4-Final Draft Contract.pdf

Page 1 of 62 Final Draft RFP 2025

SERVICE AGREEMENT

FOR

OPERATION AND MAINTENANCE OF

WATER RECLAMATION INFRASTRUCTURE

BETWEEN

MILWAUKEE METROPOLITAN SEWERAGE DISTRICT

(“DISTRICT” OR “MMSD”)

AND

COMPANY

Dated: Month, Day, Year

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SERVICE AGREEMENT FOR OPERATION AND MAINTENANCE OF WATER

RECLAMATION INFRASTRUCTURE

Table of Contents

RECLAMATION INFRASTRUCTURE

ARTICLE ONE

DOCUMENTS

1.01 Service Agreement Documents

ARTICLE TWO

DEFINITIONS

2.01 Certain Terms

2.02 Terms Generally

ARTICLE THREE

MANAGEMENT, OPERATION AND MAINTENANCE OF THE FACILITIES

3.01 General

(a) Basic Obligations of the Company

(b) Risk Sharing to Align Company and District Interests

(c) Punchlist Items

3.02 Staffing

(a) Retention of Existing Employees

(b) Company’s Project Manager

(c) Governance Structure

(d) Staffing Plan and Full Time Equivalents

(e) Training and Career Development

(f) Workforce Development

(g) Positive Culture

(h) Relationship with the District

3.03 Preventive and Corrective Maintenance General Conditions

(a) Computerized Maintenance Management System

(b) Standards of Maintenance

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(c) Preventive Maintenance

(d) Preventive Maintenance Plus

(e) Corrective Maintenance

(f) Corrective Maintenance Due to Company Non-Compliance

(g) Compliance with Permits

(h) Request Process and Scope of CM Authorization

(i) Spare Parts Inventory

3.04 Corrective Maintenance Specific Conditions

(a) Level A Corrective Maintenance

(b) Level B Corrective Maintenance

(c) Spare Parts Purchases above $150,000

3.05 Fleet Maintenance and Painting

3.06 Warranties Regarding Workmanship, Equipment, and Protocol for Additions

(a) Copies of Warranties

(b) Company’s Obligation to Maintain Warranties

(c) Company Operation of New Equipment without Documentation

(d) Company’s Failure to Maintain Compliance With Warranties

(e) Enforcement of Warranties

3.07 Information Technology Systems

3.08 Chemicals Inventory

(a) Minimum Inventory Levels

(b) Difficulty Meeting Minimum Inventory Levels

(c) Review of Inventory Levels

(d) Inventory Levels at Expiration of Service Agreement

3.09 Inventory of Spare Parts, Supplies and Consumables

(a) Beginning of Term

(b) End of Term

3.10 Ownership and Title

(a) Items Owned by MMSD

(b) Items Owned by the Company

3.11 MMSD Offices at the Facilities

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3.12 Site Security at the Facilities, Confidentiality of Site Security Measures, and Electronic Security

(a) Security of Access to Facilities

(b) Site Security

(c) Confidentiality of Site Security

(d) Cyber Security

(e) On Boarding/Off Boarding Staff

3.13 Prohibition against Use of Facilities for Other Business Purposes

3.14 High Strength Waste

3.15 Energy and Utilities

3.16 Permits

3.17 Solid Waste

3.18 Biosolids and Milorganite

(a) Management of Biosolids

(b) Manufacture of Milorganite®

(c) Storage of Milorganite®

(d) Loading and Transportation of Milorganite®

(e) Marketing of Milorganite®

(f) Milorganite Revenue®

(g) Manufacture of Class B Biosolids

(h) Sites for Land Application of Biosolids

3.19 Vacant Land

3.20 Capital Improvement Program (CIP) and Support Services

(a) Responsibility for Capital Projects

(b) Costs During Construction of Capital Projects

(c) Annual Base Fee Changes Resulting from Capital Projects

(d) Company Recommendations for CIP Projects

3.20 Community Outreach

3.21 Targeted Research

3.22 Regional Partnership

3.23 MMSD Responsibilities

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3.24 Company Recommendations

