2014-04-21 Special Meeting
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 33
WORK SESSION, APRIL 21, 2014 PAGE 65
ASSEMBLY
The New Hanover County Board of Commissioners met for a Work Session on Monday, April 21, 2014, at
10:34 a.m. in the Assembly Room of the New Hanover County Courthouse, 24 North Third Street, Wilmington, NC.
Members present:Chairman Woody White; Vice-Chair Beth Dawson; Commissioner Jonathan Barfield,
Jr.; and Commissioner Thomas Wolfe. Commissioner Brian M. Berger was absent.
Staff present: County Attorney Wanda M. Copley; County Manager Chris Coudriet; Deputy Clerk
Kymberleigh G. Crowell; and Clerk to the Board Sheila L. Schult.
Other staff present: Accounting Manager Jennifer Maready; Assistant County Manager Avril Pinder;
Strategy and Policy Manager Beth Schrader; Environmental Management Director Joe Suleyman; and Finance
Director Lisa Wurtzbacher.
Chairman White opened the meeting and reported that the purpose of the work session was to review
information and discuss the future of the County’s solid waste.
Chris Coudriet stated that information provided is a detailed financial analysis of each proposal. Staff felt it
was important to present all information learned through the process and asked Environmental Management
Director Joe Suleyman and Finance Director Lisa Wurtzbacher to make the presentation.
PRESENTATION OF SOLID WASTE MANAGEMENT REQUEST FOR PROPOSAL, ANALYSIS AND
DISCUSSION
Environmental Management Director Joe Suleyman provided an overview and reviewed the background
information of the Request for Proposal (RFP) process:
Background:
Department tasked to issue an RFP for Solid Waste Services October 21, 2013
RFP approved for release November 18, 2013
Responses due January 31, 2014 – staff received two bids:
Waste Management
Waste Industries
The RFP:
Basic Services (Required Bid):Transfer station; load; transport; and dispose of municipal solid
waste (MSW)
Optional Services:
Landfill maintenance
Construction and Demolition (C&D) debris recycling
Recycling collection, processing, and marketing
Yard waste processing
Household Hazardous Waste (HHW) collection
Proposal Review:
Review Committee: Consisted of members from Finance, Legal, County Manager’s office,
Environmental Management, and County Commissioners
Review Process:
Responsiveness of the bids
Proposer interviews
Capability, experience, and historical performance
Cost effectiveness
Financial strength
Exceptions to contract principles
Finance Director Lisa Wurtzbacher presented the proposed costs of the RFPs including additional costs the
County would still have to incur above and beyond items the proposers bid on:
Proposed Costs – Base Bids and Optional Service Bids:
Base bid:
Construction/improvement of transfer station
Operation of transfer station
Loading transfer vehicles and transportation to final disposal facility
Disposal of MSW
Waste Management - Base Bid:
Base bid of $34.32 plus $2.00 NC solid waste tax.
Transfer station operation, loading and disposal subject to Consumer Price Index (CPI)
increase each year. Estimated costs reflect estimated CPI increase of 1.76% each year based
on the past 5 year average change.
Estimated costs reflect an estimated tonnage of 208,000. Tonnage decreases each year based
on the 5 year history of MSW tonnage.
Waste Industries – Base Bid:
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 33
WORK SESSION, APRIL 21, 2014 PAGE 66
Base bid of $37.95 plus $2.00 NC solid waste tax
Transfer station operation, loading, non-fuel component of hauling and disposal subject to
CPI increase each year. Estimated costs reflect estimated CPI increase of 1.76% each year
based on the past 5 year average change.
Fuel component of the hauling fee subject to a fuel escalation charge of 1% fee increase for
every 10 cent fuel cost increase.
Estimated costs reflect an estimated tonnage of 208,000. Tonnage decreases each year based
on 5 year history of MSW tonnage.
Waste Industries Alternate W – Base Bid:
Base bid of $36.00 plus $2.00 NC solid waste tax
Details of CPI increases and fuel escalation were not made available for Waste Industries
Alternate W. As such, the same assumptions were used as were in the Waste Industries
response to County’s proposal.
Estimated costs reflect an estimated tonnage of 208,000. Tonnage decreases each year based
on 5 year history of MSW tonnage.
