POST POINT RESOURCE RECOVERY PLANT BIOSOLIDS PROJECT - US ENVIRONMENTAL PROTECTION AGENCY
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POSTPOINTRESOURCERECOVERY
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US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
WIFIA LETTER OF INTEREST
Section A: Key Loan Information
1. Legal name of prospective borrower:
City of Bellingham
2. Other names under which the prospective borrower does business:
Not applicable.
3. Project name (assign a short name to the project for purposes of identification):
Post Point Resource Recovery Plant (Post Point) Biosolids Project (“Resource Recovery Project”
or “Project”)
4. Provide a brief description of the project(s) seeking financing. Limit the description to the
elements included in the estimated total projects costs in Question A‐7. (Word Limit: 300).
The $277M Post Point Resource Recovery Project includes the repair/replacement of aging
wastewater solids treatment infrastructure and the emergency power system. The Project
includes two of the City’s top wastewater capital improvement projects (Resource Recovery
Project and Generator/Controls Upgrades and Replacement Project) both of which ensure the
long‐term reliability and environmental sustainability of the City’s wastewater services.
Resource Recovery Project: The City’s 34 MGD Post Point Resource Recovery Plant uses
multiple‐hearth furnaces (MHFs) to incinerate wastewater solids recovered from treatment
processes. The MHFs, constructed in 1972 and 1990, have been repaired multiple times in recent
decades. The City is investing over $1 million (FY 2021/2022) in major emergency repairs to avoid
service disruptions until construction of the Resource Recovery Project. Due to the age of the
existing furnaces, increasing operating expenses, increasing risk of failure, pending regulatory
requirements, and projected population growth, the City seeks to implement a more sustainable
solids management system. The Project includes the construction of a new anaerobic digestion
system with offsite soil processing, allowing the City to recover valuable resources to produce
US EPA Class A biosolids and renewable natural gas for local beneficial use. The Project, to be
delivered via an alternate delivery approach, includes the following major components:
Solids screening
Temperature‐phased anaerobic digestion system with intermediate batch tanks
Digester gas treatment and upgrading system
Thickening/Dewatering equipment replacement
Sidestream nitrogen removal process and associated plant upgrades
1US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
Heat recovery system using electric heat pumps
Biosolids loadout
Administration building complex (including operations center, laboratory, education
center, offices, maintenance shop)
Sitework, yard Piping, stormwater, odor control, and other appurtenances
Generator and Controls Replacement Project: The Project replaces Post Point’s aging back‐up
power generators (two 1,250 kW diesel Caterpillar generators, 1992 construction) associated
control systems, hardware, and software systems. This project ensures reliable WWTP service
during power outages.
5. Describe the project’s or projects’ purpose(s) (including quantitative or qualitative details on
public benefits the project will achieve). If the loan contains more than one project, the
projects must serve a common purpose. Describe the common purpose that the projects share
(i.e. addressing sanitary sewer overflows or improving drinking water quality). (Word limit:
300).
The Project replaces and rehabilitates critical Post Point infrastructure that is well beyond its
useful life to ensure reliable wastewater services for the City. Project implementation will:
provide the capacity and reliability needed to comply with solids management regulatory
requirements through 2035; the ability to meet projected demands; recovery of valuable
resources that can be reused; and provide for reliable wastewater treatment operations
during power outages. The Project provides the following benefits:
Aging Infrastructure Replacement – Replaces aging infrastructure (solids treatment and
backup power) thereby increasing the useful life of the solid’s treatment facilities for the
next 50 plus years. The project increases the reliability of the solids handling facilities,
while reducing the operation and maintenance costs. The project utilizes modern
technology to optimize power, water and natural gas use and enable reliable, cost
effective solids management.
Operational Reliability ‐ Improves the operational reliability of the biosolids systems
and overall Post Point operations during power outages/shutdowns.
Emission Reductions – The Project, a critical element to achieving the City’s Climate
Protection Action Plan, reduces Post Point’s CO2 emissions by 60‐80% by recovering
resources. The greenhouse gas emission reduction benefit is estimated to be the
equivalent of removing 1,450 cars off the road annually.
Regulatory Compliance – Produces higher quality biosolids that comply with current
and potential future solids management regulations. Eliminating the incinerator exhaust
stream is also expected to comply with future air emissions regulations.
Local Fertilizer Product – Produce a Class A biosolids product that is suitable for use by
the City’s residents and other businesses. It is estimated that the nitrogen and
2US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
phosphorus recovered by the process will be equivalent to 45,000 bags of commercial
fertilizer.
Private Partnerships –The City is currently evaluating opportunities to partner with
private entities to beneficially use the biosolids and biogas.
6. Requested amount of the WIFIA loan (in dollars). This amount may be no more than 49% of
the estimated eligible project costs provided in question A‐7:
The City is seeking a WIFIA loan in the amount of 49% of the Total Project Cost or $136,048,500
7. Estimated total eligible project costs (in dollars):
$277,650,000
8. Identify the date the prospective borrower will submit an application. (Assume invitations to
apply will be issued approximately 90 days from letter interest submission deadline).
5/1/2022
9. Identify the date the prospective borrower wants to close its WIFIA loan.
1/15/2023
City of Bellingham looks forward to working with the EPA to prioritize the closing of the WIFIA
loan for its proposed Project and seeks to avoid a lengthy review or negotiation process. The
City targets to close the loan within 7‐8 months of Application submittal and prior to the start of
construction. If invited to apply, the City is confident that it can facilitate a smooth application
submission, review, and agreement process.
10. Identify the type of entity that the prospective borrower is (pick one):
A. Corporation
B. Partnership
C. Joint Venture
D. Trust
E. Federal, State, or Local Governmental Entity, Agency, or Instrumentality
F. Tribal Government or Consortium of Tribal Governments
G. State Infrastructure Finance Authority
3US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
11. If option E, F, or G was selected in question A‐10, does the prospective borrower have legal
authority to carry out the proposed project activities described in this Letter of Interest?
