TITLE
Recommendation to authorize City Manager, or designee, to execute an amendment to the Southeast Resource Recovery Facility Operations and Maintenance Agreement No. 23336 with Covanta Long Beach Renewable Energy Corporation (Covanta), in an amount not to exceed $8,700,000, to provide for capital investment by both the City of Long Beach and Covanta for facility equipment replacement. (Citywide)
DISCUSSION
The SERRF Operations and Maintenance Agreement (Agreement) between the City of Long Beach (City) and Covanta, provides for the operation of SERRF until June 30, 2024. In 2017, Covanta notified the City that equipment in the facility had reached its operational end of life and would require replacement. Covanta has estimated that the replacement work will cost $13,700,000. The City contracted with HDR Engineering (HDR) in April 2017 to perform a condition assessment report for the facility. HDR is an engineering company that provides ongoing expertise to numerous waste-to-energy projects in the United States. Following a facility inspection, an assessment report was issued on June 8, 2017. The report verified that equipment in the facility has reached a point beyond efficient operations and without proper repair or replacement, the equipment may fail. The report outlines the required capital investment for various operating scenarios dealing with the expected operational life. For the facility to continue operations until 2024, HDR concurs with the proposed capital investment in the facility.
Under the terms of the proposed amendment, Covanta will make a capital investment in the facility in the amount of $5,000,000 and the City will commit $8,700,000. The funds will be used to replace 30-year-old equipment in the facility, as well as capital improvements to facilitate receiving higher value profile waste.
The current SERRF Agreement also allows either party to terminate the Agreement after December 2018. This termination for convenience provi...
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