HomeMy WebLinkAboutOperators, Maintenance, and Management Services
Augusta Richmond GA
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AGREEMENT
. for
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<JPERA TIONS, MAINTENANCE AND
MANAGEMENT SERVICES
for
AUGUSTA, GEORGIA
THIS AGREEMENT is made ~n this c1o~ day of MY..-1999, between Augusta, Georgia, a
political subdivision of the State of Georgia (hereinafter "Owner"), whose address for any formal
notice is 530 Greene Street,; Room 801, Augusta, Georgia 30911, Attn. City Administrator and
Operations Management International, Inc., (hereinafter "OMI") with offices at 6060 South
Willow Drive, Suite 200, Greenwood Village, Colorado 80111-5142, whose address for any
formal notice is P.O. Box 6607, Englewood, CO 80155-6607.
Owner and OMI agree:
1. GENERAL
1.1 All definitions of words or phrases used in this Agreement are contained In
Appendix A.
1.2 All grounds, facilities, and equipment now owned by Owner or acquired by
Owner shall remain th~ .property of Owner. An inventory of the equipment is
attached hereto as Appendix B.
1.3 This Agreement shall be governed by and interpreted in accordance with the laws
of the State of Georgia and venue shall be in the Superior Court of Richmond
County, Georgia. OMI by executing this contract hereby consents to jurisdiction
and venue in the Superior Court of Richmond County, Georgia, and waives any
right to contest jurisdiction and venue in the Superior Court of Richmond County,
Georgia
1.4 This Agreement shall be binding upon the successors and assigns of each of the
parties, but neither party will assign this Agreement without the prior written
consent of the other party. Consent shall not be unreasonably withheld.
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1.5 All notices shall be in writing and trans"mitted by certified mail to the address
noted above.
1.6 This Agreement, including Appendices, is the entire. Agreement of the parties.
This Agreement may be modified only by written agreement signed by both
parties. Wherever used, the terms "OMI" and "Owner" shall include the respective'
officers, agents, directors, elected or appointed officials, and employees.
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1.7
The Designated Representative is the representative of Augusta, Georgia who is
identified as the liaison between OMI and Owner in connection with OMI's
perfonnance of this Agreement. The Designated Representative as of the effective
date of this Agreement is Tom Wiedmeier, Augusta-Richmond County Utilities
Department, 2760 Peach Orchard Road, Augusta, Georgia 30906, 706/796-5012.
In the event the Designated Representative is changed during the term of this
Agreement, OMI shall be notified as set out above for fonnal notices.
1.8 Status as Independent Contractor. OMI and Owner agree that OMI is an
independent contractor and not an employee or agent of Owner. OMI shall have
exclusive control of and the exclusive right to control the details of the services
and work performed hereunder and all persons performing the same; and
nothing herein shall be construed as creating a partnership, agency, joint venture
or other similar relationship between Owner and OM!. OMI agrees that it will
not represent to anyone that its relationship with Owner is other than that of an
independent contractor, and Owner and OMI will so infann any parties with
whom they deal and may take any other responsible steps to carry out the intent
of this section. OM! shall be fully and solely responsible for its own acts and
omissions and those of its employees, officers, agents and subcontractors.
2. SCOPE OF SERVICES OMI
OMI shall:
2.1 Operate and maintain all facilities over a 24-hour per day, 7-day per week period,
under full service contract operations and maintenance. Operations may be
perfonned with on site staff and/or remote monitoring for all or portions of this
time.
2.2 Within the design capacity and capability of the Project, manage, operate, and
maintain the Project so that effluent discharged from the Project meets the
requirements specified in Appendix C.
2.3 Operate and maintain the present Industrial Pretreatment Program including all
monitoring, inspections, sampling, testing, reporting, and record keeping as
described in Appendix D. Results of all industrial sampling and testing shall be
made available to owner ,as requested.
2.4 Provide all Maintenance for the Project. Provide Owner with full documentation
that preventive maintenance is being perfonned on all Owner-owned equipment in
accordance with manufacturer's recommendations at intervals and in sufficient
detail as agreed upon by OMrand Owner. Maintenance program shall include
documentation of corrective and preventive maintenance and a spare parts in-
ventory. The costs of such services are outlined in Article 2.34. Owner shall have
the right to inspect these records during normal business hours.
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2.5
Pay all Cost incurred within the scope of normal Project operations as defined in
this contract
2.6 Staff the Project with employees to meet the certification requirements of the
State of Georgia:.
2.7 Prepare all NPDES permit reports related to the services provided in this'
Agreement and such other reports as may be required by virtue of Consent Decree
entered in Civil Action CV -194-151 in the U.S. District Court for the Southern
District of Georgia on July 14, 1997 or as may be required by any administrative
order issued by Georgia Environmental Protection Division. Such reports shall be
submitted to Owner for signature and approvaL Transmittal to appropriate agen-
cies shall be done by OM!. Any fines levied because of late reports as a result of
OMI's failure to complete and allow sufficient time for Owner's signature and
transmittal shall be paid by OM!. Submittal to the Owner by the 10th of the month
following the reporting period shall be considered timely.
2.8 Provide for the disposal of screening and grit to the existing disposal sites in
compliance with permit and regulatory requirements, as long as a suitable location
for such disposal is reasoJ;1ably available. Should regulations, disposal price and/or
disposal site availability significantly change, projected costs would be revised.
2.9 Administer the Owner's contract for wastewater sludge disposal with AMSCO,
the Owner's current residuals management contractor, or any future residuals
management contractor. OMI shall be responsible for payment to AMSCO in
accordance with the Agreement between Owner and AMSCO. Document and
record all sludge disposed of by the residuals management contractor.- Make
reasonable efforts to minimize the Owner's wastewater sludge disposal costs
consistent with appropriate industry-accepted management practices. Owner at its
option may assign the AMSCO contract to OMI, with an appropriate increase in
the Project Budget. No Administrative Fee or Management Fee shall be charged
to the AMSCO contractor any subsequent sludge hauling contract. Any permits
for sludge disposal shall remain in the name of Augusta.
2.10 OMI shall within ninety (90) days of contract start date endeavor to deliver sludge
at not less than four percent (4%) solids based upon monthly averages. Should
OMI fail to deliver sludge at not less than three and one-half percent (3 Y2%)
solids based upon mo!)thly averages during any monthly period thereafter, twelve
and one-half percent (12.5%) of the increased cost of wastewater sludge disposal
resulting from failure to meet said requirement shall be deducted from OMI's
Management Fee set forth in Article 4.1, up to a maximum deduct equivalent to
OMI's Management Fee. The maximum combined deduct derived from this
article and Article 4.5 shall not be greater than OMI's Management Fee specified
in Article 4.1. Should OMI deliver sludge at greater than four percent (4%)
solids, the management fee set forth in Article 4.1 shall be increased by twelve
and one-half percent (12.5%) of the savings in the cost of wastewater sludge
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disposal up to a a fnaximum incentive payment equal to OMI's Management Fee
set forth in Article 4.1.
2.1 I Approval of Project Manager. The Owner reserves the right of approval of the full
time, resident Project Manager that OMI assigns to direct the management,
operation and maintenance of the System. The initial Project Manager shall be
Paul Tickerhoof. OMI agrees not to reassign the initial, approved Project Manager
for at least three (3) years from the effective date of the Agreement, unless so
directed or agreed to by the Owner'sDesignated Representative. Any subsequent
OMI Project Managers must also be approved by the Owner's Designated
Representative prior to their assignment to the System. Owner agrees to not
unreasonably withhold acceptance of a proposed Project Manager in the event that
the currently assigned project manager is either a) reassigned after three (3) years
by OMI, b) voluntarily terminates hislher employment with OMlor c) is
terminated for cause by OM!.
2.12 Assume all of the Owner's employees of record at the project, up to a maximum
of 36 current employees, as set forth on the attached Appendix I, at the time of the
contract start date (hereafter Current Employees) as employees of OMI on the
contract start date, subject to a drug screen test procedure as defined in Appendix
K. OMI also agrees to provide employment to all Current Employees as long as
they continue to perform their assigned duties in a satisfactory manner and their
assigned duties are necessary for the performance of the Scope of Services under
this Agreement. OMI agrees that during the term of this Agreement, it will not
involuntarily transfer any Current Employee outside of the greater Augusta-
Richmond County, Georgia area. OMI agrees to offer employment to any
employee set forth on Appendix I who may retire from Owner prior to the
contract start date. ,
2. 13 Pay each Current Employee a wage equivalent or greater than the wage received
by such employee on the effective date of this Agreement. Wages are defined as
the base salary paid to each Current Employee, exclusive of overtime and other
incidental payments.