Yes No Not Applicable
If yes, cite the legal authority.
The City, a first‐class city per RCW 35.01.010 incorporated in 1904, encompasses 27.6 square
miles and is the State of Washington’s twelfth largest city by population. The City’s current
charter (Attachment A.1 – City Charter) was adopted in 1972. The City owns and operates water,
wastewater, and surface/storm water utility systems, ambulance service, municipal parking
facilities, a golf course, a cemetery, a museum, three public libraries, approximately 40 parks, a
civic stadium, athletic fields, and an aquatic center.
The City began operating the sanitary wastewater collection system in 1892, collecting and
discharging into Bellingham Bay. Since 1974, the City has provided primary wastewater
treatment from its Post Point Resource Recovery Plant. The Plant was upgraded in 1993 to
include secondary treatment, and its capacity was further expanded in 2014. The sewer utility
serves the City, Urban Growth Area, and certain surrounding areas, including Whatcom County
and Lake Whatcom Water and Sewer District (formerly Water District No. 10).
The stewardship of public funds is one of the primary responsibilities given to elected officials of
the City of Bellingham (Attachment A.2 – Financial Management Guidelines). The City has a
mayor‐council form of government. The seven‐member Council exercises the legislative power
of the City while the Mayor is chief executive officer and is responsible for the maintenance of
law and order within the City and general administration of City government. The Mayor is
elected for a term of four years. Six council members are elected by ward to serve staggered
four‐year terms. The seventh council member is elected at large every two years. On or before
November 1, every even number year, the Mayor submits a proposed budget to the City Council
for the following odd and even number years. Biennial appropriated budgets (Attachment A.3 ‐
2021‐2022 Adopted Biennial Budget) are adopted for the general, special revenue and debt
service funds on a basis consistent with generally accepted accounting principles (“GAAP”).
Capital project funds adopt budgets on an individual project basis. Proprietary and fiduciary
funds are budgeted for management purposes only. The City’s budget procedures were created
in accordance with the Washington State Legislature Revised Code of Washington, Title 35,
Chapter 35.34 RCW (Chapter 35.34 RCW: BIENNIAL BUDGETS (wa.gov)).
Authority for this activity stems from RCW 35.67.020, which provides that “Every city and town
may construct, condemn and purchase, acquire, add to, maintain, conduct, and operate systems
of sewerage and systems and plants for refuse collection and disposal together with additions,
extensions, and betterments thereto, within and without its limits. Every city and town has full
jurisdiction and authority to manage, regulate, and control them and, except as provided in
subsection (3) of this section, to fix, alter, regulate, and control the rates and charges for their
use.” Subsection 3 is not applicable to the purpose of this discussion, but for reference states
4US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
“The rate a city or town may charge under this section for storm or surface water sewer systems
or the portion of the rate allocable to the storm or surface water sewer system of combined
sanitary sewage and storm or surface water sewer systems shall be reduced by a minimum of
ten percent for any new or remodeled commercial building that utilizes a permissive rainwater
harvesting system. Rainwater harvesting systems shall be properly sized to utilize the available
roof surface of the building. The jurisdiction shall consider rate reductions in excess of
ten percent dependent upon the amount of rainwater harvested.”
Legal authority to incur debt payable from and secured by revenues of the water, wastewater,
and surface/storm water utility systems is found in RCW 39.46.160.
12. If “C. Joint Venture” was selected in question A‐10, describe the organizational structure of
the project(s) and attach an organizational chart illustrating this structure. Explain the
relationship between the prospective borrower, the project, and other relevant parties.
Include individual members or titles of the project team(s) and their past experiences with
projects of similar size and scope. If multiple parties are involved in the project’s construction,
maintenance, and operation, describe the project’s risk allocation framework.
Not applicable
13. County(ies) Served by project(s)
Whatcom County
14. Population Served by project(s)
146,440
15. Total population served by system
105,226 (2020) and 146,440 (2045 design year)
16. Borrower department and division name:
City of Bellingham, Public Works Department
17. Business street address:
104 W. Magnolia St., Suite 109
Bellingham, WA 98225
5US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
18. Mailing street address (if different from above):
Same as business address.
19. Employer/taxpayer identification number (EIN/TIN):
91‐6001229
20. Dun and Bradstreet Data Universal Number System (DUNS) number:
010211977
21. National Pollutant Discharge Elimination System (NPDES) and/ or Public Water System (PWS)
number (if applicable):
WA0023744 (Attachment A.4 – Post Point Facility Final WDR and Fact Sheet)
22. If the prospective borrower is not a public entity, is the project(s) publicly sponsored? Please
explain.
Not Applicable. The City of Bellingham, the prospective borrower, is a public entity.
The City of Bellingham’s Public Works Department has engaged with the City Council as well as
the public to solicit feedback on the proposed solids treatment alternatives and the selection of
the preferred alternative through a series of public workshops and regular City Council updates
(Attachment A.5 – Public Workshops and City Council Presentations).
6US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
Section B: Engineering & Credit
1. Provide a technical report such as a preliminary design/engineering report or planning
document for each aspect of the project(s). Provide the filename(s) in the textbox.
The City of Bellingham’s capital improvement program (Attachment A.3) identifies the Post
Point Resource Recovery Project (Resource Recovery Project or Project) and the
Generator/Controls Upgrades and Replacement Project (Generator Upgrades Project) as the
City’s top two critical projects to be protective of human health, ensure reliable wastewater
treatment to the City’s users, and to meet demands for a growing and diverse community. The
Resource Recovery Project implements a new anaerobic digestion system, plant heating system,
and renewable natural gas production systems. The Generator Upgrades Project replaces the
facility’s existing backup generators to ensure reliable operations during outages.
