net from Operations {194,122~ a) Revenue is sporadic throughout the year as GIS services are requested b) Reflects savings due to combined COO & Planning Director positions 1,4361809 1,436,809 696,290 I 3,007,457 4,457,366 {1,449,909} 3,677,348 3,872,830 {195,482} 669.891 584,536 11254,427 c) Additional costs incurred for on-call building safety and electrical staff due to increased business activity d) Reflects savings due to Planning Directo(s reduced allocation e) Reflects savings from retired employee through 6/30/13 Page 8 ROAD Statement of Financial Operating Data Eleven Months Ended May 31, 2013 RESOURCES: Beg. Net Working capital Revenues System Development Charge Federal Grant (ARRA) Mineral Lease Royalties Forest Receipts State Grant State Miscellaneous Motor Vehicle Revenue City of Bend City of Redmond aty of Sisters aty of La Pine Admin Recovery (SOC) Miscellaneous Road Vacations Interest on Investments Grants-Private Interrund Contract Equipment Repairs Vehicle Repairs LID Construction Vegetation Management Forester Car Washes Car Rental Sale of Equip & Material Misc. Interfund Total Revenues Trans In • Solid Waste Trans In • Transp SDC Trans In-Road Imp Res TOTAl.. RESOURCES REQUIREMENTS: expenditures PensonnelSennces Materials and Sennces Capital Outlay Transfers Out Contingency TOTAl.. REQUIREMENTS Year to Date Budget I Actual I Variance IFY % I Coli. % $4,719,551 $ 4,723,852 $ 4,301 100% 100% 2,310 2.310 92% nla 6,417 7,335 918 92% 105% 36,667 139,640 102.973 92% 349% 363.757 1.265.121 901,364 92% 319% 2.618 2.618 92% nla 497,099 542.290 45.191 92% 100% 9.890.873 9,661,183 (229,690) 92% 90% 22.917 19,869 (3.048) 92% 79% 320,833 11,554 (309,279) 92% 3% 9,167 1,008 (8,159) 92% 10% 9,167 10,000 833 92% 100% 3,129 3,129 92% nla 18.333 22,124 3,791 92% 111% 917 (917) 92% 0% 13,750 29.275 15,525 92% 195% 1.948 1,948 92% nla 632,500 (632,500) 92% 0% 201,667 220,649 18,982 92% 100% 82,500 (82,500) 92% 0% 9,167 (9,167) 92% 0% 22,917 (22,917) 92% 0% 22,917 (22,917) 92% 0% 3,667 2,074 (1,593) 92% 52% 917 1,032 115 92% 103% 663,300 772,795 109,495 92% 107% 3.380 3,380 92% nla 12,829.449 12.719.334 (110,115) 92% 91% 253,249 207,204 (46,045) 92% 75% 229.167 (229,167) 92% 0% 11.000 (11,000) 92% 0% 18.042.416 17,650,390 (162,859) 92% 94% I Exp.%1 4,918.102 4,884,698 33,404 92% 91% 8,652.107 5,576.004 3.076.103 92% 59% 1,867.525 62,982 1,804,543 92% 3% 252,083 275.000 (22.917) 92% 100% 1,959,300 -1,959,300 92% nla 17,849,117 10,798,684 8,850,434 92% 56% FY2013 YearEnd Budget Projection Variance $4.719,551 $4,723,852 $ 4,301 2.500 2,500 7,000 7,335 335 40.000 145,000 105,000 a) 396,826 1,265,121 868.295 2.618 2,618 b) 542,290 542,290 c) 10.790,043 10,450.000 (340,043) d) 25,000 309,350 284,350 d) 350,000 387,240 37.240 d) 10,000 1.009 (8.991) d) 10,000 10.000 3,500 3,500 20,000 24.000 4,000 1.000 500 (500) 15,000 32,000 17,000 1,948 1,948 e) 690,000 590,000 (100,000) 220,000 235,000 15,000 e) 90,000 80,000 (10,000) 1) 10,000 (10,000) e) 25.000 50.000 25.000 e) 25.000 25.000 4.000 2.500 (1,500) 1,000 1,100 100 723.600 842,849 119.249 3.381 3.381 13.995.759 15.014.241 1,018.482 g) 276,272 276,272 1) 250,000 (250,000) 1) 12,000 (12,OOO) 19,253,582 20,014,365 760,783 h) 5,365,202 5,321.584 43,618 i} 9,438,662 7.582.594 1.856,068 j} 2.037,300 73,884 1.963,416 275,000 275,000 2.137,418 -2.137,418 19,253,582 13,253,082 8,000,520 NET (Resources -Requhments) 393,299 6,851,707 6,687,575 8,781,303 8,761,303 Beginning Net Working Capital per Approved Budget a) Payment received annually in January b) Payment received annually in October c) Actual receipts are lower than projections d) Billed upon completion of wor1< e) Payments to be received in June 2013 from other Road Department funds 1) No SOC qualifying projects in FY 2013; no resources will be transferred in from SOC fund g) Payments made quarterly h) Retro COLA raises for 701 members, ear1y retirement and resignations i) Expenditures are seasonal and higher during summer months j) CIP project reserve carry over FY 2014 6,014,3681 Page 9 ADULT PAROLE & PROBATION Statement of Financial Operating Data Eleven Months Ended May 31, 2013 RESOURCES: Beg. Net Working Capital Revenues DOC Measure 57 State Miscellaneous Alternate Incarceration State Subsidy SB 1145 Probation Work Crew Fees Miscellaneous Electronic Monitoring Fee Probation Superv. Fees Interest on Investments Interfund -Sheriff Sale of Equipment Crime Prevention Grant CFC-Domestic Violence Total Revenues Transfers In-General Fund TOTAL RESOURCES REQUIREMENTS: Expenditures Personnel Services Materials and Services Capital Outlay Contingency TOTAL REQUIREMENTS Year to Date Budget 1 Actual 1 Variance $ 570,000 $ 630,226 $ 60,226 200,970 219,240 18,270 3,943 4,301 358 13,750 (13.750) 12,674 22,329 9.655 2,519,509 2,748,555 229,046 20,625 13,696 (6,930) 4,125 4,089 (36) 119,167 159,775 40,608 174,167 172,694 (1.473) 8,250 5,309 (2.941) 45,833 45,833 250 250 45,833 37,500 (8.333) 68,596 46,345 (22.251 ) 3,237,442 3,479,914 242,472 399.047 399,047 4,206,489 4,509,187 302,698 2.833,683 2,707,768 125.915 815,546 783,242 32,304 92 92 509.671 509,671 4.158.992 3,491,010 667,982 IFY % I Coli. % 100% 111% 92% 100% a) 92% 100% b) 92% 0% c) 92% 161% d) 92% 100% 92% 61% e) 92% 91% 92% 123% f) 92% 91% 92% 59% 92% 92% 92% nla 92% 75% g) 92% 62% g) 92% 99% 92% 92% 92% 99% I EXP.%I 92% 88% 92% 88% 92% 0% 92% n/a 92% 77% FY2013 Year End Budget Projection Variance $ 570,000 $ 630,226 $ 219,240 219.240 4.301 4.301 15,000 13,826 22,329 2,748.556 2,748.556 22.500 14,180 4.500 4.500 130,000 174,000 190.000 178,000 9,000 5,717 50,000 50,000 250 50,000 50.000 74,832 74,832 60,226 (15,000) 8,503 (8,320) 44.000 (12,000) (3,283) 250 3,531,755 3,545,905 14,150 435.328 435.328 4,537,083 4,611,459 74,376 3,091,291 3,041,291 50,000 889,687 889,687 100 100 556,005 556,005 4,537,083 3,930.978 606,105 NET (Resources -Requirements) 47,497 1,018,177 970,679 680,481 680,481 Beginning Net Working Capital per Approved Budget a) Payment received annually in September b) Annual allocation normally received by end of calendar year c) Funds are specific to a certain population. which has been smaller than expected d) Received a one time only $8,000 distribution in addition to quarterly payments e) Present economy has resulted in clients working off fees rather than paying f) Increased use of Electronic Monitoring pre-trial in lieu of jail g) State/County invoiced quarterly-3rd quarter payment not yet received 707,9531 Page 10 CHILDREN & FAMILIES COMMISSION Statement of Financial Operating Data Eleven Months Ended May 31. 2013 Vearto Date Actual Variance Variance RESOURCES: Beg. Net Working Capital Revenues Federal Grants Title IV -Family SuplPres HealthyStart Medicaid Youth Investment State Prevention Funds HealthyStart IR-S-G OCCF Grant Charges for Svcs-Misc Program Fees Court Fines & Fees Interest on Investments Donations Grants, Private Interfund Grants $ 511,994 $ 279.176 36,239 77,917 180,490 44,112 201,620 384.813 7.333 72,861 917 1,833 294,135 567,120 192.261 34,039 62,745 175,941 65,270 219.950 394,136 3.866 5,645 67,816 3,361 13 247,718 $ 55,126 (86.915) (2,200) (15,172) (4,549) 21.158 18,330 9,323 (3,467) 5,645 (5,045) 2,444 13 (1,833) (46,417~ 100% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 111% 63% 86% 74% 89% 136% 100% 94% 48% nJa 85% 336% n/a 0% 77% a) a) b) a) c) d) $ 511,994 $ 567,120 $ 55,126 304.556 251.856 (52.700) 39,533 39,533 85,000 85,000 196,898 196,897 (1 ) 48.122 65.270 17,148 219.951 219.951 419,796 394,136 (25.660) 8,000 6,500 (1,500) 5,646 5,646 79,485 73.959 (5,526) 1,000 3,666 2.666 13 13 2,000 (2,000) 320,874 350,374 29,500 Total Revenues 1,581,446 1,472,761 (108,685) 92% 85% 1,725,215 1,692,801 (32,414) Trans from General Fund Total Transfers In 253.000 253,000 253,000 253,000 92% 92% 92% 92% 275,984 275,984 275.984 275,984 TOTAL RESOURCES 2,346,440 2,292,881 (53,559) 92% 91% 2,513,193 2,535,905 22,712 REQUIREMENTS: Expenditures Personnel Services Materials and Services Capital Outlay Contingency 593,518 1,442,353 92 267,798 527,568 1,082,696 65,950 359,657 92 267,798 I Exp·%1 92% 81% 92% 69% 92% 0% 92% nJa e) 647,474 1,573,476 100 292,143 573.799 1,561,808 73,675 11.668 100 292,143 TOTAL REQUIREMENTS 2,303,761 1,610,264 693,497 92% 64% 2,513,193 2,135,607 377,586 NET (Resources· Requirements) 42,679 682,617 639,938 400,298 400,298 Beginning Net Working Capital per Approved Budget 375,7041 a) Projection based on actual awarded amounts-Medicaid reimbursements increased b) Projection adjusted to actual-grant has ended, and all funds expended c) State reduced the Circuit Court fees d) Additional grant funds of $17,500 -A & 0 70 and $12,000 EUDL projected to be received e) Personnel expenditures projected to be less than appropriated. Open positions will not be filled Page 11 SOUDWASTE Statement of Financial Operating Data Eleven Months Ended May 31, 2013 RESOURCES: Beg. Net Working Capital Revenues Miscellaneous Franchise 3% Fees Commercial Disp. Fees Private Disposal Fees Franchise Disposal Fees Yard Debris Special Waste Interest Leases Donations Sale of Assets Recyclables Year to Date Budget I Actual I Variance $ 700,513 $ 807,470 $ 106,957 20,167 183,333 788.333 1.204,500 3,666,667 66,917 22,917 6,875 9,901 41,250 17,354 206,329 900,188 1,238,926 3,644,925 95,750 70,087 7,492 9,901 1,680 1,451 43,456 (2,813) 22,996 111,855 34,426 (21.742) 28,833 47,170 617 1,680 1,451 2,206 I FY % I Coli. % 100% 115% 92% 79% 92% 103% a) 92% 105% 92% 94% 92% 91% 92% 131% b) 92% 280% c) 92% 100% 92% 92% 92% n/a 92% n/a 92% 97% FY2013 YearEnd Budget Projection Variance $ 700,513 $ 807,470 $ 106,957 22,000 22,000 200,000 210,000 10,000 860,000 940,000 80.000 1,314.000 1,290,000 (24.000) 4.000.000 4,035.000 35,000 73,000 100.000 27,000 25,000 75.000 50,000 7,500 8,000 500 10,801 10,801 1,680 1,680 1,451 1,451 45,000 45,000 Total Revenues 6,010,860 6,237,540 226,680 92% 95% 6,557,301 6,738,932 181,631 TOTAL RESOURCES 6,711,373 7,045,010 333,637 92"4 97% 7,257,814 7,546,403 288,589 REQUIREMENTS Expenditures Personnel Services Materials and Services Debt Service Capital Outlay Transfers Out 1,588.878 2,740,204 867,820 76,083 1,515,943 2,325,793 946,711 74,310 72,935 414,411 (78,891) 1,773 92% 92% 92% 92% Exp. %1 87% 78% d) 100% e) 90% 1,733,321 2,989,313 946,713 83,000 1,707,324 3,080,105 946,711 80,336 25,997 (90,792) 2 2,664 Road Capital Reserve Contingency 253,249 577,500 549,262 207,204 630,000 46,045 (52,500) 549,262 92% 92% 92% 75% 100% f) n/a 276,272 630,000 599,195 276,272 630,000 599,195 TOTAL REQUIREMENTS 6,652,996 5,699,961 953,035 92% 79% 7,257,814 6,720,748 537,066 NET (Resources -Requirements) 58,377 1,345,050 1,286.673 825,655 825,655 Beginning Net Working Capital per Approved Budget a) Due April 15, 2013--A11 payments have been received b) Seasonal item-Fall and Spring c) Dependent on special clean-ups such as asbestos and contaminated soil d) Purchasing will pick up as year progresses e) Semi-Annual: November and May 825,6551 f) All of FY 2013 budgeted transfer made because resources needed for Fund 613's capital projects Page 12 RESOURCES: Beginning Net Working Capital Revenues Inter-fund Charges: General Liability Property Damage Vehicle Workers' Compensation Unemployment Claims Reimb-Workers' Compensation Claims Reimb-Gen Uab/Property Process Fee-Events/Parades Miscellaneous Skid Car Training NSF Fee Interest on Investments Other Interest TOTAL REVENUES TOTAL RESOURCES Appropriations/Expenditures Direct Insurance Costs: GENERAL LIABILITY Settlement / Benefit Defense Professional Service Insurance Loss Prevention Miscellaneous Repair / Replacement Total General Liability PROPERTY DAMAGE Insurance Repair I Replacement Total Property Damage VEHICLE Professional Service Insurance Loss Prevention Repair / Replacement Total Vehide WORKERS' COMPENSATION Settlement / Benefit Professional Service Insurance Loss Prevention Miscellaneous Total Workers' Compensation UNEMPLOYMENT -Settlement/Benefits Total Direct Insurance Costs Insurance Administration: Personnel Services Materials & Service Capital Outlay Total Insurance Administration Transfers Out TOTAL REQUIREMENTS NET RISK MANAGEMENT Statement of Financial Operating Data Eleven Months Ended May 31,2013 Year to Date Budget I Actual I Variance I % of FY I % Coil. Budget YearEnd Projection Variance $2,000,000 $2,240,791 $240,791 262,333 262,333 313,480 313,480 173,635 173,635 1,440,176 1,440,176 250,000 250,000 500 500 60,000 40,000 (20,000) 2,000 1,300 (700) 50 50 16,000 23,000 7,000 60 60 15,000 12,000 (3,000) 50 50 2,533,224 2,516,584 (16,640) 4,533,224 4,757,375 224,151 300,000 680,000 (380,000) 250,000 230,000 20,000 100,000 70,000 30,000 1,000,000 560,000 440,000 250,000 230,000 20,000 1,900,000 1,770,000 130,000 307,896 168,990 100 476,986 307,896 168,990 476,886 100 100 7,200 2,384,186 7,200 2,254,086 130,100 2,149,038 2,503,289 354,251 $2,000,000 240,472 287,357 159,165 1,320,161 229,167 458 55,000 1,833 46 14,667 13,750 46 $2,240,791 240,472 287,357 159,165 1,320,161 229,307 32,294 1,125 37 22,520 30 11,083 2,322,122 2,303,551 $240,791 0 0 (0) 0 140 (458) (22.706) (708) (9) 7,853 30 (2,667) {46} ~18,571} 100% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 92% 112% 92% 92% 92% 92% 92% 0% 54% 56% 74% 141% nla 74% 0% 91% 4,322,122 4,544,342 222,219 92% 100% 1 % Exe· 1 275,000 372,053 48,583 66,574 148.035 8,744 45 200 644,233 (369,233) 92% 215% a) 229,167 159,171 48,753 207,924 21,243 92% 83% a) 91,667 366 15,677 46,964 63,007 28,659 92% 63% 329,468 916,667 131,788 33,865 33,170 528,292 388,375 92% 53% a) 229,167 116,017 113,150 92% 46% 1,741,667 1,559,472 182,194 92% 82% 282,238 154,908 92 437,237 6,600 2,185,504 2,136,618 278,358 111,769 390,127 5,400 1,954,999 2,589,343 3,880 43,139 92 47,111 1,200 230,505 452,724 92% 92% 92% 92% 92% 92% 90% 66% 0% 82% 75% 82% * Beginning Net Working Capital per Approved Budget 1 2,517,4791 a) Annual premium paid in July 2012 Page 13 * Contingency is $2,149,038 DESCHUTES COUNTY 911 Statement of Financial Operating Data Eleven Months Ended May 31,2013 Year to Date Actual Variance Variance RESOURCES: Beg. Net Working Capital $8.000.000 $ 8.883,086 $ 883,086 100% 111% $8,000,000 $8,883,086 $ 883,086 Revenues Property Taxes -Current 6,002,046 6,308,873 306,827 92% 96% a) 6,547,687 6,338,873 (208,814) Property Taxes -Plior 169,583 307,016 137,433 92% 166% 185,000 321,016 136,016 Federal Grants 220,000 (220,000) 92% 0% b) 240,000 240,000 State Reimbursement 33,000 28,193 (4,807) 92% 78% c) 36,000 36,000 Telephone User Tax 687,500 573,553 (113,947) 92% 76% 750,000 767,242 17,242 Data Network Reimb. 27,500 43,817 16,317 92% 146% d) 30,000 43,817 13,817 Jefferson County 27,500 29,430 1,930 92% 98% 30,000 31,262 1,262 User Fee 40,333 6,469 (33,864) 92% 15% e) 44,000 44,000 Police RMS User Fees 255,704 229,103 (26,601) 92% 82% f) 278,950 229,103 (49,847) Contract Payments 28,417 1,988 (26,429) 92% 6% g) 31,000 1,988 (29,012) Miscellaneous 8,250 9,528 1,278 92% 106% 9,000 9,528 528 Claims Reimbursement 46,760 46,760 92% nfa h) 46,760 46,760 Interest 36,667 49,222 12,555 92% 123% 40,000 50,000 10,000 Interest on Unsegregated Tax 550 589 39 92% 98% 600 600 Total Revenues 7,537,050 7,634,541 97,491 92% 93% 8,222,237 8,160,189 (62,048) TOTAL RESOURCES 15,537,050 16,517,627 980,577 92% 102% 16,222,237 17,043,274 821,037 REQUIREMENTS: Expenditures Personnel Services Materials and Services Capital Outlay Transfers Out-Reserve Fund Contingency 3,978,783 1,879,352 515,167 458,333 8,038,750 3,591,719 1,711,581 71,814 500,000 387,064 107,771 443,353 (41,667) 8,038,750 92% 92% 92% 92% 92% % Exp·1 83% 86% 13% 100% nfa i) 4,340,490 2,050,202 562,000 500,000 8,769,545 4,000,000 2,050,202 562,000 500,000 340,490 8,769,545 TOTAL REQUIREMENTS 14,870,385 5,935,113 8,935,272 92% 37% 16,222,237 7,112,202 9,110,035 NET (Resources -Requirements) 666,665 10,582,513 9,915,848 9,931,072 9,931,072 Beginning Net Working Capital per Approved Budget 9,800,000 I a) Current year taxes due November, February and May b) OOOT Project-reimbursements expected to be received over the next 2-3 months c) May payment outstanding; ongoing monthly reimbursements from Office of Emergency Mgmt for MSAG/GIS maintenance d) Annual agency payments have been received e) US Forest Service invoiced $2,156.25 Quarterly. Crooked River Ranch billed annually end of June f) RMS -Projection reduced to reflect actuals g) Protection reduced to reflect $29,000 now included in Police RMS User Fees line item h) Reimbursement for faulty UPS -American Power Conversion i) Amount appropriated was transferred September 15, 2012 Page 14 Health Benefits Trust Statement of Finandal Operating Data Eleven Months Ended May 31,2013 FY 2013 Budget Projection Variance RESOURCES Beg. Net Working Capital $13,800,000 $ 14,551,028 $ 751,028 100% 105% $ 13,800,000 $14,551,028 751,028 Revenues: Internal Premium Charges 11,728,750 11,801,897 73,147 92% 92% 12,795,000 12,875,009 80,009 Pff Emp -Add'i Prem 45,833 28,143 (17,690) 92% 56% 50,000 30,700 (19,300) Employee Prem Contribution 577,500 592,048 14,548 92% 94% 630,000 645,000 15,000 COIC 1,191,667 1,293,001 101,334 92% 99% 1,300,000 1,410,000 110,000 Retiree I COBRA Co-Pay 687,500 876,502 189,002 92% 117% 750,000 950,000 200,000 Medical Services Reimb 716 716 92% nfa 716 716 Prescription Rebates 99,330 99,330 92% nla 99,330 99,330 Claims Reimbursements 50,493 50,493 92% nla 50,493 50,493 Vending Machines (Wellness Rebate) 371 371 92% nla 371 371 Interest 73,333 65,848 (7,485) 92% 82% 80,000 71,000 (9,000) Total Revenues 14,304,583 14,808,349 503,765 92% 95% 15,605,000 16,132,619 527,619 TOTAL RESOURCES 28,104,583 29,359,376 1,254,793 92% 104% 29,405,000 30,683,647 1,278,647 REQUIREMENTS I EXP.%! Expenditures: Personnel Services (all depts) 184,041 183,456 585 92% 91% 200,772 200,772 Materials &Services Claims Paid-Medical 9,194,350 10,991,121 (1,796,771) 92% 110% a) 10,030,200 12,085,955 (2,055,755) Claims Paid-Prescription 1,763,300 961,007 802,293 92% 50% a) 1,923,600 1,059,923 863,677 Claims Paid-DentalNision 1,637,350 1.709,324 (71,974) 92% 96% a) 1,786,200 1,838,508 (52,308) Claims Refunds (128,828) 128,828 92% nfa (128,828) 128,828 Insurance Premiums 320,833 308,320 12,513 92% 88% 350,000 336,407 13,593 State Assessments 146,667 194,510 (47,844) 92% 122% 160,000 194,510 (34,510) Administration Fee 293,333 305,898 (12,565) 92% 96% 320,000 334,141 (14,141) Preferred Provider Fee 45,833 46,558 (725) 92% 93% 50,000 50,841 (841) Health Impact 50,417 47,834 2,583 92% 87% 55,000 52,224 2,776 Refund -ERRP 58,552 (58,552) 92% nfa b) 58,552 (58,552) Other -Administration 59,907 40,475 19,432 92% 62% 65,353 50,000 15,353 Other -Wellness 96,250 42,440 53,810 92% 40% 105,000 40,000 65,000 Admin & WeUness 13,608,240 14,577,211 (968,970) 92% 98% 14,845,353 15,972,233 (1,126,880) Deschutes On-site Clinic Contracted Services 627,000 724,546 (97,546) 92% 106% 684,000 831,427 (147,427) Medical Supplies 27,500 29,574 (2,074) 92% 99% 30,000 33,000 (3,000) Equipment 917 2,170 (1,253) 92% 217% 1,000 2,170 (1,170) Other 19,647 36,754 (17,107) 92% 171% 21,433 36,754 (15,321) Total DOC 675,064 793,044 (117,981) 92% 108% 736,433 903,351 (166,918) Deschutes On-site Pharmacy Contracted Services 282,596 337,444 (54,847) 92% 109% c) 308,287 375,000 (66,713) Medication and Drugs 916,667 1,319,157 (402,490) 92% 132% c) 1,000,000 1,464,157 (464,157) Start Up Costs-Take care 40,000 40,000 92% nla 40,000 (40,000) Other 15,179 16,474 (1,294) 92% nla 16,559 20,000 (3,441) Total Pharmacy 1,214,442 1,713,074 (498,632, 92% n/a 1,324,846 1,899,157 (574,311) Contingency 11,272,796 11,272,796 92% nla 12,297,596 12,297,596 TOTAL EXPENDiREQUIREMNTS 25,740,141 17,266,785 9,687,799 92% 59% 29,405,000 18,975,513 10,429,487 NET (Resources -Requirements) 2,364,442 12,092,592 10,942,592 11,708,134 11,708,134 Percentage of Expenditures covered by Revenues a) Projection based on historical data b) Disallowance of Early Retiree Reinsurance Program items (Reported as revenue in FY 2012) c) YTO Actual include accruals -April actual paid in June and May accrual based on April actual Page 15 Revenues less Expenditures I Deschutes County -Fair and Expo Center YTD-Budget Basis Commissioners Statement of Financial Operating Data Eleven Months Ended May 31,2013 Vearto Date Budget (10112 1 l l I of annual) Actual Variance FY % Coil. % YearEnd FY2013 Budget Projection Variance RESOURCES: Beg. Net Working Capital $ 46,373 $ 35,055 $ (11,318) 100% 76% $ 46,373 $ 35,055 $ (11,318) Receipts: Special Events Revenues 556,947 350,868 (206,079) 92% 58% 607.578 392,868 (214,710) Interest 1,375 (92) (1,467) 92% -6% 1,500 33 (1,467) Storage 52,654 35,283 (17.371) 92% 61% 57,441 35,283 (22,158) Camping at F & E 5.500 16,700 11,200 92% 278% 6,000 16,700 10,700 Horse Stall Rental 27,500 35.860 8,360 92% 120% 30,000 44,860 14,860 Concession % -Food 174,167 133,504 (40,662) 92% 70% 190.000 149,504 (40.496) Rights (Signage, etc.) 87,083 35,338 (51.746) 92% 37% 95,000 65,338 (29,662) I nterfund Contract 18,333 47,200 28,867 92% 236% 20,000 45,000 25,000 Miscellaneous 6,233 2,683 {3,550! 