2.14 Provide a benefits and insurance package equivalent or greater than the benefits
and insurance package enjoyed by each Current Employee on the effective date of
this Agreement. Any health insurance program provided by OMI shall not contain
an exclusion clause for pre-existing conditions for Current Employees. ;.
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2.15 Accept Current Employees' actual accrued vacation leave up to eighty (80) hours
of accrued vacation leave days. Owner will reimburse OMI directly for the cost of
such accrued vacation leave within thirty (30) days of contract start date. Owner
reserves the right to offer to each Employee the option of receiving a cash
payment in lieu of a transfer of accrued vacation leave.
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2.16 Accept up to 173 hours of actual accrued sick leave earned by each Current
Employee. Such hours are unfunded liabilities and are not paid out except in
accordance with OMI's sick leave policies and procedures.
2.17 A safety analysis has been completed prior to the effective date of this Agreement.
All areas of needed improvement including safety equipment, supplies, signs,
procedures, training, .employee health monitoring and emergency response are set
forth in Appendix L. Such safety analysis shall be in a form' for submittal to the
Georgia Environmental Protection Division.' Safety related improvements are
defined as repairs and budged for as same, up to single repairs not exceeding Four
Thousand Nine Hundred Ninety-Nine ($4,999). Safety related improvements over
and above this definition will fall into the Owner Directed Capital Improvements
definition (see A9), and wiU be approved and paid for in accordance with Article
2.40.
2.18 Arrange for all Current Employees to have a pre-effective~date physical
examination to ensure that the each employee can safely perform the specific job
requirements of hislher assignment. The results from the pre-effective-date
physical examination will not be an acceptable cause for dismissal of any Current
Employees. OMI will make reasonable accommodations for Current Employees
who cannot safely perform the specific job requirements of hislher assignment.
2.19 Develop procedures and guidelines in the form of Standard Safety Procedures
(SSPs) that clearly define all site specific safety issues and provide detailed
procedures and guidelines for the safe management, operation, maintenance and
responses to emergency conditions that may be unique to individual System sites.
A first draft of the SSPs shall be submitted to the Owner's Designated
Representative for review and approval within ninety (90) days from the effective
date of this Agreement. After approval by the Owner's Designated
Representative, the SSPs shall be posted at each facility. Approval of such SSPs
shall not be unreasonably withheld.
2.20 Place a copy ofOMI's Corporate Safety Program at each permanently staffed
project facility, -and provide all employees training specific to this Program,
within ninety (90) days from the effective date of this Agreement.
2.21 Develop and implement an Emergency Response Plan (ERP). Development of the
ERr shall be completed within ninety (90) days from the effective date of this
Agl.eement. The ERP shall be submitted to the Owner's Contract Compliance
Officer for review and approval, prior to implementation. Approval of ERP shall
not be unreasonably withheld.
2.22 Provide for monitoring and control of septage deliveries, as provided for in the
Owner's sewer use ordinance.,
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2.23 Provide all manufacturers' warranties on new equipment purchased by the Owner
and assist the Owner in enforcing existing equipment warranties and guarantees.
2.24 Operate facilities to minimize odor within the design capacity and capability of
the project
2.25 Be responsible for all laboratory testing and sampling presently required by any
current NPDES permit for the Project, or for any other required permits,
excluding any air quality testing. It is understood that the project budget set forth
in Article 4.3 is based upon six (6) collection system overflows requiring such
laboratory testing and sampling within any budget year, and any testing of
collection system overflows over this estimate will be cause for amending the
project budget set forth in Article 4.3.
2.26 Provide an inventory of equipment, chemicals,' and lubricants as set forth in
Appendix H that are being used at the Project at the beginning of this contract and
at the end of the first contract year and each subsequent contract year.
2.27 Provide twenty-four (24) hour per day access to Project for Owner's personnel.
Visits may be made at any time by any of Owner's employees so designated by
Owner's Representative. Keys for Project shall be provided Owner by OML All
visitors to the Project shall comply with OMI's operating and safety procedures..
2.28 Provide training for personnel in areas of operation, mairitenance, safety,
supervisory skills, laboratory, and energy management
2.29 Provide computerized maintenance, process control, and laboratory management
systems.
2.30 Comply with the requirements of Owner regarding affirmative action provisions
for minority hiring and/or contracting to the extent these requirements are in
accordance with nationally recognized affirmative action programs. OMI shall
strive to use Disadvantaged 13usiness Enterprises to the extent'possible.
2.31 Provide Owner with a full accounting of all project specific expenditures at
intervals and in suffiCient detail as may be determined by Owner and assist Owner
in preparation of annual operating budgets. Owner shall be allowed to conduct or
have, conducted audits at Owner's sole cost and expense of all accounting related
to the direct contract operations of this Agreement at tImes to be mutually agreed
upon by Owner andOML To the extent possible, audit of all OMI project
specific expenditures will take place in Augusta, Georgia, unless otherwise
agreed. OMI shall provide that all accounts, operating records, documents,
spreadsheets and all correspondence relating to the scope of services shall be open '
to inspection by Owner during normal business hours and shall be made available
upon reasonable prior notice for the purpose of auditing costs or verifying OMI's
performance. OMI shall turn over to Owner copies of all records, accounts,
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operating records, documents, spreadsheets and all correspondence relating to the
scope of services, and other documentation pertaining to the scope of services
within 30 days of the termination of this Agreement.
2.32 Acknowledge that under Georgia law its records, accounts, operating records,
documents, spreadsheets and all correspondence relating to the scope of services,
and other documentation pertaining to the scope of services, may be public
records subject to Georgia's Open Records Act (O.C.G.A S 50-18-70, et seq.).
OMI agrees to deliver immediately to the Designated Representative any request
made to OMI under the Georgia Open Records Act and to cooperate fully in
responding to any request made either to Owner' or OMI and making all records,
not exempt, available for inspection and copying as provided by Georgia law.
2.33 Provide Owner a statement of annual operating expenses prepared by OMI's
external auditor within one hundred twenty (120) days of year end(August 7, 1999
through December 31, 2000 for the first year of this Agreement) with the auditor
to perform an agreed upon procedure certifying that expenses and fees are
calculated in accordance with this Agreement This statement shall be prepared in
accordance with generally accepted accounting principles
2.34 Provide, for and document repairs as described in Appendix A5, provided the
total amount OMI shall be required to pay does not exceed Three Hundred Eight-
one Thousand TwentY Seven Dollars ($381,027.00) during the first period of this
Agreement (August 7, 1999 through December 31, 2000). At such time that actual
repairs costs exceed the annual repairs limit, OMI shall invoice and the Owner
shall pay excess repairs cost on a monthly basis. Said repairs will be invoiced at
direct costs, with no markup for overhead or profit. OMI will rebate to Owner the
entire amount that actual Repairs are less than the Repairs limit during the period
of this Agreement. Repairs amounts below or in excess of the annual Repairs
Limits shall not contribute to Base Fee overages or underages.
2.35 Provide visits and consultation with regulatory agencies for all items within the
scope of this contract. Related Travel expenses and labor incurred in connection
with such activities are a part of the base fee. Extraneous travel conducted at the
request of Owner shall, be treated as incidental to the scope of services with the
associated costs including but not limited to labor and travel subject to the
provisions of Article 2.37, and will be invoiced to Owner at OMI's Cost plus
Fifteen percent (15%).
2.36 Provide recommendations for Capital Improvements (CIP) with a schedule for
improvements and expenditures within sixty (60) days of contract start date and
in the month of July of each successive contract year. A five (5) year schedule
will be presented for all capital improvements and ten (10) year projections will
be made for major improvements. These recommendations will be based on
requirements determined from facility operations and does not include detailed
engineering studies. In addition, OMI will prepare the required forms and docu-
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mentation required during budget and capital improvements budget preparation
time each year. OMI shan meet Owner's deadlines for the budget and CIP prep-
aration. Except for the improvements requiring an engineering study, the follow-
ing will be included for each project:
1. Improvement needed
2. Justification of improvements,
3. Cost of improvements
4. Any projected increase or decrease in O&M costs created by the Project
5. Proposed expenditure schedule '
6. Proposed capital recovery schedule
7. Impact of early termination
All Capital Improvement costs are the Owner's responsibility.