ARTICLE FOUR

STANDARDS OF PERFORMANCE, FORCE MAJEURE, AND OTHER ALLOCATIONS OF

RESPONSIBILITY

4.01 Standards of Performance

4.02 Force Majeure

(a) Notification and Continued Operations

(b) Waiver

(c) Mitigation of the Force Majeure

4.03 Differing Conditions

4.04 Annual Review

ARTICLE FIVE

SERVICE FEES

5.01 General

5.02 Monthly Payment Calculation

(a) Service Fee

(b) Monthly Base Fee

(c) Additional Fees

(d) Discretionary Replacements or Improvements

(e) Force Majeure

(f) Reduction in the Monthly Base Fee

5.03 Retainage

5.04 Invoices: Method of Payment

5.05 Credits for Cost Share Items

5.06 Adjustments

5.07 Differing Conditions

ARTICLE SIX

AMENDMENTS

6.01 Amendments

ARTICLE SEVEN

INDEMNIFICATION AND LIMITATION OF LIABILITY

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7.01 Indemnification

7.02 Indemnification of Patent, Copyright, Trademark, and Trade Secret Infringement

7.03 Limitation of Liability

ARTICLE EIGHT

INSURANCE, LETTER OF CREDIT, AND GUARANTY

8.01 Insurance

8.02 Letter of Credit

8.03 Guaranty

ARTICLE NINE

TERM, DEFAULT AND TERMINATION

9.01 Term and Renewal Provisions

(a) Term of this Service Agreement

(b) MMSD Right to Extend Term

(c) Timeframe for Meeting to discuss Agreement Closeout or Term Extension

9.02 Default and Termination

(a) MMSD Event of Default and Termination by Company

(b) Company Event of Default and Termination by MMSD

(c) Company Responsibilities Upon Termination

9.03 Termination for Force Majeure

ARTICLE TEN

GENERAL PROVISIONS

10.01 Applicable Laws: Venue

10.02 Dispute Resolution

(a) Continuation of Obligations

(b) Process and Scope

(c) Option for Mediation

(e) Legal Proceedings

10.03 Notices

10.04 Audits, Inspections, and Enforcement

10.05 Assignment

10.06 Independent Company

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10.07 Merger, Entire Contract, Authority

10.08 Survival

10.09 Non-Waiver

10.10 Operations of Company

10.11 Remedies Cumulative

10.12 MMSD’s Retainage of Company Developed Intellectual Property Rights

10.13 MMSD’s Retainage of the Company’s Patented Invention Rights

10.14 Data and Information

10.15 Representations of MMSD

10.16 Representations of the Company

10.17 Captions, Headings, Subheadings, Headers, and Footers

10.18 Wisconsin Open Records Act

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RECLAMATION INFRASTRUCTURE

This Service Agreement is for the Operation and Maintenance of Water Reclamation Infrastructure (“Service Agreement”), dated as of the___ day of _________, 202__ by and between the Milwaukee Metropolitan Sewerage District, a special purpose district existing under the laws of the State of Wisconsin acting by and through the Metropolitan Sewerage Commission (“District” or “MMSD”), with its principal address at 260 West Seeboth Street, Milwaukee, Wisconsin, 53204 and [insert Company information] (“Company” or “Operator”).

Recitals:

WHEREAS, in 2024 the District issued a Request for Qualifications for a vendor to provide operation and maintenance services for the District’s water reclamation infrastructure and Company responded and was deemed qualified by District; and

WHEREAS, subsequent to the Request for Qualifications a draft contract and Request for Proposals was issued by the District and the Company was asked to provide a proposal for pricing and service based on the draft contract; and

WHEREAS, following negotiations over price and service the Metropolitan Sewerage Commission (“Commission”) has selected Company to provide operations and maintenance services in accord with this Service Agreement.

NOW, THEREFORE, in consideration of the mutual premises set forth above, and the terms and conditions hereinafter set forth, and for other good and valuable consideration, receipt of which is hereby acknowledged, District and Company hereby agree as follows:

ARTICLE ONE

DOCUMENTS

1.01 Service Agreement Documents

The following Exhibits are attached hereto and are incorporated into and made part of this Service Agreement:

Exhibit A – Description of the Facilities

Exhibit B – Scope of Services

Exhibit C – Standards of Performance

Exhibit D – Fees

Exhibit E – Minimum Staffing Plan

Exhibit F – CM Authorization Form

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Exhibit G – Procurement and Corrective Maintenance Management Standards

Exhibit H – WRF Design Capacities

Exhibit I – Computerized Maintenance Management System Approach

Exhibit J – Insurance

Exhibit K –Guaranty and Letter of Credit

Exhibit L – Inventory

Exhibit M – Standard Operating Procedures for Security Incidents; Cybersecurity

Exhibit N – Reserved

Exhibit O – Punchlist [to be populated during negotiations]

Exhibit P – Governance

Exhibit Q – Information Technology Requirements and Network Responsibilities

Exhibit R – Permits

Exhibit S -- Submissions

In the event of a conflict or inconsistency between or among the Exhibits and the Sections of this Service Agreement, the Parties agree that the Sections of this Service Agreement will govern the interpretation of the Exhibits. If the same topic is treated in a Section of this Service Agreement and is included in Exhibit B (or the Schedules thereto), the Parties agree that the more detailed treatment will govern.

Any action listed in this Service Agreement, unless specifically stated to be performed by others (MMSD, third party, WDNR, etc.), is to be performed by the Company.

ARTICLE TWO

DEFINITIONS

2.01 Certain Terms

As used in this Service Agreement, the following words and phrases will have the meanings set out below unless a different meaning clearly appears from the context in which the words and phrases appear:

“Agreement” or “Service Agreement” means this document including all the attached Exhibits and Schedules thereto, as set forth in Section 1.01.

“Adjustment Factor” is defined in Exhibit D to this Service Agreement.

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“Amendment” means an Amendment to this Service Agreement executed in accordance with Section 6.01.

“Annual Base Fee” means the amount the District shall pay to Company each Contract Year for providing the all services outlined in the Service Agreement and Exhibit B, Scope of Services, except Corrective Maintenance, PM-Plus and Task Order services.

“Applicable Law(s)” means any Federal, State, District, or local statute, law, ordinance, regulation, rule, judgment, order, decree, Permit, code, or license or other governmental requirement or resolution which applies to the services or obligations or both of either Party under this Service Agreement.

“Asset” means generally any real property, building, machinery, equipment or vehicle owned by MMSD and located at the Facilities or for the support of the Facilities, and which is tracked by the MMSD’s Asset Management Program. Each Asset has a criticality score, indicated in the Asset Management software.