92% n/a 6,800 5,383 {1.417! Total Receipts 929,792 657,343 (272,449) 92% 65% 1,014,319 754,969 (259,350) Transfers In General Fund (001) 155,833 276,666 92% 163% a) 170,000 320,000 150,000 Room Tax (160) 23,599 23,595 92% 92% 25,744 25,744 Welcome Center (170) 75,900 75,900 92% 92% 82,800 82,800 Reserve Fund (617) 50,000 50,000 92% nfa 50,000 50,000 Annual County Fair (619) 242,237 245,000 2,763 92% 93% 264,259 245,000 p9,259~ Total Transfers In 497,569 671,161 52,763 542,803 723,544 180,741 TOTAL RESOURCES 1,473,735 1,363,559 (110,176) 92% 85% 1,603,495 1,513,568 (89.927) REQUIREMENTS: 1 Exp. %1 Expenditures: Personnel Services 762.559 753,456 9,102 92% 91% 831,882 820,602 11,280 Materials and Services 464,038 512,796 (48,759) 92% 101% 506,223 597,796 (91,573) Debt Service 104,609 114,117 (9,508) 92% 100% 114,119 114,117 2 Capital Outlay 13,071 9,000 4,071 92% 63% 14,259 9,000 5,259 Total Expenditures 1,344,276 1,389,370 (45,094) 1,466,483 1,541,515 (75,032) Contingency 125,594 125,594 92% n/a 137,012 137.012 TOTAL REQUIREMENTS NET (Resources -Requirements) 1,469,870 3,864 1,389,370 (25,811) 80,501 (29,675) 92% 87% 1,603,495 1,541.515 i27 ,948} 61,980 (27,948} Beginning Net Working Capital per Approved Budget 48,8271 a) $100,000 budgeted as Transfer GF to Reserve fund will instead be transferred to Operating Fund and an additional $50,000 will be transferred from the General Fund Page 16 , CAPITAL PROJECTS • North County Campus • Sisters Health Clinic • Bethlehem Inn r RESOURCES: Beginning Net Working Capital Loan Proceeds , net of issuance costs Resources from Fund 140 Resources from Fund 142 Transfer In (Fund 142) Interest Revenue Total Resources EXPENDITURES: Materials & Services Architecture/Design Engineering Internal Service Fund Charges Fees, Permits &SDCs Utilities Travel -Meals/Mileage Reimb Total Materials & Services Capital Outlay Land and Building Remodel Total Capital Outlay Contingency Total Expenditures Net Deschutes County North County Services Building Inception through May 31, 2013 Received or Expended ACTUALII Encumbrances II Project to &Commitments Date 1,402,013 25,000 600,000 6,532 2,033,545 1,402,013 25,000 600,000 6 ,532 2,033,545 a) b ) 51,735 25,000 76 ,735 b) 12,193 991 16,211 23 81,153 25 ,000 12,193 991 16,211 23 106 ,153 1,402,013 230 1,402,243 1,402,013 230 1,402,243 a) 1,483,396 25,000 1,508,396 550,149 (25,000) 525,149 PROJECTION Project Budget * Projected Variance 3,400,000 1,402,013 25 ,000 700,000 13 ,740 5,540,753 325,000 75,000 13,150 75,000 20,000 508,150 1,402,013 3 ,300,000 4 ,702,013 313,513 5,523,676 17,077 3,400,000 1,402,013 25,000 700,000 13,740 5,540,753 325 ,000 75,000 13,150 75 ,000 20,000 23 ~23~ 508,173 (23) 1,402,013 3 ,300,000 4,702,013 5,210,186 313,513 (23) 330,567 313,490 * The project budget is the consolidation of FY 2012 (actual and unexpended budget) and FY 2013 adopted budget a) The building was purchased in FY 2011 with resources from Project Development and Debt Reserve (Fund 140) -$1,402,013 b) $25,000 was paid to the architect in FY 2011 with resources from General County Projects Fund (Fund 142) • RESOURCES: Beginning Net Working Capital Federal Grants Resources from Fund 142 Transfer in (Fund 142) Interest Revenue Total Resources EXPENDITURES: Materials &Services ArchitecturelDesign Engineering Planning Surveying Interfund Charges Fees, Permits &SDCs Utilities Miscellaneous Project Costs Miscellaneous Admin Costs Total Materials & Services Capital Outlay New Construction Total Capital Outlay Contingency Total Expenditures Net Beg NWC Per FY 14 Requested Budget Deschutes County Sisters Health Clinic (Fund 464) Inception through May 31 , 2013 ACTUAL Received and II Encumbrances I Expended & Commitments Project to Date 40,000 48 ,626 100,000 383 189,009 40,000 48,626 100,000 383 189,009 a) 56,499 56,499 a) 1,140 2,029 1,616 25,549 1,140 2,029 1,616 25,549 993 26 87,852 993 26 87,852 51,447 51,447 501,283 501,283 552,730 552,730 b) 139,299 501,283 640,582 49,710 (501,283) (451,573) 50,000 Project Budget 500,000 48,626 100 ,000 648,626 78,626 15,000 5,000 1,785 30 ,000 2,000 1,000 133,411 515 ,215 515,215 648,626 Projected Variance 500,000 48,626 100 ,000 383 649,009 383 383 78,626 15 ,000 5,000 2,029 1,785 30,000 2,000 993 1,000 136,433 (2,029) (993) p , 022~ 552,730 552,730 ~37,515~ (37,515) 689,163 (40,537) (40,154) (40,154) a) $48,626 paid to the architect in FY 2012 with resources from General County Projects Fund (Fund 142) b) Additional costs due to delay in the project have not yet been determined. Deschutes County Bethlehem Inn (Fund 128) Eleven Months Ended May 31,2013 Budget Actual I Variance I FY%I Coli , %1 Budget I Projection I Variance RESOURCES: Beg. Net Working Capital $(2,710,000) $(2,710,173) $ (173) 100% 100% $ (2,710,000) $(2,710,173) $ (173) Revenues Grants -Private 92,209 (92,209) 92% 0% 100,592 (100,592) Lease Payments 22,374 24,408 2,034 92% 100% 24,408 24,408 Total Revenues 114,583 24,408 (90,175) 92% 20% 125,000 24,408 (100,592) Transfers In: Project Development (140) 1 ,512,500 -(1 ,512,500) 92% 0% 1,650,000 -(1,650,000) Gen Capital Res (143) 971,667 ~971 ,667~ 92% 0% 1,060,000 -p , 060,000~ TOTAL RESOURCES (111,250) (2,685,765) (2,574,515) 92% -2149% 125,000 (2,685,765) (100,765) REQUIREMENTS: Expenditures Debt Service : Interest Expense Interest Payment 22,917 91,667 13,456 9,460 91,667 92% 92% Exp . %1 54% 0% a) 25,000 100,000 15,000 10 ,000 100,000 TOTAL REQUIREMENTS 114,583 13,456 101,127 92% 11% 125,000 15,000 100,000 NET (Resources -Requirements) (225,833) (2,699,221) (2,473,388) b) ===========(2=,7=00=,7=6=5=)=====(7=65=) a) Interest on May 2013 negative cash balance: $1,160.42 . b) Inception through May 31,2013 Revenues -Lease Payments $ 73,224 Expenditures : Land/Building (Amertitle) -July 2007 2 ,241,313 Hickman Williams 17,578 City of Bend -May 2008 250 ,000 KN EX CO 5,289 Kleinfelder 3,732 Total expended on facility 2,517,913 Interest on Negative Cash Balance 254,533 Total expended 2,772,445 Net $(2,699,221) Deschutes County General Support Services -eocc Conference/Seminar. EducationfTraining and Travel Expenditures and eocc -County College Expenditures FY2013 iDec Conference & Travel I Jul I Aug I 5ep I Oct I Nov I Dec I Jan ! I Feb i I Mar I Apr I May IYTD Total II ammy Baney ........,......."'." & Educf I raining 30 Travel Meals 20 -66 -82 ! -240 --408 A~II "" -127 --119 ---1.715 --1,961 Airfare ---_~ • 632 Mileage reimbursement -.-----=38::-:4:-----.---frio' ·~=83:::----~:~.....===.-:5::-::......~ ...~=7~===4~-3~22:==·-~-273::2~·~·-;~62~···~35=5-~3.~69~5c-\ I---:Gi;;:r:':':o=unSLd;:-:;T;::r..:.can:':::s=-=po:':':rUP:'::;a:'=r';Cki'-ng---~~--35 - - - - • • I 142 - • 177 Total Baney 30 I 566 -790 878 -704 512 i 3,586' 262 390 : 7,718 iAlan Unger i I.,;Onrf~em & EducfTraining 65 305 1_...-. _ ..............~-_~~..........6.~5...... __ ~8~0~' 65 655 Travel Meals ~~~~~~"..1I~~~~============~-====~.======~-==·~4~29~~-====~-==:=~-====~.===='~-. • 429 Airfare - • - _ •• -.1 sement 112 . : 112 Ground Transport/Parking -...... ITotallhlger 65 112 734 -65 80 i 1,195 I-!T~ocg;n~~nn...~f/~~Ir;:~m~"n~&"'-::E::-:d:-U=cfT~"..c=.:..=ra~=:--in=in:g======-30=---~.~---~1~5;--~47;;;;0;;-'-~1~0;:---~.·-·-···1-1-~3=5;;-O-·-=58=00-+-,-~10~0;:--~ -35 1,275 Travel Mea~ -c.=---..~ ~-~.--'-=.-. -.'-"-----:76=:-r·-~.-'-"----=-=_'-'-----'-.~--_-~:-2::-:0:----'..:...96::-::-1 AccomlTlodatC;-io~n~s------~-~=~-. -429· - • 339 • • 169 937 Airfare Mileage reimbur ""'. ""'''' • I• 471· 562 399 405 644 2.480 Ground I,a,,<>jJV' , 19~ Total 30 15 1,369 10 657 35 1,318 505 869 4,807 315 315 , i I Total· BOCC Department i i COnf/Sem & EducfTrilining-----:12=5;;---······-·--~ 15 775 20 -165 ;-.--=7C-C40~'-1-',1""'1=-5-, --65=-'-'-=70---=-3,""090=-=-l f-!rl,i"el Meals -20 ~.=-r--=66:::- -20 504......~._.·-=-=-=-=7'-'-=6~~~~-;;8:-:::2-'1--···········---240 I Accommodations -127 -857 119 - • i 339 1,715 -169 3,327I 'l\irtare - - - . - - - -632-,--=~ --632 I---:M~ilea=ISLg~e~R.:::ej'-"m=bu.:::rs.::.e.:::mc.::e"'-n"'-t-_............-.--~.--_4-=96;;;;-'-_~-_+___'1.~26_0-_·-6~8~3---5~6:-::2:-+--~55~7-·_~8~31~ 637 i ...._...~~~~2~··-_~_99__ 6,287 Ground Transport -35 - - -19 - -142 : • -' 196 Total-BOCC Department 125 678 15 . 2,893 888 657 , 804' 1,910 4,480. 327 1,259 14,035 I 1 , FY 2013 Revised Budget ......... ~__ 23,750 , PercentofFY 2013 Budget Expended .~_~___+_____ ..........~_~_--'-_____'--' 5~:1~ , BOCC County College ~'lnnli",., 85 - I 85 Meeting 761 -, 2.441- t--_······~To~t_a~1B_OC_C_C~o~un~ty-=--C~o_lIe-=g=-e_······_·~:::::::::-::::~:::::::::•.:.~-'--'~_~ _~ .",;-;;84:...6~'-c- 7 ' =:8:1:1---=;;:869-~_-~..~ . ===-~--:---2,526..-..L-'--~-~.-:-----+-_-' NOTE: Above amounts include orJly thoseexpenditUr6sProcessect for payment. ... ;'-;.:--_......~ ....~...~L~ -~~.... ---:-~~-~ ..~ ..~~~~_~_~_-~-~-~~.... ..'. ...~-~~-=---~~~~~.~.~--J Additional conference and travel costs may have been incurred, but not processed for P<ilyment i 6/4/2013 Technical Memorandum To: Timm Schimke, Deschutes County From: Michael Greenberg P.E., HDR Project: Review of WTEG Proposal for Steam Injection at Deschutes Landfill Copy: Joel Miller P.E., HDR Date: June 3, 2013 Job No: 00102.0000195546 Re: Final Technical Memorandum Executive Summary HDR Engineering, Inc. (HDR) was retained by Deschutes County (County) to provide an independent review analyzing the Waste to Energy Group, LLC’s (WTEG) proposal to inject steam into the Deschutes County’s Knott Landfill (KLF) in order to increase the production of landfill gas and subsequently refine the gas into pipeline quality methane (the “Project”). This Technical Memorandum (TM) represents HDR’s review of the Project. HDR understands that WTEG’s project description includes the following: • A Piezo-Penetrometer Test (PPT) survey will be conducted by WTEG initially to determine where to install gas collectors. • A steam injection system including a landfill gas (LFG) collection system will be engineered by WTEG based on the results of the PPT survey. • WTEG will provide and use a Biogas Purification and Compression System manufactured by Generon IGS, Inc., to process the raw LFG to product gas. Product gas will be sold by WTEG to a buyer and injected into a natural gas pipeline adjacent to the KLF facility. • WTEG intends to enter into a binding agreement with the County to perform the project as described. This TM is organized with sections reviewing technical, permitting/regulatory, financial, and contractual aspects of the Project, including an overview comparison to Non-Steam Bioreactors. HDR’s findings are summarized as follows: • Financial – It is HDR’s opinion that LFG generation and collection may be lower than WTEG predicts, even if above typical bioreactor output. This may adversely affect the financial pro-forma, resulting in potentially lower or negative results for the project as depicted in sensitivit y cases modeled by HDR. This increases the importance of contractual protections to the County. Based on the draft in-progress contract reviewed by HDR and discussions with the County and WTEG we understand that WTEG intends to finance the total capital and operations costs of the project, without any financial obligation to the County. HDR recommends that the County only enter into the agreement with WTEG if appropriate terms are negotiated protecting the County from any financial responsibilities or liabilities should the project fail. This TM contains a section (last section, Contractual Risks) with comments and recommendation regarding WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 2 of 33 the in-progress draft agreement reviewed by HDR and discussed with the County during this project. Although HDR has reviewed and analyzed all available WTEG economic information, for this report we have removed all of these economic figures as they are proprietary to WTEG and their development efforts. • Environmental – Based on the description of WTEG’s proposed processes, the environmental risk to County appears to be relatively low. WTEG confirms that they will install all LFG wells well above the landfill liner base grades. However, WTEG should enhance its proposal to provide backup flare capability for all LFG collected. The County should also confirm that WTEG assigns staff experienced in operating LFG systems and monitoring in order to maintain air quality compliance. The WTEG expectation and planning for a level of 99% LFG removal appears unrealistic, which relates both to financial and environmental compliance aspects of the project. However, given that the Oregon Department of Environmental Quality (DEQ) must apply monitoring requirements to assure public health and safety under RD&D rules and the project will involve limited sequential area in the injection operations, it is not expected to pose an environmental risk 1 different than other landfills. This opinion is based on the expectation that WTEG will apply appropriately experienced staff to the project such that all applicable regulatory air quality compliance measures are met and attained over the time of the project. • Permitting – The Oregon DEQ was interviewed during preparation of this TM and appears receptive to the project. There do not appear to be fatal flaws in the permitting scheme given the RD&D authority held by the state. As holder of the permits the County needs to be provided with accurate continual operational data from WTEG during all periods of operations to be able to check that the gas generation is being properly controlled and to provide for future control of the LFG. The County should reserve the right to be supplied with information in addition that required by regulatory agencies. This is recommended in the event if the project was to fail from financial, compliance or other reasons the County could be forced to address any remaining compliance or liability issues. • Operational – Based on the information provided to HDR regarding the proposed project, it appears that WTEG did not propose to provide the County with a working gas collection system after WTEG leaves each 4-acre tract. The County will be relying upon WTEG’s assertion that all or effectively most gas has been extracted from each 4-acre tract. However, there remains the possibility that once WTEG leaves an area, fugitive gas emissions could be higher than prior to the project (due to the effects of the steam injection). Similar to a conventional bioreactor, the WTEG process will be injecting liquid (steam) into the waste mass. Typical bioreactors require that operations are carefully controlled to avert the potential for overloading of the leachate collection system and/or the possibility of slope stability and side-slope leachate outbreaks, which generally increase over a typical dry cell landfill. WTEG has reported that the proposed steam 1 HDR’s scope of services and review did not include any health risk assessment or detailed environmental modeling of the proposed project. It is assumed that applicable regulations would protect public health and safety to appropriate levels. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 3 of 33 injection process will use less liquid, however, the information WTEG provided to HDR regarding the proposed project report liquid requirements similar to bioreactor operations2. Therefore, WTEG’s process could potentially carry the same operational risks as a conventional bioreactor operation. Given that the Knott Landfill has a Leachate Collection and Removal System (LCRS) with greater slopes and design than are typically required,3 it is likely that the LCRS should be able to handle the proposed steam injection. However, some care will still need to be exercised in adding stream to avoid leachate outbreak or slope stability issues that potentially can occur with typical bioreactors. These risks are known in the industry and can be readily mitigated by conscientious operation according to permit conditions. • Risks – Potential risks to the proposed WTEG project appear to be relatively low from an environmental and permitting aspect provided that WTEG assigns operational staff experienced in landfill gas control and compliance and provides adequately designed equipment to maintain air quality compliance as discussed in the environmental, permitting, and operational sections of this TM. If the steam injection functions with similar efficacy to a bioreactor, an environmental benefit of early stabilization of the waste could be realized. However, HDR believes that the LFG production and financial projections by WTEG may be optimistic, which raises the importance of the County contractually protecting itself from risks, should the project fail to meet expectations. This TM includes a section (See Contractual Risks in the last section) with detailed comments and recommendation regarding an in-progress contact reviewed and discussed by HDR and the County. We recommend that, in the case that the County decides to implement the project, protections (possibly additional ones covering subsequent negotiations) are included as the agreement is finalized in order to limit the County’s risk and protect its financial interests. Given that this project is experimental (the first of its kind proposed for full scale) and contains what HDR notes may represent overly optimistic plans and assumptions by WTEG for the project; HDR recommends that the risk should the project fail should be contractually solely borne by WTEG. • Benefits to the County - This TM also discusses potential benefits of the project to the County that would involve potential early stabilization of the landfill waste and payments to the County for LFG produced for sale. Early stabilization of the waste, a stated goal of the project, would be an environmental benefit mainly from reducing the time that the waste would pose a threat to groundwater quality. The contract that the County is negotiating with WTEG is assumed to provide royalty payments to the County. In the development of this TM, HDR has relied on information provided by WTEG and the County. We are assuming that the information is the most recent available as of the date of this memorandum and that the information represents the best available information from WTEG and the County. HDR has used our experience with landfill gas to energy projects as well as general industry standards and information available from other sources as noted in this TM. 2 For basis of liquid requirements and additional discussion, refer to Liquid Sourcing in Landfill Gas Generation section and Liquid Requirements in Overview Comparison to Non-Steam Bioreactors section. 