2.37 Subject to mutually agreeable terms and conditions, perform services
unrelated or incidental to the Project upon written agreement with the Owner. Such
services will be invoiced to Owner at OM!' s Cost plus fifteen percent (15 % ).
2.38 Provide Owner with oral and written reports as reasonably requested.
2.39 Comply with present and future, federal, state and local laws in performing their
obligations under the terms of this agreement. Changes in any such promulgation
which increase the operating cost of the facility will result in an immediate
adjustment as provided in Article 4.8.
2.40 Owner-Directed Capital Improvements. This Agreement includes an allowance
of Seven Hundred Thousand Dollars ($700,000.00) for the initial term and Fiven
Hundred Thousand Dollars ($500,000.00) per year thereafter to allow OMI to
perform major corrective repair, replacement, rehabilitation, and/or construction
of facilities and equipmenfassociated directly with or peripheral to the Owner's
wastewater conveyance and treatment facilities. One Hundred percent (100%) of
unexpended Owner-Directed Capital Improvements funds will be returned to the
Owner at the conclusion of the Contract year. Owner has the sole authority to
identify specific projects and issue a formal request in writing for' OMI to perform
said Owner-Directed Capital Improvements. OMI has the sole authority and right
to accept or reject -project, based primarily on whether OMI has the expertise and
resources available to perform said ,,project. OMI's compensation for Owner-
Directed Capital Improvements, plus' a fee of five percent (5%) of direct costs, in
lieu of the ten and one..;h~lfpercent (10.5%) administrative fee. set forth in Article
4.7. On-site labor already covered under this contract shall not be billed against
the Owner-Directed Capital Improvements account.
2.41 Chemicals. Provide and document all chemicals for the Project. Provide Owner
with an accounting of actual chemical expenditures and consumption on not less
than a quarterly basis: OMI will provide Owner with a' detailed invoice of
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2.42
2.43
2.44
2.45
2.46
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chemical expenditures over the annual chemical expenditure budget. Negotiate
each year with Owner an annual chemical budget. Should Owner and OMI fail to
agree, the chemical expenditure budget will be determined by the application of
the Consumer Price Index (CPI) adjusted for acttial consumption in the prior year
and any flow increases over the prior year.
Should the actuai chemicals expenditures be less than the annual chemical-
expenditure budget, the management fee provided in Article 4.1 shall be
increased by twelv~ and one-half percent (12.5%) of the difference, provided OMI
does not exceed the annual cost of services set forth in Article 4.3.
Power. Provide and document all power for the Project. Provide Owner with an
accounting of actual power expenditures and consumption on not less than a
quarterly basis. OMI will provide Owner with a detailed invoice of power
expenditures over the annual power expenditure budget.
Negotiate each year with Owner the annual power expenditures budget. Should
Owner and OMI fail to agree, the power limit will be determined by the
application of any adjustment in rates by the Public Services Commission- for
commercial accounts, adjusted for actual consumption in the prior year and any
flow increases in the prior year.' Should the actual power expenditures be less than
the annual power expenditure budget, the management fee set forth in Article 4.1
shall be increased by twelve and one-half percent (12.5%) of the difference,
provided OMI does not exceed the annual cost of services set forth in Article 4.3
Provide access to the Constructed Wetlands to EcoEnvironmental Corporation as
may be required by EcoEnvironmental Corporation to fulfill its contractual
obligations with the Owner and provide access to the Constructed Wetlands to
other parties authorized by Owner.
Work with Owner to develop within twelve (12) months of the effective date of
this Agreement, a regional training center in the community.. The capital cost of
constructing this facility shall be split equally between Owner and OMI, with no
markup by OMI; with the Owner's contribution not to exceed Fifty Thousand
Dollars (50,000.00). All revenues from the training center, before depreciation
and any unamortized expenses, shall be split equally between Owner and OM!.
The cost of establishing the center has not been provided for in the Project Budget
for the initial term of this Agreement.
Ensure that it's employees, subcontractors and independent contractors who
normally and regularly come into direct contact with the public are clearly
identifiable by, but not limited to, name badges. name tags or identification
cards and uniforms.
2.48 Not allow it's employees, subcontractors and independent contractors to
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possess any weapons. alcoholic beverages, or illegal substances while
performing their duties under this Agreement. Such activity 'shall be cause for
immediate enforcement action by OMI as defined in the employee handbook and
OMI Our Business Manual, or if immediate action is not taken, by Owner.
2.49 Assure that its employees, subcontractors and independent contractors serve the
public in a courteous, helpful and impartial manner. All such individuals;
whether working in the field and or in an office, shall refrain from belligerent
behavior and/or profanity. Correction of any such behavior and language shall
be the responsibility of OMI, as defined in the employee handbook and OMI
"Our Business Manual".
2.50 Submit a written report to Owner's Designated Representative outlining the
complete details of any incidents of violations of Local Regulations,
environmental requirements, or discourteous behavior. Said report shall include
the nature of the incident" time, date and location, and name, address and
telephone number of, the person alleging the violation. The report shall also
include the name and title of the employee, subcontractor and/or independent
contractor and what" action, if any, was taken. Owner reserves the right to
request the dismissal of any employee, or the cancellation Of any contract with a
subcontractor or independent contractor of OMI whose performance or actions
are obviously detrimental to Owner. Owner. Said dismissal of an OMI employee
must fall within the guidelines of the employee handbook and OMI Our Business
Manual. Said dismissal of a subcontractor or independent contractor of OMI
must fall within the provisions of the agreement between OMI and the
subcontractor or independent contractor.
2.51 Provide a drug-free workplace during the performance of this Agreement. This
obligation is met by:
2.51.1 notifying employees that the unlawful manufacture, distribution,
dispensation, possession, or use of a controlled substance is prohibited in
the OMI's workplace and specifying the actions that will be taken against
employees for violations of such prohibition;
2.51.2 establishing a drug-free awareness program to inform employees about
(i) the dangers of drug abuse in the workplace, (ii) OMI's policy of
maintaining a drug-free, workplace, (iii) any available drug counseling,
rehabilitation, and erp.plbyee assistance programs, and (iv) the penalties
that may be imposed upon employees for drug abuse violations;
2.51.3 notifying each .employee that as a condition of employment, the
employee will (i) abide by the terms of the prohibition outlined in 2.50.1
above, and (ii) notify OMI of any criminal drug statute conviction for a
violation occurring in' the workplace not later than five days after such
conviction;
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2.51.4 notifying Gwner within ten days after receIvmg from an employee a
notice of a criminal drug statute conviction or after otherwise receiving
actual notice of such conviction;
2.51.5 imposing a sanction on, or requiring the satisfactory participation in a
drug counseling, rehabilitation or abuse program by, an employee
convicted of a drug crime;
2.51.6 making a good faith effort to continue to maintain a drug-free workplace
for employees; and
2.51.7 requiring any: party to which it subcontracts any portion of the work
under the Agreementto comply with the provisions of this Article 2.50.
Failure to comply with the above drug-free workplace requirements during the performance of
the Agreement shall be grounds for termination under the provisions of Art ide 7.2 hereof.
2.52 Nondiscrimination. OM! agrees that it has adopted and will maintain and
enforce a policy of nondiscrimination on the basis of Tac~, 'color, religion, sex,
age, national origin, or disability.
2.53 Provide, upon written request, copies of notices of employment, employment
advertisements, and reports regarding OMI's affirmative action program by
Owner, for the purpose of investigation to ascertain compliance with the
nondiscrimination provisions of this Agreement
2.54 Inform Owner of any alleged violation(s) of employment practices which its
employees file with the Equal Employment Opportunity Commission, Lab 01,"
Department or any other federal' or state compliance agency; also, OMI will
inform Owner of the final disposition of such cases.
3. SCOPE OF SERVICE OWNER
Owner shall:
3.1 Provide for all Capital Expendittires except for the Projects that Owner may
authorize OMI toimplernent subj~ct to mutually agreeable tenns :and conditions
of repayment.
3.2 Maintain all eXIstmg Project warranties, guarantees, easements, pennits and
licenses that have been granted to Owner.