Table 1 summarizes available planning and technical documents (included as Attachments to
this WIFIA LOI) supporting the two projects for which the City of Bellingham is requesting WIFIA
funding.
Table 1 ‐ City of Bellingham Resource Recovery Project ‐ Technical Documentation
Attachment # ‐ Project Report Title
General Planning Documents
Attachment B.1 ‐ 2016 Comprehensive Plan, 2016
Attachment B.2 –Comprehensive Sewer Plan, June 2009
Attachment B.3 – Post Point WWTP Facilities Planning Report, October 2011
Attachment B.4 – GHG and Climate Protection Plan 2007
Attachment B.5 ‐ Climate Protection Action Plan including Regional Initiatives, 2018 Update
Attachment B.6 – Climate Action Task Force Final Report, December 2019
Resource Recovery Project (Post Point Biosolids Project)
Attachment B.7 ‐ Biosolids Plan, November 2010
Attachment B.8 ‐ Biosolids and Energy Evaluation, Post Point WWTP (Presentation), June 2010
Attachment B.9 ‐ Biosolids Business Case Evaluation Report Bellingham Post Point WWTF,
December 2012
Attachment B.10 ‐ Bellingham Resource Recovery Project Capital Funding Analysis, February 2019
Attachment B.11 – TM No. 1 – Preferred Conceptual Alternative Selection, February 2019
Attachment B.12 – TM No. 2 – Final Alternatives Section, May 2019
Attachment B.13 – TM No. 3 – Flow and Load Projections (Draft), December 2020
Attachment B.14 – TM No. 4 – Seismic Evaluation of Existing Buildings (Draft), January 2021
Attachment B.15 – TM No. 5 ‐ Draft Heating and Cooling Alternatives Evaluation, July 2021
Attachment B.16 – TM No. 6 ‐ Biogas Upgrading Alternatives (Draft), July 2021
Attachment B.17 – TM No. 7 Biosolids Production and Marketing Contractor Assessment (Final Draft),
June 2021
Attachment B.18 – TM No. 10 Biosolids EQ Evaluation and Ammonia: TKN Ratio, December 2020
7US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
Attachment B.19 – TM No. 11 Biomethane Sale Evaluation (Draft), June 2021
Attachment B.20 – TM No. 12 Solids Screening, Thickening and Dewatering Technology Evaluation
(Draft), June 2021
Attachment B.21 – TM 15 – Struvite Management, June 2021
Attachment B.22 ‐ Draft O&M Staffing and Testing Requirements, July 2021
Attachment B.23a & b – Slide Deck on Post Point Delivery Method Evaluation (2 Workshops)
Attachment B.24 – Multiple Hearth Furnace Incinerator 2 Inspection Report, August 2020
Attachment B.25 – Multiple Hearth Furnace Repairs Quote 1, December 2020
Attachment B.26 – Incinerator 1 Condition Assessment (Draft), March 2021
Attachment B.27 – Incinerator 2 Condition Assessment (Draft), March 2021
Attachment B.28 – Site Assessment Report, March 2021
Attachment B.29 – Draft Site Plan, June 2021
Attachment B.30 ‐ Preliminary Design Considerations, Post Point Biosolids Phase 3, March 2021
Attachment B.31 ‐ Resource Recovery Project USGS Sea Level Rise/Inundation Slide Deck, March
Attachment B.32 ‐ WWTP Biosolids and Nitrogen Removal Projects‐ Financial Analysis, February 2021
Resource Recovery Project (Post Point Biosolids Project)
Attachment B.33 – Post Point WWTP Drawings Emergency Generator Building, August 1990
Attachment B.34 ‐ Post Point WWTP Improvements – Value Analysis (Standby Power and 12.47 kV
Loop), October 2012
Attachment B.35 ‐ MOP#2 Generator Test Index
Attachment B.36 ‐ Post Point Generator and Controls Upgrades and Replacement RFQ and
Addendum, July 2019
Attachment B.37 ‐ Post Point Generator and Controls Update and Replacement SOQ, July 2019
Attachment B.38 – Generator and Controls Upgrade Engineering Price Proposal, October 2019
2. Present the overall project schedule start and end dates for key milestones and costs in the
provided tables. For WIFIA loans with one project, fill out Row 1. For WIFIA loans with
multiple projects, fill out and create as many rows as needed.
The following table summarizes the anticipated schedule for the completion of each project
included in the Resource Recovery Project. Conceptual development and planning for each
project is complete. The design phase for the Generator and Controls Upgrades and
Replacement Project will be completed in April 2023 and that for the Resource Recovery Project
in December 2023. Construction for both projects is scheduled to start in mid‐late 2023 and
completed within the WIFIA preferred window of 5 years from loan execution. Attachment B.39
includes the Master Schedule for the Resource Recovery Project.
Project Name Planning Design Construction
Resource Recovery 11/15/2016 – 4/1/2021 – 12/22/2023 –
Project 2/25/2022 12/21/2023 12/22/2026
Generator 11/1/2021 – 4/1/2021 – 5/1/2023 –
Replacement Project 3/31/2022 4/28/2023 10/31/2024
8US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
3. Choose the proposed lien priority for the WIFIA loan.
Senior Lien
Subordinate Lien: All project debt has the same priority as the WIFIA loan.
Subordinate Lien: Not all project debt has the same priority as the WIFIA loan.
A springing lien will be used in a bankruptcy related event.
4. Describe the proposed security for the WIFIA loan (e.g., water utility revenue or general
obligation) and provide an existing credit rating that is less than a year old or is actively
maintained. The rating should be on the same security and lien as the proposed WIFIA loan. If
a credit rating is not available, describe how the senior obligations of the project will achieve
an investment‐grade rating.