“Authorized Representative(s)” means the Company’s Authorized Representatives or the District’s Authorized Representatives, or both.

“Bid Documents” means the documents used in a solicitation for public bids for work. The Bid Documents include an invitation to bid, contract, detailed description of the work to be performed, specifications, and any plans or drawings required to construct the work. The Bid Documents shall be stamped by a licensed professional engineer when engineering is used to prepare the Bid Documents.

“Biosolids” means sewage sludge that has been treated to meet the requirements in the United States Environmental Protection Agency’s regulation entitled “Standard for the Use or Disposal of Sewage Sludge,” promulgated at 40 C.F.R. Part 503 and intended to be applied to land as a soil conditioner or fertilizer. “Heat Dried Biosolids” means Biosolids that have been processed at the JIWRF through the belt filter presses and rotary dryers

“BOD5” means 5-day Biochemical Oxygen Demand, which is a measure of the amount of oxygen required by microorganisms to break down organic matter in a water sample over a five-day period.

“Blended Sludge” means sludge from a number of sources at JIWRF that is piped to the Belt Filter Presses in the Dewatering and Drying Building.

“Capital Improvement Program (CIP)” is MMSD’s work to implement the list of Capital Projects enumerated in MMSD’s capital budget.

“Capital Project” is defined as a project to plan for, design, build, acquire, or significantly improve an Asset that is anticipated to last a minimum of 10 years and is funded through MMSD’s capital budget. Repairs to existing capital Assets are considered a Capital Project when

Page 11 of 62 Final Draft RFP 2025 the repair is (1) is extensive in nature, (2) anticipated to extend the useful life of the Asset for a minimum of 10 years, and (3) listed in MMSD’s capital budget.

“Change in Law” means: (a) the enactment, adoption, promulgation, modification, or repeal after the Proposal Date of any Federal, state (Wisconsin and any other states within the United States), or local law, ordinance, code, rule, regulation, or other similar legislation or the change in interpretation after the Proposal Date of any Federal, state (Wisconsin and any other state within the United States), or local law, ordinance, code, rule, regulation, official Permit, license, or approval by any regulatory entity having jurisdiction with respect to the operation or maintenance of the Facilities; or (b) the imposition, after the Proposal Date, of any material conditions on the issuance, modification, or renewal of any official Permit, license, or approval necessary for the operation and maintenance of the Facilities which, in either case, requires the removal of Force Majeure or activity that increases the cost of performance and which establishes requirements with respect to the operation or maintenance of the Facilities which are more burdensome than the most stringent requirements:

(a) in effect on the Proposal Date, or

(b) included in this Service Agreement.

For the purposes of part (a) of this definition, no enactment, adoption, promulgation, or modification of laws, ordinances, codes, rules, regulations, or similar requirement or enforcement policy with respect to any such requirement will be considered a Change in Law if, as of the Proposal Date, such law, ordinance, code, rule, regulation, or other similar requirement would have directly affected the continued management, operation, and maintenance of the Facilities by the District after the Proposal Date in the absence of this Service Agreement, and either such law, ordinance, code, rule, regulation, or other similar requirement was (A) officially proposed by the responsible agency and published as a final rule in the Federal Register or equivalent Federal, State, or local publication before the Proposal Date and thereafter becomes effective in the same form without further action; or (B) enacted into law by the United States, a State, or local body before the Proposal Date. In no event will a change in any Federal, State, or local tax law, nor any change that affects the general cost or procedures of conducting business off the sites of the Facilities nor for corporate accounting or non-Facility operating or non- Facility maintenance operations be considered a Change in Law.

Notwithstanding the previous sentence, changes in state sales or use tax or a change in the interpretation of how such sales or use tax laws are applied will be considered a Change in Law.

“Class A Biosolids” refers to treated sewage sludge that meet the highest standards for pathogen reduction and pollutant levels, as defined by the U.S. Environmental Protection Agency (EPA) under the CFR Part 503 regulations. Class A Biosolids are manufactured at the JIWRF using rotary dryers and include, but are not exclusively, Milorganite® and Greens Grade.

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“Class B Biosolids” refers to treated sewage sludge that meet the U.S. Environmental Protection Agency (EPA) standards for pathogen reduction and pollutant levels under 40 CFR Part 503 regulations but are less stringently treated than Class A Biosolids. Class B Biosolids are manufactured at the South Shore WRF through the plate and frame presses, a mobile centrifuge, or a belt filter press thickening system.

“CM Authorization” means authorization by the MMSD to the Company to implement Level B Corrective Maintenance work on the form in Exhibit F.

“CMMS” or “Computerized Maintenance Management System” means a software system used to manage, track and document maintenance activities, work orders, asset information and spare parts inventory. It serves as a central tool to support planning, execution and reporting of maintenance tasks.

“Commencement Date” means the date first written above, notwithstanding any other dates that appear on the signature pages of this Service Agreement.

“Company” or “Operator” is defined on Page 1 of this Service Agreement and includes its successors and assigns in accordance with Section 10.06.

“Company Event of Default” is defined in Section 9.02(b).

“Confidential Information” means information protected by the Health Insurance Portability & Accountability Act (HIPAA), Personally Identifiable Information, performance reviews and other human resources files, communications subject to the attorney-client and attorney work product privileges, critical infrastructure information, emergency response plans, trade secrets, and any other information deemed sensitive by State and federal authorities. A trade secret is defined at Wis. Stat. §134.90. Salaries and pricing information are not considered Confidential Information.