3.3 Pay all property, franchise or other taxes associated with the Project.
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3.4 Provide OMI within a reasonable time after request any piece of Owner's heavy
equipment that is reasonably available so that OMI may discharge its obligations
under this Agreement in the most cost-effective manner.
3.5 Transfer ownership to OMI those vehicles listed in Appendix E used in connec-
tion with the Project.
3.6 Pay for all potable water charges.
3.7 Carry out enforcement of the Industrial Pretreatment Program, in accordance
with State and EPA requirements including issuance of Notices of Violation
(NOVs).
3.8 Issue Significant Industrial User (SIU) permits which meet all State and EP A
requirements. Permits shall be prepared for Owner issuance as per Appendix D-
1 attached.
4. COMPENSA TION
4.1 For services rendered during the first period of this Agreement (August 7, 1999
through December 31, 2000) Owner shall pay to OMI a base fee equal to the
actual cost of services. as provided in Article 4.3 performed plus a Management
Fee of One Hundred Forty Three Thousand Six Hundred Twenty Nine Dollars
($143, 629.00). Said Management Fee and Base Fee shall be paid in seventeen
(17) equal monthly installments. (For purposes of this Agreement, the period from
August 7, 1999 through August 31, 1999 shall be considered as one month.)
Management Fee shall increase proportionally with Base Fee adjustments
described in Article 4.4.
4.2 aMI and Owner agree that at the end of each three (3) months OMI will perform
a reconciliation of estimated to actual cost and submit the reconciliation within
thirty (30) days after the end of the period. The year end reconciliation will be
performed following OMI's annual audit and will be submitted within one
hundred twenty (120) days of the end of the contract year: Any difference due to
Owner or OMI will be paid within thirty (30) days of annual reconciliation com-
pletion.
4.3 aMI estimates that co,s~ for services for the first period under this Agreement
(August 7, 1999 through December 31, 2000) shall be Seven Million, Six
Hundred Thirty Thousand, Seven Hundred Seventy Dollars ($7,630,770.00). De-
tails of said cost are shown in Appendix J. The Base Fee shall be negotiated each
year beginning 90 days priorto conclusion of contract year. Should Owners and
aMI fail to agree, the Base Fee will be determined by the application of the Base
Fee Adjustment Formula shown in Appendix F.
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4.4 Should the actual expenditures exceed estimated total expenditures by more than
Twenty Thousand Dollars ($20,000), in any telm, of this agreement, specific
spending approval will be obtained from the Owner. Owner will pay for all such
approved costs over the annual budget without markup.
4.5 Should actual expenditures.exceed the estimated expenditures, notwithstanding a
change in scope of this Agreement, twelve and one-half percent of said overage
will be deducted from OMI's Management Fee specified in Article 4.1, up to a
maximum deduction equivalent to the Management Fee identified in Article 4.1,
and all cost for services over such annual budget shall be billed at direct cost
without any administrative markup provided for in Article 4.7.
4.6 The base fee shall be negotiated each year beginning 120 days months prior to the
conclusion of the contract year; should Owner and OMI fail to agree, the base fee
will be determined by the application of the base fee adjustment formula shown in
Appendix F. .
4.7 In the event any significant requirement changes occUr in project operation as
mandated by any governmental agency, reporting, scope of services, monitoring,
level of treatment, personnel qualifications, or staffing, Owner and OMI shall
negotiate a commensurate adjustment in Base and Management Fee's.
4.8 An administrative fee of ten and one half percent (10.5%) shallbe added to all
costs, other than the reimbursement to OMI for accrued vacation as provided in
Article 2.15, Owner directed unrelated services as provided in Article 2.37,
Owner-Directed Capital Improvement costs as provided in Article 2.39, and the
management fee as provided in Article 4.1. It is specifically understood and
agreed that such administrative fee is included in the calculation of the annual
budget set forth in Article 4.3. The ten and one half percent (10.5%)
administrative fee shall include all charges for personnel not assigned to the
Project on a full-time basis (i.e. those working in Augusta, Georgia, and approved
as a part of the Project budget. OMI support is included in the Administrative Fee,
and any request for additional support is to be made to the Designated
Representative. From time to time the OMI project manager may seek approval
from the Owner's Designated Representative for additional OMI staff as
necessary to fulfill OMI's contractual obligations, or in response to Owner's
request for additional services.
4.9 OMI's compensation for Owner-Directed Capital Improvements shall be as
follows: (1) Programs undertaken by OMI personnel shall be subject to mutually
agreeable terms and conditions of compensation and payment; (2) programs
which OMI assigns to subcontractor personnel shall be billed at cost, plus a fee of
five percent (5%) of direct costs, in lieu of the ten and one half percent (10.5%)
administrative fee set forth in Article 4.7. On-site labor already covered under
this contract shall not be billed against the Owner-Directed Capital Improvements
account. There will be a total compensation limit of Seven Hundred Thousand
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Dollars ($700,000.00) for Owner Directed Capital Improvements during the initial
term of this Agreement and Five Hundred Thousand Dollars ($500,000.00) each
year thereafter. The ,Costs for Owner Directed Capital Improvements are not
included in the estimated costs identified in Article 4.3.
5.
PAYMENT OF COMPENSA nON
5.1 One Seventeenth (I1l7) of the base fee for the initial period shall be due and
payable on the first of the month for each month Jhat services are provided. For
the remaining contract period, One Twelfth (I1l2) of the base fee in any current
year shall be due and payable on the first of the month' for each month that
services are provided. (For purposes of this Agreement, the period from August 7,
1999 through August 31, 1999 shall be considered as one month.)
5.2 All other compensation to OMI is due upon receipt of OMI's invoice and payable
within thirty (30) days.
5.3 Compensation for Owner-Directed Capital Improvements as defined in Article 4.9
shall be invoiced to the Owner in the month, following the incurrance of the
expense, and is payable by the Owner within thirty (30) days.
6. INDEMNITY, LIABILITY AND INSURANCE
6.1 OMI hereby agrees to and shall hold Owner, its agents, assigns, officers,
employees, etc. harmless from any liability or damages for property damage or
bodily injury, including death, which may arise fromOMI's negligent operations
under this Agreement, to, the proportion such negligence contributed to the
damages, injury, or loss, whether such negligent operation be by OMlor by
subcontractor of OM!. 6.2 OMI shall be liable for those fines or civil penalties
that are a result of OMI's operations which may be imposed by a regulatory
agency having jurisdiction for violations of the' effluent quality requirements
specified in Article' 2.1, 'up to a limit of $500,000 (Five Hundred Thousand
Dollars) during the initial Seventeen month term of this agreement, or any
subsequent term. Owner will assist OMI to contest any such fines in administra-
tive proceedings and/or in court prior to any payment by OM!. OMI shall pay the
costs of contesting any such fines.
6.3 OMI's liability in contract or in tort to Owner under this Agreement specifically
excludes any and all indirect or consequential damages arising from the operation,
maintenance, and management of Project.
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OMI shall obtain and maintain insurance coverage of a type and in the amounts
described in Appendix G. OMI shall name Owner as an additional insured on all
insurance policies covering the Project and shall provide Owner with an insurance
certificate evidencing said coverage. OMI acknowledges that Owner has a risk
retention program.
It is understood and agreed that, in seeking the services of OMI under this'
Agreement, Owner is requesting OMI to undertake uninsurable obligations for
Owner's benefit involving the presence or potential presence of hazardous
substances. Therefore, Owner releases OMI from and against any and all claims,
losses, damages, liability, and costs including, but not limited to, costs of defense
arising out of or in any way connected with the presence, discharge, release, or
escape of contaminants of any kind, excepting only such liability as may arise out
of the sole negligence of OMI in the performance of services under this
Agreement.
The Owner and OMI recognize that there may be equipment or instrument
failures because of the inability of hardware, software, or equipment to properly
transition to the year 2000. It is not part of OMI's scope .of work to identify or
prevent these problems, although OMI will cooperate with firms hired by the
Owner to address year 2000 problems. OMI will prepare a written contingency
plan to operate the plant as much as practical if there are failures after January
1, 2000, and submit it to the Owner by September 30, 1999. Additional costs
incurred after January 1, 2000 to run the plant caused by year 2000 problems
will be reimbursed by the Owner pursuant to Article 2.37 of this Agreement.