3 Based on HDR discussions with Oregon DEQ (Joe Gingerich) and the County (Timm Schimke). WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 4 of 33 Background and Understanding Deschutes County has been approached to consider the implementation of a WTEG proprietary technology, which essentially consists of injecting steam into the KLF for the enhanced production of landfill gas. HDR understands that WTEG’s project description includes the following: • A Piezo-Penetrometer Test (PPT) survey will be conducted by WTEG initially to determine where to install gas collectors. Data from the survey will be used to create a model of the waste to show what the characteristics of the waste are and where the gas pockets are located and where perched leachate exists. • A steam injection system including a landfill gas (LFG) collection system will be engineered by WTEG based on the results of the PPT survey. LFG collection wells will be installed. Steam injection points will be placed strategically to enhance the gas production capabilities and collection wells will be installed to affect distribution of the steam and collection of the LFG. • WTEG will provide and use a Biogas Purification and Compression System manufactured by Generon IGS, Inc., to process the raw LFG to product gas. Product gas will be sold by WTEG to a buyer and injected into a natural gas pipeline adjacent to the KLF facility. • WTEG intends to enter into a binding agreement with the County to perform the project as described. This TM includes HDR comments and recommendation on a draft agreement that were discussed with the County during performance of this project. In the development of this TM, HDR has relied on information provided by WTEG and the County. We are assuming that the information is the most recent available as of the date of this memorandum and that the information represents the best available information from WTEG and the County. HDR has used our technical, regulatory, financial and contractual experience with landfill gas to energy projects as well as general industry standards and information available from other sources as noted in the report. Given that the basic concept of steam injection into a landfill and some of the individual elements of the process and technology proposed by WTEG is new and experimental, HDR could not compare WTEG’s proposed technology and project based on information to other similar operating projects as we are not aware of any others that exist. This TM includes a review of the technical, permitting/regulatory, financial, and contractual aspects of the Project, including an overview comparison to Non-Steam Bioreactors. Each component of HDR’s review is included by section below. Technical Review HDR initiated the analysis by requesting that technical information from WTEG be provided. We discussed the information provided to HDR with WTEG and requested and received follow-up information to assist in our review. This included review of the following technical aspects of the project (in general process flow order): • Initial site profiling using the WTEG Piezo-Penetrometer Test (PPT) WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 5 of 33 • Landfill gas generation • Landfill gas collection and control • Landfill gas high-Btu processing and pipeline injection PPT Testing WTEG has proposed that the project begin with WTEG’s PPT testing procedure to develop a three-dimensional profile of the waste mass for future use in detailed design and operation of the steam injection process. According to WTEG, the PPT and also the Cone Penetrometer Test (CPT) can be utilized to detect and profile internal gas pressures, perched liquids, vacuum zones, dense soil layers, and other pertinent information. HDR is familiar with the PPT and CPT equipment, but the use of the equipment to develop three-dimensional models and interpretation to enhance steam injection are proprietary to WTEG and their consultant, STI Engineering, Inc. As such, HDR cannot judge the efficacy of STI’s proprietary interpretation of these results. Based on the review of the information provided by WTEG, HDR’s opinion of the PPT Testing process is that it should not be detrimental or cause harm to the KLF. The greatest risk is penetration of the cell liner, but this can be mitigated similar to installation of conventional landfill gas wells by allowing adequate separation to the liner using accurate as-built liner information and recent survey elevations. Landfill Gas Generation WTEG has provided the following estimate of landfill gas generation for the proposed project (from Executive Summary dated 2-7-13): “WTEG will treat 4 acres of the landfill at a time and we will be converting 354 tons of organic waste per day producing 2,549 mmBtu. Another 7 mmBtu will be produced naturally. Full the flow rate [sic] is controlled by the amount of steam injected.” This provides a basic landfill gas generation estimate by WTEG of 2,556 mmBtu/day from a 4- acre parcel of the landfill undergoing the WTEG steam injection process. WTEG predicts a minimum of 60% methane in the landfill gas generated by this method. Conversion using the nominal heating value of methane at approximately 1,000 Btu/cubic foot yields an estimated raw landfill gas flow rate of 2,958 cubic feet per minute (cfm) at 60% methane 4. WTEG justifies this predicted generation rate as follows: “The Steam Injection Process is designed based on the amount of waste currently in place and the amount of refuse that is imported per day. We may assume that a total for both cells is 4,456,000 tons in place based on the data provided. It is also assumed that 50% of the refuse is organic material or 2,228,000 tons. Since the annual rainfall is only 8 inches it is assumed that 3 tons per acre per day was converted into landfill gas (LFG) for the half-life of the landfill or 875,675 organic tons. 4 2,556 mmBtu/day * 1,000,000 Btu/mmBtu * 1 cubic foot/600 Btu * 1 day/1,440 minutes = 2,958 cubic feet per minute WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 6 of 33 The landfill imports 315 tons of refuse per day. It is typically assumed that 50% of the refuse is organic or 158 tons. If 5 acres are treated at a time and convert 450 – 158 tons of import = 292 organic tons to LFG then the gas field will last 8.5 years. It requires about 56 gallons converted to steam per ton or 25,000 gallons per 5 acres per day. With 5 acres treated, 200 barrels of crude can be produced per day.” Modeling and Estimation The WTEG calculation methodology outlined in the paragraphs above is unconventional and HDR is not able to agree on the assumptions made in WTEG’s calculations. It is generally unclear to HDR how the historical waste in place is taken into account. In addition, HDR’s independent analysis and information received from the County arrives at differing values for waste in place, waste receipt volumes, and organic content. Rather than debate individual values and methodology, Figure 1 provides a comparison of the WTEG estimated landfill gas generation rate in comparison with a spectrum of generation models. This spectrum provides independent estimates of landfill gas generation from conventional landfill operation to ideal laboratory conditions (maximum theoretical gas generation). HDR utilized the EPA LandGEM landfill gas emissions model version 3.02 to estimate the LFG generation rates. The model was manually adjusted to have waste capacity comparable to WTEG’s planned 4-acre tracts. The model LFG generation variables (k and Lo) were also manually adjusted to create five “scenarios” providing a spectrum of LFG generation rates. Scenarios 1, 2, and 3 are utilize variables to model “field” LFG generation rates for dry tomb and bioreactor conditions. Scenarios 4 and 5 utilize variables to model “laboratory” LFG generation rates that have not been replicated in the field. The calculated assumptions and EPA LandGEM models for each scenario are included in Attachment A. The following should be considered when reviewing this Figure: • Waste values and characterization are per County provided information • The waste volumes have been manually adjusted to model a 4-acre by 100-foot deep “cube” of waste for comparison with WTEG planned methodology for a roving 4-acre tract. This results in a conservatively high assumption of waste design capacity at 609,840 tons. • Flow rate shown is for landfill gas with 60% methane (for comparison to WTEG claim) Figure 1 illustrates that WTEG predicts (Proposed) that their steam injection process will effectively increase landfill gas generation rates to greater than double the published rates typical of bioreactor landfills in the industry (Scenarios 2 and 3) and up to 90% of the theoretical maximum potential predicted by laboratory-derived thermodynamic properties of the waste materials (Scenario 5). WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 7 of 33 Figure 1 – Proposed LFG Generation Curves Miramar Pilot Study Comparison HDR understands that the basis for these claims is derived from the 10-month pilot study performed at the Miramar Landfill in 2005-2006. From WTEG text: “In 2005 and 2006 STI Engineering performed a 10 month long Steam Injection Pilot Study at the Miramar Landfill in San Diego, California. Two acres were selected for the study, one as a control with no steam injected and one with steam injection. This test acre was instrumented with 12 thermocouples and 2 static piezometers to monitor the effects of the steam migration through the landfill as well as settlement monuments. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 L F G G e n e r a t i o n ( s c f m ) Year Proposed LFG Generation from 4-Acre Tract at KLF LFG Generation Spectrum Scenario 1 -Typical AP-42 parameters K (methane degradation rate) & Lo (methane generation potential). No recirculation of liquids. Scenario 2 -Recirculation of liquids. Published field bioreactor parameters K and Lo Scenario 3 -Recirculation of liquids. Maximum field bioreactor LandGEM values for parameters K and Lo Scenario 4 -Maximum lab values for parameters K and Lo. Optimum lab conditions for site-specific KLF waste. Scenario 5 -Absolute maximum values of Scenarios 1 through 4 for parameters K and Lo. Optimum lab conditions for generic MSW. Proposed -Proposed value of 2,958 scfm based on WTEG estimate of 2,556 mmBtu/day at 60% methane. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 8 of 33 With steam injection the gas production was increased by 5.7 times. If 5,000 gallons per day were used instead of just 1,500 gals, then the gas production would have been increased 27 times.” To compare the results of this pilot study, Figure 2 shows a similar landfill generation spectrum for a 1-acre by 50-foot deep cube of waste to emulate the Miramar Pilot Study. HDR again utilized the LandGEM model to estimate the LFG generation rates. The model was manually adjusted to have waste capacity comparable to Miramar Pilot Study 1-acre by 50’ deep tract. The model LFG generation variables (k and Lo) were also manually adjusted to create five “scenarios” providing a spectrum of LFG generation rates. Scenarios 1, 2, and 3 are utilize variables to model “field” LFG generation rates for dry tomb and bioreactor conditions. Scenarios 4 and 5 utilize variables to model “laboratory” LFG generation rates that have not been replicated in the field. The calculated assumptions and EPA LandGEM models for each scenario are included in Attachment B Figure 2 – Miramar Pilot Study LFG Generation Curves 0 500 1,000 1,500 2,000 2,500 LF G G e n e r a t i o n ( s c f m ) Year Miramar Pilot Study LFG Generation from 1-Acre Tract LFG Generation Spectrum Scenario 1 -Typical AP -42 parameters K (methane degradation rate) & Lo (methane generation potential). No recirculation of liquids. Scenario 2 -Recirculation of liquids. Published field bioreactor parameters K and Lo Scenario 3 -Recirculation of liquids. Maximum field bioreactor LandGEM values for parameters K and Lo Scenario 4 -Maximum lab values for parameters K and Lo. Optimum lab conditions for site-specific KLF waste. Scenario 5 -Absolute maximum values of Scenarios 1 through 4 for parameters K and Lo. Optimum lab conditions for generic MSW. Observed -Observed flow of 228 scfm at Miramar Pilot Study reported by WTEG after adding 1,500 gal/day steam injection. Claimed -Claimed possible flow of 1,080 scfm at Miramar Pilot Study. Theoretical addition of 5,000 gal/day steam injection. Not actually realized. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 9 of 33 The Figure illustrates that the actually observed landfill gas generation rate at Miramar with the available leachate (Observed line) used in the steam injection process matches the maximum rate modeled using published industry field bioreactor data (Scenario 2). However, the claimed landfill gas generation rate (Claimed line - not proven or achieved in the pilot study) theorized by WTEG if more liquids were available would again fall in the spectrum of laboratory only conditions. Steam Injection Process In order to achieve the estimated landfill gas generation rates advertised, WTEG intends to employ the injection of steam in a proprietary process. This process is described in detail in the provided documents and generally consists of injection of steam in the middle of each one-acre tract with four landfill gas collectors at each corner of the square tract providing vacuum to move the steam laterally through the waste mass. In general, HDR views this as a process wherein the general goal is to increase the availability of moisture to the methanogenic bacteria in the waste mass to enhance their decomposition activity on the organic matter and subsequently increase landfill gas production. That the methanogenic bacteria require moisture and ideal conditions for decomposition activity (biostabilization of waste) is well known. The waste stabilization bacteria primarily operate in three different groups 5: 1. One set of bacteria is responsible for hydrolyzing organic polymers and lipids to basic structural building blocks such as amino acids; 2. A second set of bacteria called “acidogens” is responsible for fermenting the breakdown products (such as amino acids) to simple organic acids; and 3. A third set of bacteria called “methanogens” are responsible for converting the acids into methane and carbon dioxide. Therefore, the methanogens – a type of mesophilic bacteria – plays the final and most critical role in methane generation. The optimum temperature range for mesophilic bacteria is generally reported as 80o to 120o Fahrenheit, with limits for landfill gas well temperatures in regulated landfills restricted to less than 131o Fahrenheit. Steam injection, at greater than 212o Fahrenheit may provide an inhospitable environment for the methanogenic bacteria – although it is conceded that this temperature is restricted to the few feet directly adjacent to the steam injectors. Since this is the case, it is assumed that the process serves to move water vapor in ever-decreasing temperature (and thus moisture loading) laterally through the waste mass. Therefore, HDR views the steam injection process as a variation of pressurized moisture addition into the waste – with a risk of impacting methanogen growth near the injection point with excess temperatures. 5 Summarized from: Integrated Solid Waste Management: Engineering Principles and Management Issues; Tchobanoglous, George, Hilary Theisen, Samuel Vigil; Irwin/McGraw-Hill; 1993. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 10 of 33 The concept of pressurized moisture addition is not a new practice in the solid waste industry. The WTEG proposed steam injection closely resembles these projects but with the added technical and financial burden of heating the liquid to make steam and the aforementioned temperature risk to methanogenic bacteria. The quantitative advantages that steam injection are purported to provide (versus liquid injection) are not fully proven in field testing. It is assumed that the decrease in temperature will cause the steam to condense into a liquid water state at some point between the steam injector and the collection wells. At that temperature point, the remaining water vapor may be influenced by the vacuum exerted by the gas collection wells, but the liquid water will be governed by liquid properties of movement within the waste mass. HDR is not aware of information that verifies that the injected steam will travel the distance (greater than 100 linear feet) from the injection points to the collection wells prior to condensing. As stated in the previous section, WTEG’s predicted outcomes for KLF are based on the Miramar 1-acre pilot project. Notice in Figure 2 that after steam injection, the reported results (Observed line) came close to the landfill gas generation modeled by LandGEM utilizing published bioreactor data (Scenario 2). This indicates that the steam injection did distribute moisture effectively and pushed the landfill condition towards a bioreactor system – an expected phenomenon. However, the claim that landfill gas generation could have been 27-times greater than the pre-study flow rate (Claimed line) if the added water was 5,000 gallons per day was not proven. The observed data would suggest that the steam injection did increase the moisture content, and that the waste mass may have already reached an optimum condition with the 1,500 gallons/day addition – a possibility endorsed by the reported flow rate being consistent with a LandGEM modeled bioreactor system (Scenario 2). Waste has certain inherent methane generation potential or energy content (see Lo calculations in Attachments A and B). This potential will not increase regardless of how much moisture is added into the waste mass. It is expected that moisture delivery is the key to optimization of the waste’s landfill gas generation potential; however, WTEG’s maximum claims have not been supported by published field data, and may not be valid if a waste mass has already reached optimum moisture conditions. Liquid Sourcing As discussed in previous sections, WTEG proposes optimization of landfill gas generation by means of steam injection. This is similar in concept to a bioreactor operation. Specific to the KLF project, WTEG proposes an optimal liquid requirement of approximately 5,000 gallons/acre/day6. The issue of note for the proposed WTEG project at the KLF has to do with the sourcing of this quantity of liquid. KLF currently has approximately 38 acres of lined cells 6 Liquid quantity based on information provided in WTEG proposal dated February 7, 2013, “Executive Summary – Green Environmental Solutions for the Deschutes County Landfill Stabilization Projects”, page 6: “It requires about 56 gallons converted to steam per ton or 25,000 gallons per 5 acres per day.” Statement is consistent with WTEG stated liquid requirements at Miramar Pilot Study at 5,000 gallons/acre/day. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 11 of 33 which generate a normalized annual average of 287,000 gallons/month (9,500 gallons/day)7. This quantity is short of the required amount of 20,000 gallons/day for a 4-acre tract by 10,500 gallons per day. A magnitude of 10,500 gallons per day would equate to a residential usage rate for approximately 26 homes 8. This issue was also encountered at the Miramar pilot study. The one acre pilot study required 5,000 gallons/day, but City of San Diego staff report that the entire Miramar site produces only approximately 15,000 gallons/month (500 gallons/day) in winter and 200,000 gallons/month (6,667 gallons/day) of leachate in summer. The Miramar larger lined area was unable to support the liquid needs of a smaller pilot study. Landfill Gas Generation Conclusions In summary, this section provides perspective as to how the WTEG proposed landfill gas generation projections compare to the generally recognized spectrum of landfill gas modeling using a variety of published field and laboratory variables. The modeling efforts have been adjusted to provide a range of comparison. In each case, WTEG’s projected landfill gas generation estimates greatly exceed those published from actual field data, and fall into the realm of laboratory and theoretical output. It is known that waste has certain inherent methane generation potential or energy content (based on the available organic substrate for methanogenic bacteria). This potential will have a limit regardless of how much moisture is added into the waste mass. Therefore, the increase in liquid/steam injection will not necessarily result in a commensurate increase in LFG generation. The ability to distribute the moisture effectively within the organic waste mass will have the greatest effect. This is understood as WTEG’s goal with the steam injection process. However, due to liquid sourcing constraints, WTEG was able to match published peak bioreactor gas generation levels, but was unable to prove higher gas generation rates in the Miramar field pilot study. Based on the documents provided, it seems that the WTEG projected KLF landfill gas generation rates are estimated largely on the basis of WTEG theorized Miramar generation rates that were not actually achieved. In the absence of actual field or laboratory data from steam injection to the contrary HDR can only speculate an opinion that the generation rates from the proposed steam injection would fall somewhere between the bioreactor curves for the published and maximum field based LandGEM values shown by Scenarios 2 and 3 9. Based on the review of the information provided by WTEG, HDR’s opinion is that gas generation at the KLF will not match the estimated quantities proposed by WTEG. However, the steam injection and collection process should not be detrimental or cause harm to the KLF 7 Based on County-provided leachate data for 2012. 