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The Tampa Bay Water Surface Water DBO

Joe Ortiz

U.S. Conference of Mayors

November 19, 2008

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Veolia Water North America

No. 1 market leader with ~38% share in U.S., Canada and Caribbean*

Approximately 600 communities served in 38 states; 300 municipal facilities

Manage largest U.S. water public-private partnership (Indianapolis)

Manage largest U.S. wastewater partnership (Milwaukee)

Manage largest U.S. DBO (Tampa Bay) Provide industrial/commercial water

partnerships and operating services at 100+ facilities

Largest number of U.S. industrial projects (customer base includes many Fortune 500 companies)

*Source: Public Works Financing, April 2008

Tampa Bay WaterSignificant DBO project

Milwaukee – largest U.S. wastewater agreement

Indianapolis – nation’slargest, most innovative partnership

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Municipal Projects +180 partnerships serving 600 communities

NORTHEAST Plymouth, MA Woonsocket, RI Cranston, RI Leominster, MA Wilmington, DE Danbury, CTSOUTH Tampa Bay, FL New Orleans, LA Atlanta-Fulton County, GACENTRAL Indianapolis, IN Chicago, IL Milwaukee, WI Springboro, OH

WEST Richmond, Palm Springs,

and Burlingame, CA Vancouver, WA Gresham, OR Great Falls, MT Honolulu, HI CANADA Moncton, New Brunswick Toronto, Ontario Brockton, OntarioCARIBBEAN St. Thomas, St. Croix, VI Antigua developments

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Public control and ownership is supported by private-sector expertise and experience

Performance-based contracts deliver:► Exceptional water quality► Environmental compliance► Customer service metrics► Operations metrics► Capital asset management ► Community involvement

Lower costs and rate stabilization

Added Value to Citizens

Improved customer services, operating metrics and

compliance while stabilizing rates, lowering costs

Partnerships deliver value to citizens

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We’ve proven the PPP model.

Oldest Partnership ► Burlingame, Calif. (35 years)

Largest Partnership ► Indianapolis

All types of communities, large and small, benefit from partnerships.

Operations and maintenance agreements and design-build-operate agreements have been applied to all facets of assets – from biosolids to drinking water.

New photo/s

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We believe in public control

Water is a local issue. You continue to own and

control assets. Your community continues to

exercise control over rates. We support you as the

technical operator and customer service provider.

A San Francisco suburb, Burlingame, California, was the nation’s first community to take advantage of a partnership, beginning in 1972. We’ve served ever since!

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Design-Build-Operate: Track Record in Tampa Leads to Largest U.S. Project

Tampa Bay team delivers on DBO, builds relationship Difficult-to-treat variable water quality addressed with Actiflo

technology DBO solution delivers 66-MGD facility and helps save $80

million Proven technology, established proven working relationship and

intimate knowledge of operation Keller Degasification Plant (33 MGD)

Reservoir (15 billion gallon capacity)

TBW member governments Hillsborough, Pinellas, and Pasco Counties, St. Petersburg, Tampa, and New Port Ritchey

TBW currently provides 189 mgd of drinking water to over 2 million citizens

Expertise, experience to provide innovative solutions and benefits. Industry leader in municipal DBO projects for water and wastewater treatment Completed hundreds of capital projects, providing design, construction and O&M services Single point of responsibility and accountability Less expensive and faster project delivery method

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Existing Regional Surface Water Treatment Plant

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2.5 Million Residents Served

230 mgd total public

supply average daily flow

Tampa Bay Water- Where we are

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Objectives for AgencyObjectives for Agency

Dual commitments to the Tampa Bay Community:

► Reduce production at existing well fields

► Meet growth in demandConfiguration I program

► Develop new surface water and desalinated seawater supplies

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Why Plunge into Public-Private Partnerships?

Tampa Bay Water operated a groundwater-only system up to 1998

► No O&M experience with surface water or desalination water supply

► Tampa Bay Water Board’s desire to shift O&M risk to private operator

► Potential long-term savings if private sector stakeholders involved in project development from the outset

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Surface Water Treatment Plant DBO Summary

Original project 2000-2002► 66-mgd capacity► $85 million capital cost► 15 year O/M agreement

Expansion project 2007-2010► 120-mgd capacity► $127 million capital cost► 5 year O/M extension

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SWTP Expansion: Putting the Lessons Learned into Action

October 2006 - Negotiate with existing contract developer, Veolia Water NA

► Confidence in partnership based on performance

► Maximize previously negotiated terms and conditions

► Keep risk with existing contract operator

► Apply lessons learned in original project procurement

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Tampa Bay: Partnership Scope Expansion to 120 MGD

Tampa Bay builds on success of DBO Achieves 72-MGD rating and has 19 employees Expansion of Surface Water Plant to 99 MGD

with 120 MGD capacity and 27 employees $126.7 M Capital Expansion

Veolia equipment sourced 42-month construction schedule Cost plus structure with incentives

Approximately $32M increased O&M revenue 5-year contract extension

Negotiated Procurement

TBW Board ratification April 16, 2007

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Open-Book, Design-Build Project Delivery

Competitive bidding of 48 sub-contracts and purchase orders greater than 0.1% of GMP ensures market competitive pricing

Exceptions:► 7 sole source purchases► Negotiated engineering and construction management fees

Bid packages and award recommendations approved by Tampa Bay Water

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Private Partnership Summary

They work!► Allocate risks appropriately and take the time to

develop a full understanding between partners► Select partners carefully, the relationship needs

to endure

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TBW Surface Water Treatment Plant