7. TERM AND TERMINATION ; DEFAULT REMEDIES
7.1 The initial term of this Agreement shall be five (5) years and four (4) months
and twenty-five (25) days commencing on August 7,1999 and ending on
December 31, 2004, followed by a successive five (5) year option, which
option is renewable at the sole discretion of the Owner. Such option can be
made effective by written notification from the Owner to OMI one hundred and
eighty (180) days prior to the expiration of the previous contract period. All
contract periods and renewals are subject to and contingent upon yearly budget
approval by the owner.
7.2 Either party may terminate, this Agreement for a material breach of the Agree-
ment by the other party 'after giving written notice of breach and allowing the
other party thirty (30) days to correct the breach. Neither party shall terminate
this Agreement without giving the other party thirty (30) days written notice of
intent to terminate after failure of the other party to correct the breach within
thirty (30) days.
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7.3 Owner may terminate this Agreement at any time after giving six (6) months
notice of intent to terminate.
7.4 Upon notice of termination by Owner, OMI shall assist Owner in resuming
operation of the Project.OMI will provide O\vner at the date of termination the
quantities of chemicals shown in Appendix H. . If additional Cost is incurred by
OMI at request of Owner, Owner shall pay OMI such COSt in accordance with
Article 2.37. In addition, except for termination as a result of a material breach of
this Agreement, adjudication of bankruptcy, or the appointment of a receiver,
Owner shall pay OMI terinination expenses of One Hundred Thousand Dollars
($100,000.00) which both parties acknowledge is the reasonable value of
expenses related to a termjnatio~ of this Agreement for convenience.
8. FORCE MAJEURE
8:1 Neither party shall be.1iable for its failure to perform its obligations under this
Agreement if performance is made impractical, abnormally difficult, or abnor-
mally costly, due to any unforeseen occurrence beyond its reasonable control. The
party invoking this Force Majeure clause shall notify the other party immediately
by verbal communication and in writing by certified mail of the nature and extent
of the contingency within ten (10) working days after its occurrence.
Both parties indicate their approval of this Agreement by their signatures below.
Authorized signature:
OPERATIONS MANAGEMENT
INTERNATIONAL, INC.
Bob Young
~ Title: Mayor
. ~UGUST A, GEORGIA
orized signature:
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ATTEST:~ __ __ '_ !/JItU/
Clerk
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Aopendix A
DEFINITIONS
A,1 The "Project" means all equipment, vehicles, grounds, and facilities described in
Appendix B and where appropriate, the management, operations, and maintenance of
such.
A.2 "Capital Improvements" means any expenditures for (1) the purchase of new equipment
or facility items that cost Five Thousand Dollars ($S,OOO.OO) or more; or (2) major
repairs that significantly extend equipment or facility service life ,and cost Five Thousand
Dollars ($S,OOO.OO) or more; or (3) expenditures that are planned, 'nonroutine, and
budgeted by Owner. Capital Expenditures shall not include any vehicles or vehicle
replacements.
A.3 "Cost" means the total of all costs determined on an accrual basis in accordance with
generally accepted accounting principles, including but not limited to; direct labor, labor
overhead, chemicals, materials, supplies, utilities, equipment, maintenance, repair,
mobilization/system implementation, taxes, insurance" leases, owner approved regional
,support, and outside services. Corporate taxes shall not be included as a cost.
AA . "Maintenance " means the cost of those routine and/or repetitive activities required or
'recommended by the equipment or facility manufacturer or OMI to maximize the service
life of the equipment, sewer1vehicles, and facility.
A.S "Repairs" means the' cost of those nonroutine/nonrepetitive activities required for
operational continuity, safetY, and performance generally resulting from failure or to avert
a failure of the equipment, sewer, or" facility or some component thereoL The cost of any
single repair shall not exceed $4,999.00 (Four Thousand Nine Hundred Ninety-Nine
Dollars). Repairs and Maintenance items over this limit will be considered Capital
Improvements and not count against the Annual Repairs Limit.
A,6 "Biologically Toxic Substances" means any substance or combination of substances
contained in the plant influent in sufficiently high concentrations so as to interfere with
the biological processes necessary for the removal of the organic and chemical
constituents of the wastewater I:equired to meet the discharge requirements of Owner's
NPDES permit. Biologically toxic subs~ances include but are not limited to heavy metals,
phenols, cyanides, pesticides, and herbiCides.
A,7 "Adequate Nutrients" means plant influent nitrogen, phosphorous, and iron contents
proportional to BODs in the ratio offive.(S) parts nitrogen, one (1) part phosphorous, and
one-half (0.5) part iron for each one hundred (100) parts BODs.
A.,8 "Electrical Cost" means the monthly cost of _ kWh of energy and _ kW of demand
calculated using _ Power Company's _ rate in effect on the last day of the month.
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Flat Rates
A.9 "Owner-Directed Capital Improvements" includes major corrective repair, replacement,
rehabilitation, and/or construction of facilities and equipment associated directly with or
peripheral to the Owner's wastewater conveyance and treatment facilities. An account
will be established to allow OMI to conveniently accomplish various projects at the-
direction of the Owner, and as accepted by OMI, to facilitate the Owner's wastewater
conveyance, treatment and discharge obligations.
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Appendix B
LOCATION OF PROJECT AND EQUIPMENT INVENTORY
B.l OMI agrees to provide the serVices necessary for the management, operation, and-
maintenance of the following:
a) All equipment, grounds, and, facilities now existing within the current property
boundaries of or being used to operate Owner's J.B. Messily Wastewater
Treatment Plant located at 1820 Doug Barnard Parkway, Augusta, Georgia,
including the manmade constructed wetland system (Phase I, II, III)
b) All equipment, grounds, and facilities now existing within the current property
boundaries of the Spirit Creek Wastewater Treatment Facility located at 1120
Bennocks Mill Road, Augusta, GA.
The Owner retains total and complete responsibility for operation, maintenance and management
of all lift stations, gravity sewers, force mains, manholes and all associated wastewater
conveyance facilities not specifically identified above.
B.2 Equipment Inventory. To be completed within thirty (30) days of Contract start date.
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Appendix C
NPDES PERMIT AND PROJECT CHARACTERISTICS
OMI will operate Project so that effluent will meet the requirement ofNPDES permit No.
_( copy attached). OMI shall be responsible for meeting the effluent quality
requirements of Owner's NPDES permit unless one or more of the following occurs; (1)
the Project influent does not contain Adequate Nutrients to support operation of Project
biological processes and/or contains Biologically Toxic Substances that cannot be
removed by the existing process and facilities; (2) dischargers into Owner's sewer system
violate any or all regulations as stated in the Sewer Use Ordinance (Augusta-Richmond
County Code S 5-3-1, et seq. and, (3) the flow, influent BODs, and/or suspended solids
exceeds the Project design parameters, which are:
\-.
J.B. Messerly WPCP Spirit Creek WPCP
46.2 million gallons of flow per day 2.24 million gallons of flow per day
76,728 pounds of BODs per day 3,736 pounds of BODs per day
76,728 pounds of suspended solids per day 3,736 pounds of suspended solids per day
daily peaking factor of..li times flow daily peaking factor of 1.5 times flow
In the event anyone of the Project influent characteristics, suspended solids, BODs, or
flow, exceeds the design parameters stated above, ,OMI shall return the plant effluent to
the characteristics required by the NPDES permit in accordance with the following
schedule after Project influent characteristics return to within design parameters.
Characteristics Exceeding
Design Parameters Bv
1 0% or Less
Above 10% Less than 20%
20% and Above
Recovery Period
Maximum
5 days
10 days
30 days
Not withstanding the above schedule, if the failure to meet effluent quality limitations is
caused by the presence of Biologically Toxic Substances or the lack of Adequate
Nutrients in the influent, then OMI will have a thirty (30) day recovery period after the
influent is free from said substances or contains Adequate Nutrients.
C.3 OMI shall not be responsible for fines or legal action as a result of discharge violations
within the period that influent exceeds ddign parameters, does not contain Adequate
Nutrients, contains Biologically Toxic Substances, and the subsequent recovery period.
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The estimated Costs for services under this Agreement are based on the following Project
characteristics:
Flow
BOD
TSS
J.B. Messerlv WPCP
30.7 million gallons per day
72,709 pounds per day
68,100 pounds per day
Spirit Creek WPCP
3.25 million gallons per day
764 pounds per day
1,140 pounds per day
The above characteristics are the actual twelve (12) month averages prior to the date
services are first provided under this Agreement. A change of ten percent (10%) or more
in any of these characteristics during' the life of this Agreement, calculated by using a
twelve (12) month moving average, shall allow OMI to request an increase in the project
budget.scope. At such point in time, the above characteristics will be adjusted for the
new calculated averages.