The City of Bellingham’s Public Works Department operates and maintains the water,
wastewater, and stormwater systems (System) for the City of Bellingham. The proposed WIFIA
loan will be payable from and secured by a pledge of net revenues of the System, subject only to
the payment of operating and maintenance costs and on a parity of lien with such revenues as
the System’s existing parity lien debt and any future parity obligations. A copy of the Official
Statement for the City’s most recent parity lien revenue bonds is included as Attachment B.40.
The City’s 2021‐2022 adopted Biennial Budget (Attachment A.3) delineates sources of revenue
and expenditures for the City including the wastewater fund, one of the City’s enterprise funds.
These enterprise funds are the backbone of community and economic development in the City
of Bellingham. The wastewater fund is covered solely by customers through sewer rates, fees,
and charges for service (discussed below).
Sewer Rates. The City charges sewer rates depending on whether the service is metered or
unmetered and depending on the class of customer served. Sewer rates (found at
https://bellingham.municipal.codes/BMC/15.12.180 ) are billed on a bi‐monthly basis. The
base rate and volume charges increase annually annual adjustment each year in January by
an inflationary factor tied to the Consumer Price Index, All Urban Consumers (CPI‐U),
Seattle‐Tacoma‐Bellevue Index.
Connection Charges. The City charges a system development charge for new sewer service
or exchange services, determined by the adjusted size (not including standby fire protection
for single‐family residential), of the water service serving the premises. The current charge
for single family residential sewer connections is $7,637. System development charges
increase annually based on the annual increases in the CPI. In 2019, the City received
approximately $2,306,694 for system development charges related to sewer service.
9US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
The system has a diverse revenue base, primarily reliant on residential service customers.
No single customer represents more than 2.7% of annual revenue as shown on Table 2 and
3 below.
Table 2 ‐ Sewer Customer Revenues
Customer Type 2015 2016 2017 2018 2019
Single‐family $8,413,675 $9,199,918 $9,784,132 $9,984,487 $10,661,153
Multi‐family 4,691,825 5,038,222 5,389,615 5,781,248 5,825,175
Commercial/Industrial 4,208,494 4,476,287 4,901,667 5,094,739 5,198,159
School/Non‐profit 556,799 574,529 589,940 629,310 582,359
Water District 564,405 617,346 645,329 645,723 606,367
City/Whatcom County 202,296 214,621 234,303 210,443 224,196
Total $18,637,494 $20,120,923 $21,544,985 $22,345,951 $23,097,409
Source: The City of Bellingham.
Table 3 ‐ Top Ten Sewer Customers (2019)
Percent of Total 2019
Customer Name 2019 Revenue
Sewer Revenue(1)
Lake Whatcom Water & Sewer District $597,285 2.6%
Trans‐Ocean Products 198,908 0.9
Puget Sound Energy – Encogen 173,080 0.7
Nanak Foods 113,994 0.5
NW Healthcare Linen 105,692 0.5
PeaceHealth 102,945 0.4
Bakerview Estates 98,900 0.4
Bellis Fair Mall 94,810 0.4
Habitat Properties LLC 75,899 0.3
Virtu Bellingham 70,086 0.3
Total $1,631,590 7.1%
(1)
Percentages based on 2019 sewer revenue of $23,097,765.
Source: The City of Bellingham.
The City bills approximately 27,782 utility accounts on a bi‐monthly basis and has
63 high‐volume accounts which are billed monthly. Payment is due less than one month
after billing. As of August 1, 2020, approximately 1% of utility fees billed were over 90 days
past due, and approximately 300 active accounts were delinquent.
10US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
The City recently completed a draft rate study, inclusive of the Post Point Biosolids Project
as well as a larger water quality project, to make recommendations on future rate increases
to accommodate the increased debt service associated with this Project. The findings of the
study were presented to City Council recently in 2021. The Public Works Department will
formally take an Ordinance to City Council with the requested rate increases, upon fine
tuning the total project costs, for adoption. The Public Works Department does not see any
issues with the rate increases in light of the criticality of the project as well as the on‐going
public education of the project need and costs.
The City also follows comprehensive financial planning policies and practices, including
reserve, investment, and debt policies, (Attachment A.2) that allow for strong financial
metrics related to cash reserves and debt‐service coverage. This financial planning has
created a stable and predictable revenue stream as reflected in the utility’s strong credit
rating (Attachment B.41 – Credit Rating Letters):
Moody’s Investor Service (August 2020) assigned Aa2 to the City of Bellingham Water
and Sewer Revenue Bonds.
Standard & Poor’s Global (June 2021) assigned a AA+ rating to Bellingham, Washington’s
anticipated $16.917.7 million series 2021 Limited Tax General Obligation debt bonds,
2021 and on the City’s LGTO LTGO debt outstanding stating that the outlook is stable.
The pledge for the WIFIA loan will be the revenue of the System.
5. If an existing credit rating is not available, provide a financial pro forma and three years of
audited financial statements. Indicate the filenames in the textbox below.
Financial pro‐forma was not provided as the City provided two recent credit rating letters in
Question 4.
Attached to the City’s WIFIA LOI are the City’s three most recent Comprehensive Annual
Financial Reports.
Attachment B.42a – 2017 Comprehensive Annual Financial Report
Attachment B.42b – 2018 Comprehensive Annual Financial Report
Attachment B.42c ‐ 2019 Comprehensive Annual Financial Report
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WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
6. Provide a sources and uses of funds table for the construction period(s), including the
proposed WIFIA loan. For prospective borrowers other than Public Entities, add rows as
needed to identify the amount and source(s) of project equity, letters of credit, and other
sources of debt as applicable. Note any ineligible project costs. More information about
eligible costs is available in the WIFIA program handbook. Indicate the certainty of other
sources of funding.