8 Based on an assumed 400 gallons per day for a typical household family of four; source: http://www.epa.gov/WaterSense/pubs/indoor.html 9 Attachment A provides detailed description of Scenario LandGEM models for KLF. Attachment B provides detailed description of Scenario LandGEM models for Miramar Pilot Study. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 12 of 33 provided that the leachate collection system is installed and operated conscientiously by the County. The greatest technical risk is penetration of the cell liner, but this can be mitigated similar to installation of conventional landfill gas wells by staying a conservative distance from the landfill liner by means of accurate as-built information and recent survey elevations. WTEG has indicated that it understands this risk and has stated that the intent is to stay well above landfill liner elevations. Landfill Gas Collection and Control WTEG proposes to operate steam injection and landfill gas collection operations on roving 4- acre tracts on the lined area of KLF. It is important to note that WTEG does not propose expanding the County’s existing gas collection system to all areas of the landfill, and does not propose operating a gas collection system that would comply with any future regulatory requirement for KLF to provide collection coverage for their landfill (if this is required in the future). This is discussed in more detail in the Permitting section of this memorandum. Collection System Efficiency WTEG proposes to collect landfill gas from roving 4-acre tracts at the KLF in conjunction with steam injection. WTEG has not distinguished between landfill gas generation and landfill gas collection estimates for the KLF project. WTEG has stated to HDR that it expects that 99% of generated gas will be collected. It is assumed that WTEG takes this position due to the small scale of the project (4-acre tracts). However, it must be noted that industry standard gas collection efficiency for landfills without final cover in place is approximately 75%. HDR is of the opinion that WTEG may not achieve 99% collection efficiency. This discrepancy may serve to decrease the expected LFG collection by up to 25%. This is discussed in more detail in the financial section of this memorandum. Flaring Capacity The County has indicated to HDR that WTEG has stated that they will provide a backup flare for the Knott Landfill. However, the information provided to HDR by WTEG does not appear to provide for the installation of a backup flare station with capacity to destroy the collected gas. This is contrary to industry standard practice, and preliminary discussions with regulators (see Permitting Section) suggested that they would require this flare capacity. This is important since the steam injection process will cause the increased generation of landfill gas. Projected availability (up-time) of any processing facility is approximately 92% to 95% annually (in best- case operation), which does not equate to industry and regulatory backup requirements. Due to recent odor issues10 with neighbors at the KLF site, the lack of a back -up flare to handle the combustion of gas during processing down times appears problematic. The addition of a flare station with capacity for WTEG-estimated LFG flow rates would add approximately $500,000 to the initial capital cost of the project. 10 Based on discussions with the County and Oregon DEQ. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 13 of 33 Landfill Gas Collection and Control Conclusions Although the previous section disagreed with the magnitude of WTEG estimates of landfill gas generation at KLF, it is agreed that the steam injection process could increase landfill gas production. As such, this increased gas production must be collected and controlled to prevent odor and other issues (migration). The County should consider its goals from an agreement with WTEG. Specifically, the following issues: • The proposed project does not provide the County with a working gas collection system after WTEG leaves each 4-acre tract. The County will be relying upon WTEG’s assertion that “all” gas has been extracted from each 4-acre tract. However, there remains the possibility that once WTEG leaves an area, fugitive gas emissions could be higher than prior to the project (due to the effects of the steam injection). The County should consider how this gas will be collected and controlled. • The proposed project does not provide for increasing flaring capacity at the site to handle the increased gas production. General industry practice includes a backup control device with sufficient capacity to handle all LFG collected. • Discussion with regulatory agencies (see Permitting Section) have left open the possibility of triggering enhanced surface monitoring (at a minimum) and/or adjustment of New Source Performance Standards (NSPS) Tier 2 reporting. • The County may want to compile or establish baseline compliance data (perimeter probe date, surface emissions, landfill gas collection, etc.) and tie this baseline into the proposed agreement such that quantifiable increases can trigger specific action or resolution by WTEG. Landfill Gas Processing and Pipeline Injection WTEG proposes to process the collected LFG into a high-Btu product gas for sale to a buyer by means of injection into the local Pacific Gas Transmission pipeline that is stated to run adjacent to the KLF. This is a feasible use of the gas, assuming that WTEG can collect the flow rates proposed (discussed in detail previously) and the proposed pipeline is able to accept the product gas. As a general rule, financial feasibility decreases drastically with decreasing flow rates, as historically, high-Btu processing has been feasible for larger landfills with projected LFG flow rates in excess of 2,500 cfm. However, these technologies have been making advances in recent years to achieve financial feasibility for landfills with ever-lower flow rates. The product gas, which is approximately 99 percent methane (and will have various restrictions on other contaminants), can be injected into existing natural gas pipelines as proposed by WTEG. Processing the LFG to this high Btu product requires complex processes – e.g., membrane filtration, pressure swing adsorption, or amine scrubbing. Technical WTEG proposes a turnkey-style containerized processing facility provided by Generon IGS. The proposed process will operate on the principle of pressure swing adsorption to separate carbon dioxide (and some other constituents) from the landfill gas. This unit also has the ability to remove hydrogen sulfide with packed media beds. These are generally industry-standard WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 14 of 33 processes that are successful in removing these compounds. The technology is filtering down in recent years to package units of this type. Based on the vendor specification provided by WTEG the proposed facility is sized for 3,000 cfm at 60% methane feed gas. WTEG’s sales contract with the ultimate buyer of the product gas will govern if more processing is needed for other constituents. Operational WTEG’s proposal calls for WTEG to be solely responsible for operation of the 4-acre gas collection tracts and the processing of the gas with the Generon unit. However, the following are important considerations that should be taken into account. These may have impacts on County revenue or operations. • Flaring capacity should be installed for full gas flow (as discussed in the previous section), since the Generon unit or pipeline injection point could be shut down unexpectedly. • An important operational issue for high-Btu processing is that these units do not easily remove oxygen. The receiving pipelines impose a strict limit on the oxygen content of the injected gas. As a result, WTEG might only be able to accept and utilize “rich” landfill gas and might not be able to accept landfill gas collected from any existing county collection systems or systems pulling gas for odor or migration control. These “extra” sources could contain too much oxygen. This criterion must be controlled from the collection system and may preclude WTEG accepting gas from (some) County extraction wells. Overview Comparison to Non-Steam Bioreactors Based in part on the technical analysis in Task 1, HDR reviewed WTEG’s assumptions and compared the performance expectations to those of other liquids recirculation/injection landfills. Although HDR recognizes that WTEG asserts a patented technology, HDR views this process as a variant of a bioreactor process, wherein the general goal is to increase the availability of moisture to the methanogenic bacteria in the waste mass to enhance their decomposition activity on the available organic matter and subsequently increase landfill gas production. That the methanogenic bacteria require moisture and ideal conditions for decomposition activity (biostabilization of waste) is not disputed. Landfill Gas Generation HDR asserts that the baseline of comparing their expected performance to the published data of other liquids recirculation processes (non-steam recirculation or bioreactor) to be an appropriate comparison. As such Figure A and Figure B (and related discussion) in the previous Technical Review section compare landfill gas generation rates across this spectrum. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 15 of 33 Liquid Requirements Specific to the KLF project, WTEG proposes an optimal liquid requirement of approximately 5,000 gallons/acre/day. Although not clear on the conversion of this value, WTEG states that this is based on a factor of 56 gallons/ton of waste. 56 gallons/ton of waste is a quantity of liquid that is generally consistent with published data. For example, the volume of liquid required for waste with an initial moisture content of 25% to achieve a target moisture content of 40% is approximately 60 gallons/ton of waste 11. However, the challenge is creating conditions for uniform distribution of the added liquids so that the moisture can be utilized in the biodegradation of the waste. This is the aspect that WTEG proposes to address with steam injection. Enhanced Waste Stabilization One of the advantages of bioreactor landfills and the proposed steam injection process is the potential for earlier stabilization of the waste mass. This is a stated goal of the project 12 and a typical goal of landfill bioreactor projects as earlier stabilization of waste is an environmental benefit of bioreactors and the proposed steam injection project compared to “dry tomb” landfills, where the addition of outside moisture is not practiced. Bioreactor research has shown that municipal solid waste can be more rapidly degraded and made less hazardous in a shorter period 13. This provides a potential decrease in long-term environmental costs and risks. The leachate quality in a bioreactor landfill more rapidly improves, which reduces the period that the landfill poses a threat to groundwater quality. The WTEG proposed process for the Knott Landfill will likely have this benefit similar to bioreactor landfills. Operations Similar to a conventional bioreactor, the WTEG process will be injecting steam (liquid) into the waste mass. As such, the possibility for overloading of the leachate collection system and/or slope stability and side-slope leachate outbreaks increases. WTEG has reported that the steam injection process will use less liquid than a typical bioreactor, this reducing or removing this concern. However, the WTEG reported KLF liquid requirements are similar to bioreactor operation. Therefore, WTEG’s process would seem to carry the same risk as conventional bioreactor operation in these respects. These risks are known in the industry and can be mitigated by conscientious operation according to permit conditions. Permitting/Regulatory Review HDR reviewed the permitting/regulatory aspects of the project, including: • Allowable recirculation of liquid/steam on lined or unlined areas of Knott Landfill. • Allowable use of leachate to generate steam at landfill. 11 Source: Townsend, T., Kumar, D. Ko, J. Bioreactor Landfill Operation: A Guide for Development, Implementation and Monitoring: Version 1.0 (July 1, 2008). 12 Draft DEQ RD&D Permit Application letter document file (letter date 3/27/12) provided by the County to HDR. 13 USEPA website, Waste-Non-hazardous Waste Municipal Solid Waste; http://www.epa.gov/osw/nonhaz/municipal/landfill/bioreactors.htm. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 16 of 33 • Limitations of operational permit requirements. • Future New Source Performance Standards (NSPS) and Title V requirements for landfill gas collection and how WTEG process would have to fulfill these during the contract period. • General – identify potential permitting hurdles or fatal flaws. • Discussions with regulators regarding permitting issues and the viability of the project related to the bulleted items above. Regulation and Project Permitting Background Major Applicable Regulations Solid waste permitting and compliance of landfills in Oregon are governed under Oregon Administrative Rules (OAR) enforced by the Department of Environmental Quality (DEQ) under solid waste provisions contained in 340-93. Oregon is an approved state under Federal rules contained in 40 Code of Federal Regulations (CFR) Part 258. This means that the DEQ enforces landfill regulations under OAR 340-93 that meeting minimum standards in 40 CFR Part 258. The 40 CFR Part 258 allows Oregon as an approved state to issue research, development, and demonstration (RD&D) permits. This rule allows the Director of Oregon Department of Environmental Quality (DEQ) to issue permits waiving specific requirements of the MSWLF criteria in order to promote innovative and new landfill technologies and operating processes, provided that landfill operators demonstrate there will be no increased risk to human health and the environment. During compilation of this TM, HDR contacted Joe Gingerich of DEQ, who would be responsible for solid waste permitting under the main solid waste permit (Title V would be under DEQ, Mark Fisher). Mr. Gingerich indicated that DEQ would take the lead on permitting the project under the DEQ Guidance for obtaining a DEQ RD&D permit (June 8, 2012). Based on other information provided by Mr. Gingerich we understand that the August 24, 2012 certification letter from DEQ to the USEPA states that the draft RD&D rules were intended to be effective of that date. Further emails provided to HDR by DEQ indicate that the final process for adoption including a noticing and public review process will involve that after the Federal Register (FR) review notice is reviewed by USEPA attorneys (in progress December 12, 2012) there will be a 30 day public comment period and become effective 60 days after the (FR) review assuming no adverse comments. Major Permits Related to the Proposed Project The Knott Landfill DEQ permit is Number 6, which was issued on August 10, 2001, lists an expiration date of September 1, 2010. However, HDR understands that this permit is in the process of being reviewed and renewed by DEQ. This permit covers most aspects of design, operations and environmental compliance. In addition to the solid waste permit issued by DEQ the Knott Landfill also has a Title V permit No. 09-0040-TV-01 (expiration 8/1/2016) that governs compliance with air quality and emissions that would be related to the proposed project for WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 17 of 33 steam injection of the landfill. Based on information provided by WTEG we also understand that a Land Use Permit (LUP) is issued to the landfill from the County. Under the proposed project the LUP would need to be updated based on required permit and approvals conditions by DEQ and any additional requirements that the County would wish to require. HDR reviewed in cursory level selected information provided by WTEG or the County regarding the proposed project that included draft permit documents in various state of progress. These included a draft DEQ RD&D Permit Application 14, the DEQ permit, the Title V permit, and a draft notice of intent to construct the proposed project intended for DEQ review under the Title V permit. Discussion of Permitting Issues The discussion of permitting issues which follows begins with discussions with regulators regarding the proposed project and then includes their or HDR interpretation of the viability of the proposed project and how the project might be expected to be controlled by permitting requirements. This is followed by discussion of the particular regulatory issues listed at the top of this major section. Regulatory Input to HDR regarding the proposal project Solid Waste Permit under DEQ 340-93 Based on a telephone conversation with Mr. Joe Gingerich and HDR (Attachment C), Mr. Gingerich provided the following information and opinions: • The unlined phases of the project he would expect would be difficult if not impossible to permit under RD&D. RD&D would cover recirculation and potentially injection into lined landfill, only. • Oregon is an “approved” state under Federal regulations and can issue permits under RD&D. Mr. Gingerich indicated there might be only be limited USEPA involvement he thought that DEQ has authority to issue RD&D permit without USEPA oversight. • Mr. Gingerich indicated that from what he is familiar with about this project to date it sounds like it may be a good idea if it makes the landfill decompose and become less of a threat to environment sooner, as long is it protects the environment according to permits. • Mr. Gingerich indicated that he would be the staff overseeing the general solid waste permit. Increased emission and controls would be permitted under the DEQ Title V permit process, overseen by Mark Fisher (of the Bend, OR DEQ office). • Mr. Gingerich he envisions the process as an “iterative” process where the project would start small and then if demonstrated successful could be continued. 14 Microsoft Word document with March 27, 2012 date. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 18 of 33 • Mr. Gingerich noted that neighbors of the landfill have expressed concern about potential health impacts. He noted that air emissions compliance aspects would have to be addressed. • Mr. Gingerich indicated he is comfortable about doing a project such as this at the Knott Landfill because it is well designed. It has “overkill” in a liner drainage system with large rock and drainage net and good LCRS and liner slopes. He would expect very little hydraulic head on the liner, in compliance with regulations. • Mr. Gingerich indicated that the permit renewal for this site (needed for approval of permit changes such as this proposed project) has been in the process for a while and his thinking may be to wait until the proposed WTEG project would get bundled in to process the renewal. He said that it would be possible to hold one hearing for the permit renewal covering both air quality and solid waste issues. He indicated that timing to write the permit may be 60 to 90 days but if the project were controversial via the public hearing it is hard to gauge the timing. Air Quality Permitting under Current Title V Permit HDR spoke with Mark Fisher of the Oregon DEQ about the proposed WTEG project, specifically focused on the steam injection and the emissions units anticipated by WTEG. Attachment D provides a written log of the conversation, and a summary of the feedback and discussions is provided below: • Mr. Fisher stated that there have been recent odor complaints from KLF neighbors. He attributes this to the inability of the site to collect all of the LFG being generated because the existing flare capacity is too small. He also stated that the landfill is a pro-active permittee and that no enforcement actions have been taken for this odor complaint. • Mr. Fisher agreed that the RD&D application will be the preferred permitting mechanism. He stated that all RD&D permitting is handled from the Solid Waste Group (Joe Gingerich), but that certain conditions might be introduced from the air group (mentioned additional surface emission monitoring requirement possible). • Mr. Fisher stated that the preferred method for permitting these activities through the air group is by means of a Notice of Intent to Construct (Form ND-901). This should be completed in conjunction with RD&D application. Title V permit would not be modified until the next renewal cycle. The Notice of Intent to Construct would be reviewed by DEQ against established emission limits for the site (as set by the existing Title V permit). • An important issue/question is whether the enhanced generation of LFG in controllable areas of the landfill (4-acre tracts) might affect the New Source Performance Standard (NSPS) 50 Mg/yr non-methane organic compound (NMOC) limit for the entire landfill. Specifically, this could then affect the requirement for WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 19 of 33 installation of a GCCS on the entire landfill (as governed by the Tier 1 and Tier 2 reporting). Mr. Fisher stated that, at a minimum, the existing NSPS Tier 2 Report would require modification or the new Tier 2 Report (due in 2013) would need to take LFG samples from the steam injection areas. Discussion was not conclusive on how the NMOC value would affect the Tier 2 Report or if additional modifications to the report would be required based on the proposed LFG generation rates in these areas. The Tier 2 Report relies on NMOC concentration in the LFG (unclear how this will be affected by steam injection) and the estimated quantity of LFG to estimate a yearly NMOC emission rates. The Tier 2 report also governs the requirement for a landfill to install a LFG collection and control system (on the whole landfill). • An important issue/question regards the RD&D permit application (WTEG draft) that proposes surface emission monitoring in initial stages. This is another aspect of LFG operations that is customarily governed for the entire landfill by the NSPS Tier 1 and Tier 2 reporting. Mr. Fisher stated that, at a minimum, DEQ would likely require surface emission monitoring on the current 4-acre steam injection area as well as the previous 4-acres as WTEG moves its process across the landfill. This would likely be a condition of approval. • Mr. Fisher stated that the de-minimis carbon dioxide emissions are 2,766 tons/year at this site. If WTEG would like to install a processing unit that emits carbon dioxide (the Generon unit as proposed), the emission rate may be an issue that would require review by DEQ. • Mr. Fisher clearly stated that upgrade of a flare system would be required to have capacity for all collected LFG (even if flare is only used as backup). This would need to be addressed in the Notice of Intent to Construct and would likely be a condition of DEQ approval. Allowable recirculation of liquid/steam on lined or unlined areas of Knott Landfill Based on the above input from DEQ it appears that the DEQ does not see fatal flaws with the project from a regulatory perspective provided that the project meets all particular regulations that will include adequate recovery of leachate to minimize the head on the liner in compliance with regulations and control of air emissions in compliance with regulations. Mr. Gingerich believes that if the project also meets intended goals of decomposing the landfill sooner it would be beneficial. Further he feels that the Knott Landfill would be a good site to attempt an RD&D project as proposed because the liner system is more robust than required by regulations and has “good” liner slopes which should minimize the head on the liner system. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 20 of 33 HDR notes that bioreactor landfills have been successfully implemented throughout the US and have been able to control the head on the liner to meeting CFR Part 258 and state regulations adequately. Given that WTEG asserts in concept that its steam injection project will inject much less water than a typical bioreactor it appears feasible that the proposed project would be able to meeting regulations and not introduce significant additional threat to groundwater from liner leakage. Landfill liner temperatures have been studied for years and more recently for bioreactors, as liner temperatures up to 50 degrees C (122 degrees F) in the laboratory show only negligible degradation effects. This has not been an issue to date with bioreactors that HDR is aware of. For example, maximum temperatures on the landfill liner in the Yolo County full scale bioreactor were a maximum of 34 degrees C (93 degrees F)15 and bioreactors generally produce temperatures below concern for liners. We would expect that the proposed project liner temperatures would be similar to a full scale bioreactor as WTEG indicates that steam injection would not be extended to deeper portions of the landfill. Because steam injection has not been performed and related to liner temperatures this is an unknown but we believe the probability of the liner temperature being much different than a full scale bioreactor and an area of concern is low and should therefore also not be a regulatory concern. Allowable use of leachate to generate steam injection at the landfill The 40 CFR part 258 regulations allow recirculation of leachate to a liner landfill which recirculation to the originating cells. The RD&D regulations also allow recirculation of leachate as well as outside liquids into lined landfills, and in that sense are less restrictive, provided that the RD&D applicant shows than the environment will be protected commensurate with the 40 CFR part 258 regulations. This should allow WTEG to use leachate to generate steam for the proposed project. In addition, there are allowances in the regulations to allow the recirculation of LFG condensate into the landfill; therefore, it is probable that regulators would also allow the use of LFG to generate steam for recirculation if desired by WTEG. We understand that WTEG intends to create and inject the steam in a closed system thereby eliminating emissions from steam into the atmosphere, and eliminating atmospheric intrusion and the injection of air into the waste mass. This should allow permitting by DEQ. The DEQ may require contingency plans (by WTEG as the applicant) be provided with the permit application in case there would be any unforeseen above grade ruptures or failures of the system as steam produced from leachate could produce a release that poses a potential threat to the environment and/or exceeds permit requirements for the solid waste or air quality permit, or both. Similarly, contingency plans or monitoring procedures may be required to ensure that the system remains closed to atmospheric intrusion, as injection of air into the waste mass could contribute to subsurface combustion/oxidation if not promptly discovered. 15 Data from January 2001 to June 2003; based on email Ramin Yazdani, Yolo County, November 24, 2004. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 21 of 33 Future New Source Performance Standards (NSPS) and Title V requirements, Federal NSPS regulations (40 CFR Subpart WWW) are applicable for landfills with a design capacity greater than or equal to 2.5 million megagrams (Mg) and 2.5 million cubic meters. The KLF exceeds the capacity threshold for applicability of the NSPS regulations and has been reporting estimated emissions of NMOCs. In the past, the County has chosen to determine the site- specific NMOC value at the KLF by performing Tier 2 sampling and analysis as specified in 40 CFR 60.754(a)(2)(ii). The requirement for collection and control of all LFG generated at a site is governed by the results of this report. If the Tier 2 calculations show estimated NMOC emissions below 50 Mg/year, then a LFG collection and control system is not required by NSPS. In 2009, the County submitted a Tier 2 report to the DEQ with an average site-specific NMOC content of 729 ppmv (as hexane) and calculated a peak NMOC emission rate of 45.6 Mg/yr in 2012 (based on assumed future waste receipt estimates). An updated Tier 2 report is required to be submitted by October 27, 2013. As stated above, DEQ will require (at a minimum) some LFG sampling in the WTEG steam injection areas. It is unclear if this will increase the site- specific NMOC concentration average. HDR has performed a desktop LandGEM model using the same site-specific rate (729 ppmv) and adjusted future waste receipt based on current estimates. In HDR’s calculation, the KLF site might exceed the 50 Mg/yr NMOC threshold by 2023. This later date is due to the drop-off in waste receipt tonnages in recent years (and estimated growth rate). This result is highly contingent on gas sampling and future waste receipts, however, the County should consider the implications of this “unofficial” result since it points to the possible requirement of LFG collection and control over the entire KLF within the contract period with WTEG. Previous sections have already outlined the fact that WTEG will not be providing the County with a permanent collection system that would meet this potential requirement. The County should also be aware that this assumes that the requirement for LFG collection and control will continue to be governed by the NSPS Tier 2 reporting. It is within DEQ’s purview to accelerate the LFG collection and control requirements for the whole site based on the proposed LFG generation rates expected by WTEG. Discussions with Mr. Fisher at DEQ were non-committal in regard to this. Limitations of operational permit requirements Based on discussions with DEQ staff it appears that the DEQ would intend to permit the project on a small scale until demonstration that the project meets the permitting requirements under the RD&D approval and compliance permit process. This seems consistent with HDR discussions with the County and WTEG indicating that WTEG intends to start on a limited area of 4 acres for the first segment of Phase 1 of the project until the system is set up and calibrated to function successfully prior to moving to subsequent segments of Phase 1. We would expect that the DEQ will require monitoring data be provided to DEQ for DEQ approval to continue to additional segments on the lined area of the landfill. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 22 of 33 Aspects of the RD&D rules include the requirement that the proposed project must have an identified environmental benefit, based on sound theory supported by valid empirical evidence that project goals will be achieved, and demonstrate no additional threat to the environment. A portion of the RD&D guidance is below. “For an innovative technology to be eligible for consideration and permitting in Oregon, the proposed RD&D project must be an allowed variance under the Federal Rule and should: (1) have an identified potential environmental benefit over and above any environmental protection or benefit realized by implementing already approved plans and operations; (2) be based on sound technical theory that is supported by valid empirical evidence to confirm that the project goal(s) will likely be achieved by the proposed technology; and (3) demonstrate that it will pose no additional risk to human health and the environment beyond that which would result from a landfill operating under the criteria contained in the existing MSWLF permit and related plan approvals”. The purpose of the project as stated in the WTEG draft RD&D permit application letter is restated, below: The purpose of this demonstration is to provide the County and DEQ with sufficient data to implement a new approach to landfill gas management. The demonstration is designed provide the following information: • That the Subtitle D required depth of leachate over the primary liner not be exceeded, during or after steam injection; • That the use of steam injection will result in earlier waste stabilization; • That steam injection enhances waste stabilization and gas removal; • That the LFG can be scrubbed and sold as a by-product. The above listed purpose includes regulatory compliance and project benefits. We would expect that in addition to continued monitoring of leachate depth on the liner DEQ will also require monitoring for continued compliance with Title V permitting requirements. Based on discussions with Mr. Fisher at DEQ, this will at a minimum require surface emission monitoring in the WTEG operating areas and an approved sampling procedure for the 2013 NSPS Tier 2 reporting. The results of this Tier 2 reporting affect the requirement for LFG collection over the whole landfill – see discussion in previous NSPS section. In general, DEQ will require that emissions stay below regulatory limits even with the WTEG expected large increase in LFG generation. Given the RD&D (both Oregon and Federal) goals we will expect that DEQ will at a minimum require monitoring of waste as a means to demonstrate the environmental benefit of the project. We would expect this will be required through monitored of increased settlement, leachate quality monitoring, gas monitoring, etc. This may require compilation of baseline settlement rates, leachate quality information and trends, and gas removal rates Demonstrating sound technical theory supported by valid empirical evidence to confirm the project goals will likely be achieved would by definition require that the empirical evidence be acquired by means of observation or experimentation. It would appear that the bioreactor WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 23 of 33 research to date shows that addition of liquids to landfills increases LFG production and waste stabilization and is therefore similar to the theory of steam injection proposed. General potential permitting hurdles or fatal flaws Based on HDR review of provided information and discussions with WTEG, the County, and regulatory staff noted above it does not appear that there is a fatal flaw that would prevent WTEG proceeding with the project in a demonstration mode under the current regulations in- place. Likewise, if the initial segment of the project is approved by DEQ and others requiring permits and proves successful in meeting and demonstrating the RD&D goals, one would expect that it would be allowed to continue. However, we expect that there will be hurdles in permitting and compliance that should be considered by the County. These include the monitoring and compliance requirements and potentially public or environmental opposition. We have included reference to expected minimum monitoring requirements from DEQ to demonstrate project goals. Those items are not an exhaustive list and DEQ may also require more monitoring parameters to demonstrate meeting of project goals and benefits in addition to the compliance monitoring that will need to be continued for the landfill as well as expanded for the proposed project. Many of the early bioreactor projects required significant monitoring of many waste parameters (temperature, moisture, etc.) as data was compiled by the USEPA. We do not expect the same level of those older projects; however, we expect the monitoring will be a significant increase over the current monitoring projects. HDR understands from discussions with the County and DEQ that there has been opposition to the project at public meetings including that from neighbors and other outside groups. We would expect that this opposition will continue to be a hurdle if the County and WTEG proceed with the permitting process. We understand that the land use permitting also will include local policy maker input. The scope of this TM does not include a discussion or evaluation of public input as it related to permitting and we assume that the County is best suited to assess those conditions. Financial Review HDR performed a review of the financial aspects of the project as proposed by WTEG. The review was conducted on the financial information provided in WTEG’s Executive Summary dated February 7, 2013 and supplemental information provided by WTEG from follow-up questions. This information included: • Revenue projections; • Staff and personnel breakdown and estimated costs; • Capital and Project costs including: - Estimated total organics; WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 24 of 33 - Plant and machinery; - Service equipment; - Operating costs; and • Cash flow Year 1 to12. WTEG’s information was provided based on the steam injection project described in their February 7, 2013 document and discuss in the Technical Review Section of this Technical Memorandum. Although HDR has reviewed and analyzed all available WTEG economic information, for this report we have removed all of these economic figures as they are proprietary to WTEG and their development efforts. HDR has provided review below by section of the financial information WTEG provided. Revenue Projections In calculating revenues, WTEG assume that 355 tons of organics per day would be available over a four (4) acre area. They assumed injecting steam into this four (4) acre parcel using 19,880 gallons of water per day. WTEG calculated that the production potential using these assumptions was to produce 2,556 mmBtu per day of CH4 pipeline quality gas. WTEG also assumed that they could operate 355 days per year (97.2% availability factor) and garner a long-term contract starting in Year 1 at $7.00 per mmBtu. This translates into $17,892 per day or $6,351,660 per year in revenues as shown by WTEG and Table 1. In future years the $7.00 per mmBtu was escalated at 2% per year. Table 1 - WTEG’s Revenue Projections As discussed in the Technical Review Section of this Technical Memorandum HDR ran several landfill gas generating scenarios and arrived at much lower landfill gas generation amounts. HDR’s opinion is that gas generation at the KLF will not match the estimated quantities purported by WTEG. However, the steam injection and collection process should not be detrimental or cause undo harm to the KLF. The greatest technical risk is penetration of the cell liner, but this can be mitigated similar to installation of conventional landfill gas wells by means of accurate as-built information and recent survey elevations. The greatest financial risk is the effect that decreased gas production will have on the WTEG’s published financial information. HDR has run sensitivities No. 1 and No. 2 below representing lower gas generation figures and Knott Landfill Potential Purchase Product Price Quantity Units Per Day Annually * CH4 Pipeline Gas 7.00$ 2,556 mmBtu 17,892$ 6,351,660$ 355 * Days of Continuous Operation 355 Landfill Organics (tons per day) 19,880 Gal of water/day required 4 Acres Steamed Injected Revenue Projections WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 25 of 33 how that affects the revenues and overall economics of the project. All sensitivity runs are discussed below in the section entitled Economic Sensitivities. WTEG also assumed that the project would operate at a 97.2% availability factor (355 days per year). We believe for a project of this type, using somewhat new technology a 90% availability factor might be more appropriate. This represents about 328 days per year of operation and allows for 2 to 3 weeks of planned downtime for maintenance and 2 to 3 weeks for unplanned downtime. HDR has run Sensitivity No. 3 to show the how the lower availability affects the overall economics. WTEG has assumed garnering a long-term contract for CH4 pipeline quality gas starting in Year 1 at $7.00 per mmBtu. At the time of this report, WTEG has only provided a list of three potential buyers including: 1) the Northern California Power Agency (NCPA), 2) Noble Americas Energy Solutions and 3) Direct Biogas. A letter of interest was provided to WTEG by Noble located in San Diego, California. In addition, a draft gas purchase agreement between NCPA and WTEG was presented. WTEG indicated that as part of the funding process, WTEG and the investment group will select the buyer based on credit worthiness and rates. WTEG indicated that in recent discussions, they have markets for green gas for their fuel cell and LNG customers t hat will pay $7.00 - $8.00 per mmBtu, however as there is not yet a signed contract for the purchase of the gas produced at the KLF, the price could fluctuate. HDR has run Sensitivity No. 4 below to show the affect of the price lowered to $5.00 per mmBtu. In WTEG’s financial model they have assumed an inflation escalator of 2% per year for revenues starting in Year 3 of their 12 year projected model and a 3% per year inflation escalator for expenses starting in Year 3 (some line items were escalated in Year 2 as well). As no one can accurately predict the future price of CH4 pipeline quality gas, the assumption of a 2% per year escalation cannot be commented upon. However, we believe it is good economic conservatism to show a lower escalation rate of 2% per year for revenues as compared to a 3% per year escalation rate for expenses as WTEG has allowed in their projections. Staff and Personnel Estimates WTEG has included certain plant staff and administration personnel to operate and manage the Project. The plant staff includes three general laborers, one each available for all three shifts during a 24 hour period as well as one Site Engineer available for one shift per day. In addition, WTEG included one full time General Manger and a half-time IT Specialist and a half-time Accounting/Payroll Clerk. Capital and Project Costs This section contains information on the Plant and Machinery, Service Equipment, Operating Costs and a Summary as shown below. Plant and Machinery WTEG has proposed the following Plant and Machinery items in their financial model. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 26 of 33 • Building; • PPT Profiling, Steam Injection System, & Gas Collection Installation; • Biogas Purification and Scrubbers Systems; and • Inter-Connect and Compression Systems. WTEG has also included Engineering and Permits costs, Project Development costs and a 10% contingency of all of the items listed above. Building WTEG has included a building in their financial estimate. No details were included to the size, location or purpose of this building. HDR believes it is reasonable to include a building for the Project but does not understand the need for a building which appears to be too large and/or using costly construction. We believe it would be reasonable to build a smaller less expensive building to house the equipment and some small office space. PPT Profiling, Steam Injection System, & Gas Collection Installation WTEG included a detailed breakdown for the cost of PPT Profiling in their February 7, 2013 Executive Summary document. This estimate for PPT Profiling appears reasonable as a contingency was added to it of 10 percent. There were no costs provided for review for the Steam Injection System or the Gas Collection System Installation. HDR was only provided a total for all three cost items; not detailed by item. HDR did not receive any detailed information on these two system components to comment on the assumed cost of installation. However, it would appear that this cost may be reasonable, although HDR would have liked to reviewed the details to the overall cost assumption to verify this. Biogas Purification and Scrubbers Systems WTEG provided a detailed cost proposal from Generon IGS, Inc. for providing a Containerized Membrane System for Biogas Purification & Compression for a Design Product Capacity of about 2.35 MMSCFD (1,630 SCFM). We have seen other similar systems cost almost 2 to 3 times as much as WTEG’s estimate. However, since this technology is ever evolving and prices tend to drop as technology evolves and a detailed cost proposal was provided to back up the cost from Generon IGS, Inc. we assume that this cost is reasonable for this item. However, the County and WTEG should keep close on the cost of this item as it is installed. Inter-Connect and Compression Systems WTEG did not include any details regarding assumptions to the make-up of this total cost. It would appear that this cost would be reasonable, however HDR would have liked to review the details to the overall cost assumption to verify that indeed it was reasonable. Other This category includes Engineering and Permits, Project Development and a 10 percent Contingency. Engineering and Permits appears to be reasonable at about 7 percent of the WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 27 of 33 capital costs for engineering, however although permitting for this first phase at the KLT appears to be straight forward, WTEG will not know for sure until permitting is initiated. Project Development appears reasonable and WTEG’s use of 10% as a contingency is comparable to other projects at this stage and size. Service Equipment Although WTEG included this line item for Service Equipment in their financial model, no actual cost was included for this item in WTEG’s financial information. Operating Costs WTEG included in their financial information regarding annual operating costs for staff and personnel as well as operation costs including insurance, legal, utilities, technology license fees, maintenance, service contracts, and a 10 percent contingency. These annual costs are not recognized in full in the Cash Flow Year 1 to 12 model until Year 2 when the Project is first shown to operate full time. It should be noted that the cost for technology license fees are not included in the annual model. HDR is assuming that this is a one time fee for the Project and will be included in the Capital Costs for financing. As discussed above, the staff and personnel costs appear reasonable. So do the insurance, legal costs, service contracts, and a 10 percent contingency. However, we believe the maintenance and utilities costs may be on the low side of similar projects we have reviewed previously. Although this is the case, we believe it is potentially reasonable that the maintenance cost of this Project could be as low as projected. WTE will need to continuously monitor these costs to keep them within budget. In addition, the Generon system specifications provide for feed gas compression for the PSA system, as well as product gas compression to pipeline pressures. This is stated to require 2,000 horsepower compression capacity. Basic order of magnitude calculations with generous power-factor assumptions and electricity rates yield electricity costs on the order of $500,000 per year to run this process. We believe this figure is reasonable; however WTEG needs to monitor their power and water usage. Cash flow Year 1 to12 WTEG included a cash flow model for Years 1 to 12. WTEG’s model shows that the Project would be only operating at about 50 percent availability during Year 1. Escalation for inflation appears for Revenues starting in Year 3, while escalation for inflation for the Operating costs begins in Year 2 and 3, depending on the line item. Also as discussed above, the technology license fees are not included in the annual model. Neither is any representation of the capital costs for this Project in the form of a debt service or other financial obligation. Although we understand that the County will not be charged for any capital costs to develop, construct or finance the infrastructure for the Project, the Project will incur these costs and they need to be accounted for in the cash flow to show a true representation of the revenues and expenses (including debt service representing the capitalized items that should be reflected in an annual amortized amount). HDR has run WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 28 of 33 Sensitivity No. 5 below to show the affect of adding the expenses for capital to the cash flow model. Economic Sensitivities As discussed above, five (5) sensitivities to WTEG’s base case financial model were run by HDR to determine how they would affect the overall economics. The actual WTEG model was used running the different assumptions described below. The output for each sensitivity will be shown using the Year 1 to 12 Cash Flow Model. The scenarios include: • Sensitivities No. 1 and No. 2 representing two separate reasonable lower gas generation figures and how these affect the revenues and overall economics of the project; • Sensitivity No. 3 representing how a lower but reasonable availability of 90% affects the overall economics; • Sensitivity No. 4 representing the affect if the contract price of pipeline CH4 were reduced from $7.00 per mmBtu to $5.00 per mmBtu; and • Sensitivity No. 5 representing the affect of adding the expenses for capital (which are real costs that need to be account for) to the cash flow model. Sensitivity No. 1 As discussed in the Technical Review Section, WTEG estimated approximately 2,556 mmBtu/day of pipeline quality gas from a 4-acre parcel of the KFL using their steam injection process. WTEG also predicts a minimum of 60% methane in the landfill gas generated. Conversion using the nominal heating value of methane at approximately 1,000 Btu/cubic foot yields an estimated raw landfill gas flow rate of 2,958 cubic feet per minute (cfm) at 60% methane. For Sensitivity No. 1 HDR utilized Scenario 3 as shown in the Figure 1 graph in the Technical Review Section. This Scenario represents recirculation of liquids and the maximum LandGEM field bioreactor modeling values possible for K and Lo 16. Modeling of this scenario shows that the peak landfill generation would be in 2013 with 1,994 scfm at 60% methane. This translates to approximately 1,723 mmBtu/day of pipeline quality gas being generated.17 Although this is the maximum value modeled by LandGEM for a field bioreactor condition, it is still less than the 2,556 mmBtu/day WTEG has used in modeling their gas revenues. This sensitivity will only affect the base case by lowering the amount of gas produced and the revenues generated. Sensitivity No. 2 As discussed for Sensitivity No. 1, using the information provided by WTEG and the nominal heating value of methane at approximately 1,000 Btu/cubic foot yields an estimated raw landfill gas flow rate of 2,958 cubic feet per minute (cfm) at 60% methane. For Sensitivity No. 2 HDR utilized Scenario 2 as shown in the Figure 1 graph in the Technical Review Section. This Scenario represents recirculation of liquids and the industry-published bioreactor parameters for 16 Note that this is roughly 3 times the Miramar pilot study field results and Scenario 2 of Figure 2. 17 1,994 scfm * 600 Btu/scf * 1 Btu/1,000,000 mmBtu * 1,440 min/day = 1,723 mmBtu/day WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 29 of 33 K and Lo. Modeling of this scenario shows that the peak landfill generation would be in 2013 with 1,021 scfm. This translates to approximately 882 mmBtu/day of pipeline quality gas being generated.18 This is the flow rate using industry published values for field bioreactors; however this amount is much less than the 2,556 mmBtu/day WTEG has used in modeling their gas revenues. This sensitivity will only affect the base case by lowering the amount of gas produced and the revenues generated. Sensitivity No. 3 WTEG assumed that the project would operate at a 97.2% availability factor (355 days per year). We believe for a project of this type, using somewhat new technology a 90% availability factor is more appropriate. Running this sensitivity would mean that the facility would be less available and produce less pipeline gas for sales than WTEG originally assumed. All other costs such as personnel, insurance, legal, etc. would remain the same except for utilities. For this sensitivity HDR assumed reducing both the product pipeline gas and the utilities usage from 97.2% availability to 90% availability. The “Net Revenues” remains positive in this sensitivity. Sensitivity No. 4 WTEG assumes that they will be able to garner a long-term contract for pipeline CH4 at starting in Year 1 at $7.00 per mmBtu. There are currently no contracts signed at this price. This sensitivity shows the affect on the revenues and the overall economics by using a figure of $5.00 per mmBtu for the pipeline gas sold. Only the rate of cost for the sales of gas is modified for this sensitivity. The amount of gas assumed to be produced by WTEG is used in this sensitivity. The “Net Revenues” remains positive in this sensitivity. Sensitivity No. 5 HDR modeled Capital costs by amortizing them to an average annual payment through amortization of the costs using a 5 percent interest rate and a 12 year term. This would decrease the net cash flow each year by almost half. HDR has added this amount to the sensitivity. The amount of gas assumed to be produced by WTEG is used in this sensitivity. HDR believes this amount should be added to all sensitivities. This reduces all “Net Revenues”. Financial Review Summary In summary, HDR believes that all sensitivities and the Base Case should include the required cost for the Capital equipment and support costs. These need to be taken into account in most 18 1021 scfm * 600 Btu/scf * 1 Btu/1000000 mmBtu * 1440 min/day = 882 mmBtu/day WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 30 of 33 any cash flow to get an accurate reading of the overall economics. Although as we understand, the County will not be paying for any of these Capital costs, the cost will still be a part of the overall economics and the Project must be looked at with a full accounting of costs and revenues. Accounting for these Capital costs shows that the Base Case and all other sensitivities should be lowered. Sensitivities using lower gas generation rates have the most impact on the overall economics. If the Project does not generate the amount of product gas for sale as WTEG has proposed, the Project will have a difficult time being economic feasible. One other issue that can cause an issue with the Project being economically feasible is the price that WTEG contracts for the pipeline gas sales price. The combination of price per mmBtu and the amount of mmBtu’s produced drives the economic feasibility. Risk Allocation Review HDR has included potential risks below area of review including technological, permitting/regulator financial as well as contractual risks. Technical Risks Technical risks were assessed by reviewing WTEG’s technical considerations for the Project and all available supporting documentation and assumptions. HDR concludes that the following potential risk should be taken into account by the County when considering this project. • HDR’s opinion is that gas generation at the KLF will not match the estimated quantities purported by WTEG. However, the steam injection and collection process should not be detrimental or cause undo harm to the KLF. The greatest technical risk is penetration of the cell liner, but this can be mitigated similar to installation of conventional landfill gas wells by means of accurate as-built information and recent survey elevations. • WTEG proposes an optimal liquid requirement of approximately 5,000 gallons/acre/day. The issue of note for the proposed WTEG project at the KLF has to do with the sourcing of this quantity of liquid. KLF currently has approximately 38 acres of lined cells which generate a normalized annual average of approximately 287,000 gallons/month (9,500 gallons/day). This quantity is far short of the 20,000 gallons per day for a 4-acre steam injection tract • The proposed project does not provide the County with a working gas collection system after WTEG leaves each 4-acre tract. The County will be relying upon WTEG’s assertion that “all” gas has been extracted from each 4-acre tract. However, once WTEG leaves an area, fugitive gas emissions could be higher than prior to the project (due to the effects of the steam injection). The County should consider how this gas will be collected and controlled. • The proposed project does not provide for increasing flaring capacity at the site to handle the increased gas production. Industry standard practice is that the back-up control device has sufficient capacity to handle all LFG collected. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 31 of 33 Permitting/Regulatory Risks Discussion with regulatory agencies (see Permitting Section) have left open the possibility of triggering enhanced surface monitoring (at a minimum) and/or adjustment of New Source Performance Standards (NSPS) Tier 2 reporting. Although regulatory agencies seem receptive to the process there are still compliance risks to the County as the permit holder if WTEG does not operate the LFG collection system adequately to maintain compliance. Financial Risks Financial risks were assessed by reviewing WTEG’s financial modeling for the Project and all available supporting documentation and assumptions. HDR concludes that the following potential risk should be taken into account by the County when considering this project. • We understand that WTEG intends to obtain private financing for this project. WTEG did not provide any financial or financing information for review 19. As such, the County should require WTEG to provide a letter from their financial institution representing their support for this project. The ability to finance this project will be a direct factor affecting the viability of the project, and therefore a relative potential risk to the County. • HDR has reviewed the amount of gas WTEG estimates will be produced in the Project. From our analysis and detailed modeling we do not agree with the amounts being estimated by WTEG, we believe the amount generated will be between approximately 35 and 65 percent of the 2,556 mmBtu/day estimated by WTEG. This may leave the Project economically unfeasible. • Although WTEG has indicated that they have been in discussions and negotiating for a sales price of the pipeline gas, not contract has been signed to date. WTEG has used a price of $7.00 per mmBtu which may be reasonable in the current market, however if the contract is signed for much less than this amount, such as $5.00 per mmBtu, the Project may have difficulties being financially feasible. • WTEG should have included the required cost for the Capital equipment and support costs in their Cash Flow Model. These need to be taken into account in most any cash flow to get an accurate reading of the overall economics. Although as we understand, the County will not be paying for any of the Capital costs, the cost will still be a part of the overall economics and the Project must be looked at with a full accounting of costs and revenues. Contractual Risks HDR reviewed a draft contract between WTEG and the County that was provided by the County via email in October 2012. It contained many track changes comments, edits and clauses that were pending and need to be resolved between the parties. Upon review HDR identified potential risks and areas of concern and has the following recommendations to the County regarding the agreement reviewed: 19 The review of the viability of financing of the WTEG proposed project is not within HDR’s scope of services for the project involving developing this TM. WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 32 of 33 • Term of 15 