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Home My WebLink About2008-11-12 SWAB MeetingNEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD NOVEMBER 12, 2008 MEETING PAGE 1 ASSEMBLY The New Hanover County Solid Waste Advisory Board met on Wednesday, November 12, 2008, at 4:10 p.m. in the Lucie F. Harrell Conference Room at the New Hanover County Goverrunent Center, 230 Government Center Drive, Wilmington, North Carolina. Members present were: Chairman Claud "Buck" O'Shields, Jr.; Vice-Chairman Robert W. Mitchell; Martin J. Michaelson; John Richard Newton; David Sims; Assistant County Attorney Sharon Huffman and Deputy Clerk to the Board of Commissioners Kymberleigh G. Crowell. Others present: Assistant County Manager David F. Weaver and Environmental Management Director John Hubbard. MEETING CALLED TO ORDER Chairman O'Shields called the meeting to order and welcomed everyone to the meeting of the Ne~~ Hanover County Solid Waste Advisory Board. APPROVAL OF MINUTES Chairman O'Shields asked the members to review the draft meeting minutes of November 5, 2008 for any needed corrections and/or changes. Hearing no comments, Chairman O'Shields called for a motion to approve the meeting minutes of November 5, 2008. Motion: Mr. Sims MOVED, SECONDED by Mr. Newton, to approve the meeting minutes as presented. Upon vote, the MOTION CARRIED UNANIMOUSLY. Chairman O'Shields thanked Mr. Michaelson for representing the Board at the November 10, 2008 Board of Commissioners meeting regarding the to request adoption of the resolution requesting legislation to amend Senate Bill 3. 2007 Session to specifically state that aWaste-to-Energy facility utilizing municipal solid waste to produce electricity be deemed renewable "green" energy. The Board of Commissioners unanimously approved the resolution at the Board's November 10, 2008 meeting. CONTINUTATION OF DISCUSSION/REVIEW OF OCTOBER 29, 2008 PRESENTATIONS Mr. Mitchell reported that he has requested Director Hubbard prepare a document reflecting ways to value the airspace that WASTEC is saving as well as the fill space. Mr. Mitchell explained that the opportunity cost needs to be worked into this review; not that one is trying to avoid costs, they are being pushed further out and there should be the ability to present value some of costs back in or spread it out. Director Hubbard reported the he has a draft document prepared and plans to review it with Mr. Mitchell in the near future. In connection with the November 5, 2008 discussion of the October 29, 2008 presentations, Mr. Sims stated he had prepared a draft document concerning Waste Industries' proposal. Waste Industries Presentation Review - Mr. Sims' Draft Document Mr. Sims reviewed the draft document he prepared in connection with Waste Industries' proposal. The draft is a framework for the group to work with and modify as needed. The costs are based on FY06-07 numbers and $51 /ton was used as the overall disposal cost of waste. As recycling is not a part of the contract, it has been treated as an entity within itself in the creation of the document and section three is based on what will occur in year five. In response to questions, Mr. Sims confirmed that the information was drafted without consideration of the value gained from the sale of methane and does not reflect the budgetary information provided by Beth Schrader, Senior Budget Analyst, during the October 15, 2008 meeting. Brief discussion was held on the financial information used to develop the document. In response to the Board's November 5, 2008 request, Waste Industries and Waste Management provided responses via e-mail to the open issue comments discussed during the meeting. Brief discussion was held on Waste Industries' fuel cost estimates as stated in the sample contract. Phil Carter, Waste Industries Landfill Development, referred to Waste Industries' responses stating that the fuel cost estimates in their proposal have been updated. He stated that essentially for every $.OS/gallon increment increase or decrease in fuel there would be a $.OS increment increase or decrease in the tip fee and the CPI cap in the sample contract is 3.15%. A brief discussion was held regarding Waste Industries' response concerning gate fees. Mr. Carter confirmed that if tonnage is less than 200 NEVI' HANOVER COUNTY SOLID WASTE ADVISORY BOARD NOVEMBER 12, 2008 MEETING PAGE 2 tons per day, the company will charge New Hanover County the current gate fee of approximately $3~iton: the County would deliver the waste to the Sampson County landfill. In response to questions, Director Hubbard provided clarification that the tipping fee includes everything minus revenues from recyclables and power sales. In FY06-07 the approved tipping fee was $46'ton and in Fl'07- 08 the approved tipping fee was $49/ton. The current tipping fee is $51/ton due to the addition of the $2 state surcharge. Money is owed to the General Fund because the projected tonnage of waste was not reached and it actually dropped by approximately 6% from the year before; the projected tonnage is what the department's budget is based on. Director Hubbard will provide Mr. Sims the total cost of handling waste without recycling in FY06-07 and a breakdown of recycling numbers prior to the November 12, 2008 meeting. Director Hubbard reported that power sales for the past year were close to $1 million, explained why the power sales negotiations were based for a one year term and reported the facility currently receives $46/megawatt: will be able to add 20° ° to that next year. Mr. Sims will update his draft document for the November 12, 2008 meeting to reflect his discussion with Beth Schrader, Senior Budget Analyst, regarding the spreadsheet provided during the October 15, 2008 meeting. receiving Director Hubbard's information and including current and renegotiated power sales contract figures. A copy of Mr. Sims' draft