Sources Category Estimated Dollar Value Funding Certainty
1. WIFIA Loan (cannot exceed 49% of
$136,048,500 N/A
eligible costs)
2. Revenue Bonds $120,601,500 Certain
3. SRF Loan $0 Choose an item.
4. Borrower Cash $15,000,000 Certain
5. Previously Incurred Eligible Costs* $6,000,000 Certain
6. Other (please specify) Click or tap here
$0 Choose an item.
to enter text.
TOTAL SOURCES $277,650,000
Uses Category Estimated Cost
1. Construction $157,500,000
2. Design $25,000,000
3. Planning $5,400,000
4. Land Acquisition $1,000,000
5. Other Capital Costs $0
6. Contingency $52,100,000
7. Total Capital Costs $241,000,000
8. Financing Costs $500,000
9. Ineligible Costs (if applicable) $0
10. Other (please specify) WIFIA Program Contingency $36,150,000(1)
11. Other (please specify) None $0
TOTAL USES $277,650,000
*Previously Incurred Eligible Costs are project related costs incurred prior to the WIFIA loan’s execution. Please see the WIFIA Program
Handbook for additional information on Eligible Costs.
7. For funding sources that are uncertain (excluding the WIFIA Loan), explain alternative funding
that could be used if the funding source is not available.
The City of Bellingham’s Public Works Department operates and maintains the water,
wastewater, and stormwater systems for the City of Bellingham. The wastewater fund is one of
the City’s enterprise funds. These enterprise funds are the backbone of community and
12US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
economic development in the City of Bellingham. The cost to provide wastewater utility service
is covered solely by customers through rates, fees, and charges for service.
The Public Works Department has an established track record of successfully delivering quality
service to its customers as well as in planning and delivering its capital improvements program,
leading to the delivery of over $60M in wastewater projects over the last 10 years. The City also
follows comprehensive financial planning policies and practices (Attachment A.2) that allow for
strong financial metrics related to cash reserves and debt‐service coverage. This has largely
been achieved through the steady customer base as well as through the passing of sufficient
rate increases to fund the utility’s needs.
The City intends to issue tax exempt municipal bonds for the portion of the project not financed
through WIFIA. This portion of the financing is uncertain to the extent that the debt has not
been issued, but the City’s financing plan for this Project, developed in tandem with a rate study
(Attachment B.43) identifying rate changes needed to sustain the debt associated with this
Project, has been developed with municipal debt issuance as an integral part of the plan and the
City Council has been briefed of this intent. Per the aforementioned financing plan, the City will
adopt an updated rate schedule in advance of any debt issuance and subsequent construction.
In the event that a WIFIA loan is not received, the City will pursue full financing via bonds. The
City has performed the necessary studies to identify what rates are needed to support full bond
financing of this project.
As of 2019, the City’s water and sewer debt service coverage ratio was 7.08. In 2020, Moody’s
reaffirmed an Aa2 rating on existing and refunding debt payable from and secured by revenue
of the combined System. The City is confident that a new debt issuance backed by increased
revenues would be successful in the market.
The City of Bellingham plans to use the WIFIA loan (49%) and Revenue Bonds (51%) to fund the
Resource Recovery Project. The City anticipates that the WIFIA assistance credit term will have a
maturity of 35 years, secured by future wastewater revenues on parity with other outstanding
debt. The City will work with its financial planner and the EPA’s WIFIA program to determine the
loan amortization (e.g., straight line, level debt service schedule, structured to wrap around
other debt, etc.).
13US Environmental Protection Agency OMB Control No. 2040‐0292
WIFIA Program EPA Form No. 6100‐030
Letter of Interest Approval expires 4/24/2023
Section C: Selection Criteria
1. Will the project create construction jobs?
Yes No
If yes, approximately how many?
The Post Point Resource Recovery Project (Project) (total construction cost of $192M) is
anticipated to create a total of 579 FTEs over the duration of construction. Construction staffing
needs are estimated to peak at 210 FTEs, with approximately 198 FTEs in FY 2024 and 209 FTEs
in FY 2025 (the two peak years of construction activities). The median construction staffing
needs during construction is estimated to be 156 FTEs.
In addition to the direct construction jobs, it is anticipated that the Project will create a number
of indirect jobs including:
Design services (FY 2021 through 2023) is estimated to average 26 FTEs.
Design (Engineering Services During Construction) and services (Construction
Management, Labor Compliance, Environmental Monitoring, and other services) during
construction. It is estimated that on average 19 full time employees (FTE) positions.
Supplier jobs: It is projected that for every 100 direct construction jobs, an additional
88 jobs in the supply field will be created, per Updated employment multipliers for the
U.S. economy | Economic Policy Institute (epi.org)
Attachment C.1 includes a project memorandum documenting the approach taken in this job
creation analysis.
2. Will the project create post‐construction jobs?
Yes No
If yes, provide approximately how many and explain how this number was calculated.
Based on a preliminary Biosolids Project Future Staffing Assessment Analysis (Attachment B.22)
provides a basis for the calculation), the Post Point Resource Recovery Project is estimated to
require an additional 2 full time employees (including maintenance and laboratory staffing) for
the operation and maintenance of the Biosolids facilities. In addition, pending the offsite
alternative selected, additional staff will be needed for offsite composting operations, biosolids
hauling and other operations. Post construction staffing needs were calculated based on the
guidance from the Northeast Staffing Guide and based on historical staffing demands for similar
sized facilities.
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3. Will the project support economic growth?
Yes No
If yes, explain how.
