2. City of Rialto, CA: Utilizing a Private Partner to Fulfill Municipal Needs October 1, 2005 City of Rialto, CA: Utilizing a Private Partner to Fulfill Municipal Needs October 1, 2005 City of Rialto California Presentation

3. Rialto: Partnership Yields Results ► Community Demographics ► Disciplined Execution Through a Proven Project Approach ► Results are Verified ► Value Added through a Long-Term Partnership

4. City of Rialto, CA

5. City of Rialto San Bernardino County Inland Empire Population 200497,9471,858,3903,651,973 Average Household Size 3.753.183.10 Median Age26.530.531.8 Average Household Income $56,128$61,733$63,937 Per Capita Income $15,053$19,418$20,601

6. City of Rialto, CA 2000 Population 25+ by Educational Attainment Total47,766 High School Graduate27.6% Some College23.6% Bachelor's Degree12.9% Advanced Degree2.3%

7. City of Rialto, CA With the City experiencing explosive growth, municipal leaders searched for a partner to effectively operate and manage wastewater facilities to allow them to focus on other community priorities. City Goals for the WWTP included: ► Eliminate continued facility operational and fiscal accountability issues. ► Recruit and retain employees for key management positions. ► Hiring a corporate citizen that would invest in the community and support economic development.

8. Veolia Shares the City’s Vision to become a Long Term Business Partner by providing Exceptional Value and Service to its Citizens

9. Rialto: Partnership Yields Results ► Community Demographics ► Disciplined Execution Through a Proven Project Approach ► Results are Verified ► Value Added through a Long-Term Partnership

10. Foundations of a Successful Partnership Transition Plan O&M Plan Communications and Community Relations A Successful Partnership Maintenance Management Program

11. Foundations of a Successful Partnership Transition Plan O&M Plan Communications and Community Relations A Successful Partnership Maintenance Management Program

12. The Veolia Water Approach “ ‘People are your most important asset’ turns out to be wrong. People are not your most important asset: the ‘Right People’ are!” Quote from Good to Great by Jim Collins

13. Veolia undertook Largest Public-Private Operator Transition  20-Year $1.5 Billion Water System Private Partnership Project  460 Technical, Professional and Management Level Employees o Former Indianapolis Water Company (IWC) Employees Employee Transition

14. An Effective Workforce The Right People from the Beginning Veolia Water Staff Existing Staff New Hires VW Rialto

15. Foundations of a Successful Partnership Transition Plan O&M Plan Communications and Community Relations A Successful Partnership Maintenance Management Program

16. Technical Resource Management Systems Process Control PlanSafety & Compliance Laboratory QA/QC Maintenance Management Safe, Efficient Operations Meeting all Regulatory Standards

17. Process Control Management Plan

18. Laboratory QA/QC

19. Foundations of a Successful Partnership Transition Plan O&M Plan Communications and Community Relations A Successful Partnership Maintenance Management Program

20. Maintenance Management Condition versus life 0 20 40 60 80 100 120 Time Condition (%) 4%2%5%7%14%68% Asset Failure Vs. Life

21. Foundations of a Successful Partnership Transition Plan O&M Plan Communications and Community Relations A Successful Partnership Maintenance Management Program

22. Communication Plan Allows for Effective Two-way Communications at All Levels Annual O&M Report Discharge Report IPP Report Performance Audit Monthly O&M Report Discharge Report IPP Report Daily Complaints Equipment Removed from Service Blockages/ Collection System Condition Weekly Analytical Results  Mayor  City Council  City Administrator  Asst. City Administrator  Director of Public Works  Contract Officer

23. Community Relations ► Committed to being a “Good Neighbor” to the community ► We Work with the City to Identify Community Needs and Lend Our Support

24. Rialto: Partnership Yields Results ► Community Demographics ► Disciplined Execution Through a Proven Project Approach ► Results are Verified ► Value Added through a Long-Term Partnership

25. Successful Partnership “Trust … but verify” President Ronald Reagan

26. FunctionContract TypeAccountability OperationsLump SumPerformance Audits Capital Improvements Time and Materials Financial Audit Commitment Performance and Financial Accountability

27. City of Richmond Project 6 Month Performance Record Current Status Effluent Quality Performance The City Has Consistently Met Effluent Quality Under the Veolia Program BOD, TSS mg/l Monthly Limits July 2001 Jan 2002 July 2002 Jan 2003

28. Rialto: Partnership Yields Results ► Community Demographics ► Disciplined Execution Through a Proven Project Approach ► Results are Verified ► Value Added through a Long-Term Partnership

29. Capital/Energy Management Revenue Enhancement Opportunities Biosolids Beneficial Use Comprehensive Partnership Extends Beyond the O&M Contract

30. Rialto WWTP- Site Plan Replace Gaseous Disinfection System Anaerobic Digestion Improvements New Plant 5 Circular Clarifier Plant 3 and 4 Aeration System Improvements

31. Cogeneration Comparison IssueVeolia Water 45-50% Volatile Solids Reduction  650-700 btu/ft^3 Methane- Clean and scrubbed Natural Gas is 1000 btu/ft^3  Utilize conservative 13 cu- ft/lb VS conversion  AssumptionViron Energy 60% Average Volatile Solids Reduction  960 btu/ft^3 Methane  Increase volatile solids conversion from 14 cu-ft/lb VS to 16 cu-ft/lb VS  City of Palm Springs- USFilter recently installed 90 KW cogeneration system, 21 month payback period, $10,000 savings/month

32. Biosolids Management in California Approaching a Critical Stage 2003 The Current Situation 2003 The Current Situation Actual Ban of Class “B”/ Practical Ban Actual Ban of Class “B”/ Practical Ban Restricted Use/ Reasonable Restricted Use/ Reasonable Limited Future Situation California’s Moving Regulatory Target Actual Ban of Class “B”/ Practical Ban Actual Ban of Class “B”/ Practical Ban Restricted Use/ Reasonable Restricted Use/ Reasonable Limited

33. Rialto Based Alternative Meeting the Needs of the City and Region Operational Synergy Long-Term Disposal Environmentally Friendly Revenue (Via Host Fees) Relationship with EnerTech Regional Biosolids Facility

34. CalTran Reclaimed Water Sale CNG Facility General Fund Transfer Order Desk Other Future Initiatives Revenue Enhancement Opportunities Rialto/Veolia Water Partnership

35. Questions?