Aooendix D
INDUSTRIAL WASTE DISCHARGERS
AND MONITORING PROGRAM
Attached to and a part of this Agreement is a listing of all industries discharging into the
collection system and monitored under Sewer Use Ordinance (Augusta-Richmond County Code
S 5-3-1,.et seq.t(Appendix D).
D.1 INDUSTRIAL PRETREATMENT PROGRAM
OMI Shall:
D .1.1 Establish or otherwise maintain the eXIstmg Industrial Pretreatment Program
(IPP). This shall include an annual evaluation of the Program, and notification
to Owner of changes in Federal and State pretreatment standards that may effect
the Program.
D.1.2 Conduct a survey of the industrial user base one (1) time per three (3) years.
Update, as required, the, list of Categorical Industrial Users (CIU) and
Significant Industrial Users (SIUs) as described in Appendix D-2 according to
the definition of CIU and SiD in 40 CPR 403 or the defirution in the approved
pretreatment program (Program), whichever is more stringent.
D.1.3 Carry out inspection, surveillance, and monitoring procedures to determine if the
SIUs are in compliance' with 'the Pretreatment Standards and the approved
Program. Each CIU and SIU shall be sampled and inspected at the frequency
established in 40 CFR 463 or the Owner's approved implementation manual, ,
whichever is more stringent. Maintain adequate records.
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D.1 A Maintain the laboratory analysis program for each SIU as described in Appendix
D.2. Results of all iildustrial sampling and testing shall be reported to Owner, as
required, in a timely manner.
D.1.5 Implement the' approved industrial pemlitting system. Prepare CIU and SIU
, permits for issuance or renewal within 90 days of the expiration date or within
180 days after the industry has been determined to be a CIU or SIU. Prepare'
notices of violation for noncompliance with 40 CFR 403 or the approved
Program, whichever is more stringent, and initiate other enforcement actions by
notifying Owner of the appropriate enforcement action according to the approved
enforcement response pl.an.
D .1. 6 Advise Owner of changes in federal and State Pretreatment Standards and
regulations and how the changes affect the local Program. Request approval
from Owner and the . Approval Authority prior to implementing significant
changes to the approved Program in accordance with 40 CFR 403. 18(c).
D .1. 7 Provide local limits evaluation as required as an out of scope or incidental to the
scope of service. The costs of such evaluation will be determined and negotiated
at the time of the request.
D.1.8 Perform inspection, sampling, and laboratory testing services at the frequency
established in 40 CFR 403, or the approved Program, whichever is more
stringent, for eachpermitte9 CIU or SIU to determine compliance with
pretreatment standards and' the approved Program. Where more complex
analysis is required, e.g., organics or other priority pollutants which are not
within the capabilities of the, Project, OMI shall be responsible for submitting
samples to another laboratory.
D.1. 9 Notify Owner as soon as is practical, verbally and followed by written
confirmation, whenever an industry is suspected of violating, or has violated
Owner's industrial waste and/or sewer ordinance(s).
D.2 INDUSTRIAL WASTE DISCHARGERS
Below is a current listing of all industries (CIUs and SIUs) discharging into the
collection system and monitored under Sewer Use Ordinance (Augusta-Richmond Code
9 5-3-1, et seq.). i "
Industry
Permit Number
1. AC Industri~s
2. Alternate Energy Resources
3. Alternate Energy Wells (sites 1 & 2)
4. Amoco Polymers (sites 1 & 2)
159
135
142
119
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5. Augusta Coca~Cola
6. A vondale Mills
7. Blackman Uhler
8. Castleberry, Foods
9. Cintas
10. Columbia Augusta Medical Center
11. Commercial Military Systems
12. DSM Chemicals
13. EKA Nobel
14. EZ Go (sites J & 2)
15. Florida Rock,
16. G & K Services
17. Georgia Power
18. Howard Sheppard
19. Huron Tech
20. Industrial Metal Finishing
21. International Flavors and Fragrances
22. J.P. King Mill (sites 1 & 2)
23. Kendall
24. J & J Midsouth
25. Praxair
26. Monsanto Dairy Plant
27. Monsanto Nutrasweet
28. Monsanto Searle
29. Oxychem
30. Ponderosa
31. President Baking
32. PVS Technology
33. Procter and Gamble-
34. Quala , ,
35. Rutgers Organic
36. Schwerman
37. Shapiro
38. Solutia
39. Southern Wood Piedmont (sites 1 & 2)
40. Spuds
41. Steven's Appliance
42. Sweetheart Cup,
43. University. Hospital (sites 1 & 2)
44. VA 15th ~Street (sites 1 & 2)
45. V A Lenwpod (sites 1, 2, & 3)
46. Waste Research and Recovery
,117
101
. 112
114
129
118
160
203
144
115
154
128
202
155
158
123
163
109
104
130
161
100 .
168
170
110
'113
121
167
107
138
141
133
134
111
148
140
147
106
105
172
116
164
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Owner will notify OMI of any future additional industries (CIUs and SIUs) discharging into the
city system.
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Appendix E
VEHICLE DESCRIPTION
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Appendix F
BASE FEE ADJUSTMENT FORMULA
B F = BF 0 { X C + Y E }
,., Co Eo
Base fee specified in Article 4.1
Adjusted base fee
cpr for All Urban Consumers (U.S. City Average) as published by U.S.
Department of Labor, Bureau of Labor Statistics in the cpr Detailed
Report for the month three (3) months prior to OM! beginning service
under this Agreement
cpr for All Urban Consumers (U.S. City Average) as published by U.S.
Department of Labor, Bureau of Labor Statistics in the cpr Detailed
Report for the month three (3) months prior to the beginning of the period
for which an adjusted base fee is being calCulated
Electrical Cost for the month prior to OMr beginning service under thi.s
Agreement
Electrical Cost for the month three (3) months prior to the beginning of the
period for which .an adjusted base fee is being calculated
1.0 - y
Total Electrical Cos(divided by Total Direct Cost
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Appendix G
INSURANCE COVERAGE
OMI shall maintain:
1. Statutory workers' compensation for all of OMI's employees at the Project as
required by the State of Georgia.
2. Comprehensive general liability insurance for this Project in an amount not less
than Five Million Dollars ($5,OOO,OOOLcombined single limits for bodily injury
and/or property damage, each occurrence and in the aggregate.
3. Auto liability-Liability Insurance for all motor vehicles and equipment owned
and operated by OMI under this Agreement.
Owner and OMI will provide for a waiver of subrogation against the other as to all insurance
required to be carried hereunder, and each Pafo/ waives any claim against the other arising in
contract or in tort which are covered by their respective insurance hereunder.
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Aopendix H
THIRTY-DAY INVENTORY
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Appendix I
CURRENT EMPLOYEES
Cynthia Anderson
Roy Butler
Tommy Carpenter
Pierce Cook
Russell Crow
John Davis,'
Eric I>ixon
Rusty Doggette
Cecil Eubanks
Eddie Gevedon
Charla Hagan
Jerry Harper
Marion Harris
James Isdell
Joanne Jones'
Vernon Jennings
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Elijah}ordan
Sheridan Kantor
Benny Kelly
Gregory Kenny
Bernard McCaulley
Cornelia Murray
Kenneth Muthcherson
Stephanie Myers
Robert Nelson
William Nesmith
Victor Phillips
John Pinkney
Louis Pryor
Robert Richards
Robert Russ
Frank Lord
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Appendix J
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Appendix K
ESTIMATED COSTS
FIRST YEAR ESTIMATED COSTS (17 MONTHS)
Annualized First Year (1)
Description Cost Contract Cost
Labor and Benfits $1,535,403 $2,149,564
Mobilization/Systems Implentation $144,319 $14~,319
Administrative $104,367 $146,114
Equipment & Vehicle Expenses $31,092 $43,529
Training $38,465 $53,851
Materials & Supplies $407,283 $570,196
Outside Services $57,809 $80,933
Utilities $831,827 $1,164,558
Repair $272,162 $381,027
Miscellaneous $10.324 $14.454
Sub-Total $3,433,051 $4,748,544
Overhead 10.5% $360,470 $498,597
Management Fee $102.592 $143.628.80
Sub-Total $3,896,113 $5,390,770
Sludge Hauling $1.600.000 $2.240.000
Total $5.496,113 $7,630,770
(1) Approximately seven (17) months - Augusta 7,1999 - December 31, .