Bellingham's economy has traditionally been based on agriculture, fishing, and timber. While
these sectors are still vital components of the City’s economy, manufacturing, academia,
healthcare, and arts/culture have become bigger influencers in the region’s economy. The City
has become a popular tourist destination. The bulk of Whatcom County’s agricultural activity
involves berry and dairy farming. In 2001 the county's 201 dairy farms produced milk valued at
$185 million, compared to the 480 farms and $130 million in production in 1985. During 2000,
workers in Whatcom County's berry farms produced more blueberries and raspberries than any
other county in the state and ranked second in strawberries. Seed potatoes and apples are also
important crops. Commercial fishing, one of the area's oldest industries, has taken a drastic hit
due to overfishing, shortened seasons, and falling prices. In 1985, Whatcom County was home
to one of the largest commercial fishing fleets at 740 commercial vessels; by 2002 the Port of
Bellingham reported only 177 vessels. The forestry industry has been more stable, with
manufacturing of wood products and transportation equipment seeing gains recently. Growth is
projected to continue fueled by the availability of land, affordable housing, modestly priced
labor, access to water, and location in the Cascadia Innovation Corridor.
The Post Point Resource Recovery Plant provides for 100% of wastewater treatment for the
service area. Implementation of the biosolids and generator projects, which replace aging
infrastructure, will extend the solid’s facility useful life, and ensure the long‐term solids
treatment reliability and sustainability. Securing reliable wastewater treatment (liquids and
solids) is critical to the region’s economic development, which per its Comprehensive Plan
would otherwise impact the City’s ability to grow and the community’s economic vitality.
The Generator Upgrades and Replacement project, which replaces aging infrastructure, provides
for reliable backup power service during outages. Power disruptions historically and frequently
occur during winter storms when power use is high. During these times, typically the
wastewater treatment plant is near its maximum hydraulic capacity and outages can
immediately result in sewage overflows. By replacing the City’s backup generators and
associated controls, the City will ensure that there is backup power in case of outages and
thereby the ability to continue operations and avoid potential facility and environmental
damage.
In addition, the project produces U.S. EPA Class A Biosolids with the new solids treatment
process that will be suitable for use by the City’s residents and other businesses including
agricultural applications. It is estimated that the nitrogen and phosphorous recovered by the
process will be the equivalent of 45,000 bags of commercial fertilizer (50 lb bags). This local
fertilizer source could become a sustainable and economical fertilizer benefit to the community.
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4. Will the project protect drinking water, including source water protection?
Yes No
If yes, explain how.
The City of Bellingham’s water supply comes from Lake Whatcom Reservoir which is fed by
rainwater within the watershed and water from the Deming Glacier on Mt. Baker, which flows
via local rivers to the lake. Lake Whatcom was placed on Washington’s 303(d) list for polluted
waters because it failed to meet state standards for dissolved oxygen due to algal blooms.
Subsequently a TMDL for total phosphorous and bacteria were developed for the lake. Other
threats to the lake include heavy metals, hydrocarbons, and pesticides. In addition, climate
change is likely to increase temperatures and decrease snowpack which will impact lake levels.
These conditions may increase the flood risks around the lake which could overload stormwater
and wastewater systems and damage wastewater treatment facilities.
While the Resource Recovery Project does not directly protect a drinking water source, the
project will have some level of positive impact on reducing the pollutant loads into the City’s
drinking water source (Lake Whatcom), and as a result, offer some protection of the City’s
drinking water source. The current incineration system burns wastewater solids at Post Point,
which emits carbon dioxide and other contaminants (e.g., nitrogen oxide, carbon monoxide,
sulfur dioxide, mercury, cadmium, lead, and VOCs) into the air. Prevailing winds from the
southwest could transport these airborne pollutants to Lake Whatcom since it is located to the
northeast of Post Point. The Project replaces the aging incineration equipment, which is very
expensive to maintain and repair, difficult to permit and burns rather than recovers resources
with a digestion based solution.
Replacement of the aging backup generators will ensure facility operations during power
outages and avoid wastewater overflows which can also impact receiving stream water quality.
In addition, the Project includes the construction of a new operations center and accredited
water quality laboratory that meets current best practice working spaces for real‐time
monitoring and maintaining the complex biosolids processes.
5. Will the project support international commerce?
Yes No
If yes, explain how.
The Port of Bellingham, established in 1920, focused on the shipping and fishing industries.
Current day operations include shipping, an international airport and business. The City of
Bellingham is located in Whatcom County, which neighbors British Columbia. Business relations
are very strong with daily cross border activity of 36,000 cars and 2,800 trucks passing through
the County and Port. Canadian businesses have chosen Whatcom County to expand into the US
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market due to lower real estate costs and proximity to the Canadian border. Specifically, the
Port of Bellingham’s Foreign Trade Zone, where foreign and domestic merchandise is considered
to be international commerce and outside of US Custom’s territory, provides benefits for
businesses in Whatcom County. In addition, the Bellingham Cruise Terminal is the southern
starting point for the Alaska Maritime Highway System, which is the nation’s first marine scenic
highway.
The bulk of Cascade Gateway traffic consisting of Canadians involved in shopping, vacation, and
recreation in the U.S. In Whatcom County, Washington. Canadian shoppers have a significant
impact upon the regional economy, with between 6 and 16% of taxable retail sales in the county
attributable to Canadians. According to the Border Policy Research Institute (Attachment C.2),
many corporations in the State of Washington are linked to Canadian investors/owners,
particularly in near border cities such as Bellingham where 4% of businesses are linked to
Canadian owners.
The Post Point Resource Recovery Plant provides for 100% of wastewater treatment for the City
of Bellingham as well as the Port of Bellingham. Implementation of the Resource Recovery and
Generator Replacement projects, provide for the long‐term solids treatment reliability and for
on‐going operations during power outages, by replacing aging infrastructure, are critical to
supporting international commerce. The lack of reliable wastewater services would impact the
attractiveness of the region for international commerce (tourism, manufacturing and other).
6. Will the project implement new or innovative technology(ies), such as using renewable or
alternate sources of energy, water recycling, or desalination?