“Contract Year" means a particular 12-month period of the Term. Contract Years are numbered consecutively. Contract Year One begins on the Operational Start Date and lasts until February 28, 2029, and each succeeding Contract Year begins on the anniversary of the start of Contract Year One.

“Corrective Maintenance” is defined as any activity to repair or replace a nonfunctional, inefficient, unsafe or otherwise not-performing-per-design Asset or to address issues and ensure an Asset continues to function according to the more stringent of (i) the provisions of Exhibits B and C; (ii) the Operation and Maintenance Manuals, (iii) Prudent Industry Practices; and (iv) Applicable Laws, rules, regulations, and standards. Purchase of spare parts, in anticipation of future Corrective Maintenance, is considered Corrective Maintenance. “Level A Corrective Maintenance” is Corrective Maintenance that costs less than $50,000 for labor, parts, and supplies and which Company will perform with its own staff. “Level B Corrective Maintenance” is Corrective Maintenance that costs $50,000 or more. The Maintenance Committee may reevaluate and may change the threshold for Level A and Level B Corrective

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Maintenance during the Term per Exhibit P. Corrective Maintenance does not include Fleet Maintenance and Preventative Maintenance Plus.

“Emergency” means damage or threatened damage to MMSD Facilities that creates an unforeseen situation in which public health or welfare is endangered. A “Declaration of Emergency” means that the Executive Director has declared and notified the Company that an Emergency exists. Such declaration and notification will occur in writing, but it may also occur verbally followed by the written declaration and notification.

“Emerging Contaminant(s)” means a chemical or compound identified by the United States Environmental Protection Agency, Wisconsin Department of Natural Resources, or other governmental authority for which regulations have not been promulgated as of the Proposal Date and may potentially have an adverse effect on humans or the environment. Emerging Contaminants include, but are not limited to, Per- and Polyfluoroalkyl Substances (see PFAS Compounds), pharmaceuticals, and micro-plastics.

“Executive Committee” refers to the committee set up by the Governance Structure consisting of the MMSD’s Executive Director and the Operator’s Project Manager and two other District and Company representatives.

“Executive Director” means the Executive Director of MMSD or any other Person who may be designated to perform the functions delegated to the Executive Director in this Service Agreement, including without limitation, agents of District, but only for so long as the designation remains in effect.

“Facility” or “Facilities” means any one of the facilities described in Exhibit A including other improvements or modifications to such Facility.

“Fleet Maintenance” means all routine service, maintenance and unscheduled repairs performed on vehicles and mobile equipment listed in Exhibit A, Tables A-6 and A-12 and their replacements, to ensure they remain in a safe and reliable operating condition, as recommended in manufacturer’s Operations and Maintenance Manual specifications, dealer warranty documents, and Prudent Industry Practices.

“Force Majeure” means any act, event, or condition that is unforeseeable, beyond the control of a Party and has a direct significant adverse effect on the performance of this Service Agreement by such Party. Such acts or events may include, but are not limited to: (a) tornados, explosions, and other acts of God and natural disasters, a terrorist act, declaration of war or the acts of civil or military authority, riots; and (b) loss of electricity from We Energies to the extent not caused by the acts or omissions of the Company and for a period of 24 consecutive hours or more.

A fire is a Force Majeure unless caused in whole or in part by actions or inactions of the Company. A flood is a Force Majeure only when water covers land that is normally free of standing water and either:

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• reasonably prevents the Company from safely or effectively performing their work,

• causes damage to infrastructure and equipment, or

• makes processes and equipment inoperable.

A monetary impact to the performance of this Service Agreement less than $50,000 per occurrence will not be considered significant.

Except when resulting from conditions described above, a change in the influent loadings to the Water Reclamation Facilities is not considered a Force Majeure.

“FTE” or “Full Time Equivalent” means the annual amount of 2,080 hours of labor services provided in a Contract Year which shall include benefits such as sick time, vacation, and training as per the Staffing Plan in Exhibit E.

“Governance Structure” refers to the structure and operation of committees set forth in Exhibit P to facilitate communication and dispute resolution between the Operator and MMSD. This includes: the Executive Committee, the Operations Committee, the Maintenance Committee, and all subcommittees formed by these three committees.

“Greens Grade” means the heat dried Class A Biosolids pelletized fertilizer produced at the Facilities meeting the quality requirements in Exhibit C.

“Hazardous Substance(s)” means, as defined in Wis. Stat. § 292.01(5), any substance or combination of substances including any waste of a solid, semisolid, liquid or gaseous form which may cause or significantly contribute to an increase in mortality or an increase in serious irreversible or incapacitating reversible illness or which may pose a substantial threat to public health or the environment. This term includes, but is not limited to, substances which are toxic, corrosive, flammable, irritants, strong sensitizers or explosives as determined by the WDNR.

“Hazardous Waste” is defined in the Resource Conservation Recovery Act (42 U.S.C.A. § 6901 et seq.) and federal regulations implementing said Act as amended.

“Immediate” or “Immediately” is defined as within one hour.

“Information Technology” or “IT” means all hardware, software, firmware, systems, networks, data, and related services used to create, process, store, retrieve, and transmit information in digital or other electronic forms. This includes, but is not limited to:

• Hardware: Computers, servers, data storage devices, networking equipment (routers, switches, firewalls), peripherals, and other electronic devices.