2000
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Appendix L
,SAFETY ANALYSIS
Safety Training Materials:
· Confined Space Entry
· Lockout / Tagout
. Bloodborne Pathogens
. Hazard Communication
. Personal Protection
· TV/VCR Combination Unit
. Overhead Projector
Augusta, GA Safety Equipment List (needed at
startup)
Item Vendor Quantity Cost Total
Each
Safety Eyewear Grainger 25 $2.75 $68.75
Ratchet Headgear Grainger 2 $11 .00 $22'.00
Replacement Visor Grainger 2 $4.10 $8.20
Ratchet Hard Hat - Ylw Grainger 21 $8.60 $180.60
Foam Earplugs(200 pr) Grainger 1 $22.00 $22.00
Dielectric Earmuffs Grainger 6 $8.75 $52.50
Work Gloves Grainger 30 $3.97 $119.10
Nitrile Gloves Grainger 3 $3.90 $11.70
PVC Gloves(PK 100) -c- , ' Grainger 4 $6.50 $26.00
Green Acid Apron Grainger 3 $12.00, $36.00
First Aid Blankets Grainger 4 $41.00 $164.00
Body Harness Grainger 2 $110.00 $220.00
5 Ft Yoke Lanyard Grainger 2 $43.00 $86.00
25' Vinyl Duct-8" Diam Grainger 1 $165.75 $165.75
6 Gal Oily Waste Can Grainger 3 $38.00 $114.00
60 Gal Storage Cabinet Grainger 2 $705.00 $1 ,41 0.00
Spill Kit _ Lab Safety 2 $251.00 $502.00
14 Gal Eyewash Station Grainger 2 $218.00 $436.00
32 oz Eyewash Station , Grainger 5 $16.41 $82.05
Electrical Work Mat .Grainger 1 $138.00 $138.00
Lockout Safety Kit Grainger 6 $61.25 $367.50
Reflective Vests Grainger 10 $7.80 $78.00
Saddle Vent Mount Grainger 1 $38.25 $38.25
Polyduct Carrier Grainger 1 $80.75 $80.75
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Elbow for Saddle Vent Grainger 1 $38.25 $38.25
Eyewash Concentrate Grainger 2 $35.66 $71.32
Blower - Gas "Grainger 1 $637.50 $637.50
Miller Tripod Grainger 1 $2,791.00 $2,791.00
14" Electrical Gloves Grainger 2 $125.00 $250.00
Fire Extinguisher (ABC) 5 Ib Grainger 20 $28.45 $569.00
Fire Extinguisher (ABC) Auto " Grainger 15 $14.20 $213.00
First Aid Kits, Auto , Grainger 15 $7.11 $106.65
First Aid Kits, Office Grainger 8 $30.87 $246.96
Traffic Cones Grainger 20 $11.97 $239.40
Dust Masks (20 per pkg) Grainger 5 $16.36 $81.80
Gas Detectors All Ind. ,2 $1,350'.00 $2,700.00
Safety
Various Signs - Required Lab Safety 1 $3,000.00 $3,000.00
Chlorine Alarms Grainger 5 $510.00 $2,550.00
Chain . Local 1 $600.00 $600.00
Barricades . Grainger 10 $54.99 $549.90
Hazardous Location Hand Grainger 2 $274.00 $548.00
Lamps
Safety Shoes " Local 0 $75.00 $0.00
Miscellaneous Local 1 $1,100.00 $1,100.00
Eagle Gas Cans 5 Gal Grainger 2 ' $34.80 $69.60
Eagle Gas Cans, Type 1, 1 Gal Grainger 2 $29.40 $58.80
North SCBA, Aluminum 30 min Grainger 2 $1,881.95 $3,763.90
SCBA Extra Cylinders Grainger 2 $406.36 $812.72
TOTAL $25,427
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MEMORANDUM
OMI
TO:
D. Allen Saxon, Jr.
FROM:
Clay Sykes and Melinda Shepherd
DATE:
January 15, 2002
SUBJECT:
Reconciliation of First Agreement Year
, To bring closure to Augusta and Operational Management International's (aMI) first agreement term the
attached Tabie 1 is used to represent expenditures as outlined in Appendix K of our Agreement. Table 1
renects direct costs, sludge hauling, overhead, management fees and interim dewatering services that
were not part of OMI' s, initial scope of servIce. Additionally, footnotes regarding specific line items are
included as Attachment 1.
To summarize, overall direct costs exceeded'the estimated budget amount by $313,930.47 or 6.6 percent
The budget overrun is primarily due to two factors.
. The construction projects referred to as'~ ~he digester cleaning and rebuild and the dewatering and
thickening enhancements.
. Power cost due to kilowatt demand being established prior to aMI's taking over plant operation.
The Augusta/OMI agreement includes split incentives for the electricity, chemicals and solids disposal
account when'the overall budget is achieved. Given the overrun of the initial budget, there is no
obligation for Augusta to pay incentives for the tirst term of our agreement A summary of the first term
reconciliation is as follows:
Dire'ct Cost Overage
Sludge Hauling Overage
Interim Dewatering
Subtotal
$313,930.47
$366,121.02
$193.714.98
$873,766.47
Less
Direct Cost Penalty (12.5 percent)
Sludge Hauling Penalty (12.5 percent)
Sludge Hauling percent TS Penalty (12.5 percent)
Mobilization Overage
Repairs ~.~bate
Subtotal
$ 39,241.31
$ 45,765.13
$ 15,187.00
$ 65,548.78
,$ 3.699.17
$169,441.39
~
Total Due OMI
$704,325.08
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, ;' Pa'ge 2
January 15,2002
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Given the comprehensive assessment of activities performed by OMI during the first agreement term, the
additional cost of service over the estimated cost of service is due to scope of service increases over the
initial agreement primarily due to facility upgrades at the J.B. Messerly Water Pollution Control Plant
(WPCP). The primary focus of the plant upgrade was to remove years worth of accumulated grit and
debris from the digesters, which were then upgraded with modern heating and mixing equipment.
Unfortunately, the digester rehabilitation process (which lasted nearly two years) created a continuous
recycle stream that significantly incr~ased the loading back to the head of the wastewater treatment
, facility. This resulted in increased chemical consumption, aeration power demand, and additional solids
generation. In summary, the loading to the J.B. Messerly WPCP was 24 percent greater than that
projected and this resulted in a 10 percent increase in the overall cost of treatment. In good faith, OMI is
absorbing the penalty due to budget overruns even though the scope of service has increased.
Also, during the initial term of our agreement the repair account finished $3,699.17 below budget. The
in-budget accounting was a result of transferring a portion of first year repair expenditures to the capital
expenditure account, which is more accurately described as any repair exceeding $5,000.00.
OMI appreciates Augusta's continued support and can be reached at 706/793-1961 to discuss any
questions regarding the reconciliation of the fi:st year agreement.
WP/AuguSlil RecolJcir~ ofFirsr Agrccmcnl YCilT.doc
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Attachment 1
A review of the influent BOD loading at the J.B. Messerly WPCP, as a 12-month moving average,
reveals a 24 percent increase over the contracted loading of 72,709 pounds per day. It is suspected that
the increased loading is due to rehabilitation projects underway at the J.B. Messerly WPCP. The two
construction projects, instrumental to effective long-term facility operation, that occurred during aMI's
first term were the, digester cleaning and rebuild and the dewatering and thickening enhancements. This
increased loading translates into increased power, consumption and sludge generation.
