(2)AR 032007 Lease Agreement (Biosolids)

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF MARCH 20, 2007 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: Director of Water/Wastewater & City Attorney SUBJECT: APPROVAL OF LEASE AGREEMENT AND TEMPORARY LICENSE OVER PORTIONS OF PROPERTYY LOCATED AT 1201 S.RANCHO AVENUE, COLTON CALIFORNIA (CITY WASTEWATER TREATMENT PLANT), FOR THE CONSTRUCTION AND OPERATION OF A BIOSOLIDS DRYING FACILITY FOR A TERM NOT TO EXCEED 54 YEARS AND 10 MONTHS DATE: March 14, 2007 BACKGROUND: For the past year, staff has been negotiating a lease agreement with Biosoils of Southern California ("Biosoils") that would permit Biosoils to construct and operate a facility for the processing and treatment of municipal sewage and its byproducts at the City's wastewater treatment plant located at 1201 S. Rancho Avenue (Biosolids Drying Facility). The Biosolids Drying Facility is proposed to be built using bond monies obtained via the California Municipal Finance Authority ("CMFA"). These are entirely private bonds and the City has no involvement in their issuance, except to assist in holding a public hearing to invite interested members of the public to comment on the use of this bond money. That public hearing was held by the City Council last month. The disposal of biosolids derived from sewage sludge is looming as a critical issue for those municipalities that operate publicly owned treatment works (wastewater treatment plants) in the Southern California region. The disposal of such biosolids in an environmentally acceptable manner represents an essential public service in that it constitutes the last step in the treatment and disposal of sewage. Currently, the City dries its municipal sewage or "biosoils" on open-air drying beds at the wastewater facility and