• Software: Operating systems, applications, databases, middleware, and all other computer programs and code.

• Networks: Internet, intranet, extranet, and other data communication networks.

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• Data: Electronic data, databases, and information in any digital format.

• Services: IT support, maintenance, development, consulting, cloud services, and cybersecurity services.

“Inline Storage System” or “ISS” or “Deep Tunnel” refers to approximately 25.2 miles of tunnel ranging from 17 to 32 feet in diameter, with 432 million gallons of storage capacity located 250 to 300 feet below the surface (the system includes four tunnel sections: CrossTown, Kinnickinnic, Lake Michigan, and North Shore) and also includes the Northwest Side Relief Sewer which is approximately 7.3 miles in length, 20 feet in diameter and ranges from 175 to 250 feet in depth with storage capacity of 89 million gallons.

“Inventory” is defined as the amount of chemicals, spare parts, supplies and consumables kept at the Facilities used for operations and Preventive Maintenance. The “Initial Inventory” is list of chemicals, spare parts, supplies and consumables provided to Company at the beginning of the Term. The “Process Chemical Inventory” is a subset of the Inventory for critical Process Chemicals.

“Markup” shall mean a standard percent set forth in Exhibit D that the Company is permitted to add onto certain costs for payment by the District. The Markup established in Exhibit D is meant to include the Company’s overhead costs and any profit.

“Maintenance Officer” shall mean the District staff member appointed by the Executive Director to oversee maintenance activities, as further set for in section 3.

“Milorganite®” means the heat dried Class A Biosolids pelletized fertilizer produced at the Facilities meeting the quality requirements in Exhibit C.

“Minimum Inventory Levels” is defined in Section 3.09(a).

“Monthly FTE” means eight hours of labor services per day times the number of routine working days within the calendar month that such services were provided.

“MMSD Indemnified Parties” means MMSD’s Commissioners, officers, agents, and employees.

“Native Electronic Format” means the file format as created and saved by the application used to generate the electronic document or data, including all associated metadata, formatting, and embedded objects, and without any subsequent conversion, modification, or alteration that would change the original file structure or data. For example, the Native Electronic Format of a Microsoft Word document is .docx, and the Native Electronic Format of an Adobe Photoshop file is .psd.

“Operation & Maintenance Manuals" or “O&M Manuals” means all operating and maintenance manuals for the Facilities, including manuals for both systems operation and for the operation and maintenance of the individual items of equipment in the Facilities as provided by

Page 16 of 62 Final Draft RFP 2025 the manufacturer(s), designers, or engineers and as developed by the Company based upon manufacturer’s information.

“Operational Start Date” is 12:01 AM on March 1, 2028.

“Party” or “Parties” means either MMSD or the Company as the context of the usage of such term may require.

“Permit(s)” means any license, permit, authorization, approval, consent, variance, exemption, or other similar authorization issued or required by any federal, state, or local governmental or regulatory authority, agency, or body, including, without limitation, environmental permits, building permits, zoning permits, and operating permits, necessary for the performance of the obligations under this Service Agreement. Permits in effect as of the Proposal Date are set forth in Exhibit R.

“Permitted Land Application Sites” means the parcels of land permitted to be used for the land application of Class B Biosolids as set forth in and pursuant to Section 3.17.

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof.

“Personally Identifiable Information (PII)” means information that is linked to a specific Person and could be utilized to prove identity including, but not limited to, social security number, driver’s license number, passport number, date and place of birth, personal email address, personal IP address, biometric data, and bank account numbers.

“PFAS Compounds” or “Per- and Polyfluoroalkyl Substances” refers to a large class of manufactured organic chemicals characterized by at least one perfluorinated methyl group (−CF3) or at least one perfluorinated methylene group (−CF2−) with the exception of fluoropolymers.

“Preventive Maintenance” is defined as maintenance performed at the Facilities to equipment, buildings, channels and other Facilities to prevent the need for repair, to reduce downtime, and to ensure the longest possible useful life. Preventive Maintenance for individual Assets is the more stringent of (i) Schedules set forth in Exhibit B; (ii) the Operation and Maintenance Manuals,

(iii) the requirements necessary to maintain any applicable warranties, (iv) Prudent Industry Practices; and (vi) Applicable Laws, rules, regulations, and standards. Preventive maintenance practices set forth in Schedule B-7 to Exhibit B titled “Preventive Maintenance Plus” or “PM-plus” is not considered Preventive Maintenance for the purpose of this Agreement.

“Preventive Maintenance Plus (PM-plus)” is defined as physical preventive maintenance performed at the Facilities that is intended to provide long-term stability and prevent major failures of an Asset, such as overhauls, rebuilds, major parts replacements or major cleaning.

PM-plus does not include any type of non-intrusive inspection or condition assessment. PM-Plus

Page 17 of 62 Final Draft RFP 2025 are listed at Schedule B-7. Additional activities may be added to the PM-Plus Schedule by the Maintenance Committee.

“Prior Contractor” means the entity that operated and maintained the Facilities prior to the Operational Start Date.