Yes No
If yes, explain how.
The Post Point Resource Recovery Project implements an anaerobic digestion process to recover
valuable resources to replace the current incineration process which emits CO2 and other
contaminants into the air. The projects enable the City to transform wastewater solids into
two beneficial ,safe and reusable resources: biosolids and biogas.
Biosolids: Wastewater solids will be treated to produce U.S. EPA Class A biosolids so it can be
used as a soil additive (e.g., fertilizer) for the community’s use. The "Class A" biosolids could also
be beneficially applied to local farmlands to safely enhance soil nutrients and condition and
avoid disposal at sanitary landfills, thereby conserving landfill capacity. Based on a preliminary
market evaluation, there are numerous entities that are interested in partnering with the City to
haul Class A biosolids from Post Point to an off‐site location for further processing to a product
suitable for beneficial use (via a “soil blending” process).
Biogas: The anaerobic digestion process’s biogas production creates an renewable energy
opportunity. This could include biogas conversion to electrical power through cogeneration or
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biogas selling or trading. Some of this renewable gas will be combusted in boilers that will be
used to provide hot water for heating the digester process and to provide building heating to
the solids handling process areas. The combustion heat from the boilers will be used to power
absorption heat pumps, which will recover additional heat and thereby reduce Post Point’s
energy consumption. In addition, based on discussions with the local natural gas utility, there is
significant interest in partnering with the City to inject the City’s renewal natural gas into the
natural gas pipeline to offset the use of carbon‐based fuels. This pipeline injection approach not
only would result in significant environmental benefits compared to flaring the biogas, it offers
considerable financial benefits through the potential implementation of renewable fuel
programs such as Renewable Identification Number (RIN) and Low‐Carbon Fuel Standard (LCFS)
credits.
7. Will the project use new or innovative approaches to plan, design, manage, and/or
implement the project?
Yes No
If yes, explain how.
The City of Bellingham’s Public Works Department strives to provide safe, reliable sewer service
at a fair, reasonable price while protecting and preserving the environment. The City and
Utilities support the incorporation of environmentally sustainable and innovative concepts into
project designs, as well as supports the development of green infrastructure. The Post Point
Resource Recovery project demonstrates this commitment with the replacement of its aging
solids incineration processes (1970’s construction), that is unreliable, expensive to maintain and
repair, difficult to permit, and burns solids, with anaerobic digestion to recover this valuable
resource. The City has implemented innovation through project concept to planning and
continues to seek innovative approaches in the project’s design and implementation. Some
innovative approaches used or to be used include:
Active Community Involvement in Process Selection: Earlier planning phases of the project
proactively engaged with and solicited input from the community in the development of the
preferred alternative through workshops, message boards, City Council updates, community
surveys, etc. Feedback from these workshops and one‐on‐one meetings indicated public support
for an alternative focused on resource recovery and environmental benefits, preference for
biosolids product that could be available for local distribution and use, minimizing impacts of
facilities to neighborhoods, and other items were incorporated into the Triple Bottom Line
“+”evaluation.
Decision Making Using a Two Phased Triple Bottom Line + Framework: The City established a
decision‐making process that was directly linked to the Council’s adopted Legacies and Strategic
Commitments goals (Attachment C.2). Built around a Triple bottom Line “+” (TBL+)methodology,
the City’s two‐step process including a high level screening of potential alternatives and a
second step using a TBL+ evaluation of the most feasible alternatives considering
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environmental, financial, social, and technical considerations, existing facility condition, current
and future regulatory requirements, and future capacity needs. The Resource Recovery Project
is guided by the City’s Legacies and Strategic Commitments goals which were tied directly to
each of the four TBL+ criteria, making it clear to the Council and stakeholders that the decision‐
making process was rooted in City values. Using this approach, the highest scoring alternative
(Class A Digestion & Offsite Soil Blending) that aligned closely with the City values was selected.
Optimizing the Use of Existing Infrastructure: The project is an example successfully blending
optimization of existing infrastructure with state‐of‐the‐art technology. Upgrading and replacing
aging infrastructure while also maximizing the use of existing facilities, promotes the best use of
existing assets, and extending asset value for the ratepayer. In addition, selection criterion for
the selected process (of Anerobic Digestion) was based on its ability to meet current and future
regulation, proven process and allows for innovation, reliable, safe working environment, meets
Climate Action Plan (resource recovery) and minimizes social impacts.
Innovative Heat Recovery System: The process design utilizes temperature phases anaerobic
digestion (TPAD) with batch tanks for heat recovery which is considered innovative in this
application. In addition, the design of the heat recovery system allows the City to reduce the
natural gas or digester gas combustion by recovering heat from the cooling step to heat the
thermophilic stage. Normally solids are heated to thermophilic (135deg F) temperatures using
natural gas or digester gas combustion in boilers, then cooled to mesophilic temperatures using
plant effluent.
Building Information Model (BIM): The City modeled the entire wastewater treatment plant
using AutoCAD’s REVIT software that will integrate with AutoCAD Civil 3D to produce a full 3D
design. In addition, the design includes the use of Building Information Model (BIM) to enhance
constructability by helping to identify potential conflicts during design and to provide the City
with a model that can be updated to enhance future planning, operation, and maintenance for
the Post Point Facility. The use of the BIM for Operation and Maintenance Training will provide a
more objective and real‐time decision based tool for new employees and to upgrade training.
Public Private Partnership Opportunities: The City is exploring opportunities for private entities
to provide biosolids management and treatment services “off‐site” to maximize the value to
residents. These services could entail hauling Class A biosolids from Post Point facility to an
off‐site location for further processing, as well as marketing and distribution of the final
biosolids product. To implement this partnership, the City has established a customized
two‐phased procurement process as follows:
Phase 1 RFP: Solicit proposals from the market to determine level of interest, proposed
approaches, and extent of services.
