(2)AR 032007 Lease Agreement (Biosolids)

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contracts with companies to have it removed and treated. It costs the City approximately $200,000 per year to dispose of the biosolids. However, this may not represent the most environmentally -friendly or cost-efficient approach to disposal. As a result, Biosoils of Southern California, a company made up of Cambrian Energy and Jim Sullivan, has been working with the City on a public-private partnership that would utilize the expertise of the Biosoils Team and the City's existing land and other resources to permit the construction and operation of a Biosolids Drying Facility. A copy of the Cambrian Energy company profile and resumes of its principals is attached. DISCUSSION Lease Agreement Terms The attached lease agreement with Biosoils includes the following terms: 1. City would ground lease approximately 10+ acres of property at the City's wastewater treatment plant to Biosoils for a term to 54 years and 10 months. 2. Biosoils would construct, at their cost, a Biosolids Drying Facility for the processing and treatment of municipal sewage. That facility would be constructed by recognized engineering and technological leaders (See Attached Flow Chart of Participants). Biosoils would be responsible for obtaining all applicable permits from federal, state or local government entities (including and amendment to their CUP from the City of Colton). These permits would have to be obtained within 30 months from the date they finalize plans with the City. In addition, they would have to complete construction 24 months after receiving the permit approvals. 3. Biosoils would construct and operate an interim dewatering facility on additional land at the wastewater treatment plant that would be licensed to them from the City. This interim dewatering facility would process the City's biosolids during the time that the main Biosolids Drying Facility is being constructed. This interim dewatering facility is needed because construction of the main Biosolids Drying Facility would disturb the existing drying beds where the City currently dries and stores its biosolids pending pick up and treatment. 4. Biosolids would process and treat the City's municipal sewage at no cost to the City. Currently, the City dries municipal sewage on open-air drying beds at the facility and contracts with companies to have it removed and treated at a cost of approximately $200,000 per year. It is anticipated these costs will increase over time. The agreement