“Process Chemicals” means all chemicals used in the wastewater treatment process including ferric chloride (including for odor control), ferrous chloride, pickle liquor, polymer (various types), sodium bisulfite, sodium hypochlorite (including for return activated sludge chlorination), dust suppressant (various types), and ammonium sulfate. Process Chemicals does not include chemicals used to maintain equipment such as grease, oil, and cleaning solvents, carbon for odor control and nitrogen for fire suppression at the WRFs and for pressure control in the WRFs and Collection and Conveyance System.

“Professional Engineering,” as defined under Wis. Stat. § 443.01(6), includes any professional service requiring the application of engineering principles and data, in which the public welfare or the safeguarding of life, health or property is concerned and involved, such as consultation, investigation, evaluation, planning, design, or responsible supervision of construction, alteration, or operation, in connection with any public or private utilities, structures, projects, bridges, plants and buildings, machines, equipment, processes and works.

“Project Manager” means the Person designated by the Company in Section 3.02 to perform the duties stated therein.

“Proposal Date” is [insert date].

“Prudent Industry Practices” means those methods, techniques, standards, and practices which, at the time they are employed and in light of the circumstances known or believed to exist at the time, are generally accepted as reasonably prudent in the operation and maintenance of wastewater assets as practiced in the United States with respect to equipment of similar type.

“Qualified Financial Institution” means any depository institution incorporated under the laws of the United States or any state thereof (or domestic branches of any foreign bank) meeting the following criteria: (a) such depository institution is subject to supervision and regular examination by federal or state banking or depository institution authorities; (b) such depository institution has a combined capital and surplus not less than fifty million dollars ($50,000,000):

(c) such depository institution is an FDIC insured banking institution chartered to conduct business in the State; and (d) the commercial paper or other short term debt obligations of such depository institution (or, in the case of a depository institution which is the principal subsidiary of a holding company, the commercial paper or other short-term debt or deposit obligation of such holding company or depository institution, as the case may be) has a short-term rating of at least “P-1” by Moody’s Investors Service (“Moody’s”) and a short-term rating of at least “A-1” by Standard & Poor’s, a division of the McGraw-Hill Companies, Inc., or any successor in interest (“S&P”), or a long-term rating by S&P of at least “AA”.

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“Required Position” is a position listed on the Minimum Staffing Plan set forth in Exhibit E.

“Security Incident” is any breach of security protocols or event which poses a threat to District or Company staff, visitors or neighbors, and includes events such as intruders/trespassers, fire, building damage, significant illness or injury or anytime emergency services are called to the Facilities. A Security Incident may or may not overlap with an Emergency depending on the circumstances.

“Standards of Performance” are the metrics of performance that are expected of the Company in providing services under this Service Agreement and which are more fully set forth in Exhibit C.

“State” means the State of Wisconsin and all of its administrative, contracting, and regulatory agencies and offices.

“Solid Waste” means all non-recyclable materials where disposal at a landfill is the most appropriate option including, without limitation, grit, chaff, spent filters and ordinary office and shop waste.

“Task Order Services” are services described in Exhibit B that are not compensated under the Annual Base Fee, but are compensated on an as performed basis according to the pricing set forth in Exhibit D.

“Term" is defined as the Operational Start Date through February 28, 2038 at 11:59 PM.

“Thirteenth Street” or “13th Street” refers to the MMSD facility located at 6060 South 13th Street in the City of Milwaukee. Fleet Maintenance operations are located at 13th Street.

“Water Reclamation Facility" or “WRF” means the Facilities where influent flows receive treatment prior to effluent discharge into Lake Michigan, specifically the Jones Island Water Reclamation Facility (“JIWRF”) and the South Shore Water Reclamation Facility (“SSWRF”).

“Wet Weather Event” takes place when the SCADA system shows an “In Tunnel Filling” event. For clarity, this happens when combined sewage inflow into the ISS is at a rate greater than 30 million gallons per day and (i) in a rain event the average intensity of precipitation across all District rain gauges is greater than 0.05 in/hour and the average precipitation accumulation across all District rain gauges is greater than 0.05 inches in 24 hours; or (ii) in a snow melt event the average temperature is greater than 40 degrees Fahrenheit and the average rainfall accumulation across all District rain gauges is greater than 0.05 inches in 24 hours.

“WDNR” means the Wisconsin Department of Natural Resources.

“WPDES Permit” means the Wisconsin Discharge Elimination System Permit issued by the WDNR under the federal Clean Water Act and state law applying to the Facilities.

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2.02 Terms Generally

Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” except as the context may otherwise require. The words “agree,” “agreement,” “approve,” “approval” and “consent” shall be deemed to be followed by the phrases (a) “without limitation,” except as the context may otherwise require and

(b) “which shall not be unreasonably withheld or unduly delayed” except as the context may otherwise require. The word “or” is not exclusive. Words in the singular number include words in the plural and vice versa unless the context of the usage of such term clearly indicates otherwise.

“Written” shall mean any commercially acceptable form of writing including handwriting, typewriting, printing, photocopying, e-mail, and every other means of recording, including electronic media.

2.03 Ethical Conduct

Company represents and warrants that it has not and will not, directly or indirectly, engage in any fraudulent, corrupt, or unethical conduct in connection with this Service Agreement. This includes, but is not limited to, the offering, giving, or receiving of any bribes, kickbacks, or other improper payments or inducements. Company shall comply with all applicable laws and regulations relating to anti-bribery and anti-corruption, including the U.S. Foreign Corrupt Practices Act (FCPA) and Wisconsin Statute § 19.45.