Phase 2 RFP: Establish a Phase 2 RFP that is crafted around the actual market input
(based on results of Phase 1 RFP) to request detailed proposal, including pricing and a
long‐term contract.
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Alternative Project Delivery: The City is conducting a thorough project delivery evaluation to
determine the most appropriate delivery model for the Project. Given the scale and complexity
of this Project and to encourage innovation and creativity, the City determined that an
alternative delivery approach that included increased collaboration between the engineer and
contractor would be vital to successfully executing the work. The City has short‐listed the
options to General Contractor/Construction Management (GCCM) and progressive design build
(final decision in summer 2021).
8. Does the project protect the system, project specific asset, or community from extreme
weather events such temperature, storms, floods, or sea level rise expected based on current
conditions?
Yes No
If yes, explain how.
The State of Washington, including Bellingham, has been impacted by the adverse effects of
climate change from droughts to super storms, floods, and sea level rise to wildfires. Per
Bellingham’s Climate Action Plan (Attachments B.4 and B.5), 2015 was the hottest year on
record in Washington State and impacts were felt in Bellingham. The record drought of 2015
shutdown salmon fishing to protect the stressed fish. Warm ocean temperatures caused
unprecedented toxic algae blooms, leading to widespread impacts to fisheries, including
closures of recreational razor clamming in Washington and Oregon, and much of the state’s
Dungeness crab harvest. Low snowpack, heat, and drought led to Washington’s worst‐ever
wildfire season, leaving over a million acres charred across the state and a $347 million
firefighting bill.
The State of Washington has issued drought emergency declarations, in 2015, 2019 and as
recently as July 14.,2021. The Governor issued the drought declaration as the state’s water
supply is projected to be below 75% of the average. As shown on the July 8th U.S. Drought
Monitor map, much of western Washington is classified as “abnormally dry”, while the eastern
portion is currently in an “extreme drought”. In July 2021, the Washington’s governor issued a
state of emergency due to the threat of wildfires. The unusually dry spring (the second driest in
the state since 1895) and the record‐breaking heat wave, the likely consequence of climate
change, has led to an early and active wildfire season. Recent trends predict that the City of
Bellingham will experience hotter and drier summers and more intense rain events in winter,
spring in fall.
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The Project design accounts for current and projected extreme weather events and provides for
treatment capacity as well as redundancy, as appropriate, to help ensure undisrupted service.
Design elements that protect the solids treatment system and assets include:
Electrical equipment is located above the anticipated high‐water levels from a minimum
100‐year storm surge or flood elevations.
The City stores backup motors for prompt replacement of installed motors after
flooding events, if needed.
Sump pumps are located in low areas of the facility to discharge water in the event of
flooding.
Submerged duty electronics.
Temporary flood barriers stored on‐site to provide dry floodproofing.
In addition, the Backup Generator and Controls project ensures ongoing operation during power
outages and aims to prevent pollution from wastewater overflows that would otherwise occur
due to extreme wet weather events.
The City has also recognized the need to account for sea level rise and storm surges to
proactively plan to protect infrastructure and ecosystems. The City engaged with the U.S.
Geological Survey (USGS) to implement a model across the Bellingham Bay and Whatcom
County to aid in evaluating risks and opportunities for increasing infrastructure resiliency with
the initial modeling outputs presented to the City in early March 2021 (Attachment B.31). The
City continues to collaborate with U.S. Geologic Service and results will be incorporated into the
Resource Recovery Project(Post Point Biosolids Project) preliminary design to evaluate potential
impacts to building floor elevations and other design considerations.
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The Project will eliminate the use of incinerators and reduce the overall greenhouse gas
emissions associated with the biosolids handling processes. The predominant sources of
greenhouse gas emissions (carbon dioxide, methane, and nitrogen oxide) at WWTPs come from
using energy for aeration and solids processing (i.e., stationary combustion and purchased
electricity). The current incineration process is a significant source of greenhouse gas (GHG)
emissions at the Post Point facility, both in the form of direct (combustion) emissions from
incineration using pipeline natural gas and from indirect emissions related to electricity
purchased to power the process. The Post Point Resource Recovery Project implements a state‐
of‐the‐art anaerobic digestion process and eliminates the use of incineration. In addition, all
biogas that is currently flared off producing greenhouse gas emissions will be recovered as
biogas. These changes will improve regional air quality and reduce the City’s contribution to
climate change.
9. Does the project protect the system, project specific asset, or community from extreme
weather events such temperature, storms, floods, or sea level rise predicted to occur in the
future?
Yes No
If yes, explain how.
As discussed in the response to question 8, the Post Point Resource Recovery Project protects
the City’s solids treatment system and project specific assets from extreme wet weather events
both in the present and in the future. The region has been facing increasing temperatures and
flood events and these conditions are anticipated to be further exacerbated in the future.
Implementation of the Generator and Controls Replacement Project, which replaces the WWTPs
aging back‐up power generators will enable the Post Point facility to continue operations without
utility power and allow it to be self‐sufficient from the power grid. This project ensures reliable
wastewater services during power outages – events likely to occur during extreme weather
events.
10. Does the project reduce greenhouse gas emissions?
Yes No
If yes, explain how.
The 2018 Climate Action Plan (Attachment B.5) identified wastewater services as contributing
40% of municipal emissions primarily due to electrical and natural gas usage. The Post Point
Resource Recovery Project is a defining opportunity for Bellingham to implement its 2018
Climate Action Plan and reduce sewer utility carbon dioxide (CO2) emissions by 60‐80%. It is
calculated that the greenhouse gas emissions from the facility’s current incineration system is
approximately 3,900 Tonne CO2 emissions/year. The Resource Recovery Project is expected to
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