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The Bio-Digester: A Critical Juncture

Points for Discussion
with the Council of the Township of Chatsworth
at its Meeting on June 18, 2014


1. My Freedom of Information request on June 11, 2014 asked for documents including feasibility studies,
financial risks, sensitivity analyses related to forecast costs and revenues, and analyses of assumptions
related to all aspects of the February 2, 2011 Agreement (bio-digester, lagoon and Chatsworth landfill sites).
All or most of these documents should have been part of Chatsworths due diligence process before
making a decision to proceed with construction.
a. In my opinion, the litany of problems experienced with the bio-digester would have been
anticipated through a due diligence process that would then have led to a decision by Chatsworth
along the lines of thanks, but no thanks.
b. Based on my observations since August, 2012 (when I first started to pay attention to the bio-
digester), I suspect that many of these elements were not given adequate (or any) consideration in
the decision to build and in the negotiations between Chatsworth and Georgian Bluffs leading up to
the Agreement. I truly hope the information returned from the FOI request proves me wrong.
c. As evidenced by: 1) the positive reception given to the presentation at the joint meeting on May
28
th
; and 2) the lack of insightful analyses and discussion of assumptions, uncertainties and risks in
relation to either that presentation or the scenarios tabled at the last Council meeting (June 11
th
), it
appears that there is a significant risk of repeating the same mistake.
2. In support of point 1 b), above, I would point out that the consultants report (excerpts from which are
included in the Agreement) said that for $3.8 million dollars and annual operating costs of $212,000 the bio-
digester would process ALL of the septage from the two townships including the Sunset Strip, and bring in
revenue of $322,000 per year. Chatsworth taxpayers were told that the capital cost would be repaid within
10 years.
Obviously, it isnt working out that way. At least another $1 million has been spent, operating costs are at
least double the consultants estimates (even though throughput has been less than half), and the Mayors
have been trying for months to get a meeting with a Minister to beg the Province for more free money.
The original design included adding corn stover to septage for the simple reason that there isnt enough
energy in human waste for production of biogas. But the corn stover posed extra costs and other difficulties
(one would think that these should have been foreseen), so it was abandoned. Since then, taxpayers have
been paying for some sort on ongoing experiment that has had limited success. Incidentally, the fact that
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human waste is entirely different from, say, cattle manure is the reason that it is fundamentally misleading
to draw parallels with agricultural bio-digesters.
The bio-digester is now one of the largest expenses in the Chatsworth budget. In my view, the present
situation developed because Chatsworth didnt exercise due diligence. Many assumptions in the Design
Report were never probed or tested, and no rigorous business planning process was carried out. I cannot
explain the rush at that time, and I cannot understand the apparent rush now.
3. At its meeting on June 11
th
, Council discussed scenarios that would cost every residential taxpayer in
Chatsworth in the range of $50 - $250 per year, depending on assessment.
As I understand them, all of the scenarios contain an embedded set of assumptions that may be unrealistic.
No effort seems to have been given to quantifying the risks, financial and otherwise, in the event that some
of these assumptions prove to be wrong. This seems to be exactly what took place in 2010.
For example, an arbitrarily high generator capacity factor is assumed and incorporated as if it were a
certainty; if it is not achieved, which is likely to be the case, the electricity revenue will be lower than shown
in the scenarios. Similarly, in the absence of an engineering assessment, there is a reasonable chance that
the arbitrary allowances in the scenarios for capital equipment and facilities to handle much higher
residential volumes are not very close to the mark.
What assurance does Council have that adequate recognition has been given to higher operating costs as a
result of the much greater volumes that will result from the changes being proposed, or will this be another
surprise? Are the assumed cost savings from re-negotiating the Veolia contract realistic? In my experience,
it is risky to assume the outcome of a negotiation, even when the negotiations are already well underway.
Further to the point of arbitrary and optimistic assumptions, it is important to note that all of the scenarios
assume that the very high feed-in tariff will continue indefinitely, whereas such rates will almost certainly be
reduced in the long term, if not in the near future.
4. As I understand it, the presentation by the Treasurer of the Township of Georgian Bluffs on May 28
th