Company shall not, without express authorization of the District, knowingly do business, directly or indirectly, with any Commissioners or employees of the District and any of their spouses or dependents.

Any breach of this clause shall be considered a material breach of this Service Agreement, entitling the District to terminate the Agreement without liability and pursue any and all remedies available at law or in equity.

ARTICLE THREE

MANAGEMENT, OPERATION AND MAINTENANCE OF THE FACILITIES

3.01 General

(a) Basic Obligations of the Company – From the Operational Start Date and throughout the remainder of the Term, the Company will continuously provide full time 24 hours per day, 7 days per week management, operation, and maintenance for the Facilities as set forth in the Scope of Services, set forth in Exhibit B. The Company will operate and maintain the Facilities required by this Service Agreement including without limitation, compliance with all Applicable Laws, the District’s WPDES permit and air pollution control permits, the Scope of Services as set forth in Exhibit B to this Service Agreement (including all Schedules thereto), and the Standards of

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Maintenance as defined in Section 3.03(b). The Company shall meet the Standards of Performance at all times, except as otherwise provided for in this Agreement. In performing all of the above services, including without limitation, all the other services set forth in this Service Agreement, the Company agrees that time is of the essence.

Company shall perform the Task Order Services, as set forth in Exhibit B or as directed by the District.

Company shall operate and maintain the Facilities to achieve the Standards of Performance set forth in Exhibit C.

Company shall provide all the reporting listed in Exhibit S. The Executive Director has the right to request that any submission by the Company to the District including, without limitation, plans, reports, plans and specifications, manuals, or any other documents submitted by or requested to be submitted by the District, be submitted in native electronic format and the Company will comply with such request in a timely manner. Any noncompliance, or identified potential noncompliance, with the Permits shall be reported to the District Immediately and with sufficient information to allow the District to comply with the reporting requirements of the Permits.

The payment for such labor, materials, and supplies will be as provided elsewhere in this Service Agreement.

(b) Risk Sharing to Align Company and District Interests

Company and the District agree to share costs of operating the Facilities to align their interests and promote cooperation. Any proposed change to the following cost-sharing structure must be approved by the Commission.

i) Energy. Costs for natural gas, electricity purchased from We Energies, fuel oil, propane and diesel fuel, other than diesel fuel used in vehicles, shall be split with 60% of costs covered by Company as part of the Annual Base Fee and 40% of costs covered by the District. However, District shall cover 100% of purchased electricity for all non-WRF meters. Specifically, the We Energies meters that will be split between the Company and the District are: PJZT1326, PNXZT24027, PJZT1114, PJXZT1418, and PJXZT1570.

District shall provide landfill gas, electricity generated from solar power and digester gas at no cost to the Company. All fuel used in Company vehicles (including diesel) is covered 100% by the Company. All fuel used in District vehicles (including diesel) is covered 100% by the District.

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ii) Process Chemicals. Costs for all Process Chemicals shall be split with 60% of costs covered by Company as part of the Annual Base Fee and 40% of costs covered by the District. Company is responsible for purchasing all Process Chemicals.

iii) Carbon for Odor Control. Costs for carbon used at the WRFs for odor control shall be split with 60% of costs covered by Company as part of the Annual Base Fee and 40% of costs covered by the District. Company is responsible for procuring and purchasing all carbon. Note: Costs for odor control carbon at the ISS Sites (See Schedule A-15) is 100% covered by the District, and carbon for odor control at the MIS Odor Control Facilities (See Schedule A-14) is 100% covered by the Company.

iv) Regulatory Fees. Annual fees payable to the Wisconsin Department of Natural Resources shall be split with 60% of the cost covered by Company and 40% of the cost covered by the District. District is responsible for paying the fees to the WDNR related to effluent discharges, air discharges and water withdrawal and then obtaining a credit from Company.

v) Water. Water usage at the Facilities will be split with 60% of the costs covered by the Company and 40% of the costs covered by the District. District is responsible for paying water bills and then obtaining a credit from Company. All ancillary fees on the water bill will be covered 100% by the District.

vi) Biosolids Removal. Setting up and running equipment to generate Class B Biosolids (the plate & frame system or a centrifuge/mobile BFP system) shall be paid for as Task Order Service. The cost of third party land application or the cost of landfill disposal shall be split with 60% of the cost covered by Company and 40% of the cost covered by the District. In the event the District directs disposal of Class B Biosolids in a landfill that could otherwise be land applied, the District will cover 100% of the incremental cost of landfilling.

vii) Change in Law and Emerging Contaminants. Any incremental costs associated with any Change in Law will be covered 100% by the District. Any incremental costs caused by District decisions surrounding management of Emerging Contaminants will be covered 100% by the District.

(c) Punchlist Items -- Exhibit O contains a Punchlist of items to be completed at District expense to correct unsatisfactory conditions at the Facilities. District shall notify Company as Punchlist items are completed. [This will be negotiated during the RFP process.]

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3.02 Staffing

(a) Retention of Existing Employees – Company shall make offers of employment to at least 180 of the Prior Contractor’s employees at the Facilities as of the Proposal Date, however Company is not required to make an offer to any employee that fails a Company required background check or drug screen. Company is expected to use good faith efforts to retain such employees for at least one year, assuming such employees comply with Company’s employee handbook and other policies and are competent in performing their job duties.