years may be too long; needs to be consistent with term for payback of capitalized equipment • Clause for two automatic extensions should be just one extension based upon their performance over the original term of the agreement. • This agreement should only define Phase 1 as this project needs to be proven before Phases 2 or 3 are considered. • Definitions – specifically for locations, “commercial operations date”, “gas rights” (not a good term). • Since this is a “research and development” type project, the County should not allow delegation of this contract unless consent is granted by both parties. The language “such consent shall not be unreasonably withheld” from the contractor makes it open for delegation to be made to anyone the contractor chooses and not who the County approves of. • The cure period should be consistent and be not more than 30 days without the written approval of the County. • The contractual clause; “County reserves the right to suspend operation of the technology at any time should continued operation pose a significant threat to human health or the environment.” Should include the added words, “at any time”. • The 2 year suspension clause should be reduced to one year so the County is not tied to the Contractor and can seek other technologies to handle the landfill and its gas. During the one year suspension, the Contractor should be required to report progress towards regaining operations on a periodic basis. • County and Contractor cooperation should have County added to the clause so that the County is cooperated with as well. • Environmental attributes such as tax credits, grants, and rebates can be provided to the Contractor; however the County should still be able to collect carbon credits. If not , the County should use their potential collection of carbon credits when negotiating the final financial terms. • The contract should include a clause for a 3rd party review if parties do not agree on issues pertaining to the contract. • The WTEG requirement for 500 hours of the County’s employee is almost ¼ quarter time employment. If this is required by the Contractor and the County is amenable to this clause the County should include an additional clause that warrants that the employee or the County is not responsible for any damages created by the employee as directed by the Contractor. • Need to have protection in the contract that Contractor’s obligations in no way interfere with County’s responsibilities to operate and maintain the Landfill according to industrial standards and DEQ regulations. • Under County Obligations the following clause should be edited as shown. “Operate the landfill in a manner that that follows the County’s needs and protocols and does not hinder Contractor’s LFG enhancement activities and that does not interfere with the System, provided that such requests of Contractor do not cost the County additional monies, cause a violation of DEQ operational permits or deviate from the standards of good industry practices.” WTEG Technical Review HDR Engineering, Inc. 2365 Iron Point Road, Suite 300 Folsom, CA 95630 Phone (916) 817-4700 Fax (916) 817-4747 www.hdrinc.com Page 33 of 33 • This contract should be based upon what has been landfilled to date and does not include the use of any new materials that is provided to the Landfill. The County has the right to direct its waste and potential divertible materials as it wishes. • Access to the site should be limited to only the hours the County is permitted for operations. • Contractor should not violate any permit conditions through operation of their project. If Contractor triggers revision to the County’s Title 5 permit, the Contractor shall be responsible for all costs. • Financial terms should be negotiated to include a base payment figure by the Contractor as suggested at $20,000 per month. However if “net revenues” from the project increase above $200,000 per month, the County shall, in addition to the base payment of $20,000 per month, garner a royalty payment of 10% of the net revenues from the project. The term “net revenues” should be defined in the agreement addressing all costs to be reflected for reducing the “gross revenues” to “net revenues”. • Collection system requirements should be include, or clearly state what is not included. The collection system should be subject to County approval. • County should be aware that WTEG systems will not be in compliance with NSPS regulatory criteria if that should be become a requirement. • Need clear delineation of responsibility for monitoring and data collection that may be required to comply with RD&D permit (or other permitting). • Flare capacity – highly recommend the site have flare capacity for ALL collected gas. Best management practice and regulatory requirement in case all conversion technology goes down. • Need milestones tied to termination, so that project cannot sit undeveloped for too long waiting for WTEG funding or end-user power purchase agreement negotiations. • Not clear if County will allow WTEG to utilize/sell the LFG currently collected in the County system • Language that clearly denotes space for the Contractors operations. Usually denoted by a map, with a simple sublease for a nominal ($1/year) fee. • If for any reason, the collection system in that area becomes required by regulation (NSPS most likely), the County will need access to monitoring data. • Recommend County petition to keep all “subsurface” attributes upon termination of the contract. This will preserve a collection system in place if WTEG is displaced. • Recommend section on migration control and surface emissions and odors as primary goals of County and that WTEG may be required to modify operations to address (and these modifications could lead to less LFG conversion and sale). Language can be negotiated. ATTACHMENT A Figure 1 LandGEM Model Summary and Assumptions Component1 Percent by Weight Wet Faction per Kg MSW Moisture Content (% by wt)2 Dry Faction 100 Kg Rate, (yr based M × k × η (m3/dry M × L MC MSW-Food Waste 9.0% 70.0% 13.63 122.67 220 594 MSW-Paper 26.4% 5.5% 21.56 569.18 136 3393 MSW-Yard Waste 7.2% 60.0% 18.73 134.86 144 414 MSW-Wood 1.2% 20.0% 7.16 118 113 MSW-Misc 16.2% 5.0% 0.05 170 2616 C&D-Wood5 40.0% 20.0% 7.16 286.40 118 3776 Total 100.0% 78.88 10,906 Job No. No. HDR Engineering, Inc. Project Deschutes Computed KS Date 1/24/2012 Subject Calculation of site specific "Lo" & Lab "k" Checked JM/CL Date 2/15/2013 Task Sheet 1 Of 3 The efficiency of actual landfill compared to laboratory scale experiment (η)= 100% (assumed variable) t,w lab t,d o C&D (Wood) fraction = 40 % MSW fraction = 60 % Bulk waste reaction rate = 11.23 yr-1 Bulk waste L0 = 138 m3/dry Mg Bulk waste L0 = 109 m3/wet Mg Notes 1. Waste composition is based on Table 4-2 of the "Solid Waste Engineering Principles & Mgmt Issues" by Tchobanoglous et. al (1997) - Book Published by McGraw-Hill. 2. Moisture content is based on Table 4-3 of the "Solid Waste Engineering Principles & Mgmt Issues" by Tchobanoglous et. al (1997) - Book Published by McGraw-Hill. 3. Reaction rate (k) values are based on Lab scale experiments performed by Cruz et. al. (2010) and Owens et. al. (1993). 4. Methane generation potential (Lo) values are based on Cruz et. al. (2010), Eleazer et. al. (1997), Owens et. al. and Staley et. al. (2006). The average is used as applicable when reported. 5. Misc wastes consists of Textile, Leather, Plastics, Metals and residue. These components are not readily biodegradable but have high energy content. Therefore, k and Lo were picked based on LandGEM. 6. Per 12-27-12 email from Timm Shimke: "I estimate that we average about a 60% MSW and 40% C&D split although our C&D stream contains very little inert materials. Rock, dirt, asphalt and concrete have always been directed to other disposal sites." Therefore, C&D Waste is assumed as primarily wood. References 1. F. De La Cruz, M. Barlaz, "Estimation of Waste Component-Specific Landfill Decay Rates Using Laboratory-Scale Decomposition data", Environmental Science and Technology, vol. 44, no. 12, 2010, pp. 4722-4728. 2. W. Eleazer, W. Odle ΙΙΙ, Y. Shengwang, M. Barlaz, "Biodegradability of Municipal Solid Waste Components in Laboratory-Scale Landfills", Environmental Science and Technology, 31, 911-917, 1997. 3. B. Staley, Fangxiangxu, S. Cowie, M. Barlaz, G. Hater, "Release of Trace Organic Compounds during the Decomposition of Municipal Solid Waste Components", Environmental Science and Technology, 40, 5984-5991, 2006. 4. J. Owens, D. Chynoweth, "Biochemical Methane Potential of Municipal Solid Waste (MSW) Components", Water Science and Technology , Vol.27, No. 2, pp. 1-14, 1993. Job No. No. HDR Engineering, Inc. Project Deschutes Computed KS Date 1/24/2012 Subject Modeling Scenarios Checked JM/CL Date 2/15/2013 Task Sheet 2 Of 3 HDR Assumptions Heat Content of Methane = 1000 BTU/scf Percent Methane in Landfill Gas = 60% Claimed Parameters by the Developer Claimed landfill gas flowrate = 2556 mmBTU/day COLLECTION FROM 4 ACRE AREA Landfill gas (LFG) flowrate = 2,958 scfm COLLECTION FROM 4 ACRE AREA To evaluate the spectrum of landfill gas generation, five scenarios were considered for LandGEM modeling. The Methane Generation Rate (k) and Methane Generation Potential (Lo) for the five scenarios were developed as discussed below: Scenario No. Description k (per yr) Lo (m3/Mg) 1 Scenario is based on typical landfill conditions used to model LFG flowrates anticipated to design initial LFG collection systems at landfill facilities (AP-42 Parameters). Assumes NO re-circulation of liquids. 0.04 100 2 1 Scenario is based on published landfill bioreactor conditions. k value is based on published data and Lo value is developed based on Deshutes site specific conditions2 (see k & L sheet) 0.30 109 3 Scenario is based on LandGEM maximum bioreactor values (wet conditions and high energy waste types) - a hypothetical high energy bioreactor 0.70 170 4 Scenario is based on lab maximum conditions specified on k & L Sheet 11.23 109 5 Scenario represents absolute maximum methane generation. k value developed based on lab data & Lo is based on LandGEM maximum 11.23 170 Notes: 1. k value is based on: Faour, Ayman A., Reinhart, Debra R., and You, Huaxin. (2007) “First‐order kinetic gas generation model parameters for wet landfills.” Waste Management 27 (2007), 946–953. 2. k & L Sheet calculates laboratory conditions. Note that Lo is inherent property of waste material (based on constituents) and will remain same for waste regardless of lab or field conditions. 0 Job No. No. HDR Engineering, Inc. Project Deschutes Computed KS Date 1/24/2013 Subject LandGEM Results Checked JM/CL Date 2/15/2013 Task Sheet 3 Of 3 Proposed LFG Generation from 4-Acre Tract at KLF LFG Generation Spectrum 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Year Scenario 1 - Typical AP-42 parameters K (methane degradation rate) & Lo (methane generation potential). No recirculation of liquids. Scenario 2 - Recirculation of liquids. Published field bioreactor parameters K and Lo Scenario 3 - Recirculation of liquids. Maximum field bioreactor LandGEM values for parameters K and Lo Scenario 4 - Maximum lab values for parameters K and Lo. Optimum lab conditions for site-specific KLF waste. Scenario 5 - Absolute maximum values of Scenarios 1 through 4 for parameters K and Lo. Optimum lab conditions for generic MSW. Proposed - Proposed value of 2,958 scfm based on WTEG estimate of 2,556 mmBtu/day at 60% methane. ATTACHMENT B Figure 2 LandGEM Model Summary and Assumptions Component1 Percent by Weight Wet Faction per Kg MSW Moisture Content (% by wt)2 Dry Faction 100 Kg Rate, (yr based M × k × η (m3/dry M × L MC MSW-Food Waste 15.0% 70.0% 13.63 204.45 220 990 MSW-Paper 44.0% 5.5% 21.56 948.64 136 5655 MSW-Yard Waste 12.0% 60.0% 18.73 224.76 144 689 MSW-Wood 2.0% 20.0% 7.16 14.32 118 189 MSW-Misc5 27.0% 5.0% 0.05 170 4361 Total 100.0% 78.13 11,883 Job No. No. HDR Engineering, Inc. Project Miramar Computed KS Date 1/30/2013 Subject Calculation of site specific "Lo" & Lab "k" Checked JM/CL Date 2/15/2013 Task Sheet 1 Of 3 The efficiency of actual landfill compared to laboratory scale experiment (η)= 100% (assumed variable) t,w lab t,d o Bulk waste reaction rate = 13.94 yr-1 Bulk waste L0 = 152 m3/dry Mg Bulk waste L0 = 119 m3/wet Mg Notes 1. Waste composition is based on Table 4-2 of the "Solid Waste Engineering Principles & Mgmt Issues" by Tchobanoglous et. al (1997) - Book Published by McGraw-Hill. 2. Moisture content is based on Table 4-3 of the "Solid Waste Engineering Principles & Mgmt Issues" by Tchobanoglous et. al (1997) - Book Published by McGraw-Hill. 3. Reaction rate (k) values are based on Lab scale experiments performed by Cruz et. al. (2010) and Owens et. al. (1993). 4. Methane generation potential (Lo) values are based on Cruz et. al. (2010), Eleazer et. al. (1997), Owens et. al. and Staley et. al. (2006). The average is used as applicable when reported. 5. Misc wastes consists of Textile, Leather, Plastics, Metals and residue. These components are not readily biodegradable but have high energy content. Therefore, k and Lo were picked based on LandGEM. References 1. F. De La Cruz, M. Barlaz, "Estimation of Waste Component-Specific Landfill Decay Rates Using Laboratory-Scale Decomposition data", Environmental Science and Technology, vol. 44, no. 12, 2010, pp. 4722-4728. 2. W. Eleazer, W. Odle ΙΙΙ, Y. Shengwang, M. Barlaz, "Biodegradability of Municipal Solid Waste Components in Laboratory-Scale Landfills", Environmental Science and Technology, 31, 911-917, 1997. 3. B. Staley, Fangxiangxu, S. Cowie, M. Barlaz, G. Hater, "Release of Trace Organic Compounds during the Decomposition of Municipal Solid Waste Components", Environmental Science and Technology, 40, 5984-5991, 2006. 4. J. Owens, D. Chynoweth, "Biochemical Methane Potential of Municipal Solid Waste (MSW) Components", Water Science and Technology , Vol.27, No. 2, pp. 1-14, 1993. Job No. No. HDR Engineering, Inc. Project Miramar Computed KS Date 1/30/2013 Subject Modeling Scenarios Checked JM/CL Date 2/15/2013 Task Sheet 2 Of 3 HDR Assumptions Waste volume based on 1 Acre Cubed Cell & 50 ft depth = 80,667 cy Density of landfilled waste = 1890 lb/cy Total Design Capacity of 1 Acre Cell = 76,230 tons Assumed Capacity of the Cell in Years = 1 Year (very conservative assumption) Parameters Provided by the Developer Landfill gas flowrate with 1,500 Gal/day water = 228 scfm COLLECTION FROM 1 ACRE AREA Landfill gas flowrate with 5,000 Gal/day water = 1,080 scfm COLLECTION FROM 1 ACRE AREA Methane Content = 66 % To evaluate the spectrum of landfill gas generation, five scenarios were considered for LandGEM modeling. The Methane Generation Rate (k) and Methane Generation Potential (Lo) for the five scenarios were developed as discussed below: Scenario No. Description k (per yr) Lo (m3/Mg) 1 Scenario is based on typical landfill conditions used to model LFG flowrates anticipated to design initial LFG collection systems at landfill facilities (AP-42 Parameters). Assumes NO re-circulation of liquids. 0.04 100 2 1 Scenario is based on published landfill bioreactor conditions. k value is based on published data and Lo value is developed based on Deshutes site specific conditions2 (see k & L sheet) 0.30 119 3 Scenario is based on LandGEM maximum bioreactor values (wet conditions and high energy waste types) - a hypothetical high energy bioreactor 0.70 170 4 Scenario is based on lab maximum conditions specified on k & L Sheet 13.94 119 5 Scenario represents absolute maximum methane generation. k value developed based on lab data & Lo is based on LandGEM maximum 13.94 170 Notes: 1. k value is based on: Faour, Ayman A., Reinhart, Debra R., and You, Huaxin. (2007) “First‐order kinetic gas generation model parameters for wet landfills.” Waste Management 27 (2007), 946–953. 2. k & L Sheet calculates laboratory conditions. Note that Lo is inherent property of waste material (based on constituents) and will remain same for waste regardless of lab or field conditions. 1 ca pa ame e me degrada on a e &me a po en a No ec a o qu d Job No. No. HDR Engineering, Inc. Project Miramar Computed KS Date 1/30/2013 Subject LandGEM Results Checked JM/CL Date 2/15/2013 Task Sheet 3 Of 3 2,500 Miramar Pilot Study LFG Generation from 1-Acre Tract LFG Generation Spectrum 2,000 1,500 1,000 500 0 Year Scenario 1 - Typical AP-42 parameters K (methane degradation rate) & Lo (methane generation potential). No recirculation of liquids. Scenario 2 - Recirculation of liquids. Published field bioreactor parameters K and Lo Scenario 3 - Recirculation of liquids. Maximum field bioreactor LandGEM values for parameters K and Lo Scenario 4 - Maximum lab values for parameters K and Lo. Optimum lab conditions for site-specific KLF waste. Scenario 5 - Absolute maximum values of Scenarios 1 through 4 for parameters K and Lo. Optimum lab conditions for generic MSW. Observed - Observed flow of 228 scfm at Miramar Pilot Study reported by WTEG after adding 1,500 gal/day steam injection. Claimed - Claimed possible flow of 1,080 scfm at Miramar Pilot Study. Theoretical addition of 5,000 gal/day steam injection. Not actually realized. ATTACHMENT C Telephone Conversation Record - Joe Gingerich, Oregon DEQ, 12/11/2012 Project: Deschutes Co LFGTE Steam Injection Review Telephone Record Project No: 000102.0000195546 Date: 12/11/12 Subject: County-WTEG steam injection proposal Call to: Joe Gingerich, OR DEQ Phone No: 503-236-5563 Call from: Mark Urquhart, HDR Phone No: 916-817-4933 Discussion, Agreement and/or Action: Called Joe after return call from telecommuting. I introduced myself and discussed that I wanted his thoughts on permitting requirements for project. Summary of feedback and discussions is below: 1. The unlined phases of the project he would expect would be difficult if not impossible to permit under RD&D. RD&D would cover recirculation and potentially injection into lined landfill. 2. OR is an “approved” state under Federal regulations and can issue permits under RD&D. The Columbia Landfill has an RD&D permitted project. When I asked if he thought there might be some USEPA involvement he thought not, as DEQ has authority to issue RD&D permit without USEPA oversight. 3. Joe said from what he is familiar with about this project it sounds like it may be a good idea if it makes the landfill decompose and become less of a threat to environment sooner. He said he may support “helping to make a good idea happen” as long is it protects the environment according to permits. 4. I asked about additional emission monitoring given increase in gas production and he said that would be handled under the Title V permitting. That is all under DEQ but Mark Fisher of the Bend office would handle the air permitting aspects. 5. Joe said that he would see the process as an “iterative” process where the project would start small and then if successful could be continued. 6. Joe noted that “we have neighbors” that are concerned about health impacts. He that the air emissions compliance aspects would have to be addressed. 7. Joe said he is comfortable about doing a project such as this at the Knott Landfill because it is well designed. It has “overkill” in a liner drainage system with large rock and a drainage net and good LCRS and liner slopes. He would expect very little head on the liner. 