document is included herein as Attachment 1 In response to additional questions, Director Hubbard confirmed that if the requested tipping rate of $54 had been approved for FY07-08 and the projected tonnage had been received, facility would have been able to stay on track for maintenance (i.e. retubing of boiler unit #1) and operation. The FY08-09 budget is in the ver}• beginning stages. He further confirmed that the County Commissioners would have to approve the tipping fees requested by him; if there is a contract with an outside company, the Commissioners would still have to approve the tipping fees. A brief discussion followed regarding the effect on the facility when a requested tipping fee is not approved and how the options presented by Waste Industries and Waste Management were good ideas. Deputy Attorney Burpeau commented that prior to the certainty of flow control or franchises, the Commissioners were constrained by the need to not set tipping fees so high as to possibly cause citizens to take waste out of the county. In the past, the tipping fee was as high as $60/ton and the result was a fund balance in the department's enterpnse fund. Assistant County Manager Weaver described the composition and operation of the WASTEC Commission that existed approximately fifteen years ago. At the Board's request, copies of the Commission's report will be provided, if he is able to locate the report. Discussion was held about the possibility of making a recommendation that a solid waste advisory board be formed by the County Commissioners, in perpetuit}', to aid government in all aspects of environmental management. Chairman O'Shields called for a motion that the final recommendation to the County Commissioners includes a proposal that a solid waste advisory board be formed by the County Commissioners, in perpetuity, to aid the County in all aspects of environmental management, regardless of the Commissioners' decision about the management of the County's solid waste. Motion: Mr. Mitchell MOVED, SECONDED by Mr. Sims, to approve that the fmal recommendation to the County Commissioners includes a proposal that a solid waste advisory board be formed by the County Commissioners. in perpetuity, to aid the County in all aspects of environmental management, regardless of the Commissioners' decision about the management of the County's solid waste. Upon vote, the MOTION CARRIED UNANIMOUSLY. After a brief discussion about the balance of the Board's meeting schedule, the general consensus was to meet on November 19, 2008, cancel the November 26, 2008 meeting and resume the current schedule with the December 3, 2008 meeting at 4:00 p.m. ADJOURNMENT There being no further business, Chairman O'Shields adjourned the meeting at 5:20 p.m. Respectfully submitted, ~~ ~~~~.~~~ K iberleigh G1Crowell Deputy Clerk to the Board NEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD NOVEMBER 12, 2008 MEETING PAGE 3 ATTACHMENTI David Sims' Draft Document NEW HANOVER COUNTY (NHC) -SOLID WASTE TASK FORCE SECOND REVIEW OF WASTE INDUSTRIES PROPOSAL November 11, 2008 1. 2006-2007 Fiscal Year - Existing Disposal Cost Breakdown Disposal Volume Cost Incinerated by WASTEC 95,000 Tons $84.00 per ton New Hanover County (NHC) Landfill 150,000 Tons $30.00 per ton Total Tons of Waste 245,000 Tons Overall Disposal Cost of Waste $51.00 per ton Total Disposal Cost WASTEC and Landfill $51.00 per ton multiplied by 245,000 Tons = $12, 495,000.00 2. Waste Industries (WI) Contract 2006-2007 Conditions Results: a. Savings Cost NHC @ $51.00 per ton tipping fee $12,495,000.00 per year Cost per WI contract $_8,918,000.00 Total Savings $ 3,577,000.00 per year b. Volume reduction to NHC Landfill is approximately 85% c. Greatly reduces Capital Expenditures for landfill and eliminates Capital Expenditures at Wastec d. Improvements in recycling will further increase our savings by reducing volume flowing to Sampson County Assumptions: 10% of trash goes to the NHC landfill 80% of trash goes to the Sampson County landfill 10% overall volume reduction due to recycling NHC Overhead Expense: $4.00 per ton overall for maintaining the existing NHC landfill WI fee to take NHC trash to Sampson County $40.50 per ton NEVV HANOVER COUNTY SOLID ~~'ASTE ADVISORY BOARD NOVEMBER 12, 2008 MEETING Volume transferred to Sampson County Total stream 245,000 tons per year (TPY) 10%NHC Landfill 24,500 TPY 10% Recycle Reduction 24,500 TPY Trash to Sampson County 196,000 TPY Cost to NHC under WI Contract WI 196,000 TPY times $40.50 per ton = $7,938,000.00 NHC Overhead Expense 245,000 TPY times $4.00 per ton = $ 980,000.00 Total Cost to NHC $8,918,000.00 3. WI Contract: Five Year Proiection Results: Savings: Cost without WI $280,000 x $75 per ton = $21.000,000.00 Cost under WI Contract WI Trash to Sampson County 224,000 x $50.60 per ton = $11,334,400.00 Overhead Expense 280,000 x $5.00 per ton = $ 1.400,000.00 Total Cost $12,734,400.00 Total Savings $8,265,600.00 Assumptions: NHC A. $8,000,000.00 upgrade of WASTEC is completed B. Tipping fee increases to $75 per ton to cover WASTEC investment C. Assumes no additional WASTEC investment; i.e., air pollution control equipment D. Sales of electricity increase by $1,000,000 (This increase in revenue is reflected in the $75-per-ton tipping fee) E. General overhead increases from $4 per ton to $5 per ton. PAGE 4 NEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD NOVEMBER 12, 2008 MEETING PAGE 5 WI A. New transfer fee would be $50.60 per ton. This figure is based upon the following: i. Average inflation rate of 5% at 75% ($8.20) ii. $4.00 per gallon fuel cost (original fuel cost is assumed to be based on $3.00 per gallon, resulting in an increase of $1.90) Total Volume of Trash 280,000 TPY Volume transferred to Sampson County Total Stream 280,000 TPY 10% NHC Landfill 28,000 " l 0% Recycle Reduction 28, 000 " Trash to Sampson County 224,000 TPY