(b) Company’s Project Manager – The Company’s Project Manager will have overall responsibility and decision-making authority for the management, operation, and maintenance of the Facilities and will act as primary liaison between the Company and the District. The Project Manager will be on-site at the Facilities a majority of their working days and available on a 24/7 basis. During all absences, an acting Project Manager shall be designated who can ensure obligations are met and make critical decisions.

The District has selected the Company to perform the services contemplated under this Service Agreement based, in part, on the past successful experience and expertise of the designated Project Manager. Accordingly, the Company will not, absent good cause, replace or remove the approved Project Manager during the Term of this Service Agreement without the prior approval of the Executive Director. Any replacement Project Manager must be approved in writing by the Executive Director prior to starting work, which approval will not be unreasonably withheld.

(c) Governance Structure - Exhibit P sets forth a Governance Structure. Both parties are required to staff their respective committee positions at all times and provide regular attendance at the meetings indicated in Exhibit P.

(d) Staffing Plan and Full Time Equivalents

i) Minimum Staffing Levels.

The Company will provide minimum staffing for the Facilities as forth in the Minimum Staffing Plan at Exhibit E. The Minimum Staffing Plan delineates required minimum staffing levels and minimum qualifications to complete the Scope of Services, including Corrective Maintenance and Task Order Items. The District does not guarantee that the entire Scope of Services can be completed only with the staffing on the Minimum Staffing Plan. The Company may need additional positions or subcontracted services to complete the Scope of Services. The Company is expected to provide all Preventive Maintenance and most Corrective Maintenance with the maintenance staff listed on the Minimum Staffing Plan.

The Company will deploy staff to continuously provide the Scope of Services on a 24 hours per day, seven days per week basis. The Company’s staff will include duly

Page 23 of 62 Final Draft RFP 2025 licensed individuals for those positions requiring licenses as indicated on the Staffing Plan.

The Company agrees that the staff delineated for the Scope of Services in the Minimum Staffing Plan as provided in Exhibit E are required to effectively operate and maintain the Facilities, to be in compliance with the Standards of Performance, and to meet all obligations of the Scope of Services. The Company will maintain the Minimum Staffing Plan for the Scope of Services shown Exhibit E (FTE and classification level). Company shall endeavor to fill vacancies within 90 days. In the event a position in the Required Position is vacant for longer than 90 days, a credit will be taken equal to the monetary value of the missing staff (considering the most recent salary plus a benefit addition of 50%) beginning on day 91 of the vacancy and continuing until the position is filled. In addition, in filling positions required by the Minimum Staffing Plan, the Company agrees that time is of the essence, and therefore the Company will use best efforts in order to fill such positions. Company agrees to provide salary information to MMSD for the purpose of implementing this provision.

ii) Key Positions. The Minimum Staffing Plan designates certain Key Positions. Key Positions must be filled at all times. In the event a Key Position becomes vacant the Company must designate another staff member (either from existing staff at the Facilities or from elsewhere in its corporation) who will provide services on a temporary basis. These Key Positions are Project Manager, two Capital Project Coordinators, Conveyance Manager, WRF Operations Manager, two Maintenance and Asset Managers, and two Safety Managers (one at each WRF). Any individual can have no more than one temporary assignment in addition to their regular duties.

Assigning temporary coverage for a Key Position will not eliminate the fee reduction in the event the position remains open longer than the 90 day grace period.

The Company is expected to be the employer of staff members in positions on the Minimum Staffing Plan. The Company may enter into labor subcontracts for positions on the Minimum Staffing Plan, including temporary employees, only with prior written approval of the District.. The Company cannot use inadequate staffing as an excuse for not meeting Standards of Performance. In the event a Capital Project has been implemented which changes the amount of personnel needed to meet the Scope of Services, the Parties will enter into an Amendment to this Service Agreement to change the Minimum Staffing Plan and a make a corresponding change to the Annual Base Fee.

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iii) Annual Conference. Annually by May 1, the Operations Committee and Maintenance Committee shall meet jointly to discuss and reevaluate the Minimum Staffing Plan as set forth in this Service Agreement. Should the Parties agree that adjustments in the staffing requirements are necessary or beneficial, the Parties shall negotiate in good faith to reach an agreement with regard to staffing changes and an equitable adjustment in the Annual Base Fee, considering the extent to which the staffing changes impact work paid for under the Annual Base Fee or on a Task Order or Corrective Maintenance basis. This section shall not prevent the Parties from voluntarily assessing the Staffing Plan at any other time during the Term of this Agreement as a result of one or more Capital Projects, or for any other reason.

(e) Training and Career Development – The Company will provide at least 24 hours of technical job-related training to each employee each Contract Year. This is separate from training related to safety, human resources, new equipment training, or training related to the Company’s internal business processes.

(f) Workforce Development Company will implement a workforce training program as forth in Exhibit B, Scope of Services to provide a reliable workforce to the Facilities.

(g) Positive Culture – The Company will maintain a positive work culture that is free from harassment, discrimination, bullying, intimidation, and abuse. The Company will provide mandatory training to employees on anti-discrimination and anti-harassment upon hire and at least every two years. The District will provide a third-party ombudsperson for reporting incidents of discrimination or harassment or for making whistleblower complaints and Company shall prominently display instructions for contacting the ombudsperson.

(h) Relationship with the District – The Company and MMSD will actively pursue, establish, and maintain a business-like,…