8. When I asked about timing he said that the permit renewal for this site (only needed when changes) has been in the works for a while and the thinking may be to wait until the WTEG gets bundled in to process the renewal. He said that it would be possible to hold one hearing for the permit renewal covering both air quality and solid waste issues. Timing to write the permit may be 60 to 90 days but if it gets controversial via public hearings that it is hard to gauge the timing. ATTACHMENT D Telephone Conversation Record - Mark Fisher, Oregon DEQ, 1/30/2013 Project: Deschutes Co LFGTE Steam Injection Review Project No: Telephone Record Date: 1-30-13 Subject: County-WTEG steam injection proposal Call to: Mark Fisher, Oregon DEQ, Air Permitting Phone No: (541) 633-2022 Call from: Joel Miller and Mark Urquhart, HDR Phone No: Discussion, Agreement and/or Action: HDR (Mark Urquhart and Joel Miller) spoke with Mark Fisher of the Oregon DEQ about the proposed WTEG project. Specifically focused on the steam injection and the emissions units anticipated for “Phase 1” project defined by WTEG. Summary of feedback and discussions is below: Agenda (and associated discussions): 1. Introductions 2. Clarification of current air permitting status a. Title V b. Tier 2 c. Notice of Intent to Construct d. Pending RD&D Application (not yet submitted) 3. Question: Are there any current compliance issues with KLF? If so what is the status and requirements. Might any affect the WTEG project? Mark Fisher stated that there have been recent odor complaints from neighbors. Attributes this to the inability of the site to collect all of the LFG being generated because flare capacity is too small. Also stated that the landfill is a pro-active permittee and that no enforcement actions have been taken for this odor complaint. 4. Discussion of future WTEG initial startup period and “Phase 1” WTEG project (to be proposed under RD&D application) Discussion of the role of the RD&D application and the preferred permitting mechanism. Mark stated that all RD&D permitting is handled from the Solid Waste Group (Joe Gingerich), but that certain conditions might be introduced from the air group (mentioned additional surface emissions). Mark stated that the preferred method for permitting these activities through the air group is by means of a Notice of Intent to Construct (Form ND-901). This should be completed in conjunction with RD&D application. Title V permit would not be modified until next renewal. The Notice of Intent to Construct will be reviewed against established emission limits for the site (as set by the existing Title V permit). 5. Proposed potential additional emission sources/units for WTEG Phase 1 Project a. Gas-fired boiler (heating of leachate) b. Generon Scrubber – Carbon dioxide removal and emissions (assume not sequestered). Current estimate of up to 1,775 scfm carbon dioxide emissions. c. Front and back end compression will be electric – assume no emissions. d. Possible increase in flared LFG when processing units are down. e. Possible IC engine generator (not clear if this is part of project) (may invoke Subpart ZZZZ regulations) 6. EPA GHG Reporting Rule – assume no change – must monitor collected and destroyed gas. Mark noted that Oregon has their own GHG Reporting Rule in addition to the Federal rule. 7. Issue/Question: will the enhanced generation of LFG in controllable areas of the landfill (4-acre tracts) affect the NSPS 50 Mg/yr NMOC limit (for the entire landfill), or will the requirement for installation of a GCCS on the entire landfill still be governed by the Tier 1 and Tier 2 reporting (as normal). Mark stated that, at a minimum, the existing Tier 2 Report would require modification or the new Tier 2 Report (due in 2013) would need to take LFG samples from the steam injection areas. Discussion was not conclusive on how the NMOC value would affect the Tier 2 Report or if additional modifications to the report would be required based on the proposed LFG generation rates in these areas. Tier 2 Report relies on NMOC concentration in the LFG (likely not affected by steam injection) and estimated quantity of LFG to estimate a yearly NMOC emission rate. Tier 2 report also governs the requirement for a landfill to install a landfill gas collection and control system (on the whole landfill). 8. Question: RD&D permit proposes surface emission monitoring in initial stages. Will this be required through build-out Phase 1 enhancement of LFG, or will this also continue to be governed (for the entire landfill) by the Tier 1 and Tier 2 reporting (as normal). Mark stated that, at a minimum, likely requirement would be for surface emission monitoring on the current 4-acre steam injection area as well as the previous 4-acres. This would likely be a condition of approval. Additional Discussion: Mark stated that the de-minimis carbon dioxide emissions are 2,766 tons/year at this site. IF WTEG would like to install a scrubber that emits carbon dioxide, the emission rate may be an issue. Mark stated that surface emissions monitoring on the steam injection areas would be a likely condition on approval Mark stated that upgrade of a flare system would be required to have capacity for all collected LFG (even if flare is only used as backup). This would need to be addressed in the Notice of Intent to Construct. WASIE to TO: MR. TIMM SCHIMKE DESCHUTES COUNTY DIRECTOR OF SOLID WASTE SUBJECT: RESPONSE TO HDR TECHNICAL REVIEW DATE: APRIL 18,2013 This memorandum is in response to the HDR Engineering, Inc. (HDR) Technical review of the proposed Landfill Stabilization Project (the "Project") at the Deschutes County Knott Landfill (KLF). WTEG understands HDR's concern about the possibility that gas generation rates may not be as high as WTEG expects. HDR's only source of comparison is a typical bioreactor approach to increased gas production. HDR and the County do not have experience with the proposed "steam injection" which generates the increased gas production predicted. Based on our prior experience, WTEG expects to perform as projected. WTEG has requested a RD&D permit status to record gas productions, monitor and assure public health and safety, as well as, compliance with all regulatory agencies. This will allow WTEG to demonstrate to the County and the DEQ the process, in a safe and environmentally responsible manner. WTEG is pleased that HDR has concluded that our proposal will not increase any environmental or health risks at the landfill. 8 Corporate Park. Suite 300 • Irvine, california 92018 • (949) 274-9634 WASTE to WTEG has thoroughly vetted the "Steam Injection" process with its investment groups to obtain funding from several sources. It should be clear that the financial risk will be borne by the investment group and not by the County. Operationally, all areas of the landfill will maintain compliance at all times. WTEG will work closely with the County and DEQ to monitor the landfill during all phases of operation. In addition, WTEG will also continue to conduct Piezo-Penetrometer Tests (PPT) to monitor progress and check for gas migration as the landfill stabilizes, including those areas that have been treated. Existing wells that are not performing correctly in the gas collection system will be replaced as we monitor the system and oxygen levels. As described in the RD&D permit, the DEQ and County will determine the compliance data to be collected and monitored, pre and post project. WTEG agrees with HDR's assessment of flare capacity. Permitting requires a backup method with the capacity to destroy the collected gas. WTEG will increase the backup flare capacity to be compliant, or use the gas collected in another approved method. For example, WTEG has not determined whether the Project will generate its own power or purchase power from the grid. If WTEG elects to generate its own power, that same generator can be used in conjunction with the existing flare to consume collected gas during an emergency shut-down. WTEG agrees that no one can predict the future price of CH4 pipeline quality gas in today's market. It has never been our intent to rely solely upon this method to generate sustained revenue generation. WTEG and County are evaluating much stronger off-take products (not covered in HDR analysis) which will Significantly increase revenue and mitigate risk. Some of this technology is currently being developed and funded by the same investment groups that have expressed interest in the KLF project. 8 Corporate Park. Suite 300 • Irvine, california 92018 • (949) 274-9634 WASIE to WTEG believes the risks identified by HDR can be mitigated through contract. WTEG and County will continue to work together to finalize a contract that will address these points and allow WTEG to move into a "funding" phase. WTEG appreciates the due diligence done by the County and HDR as we move forward. Regards, Randy Lutz L. Randall Lutz Waste to Energy Group, LLC. Chief Executive Officer 949.274.9634 Office 949.293.9740 Mobile 8 Corporate Pari< • Suite 300 • Irvine, California 92018 • (949) 274-9634 To: Deschutes County Board of Commissioners From: Judith Ure, Department of Administrative Services Date: June 20, 2013 Subject: Economic Development Loan Requests Attached are briefing papers describing two economic development loan requests scheduled for discussion during the Board’s June 26, 2013 work session. Both requests have been reviewed by Economic Development for Central Oregon (EDCO) and evaluated by EDCO’s Due Diligence Committee. The resulting recommendations are as follows: Vantage Clinical Solutions, Inc.: $10,000 LMH Industries, Inc.: $40,000 Representatives from EDCO will be attending the June 26 meeting to provide additional information and to answer any questions Board members may have. The Deschutes County Economic Development Fund currently has a cash balance of approximately $142,000. This balance reflects loan repayments received year-to-date as well as loans and grants approved and paid during this fiscal year, including: December 19, 2012: Consumer Cellular - $50,000 January 17, 2013: Energyneering, Inc. - $34,000 March 16, 2013: Venture Catalyst Program - $20,000 June 13, 2013: NAVIS - $50,000 An additional $25,000 payment to the Redmond Airport in support of the new direct flight service to Los Angeles is pending based on the Board’s approval of modifications to the resolution that governs the Economic Development Fund. If the revised language and payment are approved, the fund balance available for new loan requests, including those described above, will be approximately $117,000. Please contact me if you have any questions concerning the Economic Development Fund or Economic Development Loan program in advance of the June 26 meeting. -- -- ~ u ro r-~ -c c :J u.. C ro o --I -OJ ..c ro > t:l.O ~ o u.. BRIEFING PAPER FOR Vantage Clinical Solutions, Inc. Request for Deschutes County Forgivable Loan May 1, 2013 Company Request: $10,000 EDCO Recommendation: $10,000 Proposed Job Creation within 12 months of March 4, 2013: 5 new employees Average Pay for New Employees (all positions, excluding commissions): $40,600 Industry: Software and Medical Billing Solutions for Medical Clinics Website: www.VantageClinicalSolutions.com Company Background: Vantage Clinical Solutions is a business-to-business services company which specializes in the healthcare sector. The company was founded in 2007 and has grown to eleven employees (nine of which have been added in the last three years) serving clients in 20 states. The central tenet of the company is to “improve healthcare through entrepreneurship”. Vantage accomplishes this through providing a variety of needed business and medical services (primarily software and billing solutions) to small healthcare practices in order to improve competitiveness in the markets their customers serve. Vantage services 24 clients currently (90% outside Central Oregon) and is expanding service to existing clients while bringing more on each month. With many changes occurring in the healthcare sector, Vantage has uniquely positioned itself to be competitive despite trends showing movement of practitioners to larger medical facilities and practices. Vantage focuses on a core group of entrepreneurial medical professionals that service rural areas and/or find benefits in maintaining smaller, more specialized clinics. Based on projected growth of new customers as well as providing additional services to existing clients, Vantage plans on adding at least five more employees to its team. These positions include a software developer, business services manager, client services administrator, and two medical billers, all full-time positions. Forecasted average salary for these positions is $40,600, not including benefits. The $10,000 in Deschutes County Forgivable Loan funds will go towards purchases of new server and computer equipment and build-out critical to the company’s next phase of growth. Vantage’s capital investment will include data warehousing development, an additional server, enterprise software, and five new computers. Total investment for this expansion will total around $60,000. EDCO Recommendation A due diligence process was completed by the Bend Deschutes County Forgivable Loan Due Diligence Committee on May 1 st , 2013. The participants in the review included, Bruce Barrett, Business Consultant; Bill Kuhn, Commercial Banker; and Nate LiaBraaten, EDCO (Economic Development for Central Oregon) Business Development Manager. HR Specialist, Eric Strobel, is also a member of the Due Diligence committee and, although not able to participate in the review meeting, was still able to weigh in on the process and recommendation as he is very familiar with the company and its principals. After thorough review of the application, onsite tour of operations, and review of financial statements, the committee supported the following recommendation: EDCO is recommending Deschutes County award $10,000, or $2000 per job created over 12 months and retained for an additional 24 months following the application date. Conditions include: • Company hires 5 full-time positions by March 4, 2014 and maintains total employment of 16 local employees until March 4, 2016 • Providing quarterly employment updates and the ability to inspect complete financial statements from award date through termination of the yet-to-be executed agreement with Deschutes County. Failure to meet the above provisions would result in partial or full repayment of the loan, with interest. BRIEFING PAPER FOR LMH Industries, Inc. Request for Deschutes County Forgivable Loan June 7th, 2013 Company Request: $40,000 EDCO Recommendation: $40,000 Proposed Job Creation within 24 months of Dec 31, 2012: 40 new employees Average Pay for New Employees (all positions, excluding commissions): $41,793 Industry: Electronic Equipment Manufacturing Website: www.LMHindustries.com Company Background: LMH is a manufacturer of cable assemblies and harnesses, custom molded products, cable and connector manufacturing for the military and medical markets. The company currently has over 50 customers who are reputable and long standing military and medical device manufacturers who use LMH high quality and substantially durable cable assemblies. The company began operations in March of 2011 and has experienced tremendous growth due to growing customer relationships and orders. LMH’s Business strategy, like most businesses, is to grow and be the best at what they do. In the first year of business, LMH has secured several large purchase orders from top military and medical original equipment manufacturers. To support this large volume of orders LMH has grown its employee base to 94 local full time employees, 3 out of area employees and the project that this will increase to 146 local full time employees by 4th Qtr. 2014. Funds will be used to purchase new computers, software, manufacturing machinery and building improvements. LMH has purchased their formerly leased production facility at 2095 SW Badger and is operating at a temporary location on SE 1st Street while the second floor can be built out to accommodate additional needed manufacturing space. EDCO Recommendation A due diligence process was completed by the REDI (Redmond Economic Development, Inc.) incentives review committee on May 10th, 2013. The participants in the review included, Joe Centanni, CPA; Bruce Barrett, Business Consultant; Roger Lee, EDCO (Economic Development for Central Oregon) Executive Director and Jon Stark, Manager for REDI. After thorough review of the application, onsite tour of operations, and review of financial statements, the committee supported the following recommendation: EDCO is recommending to Deschutes County an award of $40,000 or $1000 per job created over 24 months following the application date. Conditions include:  Company hires 40 FTE by December 31, 2014 and maintains total employment of 134 local employees until December 31, 2015  Providing quarterly employment updates and the ability to inspect complete financial statements from award date through termination of the yet-to-be executed agreement with Deschutes County.  Deschutes County’s successful negotiation of a personal guarantee with a principal of the company. Failure to meet the above provisions would result in partial or full repayment of the loan, with interest. MEMORANDUM TO: Board of County Commissioners FROM: Nick Lelack, AICP, Director Kevin Harrison, Principal Planner DATE: June 5, 2013 RE: Horse and Yurt Text Amendments to Deschutes County Code Summary Deschutes County’s Exclusive Farm Use (EFU) Zone definition of “horse events,” which is embodied in the definition of “farm use,” has not been updated to fully comply with state law. The County adopted its definition of “horse events” in 1994. Under this definition, any type of horse event is allowed without a County permit. However, state law changed in the mid 2000s to more narrowly define the type of allowed horse events to those related to schooling (i.e., small- scale, non-sanctioned) shows. County planning staff discussed this issue with Department of Land Conservation and Development (DLCD) staff. County and DLCD staff agree that large (i.e., “sanctioned” or “open”) horse events may be allowed in the EFU zone per a “Limited Use Permit” authorized by Senate Bill 960 for agri-tourism and other commercial events and activities in 2011. Alternatively, a property owner/operator may apply for an Outdoor Mass Gathering permit for large horse events every 90 days, but not more frequently. Staff proposes to amend Deschutes County Code (DCC) Title 18 to clearly differentiate between different types of horse events so property owners/operators may apply for and obtain the appropriate permit for a large horse event. The purpose of this work session is to seek Board direction on whether the Planning Division should initiate amendments to: 1. Update the County’s definition of “horse events” to bring it into compliance with state law. 2. Update the County’s definition of “agri-tourism” to clearly allow horse shows/events/competitions other than schooling shows. Background The Community Development Department received code complaints regarding horse events (shows and competitions) at a property on Cline Falls Road. Staff initially determined that the horse events complied with County Code per the adopted definitions. However, an attorney -2- representing the complaining party presented compelling evidence that the state’s definition of “horse events” changed to more narrowly define such events to those limited to schooling shows. The result of these amendments would be that a property owner/operator of a horse event other than a schooling show will be allowed to apply for an “Agri-Tourism and Other Commercial Events and Activities Limited Use Permit” or an “Outdoor Mass Gathering Events Permit.” County planning and legal staff believe the code amendments will be straight-forward and require minimal resources, and can be accommodated without impacting existing projects. Discussion If County Code is not amended, then the County will be required apply state law directly. Horse events other than schooling shows would be allowed with an Outdoor Mass Gathering permit every 90 days. More frequent large horse events may be allowed with an “Agri-Tourism and Other Commercial Events and Activities Limited Use Permit,” but it is not clear. Amending the definition of “agri-tourism” would clearly allow large horse events to be permitted in Deschutes County subject to DCC 18.16.042 Agri-Tourism and Other Commercial Events or Activities Limited Use Permit. Board Direction Staff seeks Board direction on whether to initiate text amendments to: 1. Update the County’s definition of “horse events” to bring it into compliance with state law; and 2. Update the County’s definition of “agri-tourism” to specifically allow large horse events.