recommended that tipping fees be eliminated (in addition to other changes). This would be a profound
change to the original business plan since, according to the 2009 Design Report (portions of which are
incorporated in the Agreement), revenues from tipping fees comprise about 75% of the forecast total annual
revenue.
Although I agree that tipping fees and transportation subsidies should be eliminated, and that it makes more
sense to allocate operating costs on some other basis than at present (such as assessment), I think that the
Council should take a deep breath at this juncture, and hit the pause button.
Council and staff know that the original design had major shortcomings. You know that capital and operating
costs have been far higher than ever imagined. You know that there have been many other problems that
were never anticipated. You know that more money will be required to handle much greater volumes. You
know, or ought to know, that chances are pretty slim that the Province will come to the rescue with more
free money.
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In these circumstances, I believe that Council needs engineering advice and a rigorous new plan, not just
scenarios put together in haste. What is required is a thoughtful re-assessment from an engineering
perspective, together with a realistic business plan the points the way forward.
5. In addition, something else is completely missing: an honest and straightforward discussion with the people
who are paying the bills.
In this regard, I attach a copy of the Project Summary that was released to the media in October, 2010
with much fanfare. As far as I am aware, this is the last official information about the bio-digester from the
Chatsworth Council. According to this, the bio-digester should be about half paid for by now.
Council has a responsibility to inform taxpayers that it hasnt worked out as they were told.
6. Therefore, I urge Council to commission a proper engineering and business study that includes realistic
assessments of costs and environmental impacts, and that provides options for the way forward.
One of the options may be to make the bio-digester capable of handling much larger quantities of septage
such as is being proposed in the scenarios discussed on June 11
th
, but it is possible that the best option for
Chatsworth is to either withdraw from the Agreement or reach agreement with Georgian Bluffs to put the
bio-digester in mothballs.
After any such report is prepared and accepted, public input should be sought; however, I hasten to say that
informing taxpayers about the present situation is required now, before the required study is initiated, not
after the report has been prepared.
7. Finally, I am of the view that the Source Water Protection presentation at the meeting on June 11
th
has
virtually nothing to do with the bio-digester. There are no fields in Chatsworth Township that are approved
by the Ministry of the Environment for spreading untreated septage.
Untreated septage is spread on vacant fields, not farm fields, and there are requirements for setbacks from
watercourses, water bodies, wells and the like. Furthermore, the digestate is not benign; according to my
understanding, it is handled through a Nutrient Management Plan (same as manure). The difference in risk
to source waters between spreading untreated septage on approved vacant fields away from water bodies,
and spreading digestate or manure on agricultural fields has not been quantified by MoE (or anybody else),
and may in fact not be quantifiable.
With respect, it is not the role of the Council of Chatsworth Township to assume responsibilities that belong
to the councils of other townships or that are within the purview of the Province.

Respectfully submitted,

Trevor Falk






Project Summary
Georgian Bluffs and Chatsworth have partnered to build an anaerobic bio-digester on the site of the
existing sewage lagoon in Georgian Bluffs. Under the Communities Component of the Build Canada
Fund, the project was designed by Ross Slaughter of Genivar. Chatsworth and Georgian Bluffs have
agreed to each cover half of the municipal share of the project, and partner to operate the facility.

A public meeting held at the Keady Community Centre Thursday October 1, 2009 provided
opportunity for the public to discuss plans for the facility. A ribbon cutting was held on October 30
th
,
and construction began in spring of 2010.
This green energy project will digest organic material with the biogas used to run a generator and
produce electrical power. A variety of organic materials will be processed at the facility including
septage, agricultural waste, and other appropriate materials that generate biogas.

The Anaerobic Digester includes a bio-digester system, biogas generator and pumphouse as well as
associated septage screening, piping, roadways, storage bunkers and operation centre. Two
certificates of approval have been issued for the project by the Ministry of Environment, and an air
and noise approval on the generator is pending. The project is designed to produce up to 2400 kWh
per day on the power grid. Connection agreements with the Ontario Power Authority and Hydro One
are in place. The project is currently being commissioning so that it produces electricity before the
end of this year.

The construction tender was awarded in December of 2009 at $3.15 million To Maple Reinders.
There are about $670,000 thousand additional costs outside the tender. These included site clearing,
tractor, material testing, soil analysis and engineering fees. The Federal and Provincial contribution
to the project is $1,666,700 leaving each Township half of $2.13 million to finance. Projected
operating budget for the facility shows a payback of the capital investment within 10 years.

The digestate bi-product following the treatment will be 99.5% pathogen free while retaining
characteristics of a good land applied soil conditioner. It is considered a safe environmentally friendly
alternative to direct application of raw septage on farm fields.

Georgian Bluffs and Chatsworth are represented on the Bio-digester Steering Committee by the
Mayor Alan Barfoot and Deputy Mayor Dwight Burley of Georgian Bluffs, and Mayor Howard Greig
and Deputy Mayor Bob Pringle of Chatsworth. CAO Will Moore of Chatsworth and Bill White of
Georgian Bluffs and the Georgian Bluffs Operations Manager Rick Winters provide staff support to
the Committee.