Item No.8. A detailed review of Table 1 indicates the most significant fattor to the budget overrun
comes from the utility account and more specifically is attributable to the cost of electricity. The cost of
power closed the first term at $182,442.55 over the estimated budget amount. In spite of the higher
influent BOD loading, the actual primary contributing factor responsible for the overage was the kilowatt
demand component of the monthly power bill. The demand is in essence a billing component which
represents the cost that the power company charges in response to the maximum short term power
, demand (1/2 hour) that a customer puts on thegri.d during a 12 month period. Unfortunately, when this
maximum peak usage is established, even if only for a 30 minute to one hour period; it impacts the
monthly electric bills for 12 months or until a greater demand is established. The J.B. Messerly WPCPs
demand charge was established on June 23, 1999, six weeks prior to aMI's inception in Augusta and
10 weeks following aMI's cost modeling. The June 1999 incident established a billed kilowatt demand
setting of 3,011 although the actual average kilowatt demand is less than 2,500, which matched OMI's
projection. The impact of the higher billed kilowatt demand resulted in aMI paying for reserve energy
that was not used nor budgeted for. Attachment 2 reveals the billed versus actual kilowatt demand at the
J.B. Messerly WPCP during the first agreement term. Additionally, the fuel cost recovery surcharge
increased approximately 5 percent due to higher fuel costs in 2000.
, Item No. 11. The sludge hauling overage of $366;121.00 is attributed to the previously mentioned facility
upg"Tades taking place at the lB. Messerly WPCP during the tirst agreement term. In cleaning the
digesters, an outside contractor used belt filter presses to de water the material in the digesters. As part of
, the dewatering process, a less than desirable residual material, via filtrate, was returned to the influent
waste stream for treatment by the WPCP. This is confirmed based on the decrease in average BOD
loading from 87,723 to 65,101 pounds per day upon cessation of both construction projects.
Another factor contributing to the budget overrun was the land applied solids concentration being below
the contractual minimum. Foremost, were numerous centrifuge failures resulting in extensive downtime
on both sludge thickening units. In November 1999, Centrifuge No.1 was permanently removed from
service due to a major failure requiring at least $90,000.00 to repair the mechanical deficiencies. Given
the age of both centrifuges, their history of repairs and alternatives reviewed, Augusta and OMI agreed to
proceed with gravity belt thickening and discontinue repair of the centrifuges. The end result of
discontinuing centrifuge repair was to use only one centrifuge for future operations until a gravity belt
thickener could be procured. Therefore, the entire year of 2000 thickening was, accomplished with one
WPIAugunO& Recollcile or Fim AgTl:cnleO\ Ye:U.doe
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centrifuge. Following are ,the dates when the only centrifuge available was out of service due to
mechanical or electrical failures during the year 2000.
March 21 - 27
May15-17
June 22 - July 20
July 23 and 24
August 2 - 7
August 28 and 29
November 1- 14
December 24 - March 2001
The second factorresulting in poor land-applied sludge solids' concentration was the digester
rehabilitation project In an effort to expedite rehabilitation of the anaerobic digestion system, operation
of the digestion 'process was in a state of continuous flux. Sludge heaters were removed from servic,e,
tanks were drained and filled to test piping and pumps, and fewer units were in continuous service
whereby the contractor would have sole undisturbed access to perform the rehabilitation.
If the minimum total solids' concentration target of 3.5 percent were achieyed, savings9f $121 ,496.00
would have occurred. Based on our agreement, aMI would be responsible for $15,187.00 of the fiscal
overrun with regard to sludge hauling. The remaining over expenditure of $244,625 .00 is a conservative
cost of disposing of the additional solids generated due to the increased BOD loading at the
J.B. Messerly WPCP.
Item No. 12. Interim dewatering services were added to Amendment No.1 to allow for continued land
application of the majority of the biosolids ge~erated at the J.B. Messerly WPCP during the digester
rehabilitation project aMI's approach involved reducing solids feed to the digestion system while two
anaerobic digesters were out of service for rehabilitation so as to insure vector attraction reduction and
pathogen compliance of the land applied biosolids. The interim measure was in effect for three months
and provided continued compliance with the 40 CFR Part 503 guidelines for land applied sludge. The
solids not digested were landfilled as a final disposal method. The direct cost of this service was
$170,673.99 plus OMI's margin of$23,040.99 for a total 01'$193,714.98, which is consistent with
preliminary estimates discussed in April 2000. As previously mentioned, this service was not budgeted
due to the sludge hauling account being under budget wheI) preliminary discussions were underway.
WP/AuguSliI Rctoncile of Firsl Agreement Yc:u.doc
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Attachment 2
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J.B. Messerly Main Power Demand
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Other ~c~ounts
11 Sludge Hauling $ 2,240,000.00 $ 2,606,121.02 $ (366,121.02)
12 , Interim Dewatering $ . $ 170,673.99
.
Overhead 10.5% $ 17,920.77
Management Fee $ 5,120.22
Subtotal $ 193,714.98 $ (193,714.98)
Total $ 7,630,770.00 $ 8,504,536.47 $ (873,766.47)
Rebateabh~ Account
I
13 Repair Account Rebate $ 381,027.00 $ 377,327.83 $ 3,699.17
14 Direct Cost Penalty $ 39,241.31
15 Sludge Hauling Penalty $ 45,765.13
16 Sludge Hauling Concentration Penalty $ 15,187.00
Subtotal $ 1 03,892.~1
17 Less Overage on Mobilization $ (65,548.78)
Billable $ 704,325.08
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Page 6
January 15,2002
Table 1
Item Number, :'Account
1 Labor and Benefits
2 Mobilization/Systems Implementation
3 Administrative
4 Equipment and Vehicle Expense
5 . Training
6 Materials and Supplies
7 Outside Services
8 Utilities
9 Repair
10 Miscellaneous
$
$
$
$
$
$
$
$
$
$
Subtotal $
Overhead 10.5% $
Management Fee $
Subtotal $
2,149,564.00
144,319.00
146,114.00
43,529.00
53,851.00
570,196.00
80,933.00
1,164,558.00
381,027.00
14,454.00
4,748,54S.00
498,597.23
143,628,77
5,390,770.00
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$ ,47,178.63
$ . (65,548.78)
$ (8,885.01)
$ 2,429.86
$ 6,756.08
$ 30,630.97
$ (189,079.82)
$ '(152,725.51)
$ 3,699.17
$ 11,613,94
$ (313,930.47)
":, 'Actual, '
$ 2,102,385.37
$ 209,867.78
$ 154,999.01
$ 41,099.14
$ 47,094.92
$ 539,565,03
$ 270,012.82
$ 1,317,283.51
$ 377,327,83
$ 2,840.06
$ S,062,47SA7
$ 498,597.00
$ 143,628,00
$ 5,704,700.47 $
(313,930.47)
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i
ANDERSEN
Independent Public Accountants' Report
on Applying Agreed-Upon Procedures .
To the Management of Operations Management International, Inc.
and the City of Augusta, Georgia:
We have performed the procedures enumerated below, which were agreed to by Operations Management
International, Inc. ("OMI") and the City of Augusta" Georgia, ("Augusta") with respect to the Statement
of Annual Operating Expenses (the "Statement"), as defined in the Agreement for Operations,
Maintenance and Management Services (the "Agreement") between OMI and Augusta, for the seventeen-
month period ended December 31,2000 as wellasthe ten-month period ended October 31,2001
(collectively, the twenty seven-month period), solely to assist the users in determining that the expenses
and fees have been calculated in accordance with the Agreement. This engagement to apply agreed-upon
procedures was performed in accordance with standards established by the American Institute of Certified
Public Accountants. The sufficiency of the procedures is solely the responsibility of the specified users of
the report. Consequently, we make no representation regarding the sufficiency of the procedures
described below either for the purpose for which this report has been requested or for any other purpose.
A. We obtained a listing of all Allowable Expenses billed to Augusta in'relation to the Agreement
including those billed as part of the excess expense incurred over budget.
B. We agreed the total from the listing to the amounts billed to Augusta with no exceptions.
C. We determined a sample size of 28 for testing based on an eight percent tolerable error and a
zero percent expected error.
D. We randomly selected the sample from,the listing of Allowable Expenses incurred during the
twenty seven -month period ended OCtober 31, 2001, provided by OMI.
E. We agreed the selected expenses to invoices, time reports or payroll registers, as applicable,
with no exceptions.
F. We reviewed the selected expenses noting the expenses directly related to the Agreement with
no exceptions.
We were not engaged to perform an examination, the objective of which would be the expression of an
opinion on management's assertion; Accordingly, we do not express such an opinion. Had we been
engaged to perform additional procedures, other matters might have come to our attention that would
have been reported to you.
This report is intended solely for the use of the specified users listed above and should not be used by
those who have not agreed to the procedUres and taken responsibility for the sufficiency of the procedures
for their purposes.
Very truly yours, ,
~ ~ LLP