Optional Service Bids:
Compliance maintenance, landfill operations, site maintenance, site leachate system and wetlands
operation and maintenance
Operation and maintenance of 7 public recycling drop off centers, 2 government facilities,
transfer, hauling, processing and marketing of recyclables
Household hazardous waste and electronic waste collection site operation and maintenance
Operation and management of construction and demolition diversion and recycling site
Operation and management of yard waste collection site and processing
Optional Services – Analysis:
Estimated costs reflect estimated CPI increases of 1.76% each year based on the past 5 year
average change.
Estimated costs reflect an estimated tonnage of 208,000. Tonnage decreases each year based
on 5 year history of MSW tonnage.
Other County Operational Costs:
Encompass additional costs the County would still have to incur above and beyond items the
proposers bid on:
Household hazardous waste for Waste Management bid as service was not bid on by vendor
Household hazardous waste disposal costs for Waste Industries
Administrative and personnel costs
County Capital, Long Term, & One Time Costs:
Capital projects include wastewater treatment system upgrade, cell 5B/6A closure and southern
property permitting
Demolition of WASTEC
Separation costs
Debt service for outstanding debt
Rain cover installation under Waste Industries proposal
Creating reserve for closure/post closure costs
Creating reserve for unexpected storms or events
Revenues:
Tip fee of $59.00 per ton
State distribution and rebates
Sale of current fixed asset
Sale of current inventory
Chairman White requested questions/comments from the Board.
In response to questions concerning airspace value estimation, Martin Sanford with CDM Smith Inc.
explained that of the four typical asset valuation approaches available, the acquisition cost approach was used to
provide an airspace value estimate. Airspace in a subtitle D landfill is a valuable, tangible asset. The current permit
in place and the pursuit of the permit expansions to allow landfill expansion have intrinsic value. Land costs were
reviewed and it was determined that the County basically has enough land to construct airspace beyond 10, 20 and
30 years so those costs are already incurred by the County. If cost is spread out over the total tonnages saved over
10, 20, 30 years it would not change the future value significantly from current cost.
For simplicity and due to variability in timing of incurred costs, CDM Smith utilized a per ton average
acquisition cost of the amount of airspace saved over 10, 20 and 30 years of transferring waste:
10 years: $31,200,000
20 years: $66,560,000
30 years: $112,320,000
In response questions on current landfill life, Director Suleyman reported that under the current approved
design there are 45 years of remaining capacity on the southern property and another 8 to 10 years of capacity on the
northern property. He further explained that southern property engineering documents are currently being prepared
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 33
WORK SESSION, APRIL 21, 2014 PAGE 67
to submit a permit modification request to the Department of Environment and Natural Resources (DENR) to: 1)
change the side slope from 4:1 to 3:1 that will provide additional capacity and 2) raise the final height elevation
from 170 feet to 270 feet. If approved as submitted, the southern property may have upwards of 60 years of
available airspace.
In response to questions about costs of the proposed WASTEC refurbishment, County Manager Coudriet
stated that renovation costs alone were estimated at $30 - $35 million. If the project had moved forward based on the
renovation of WASTEC and the then operating costs analysis at the time, landfill life would have been extended
from 45 years to 90 years. However, in that analysis was the assumption that the facility would continue to be
invested in, operated and maintained.
In response to questions on the permit modifications as it related to being approved, Director Suleyman
explained that estimated airspace life is calculated using compaction rates, known densities and what engineering
designs say is the capacity. While it may fluctuate +/- several years it does not include any additional activities such
as C&D debris recycling. Current capacity for C&D debris recycling is 6,000 tons per year. Approximately 60,000
tons per year could be addressed if the infrastructure was in place. The existing C&D debris recycling facility was
incorporated as part of the RFP to continue operating it. The turnkey investment cost for a facility able to handle all
potential inbound waste to capture the full 60,000 tons per year would be $1.8 million. Key infrastructure
investments include items such as extending the concrete pad which will not extend into future permitted airspace,
purchase of needed automated sorting equipment, and a three-phase power access currently in place but needs lines
extended and permitting done. The cost would be manageable under current tip fee.
In regard to the leachate processing project, Director Suleyman reported that the project total cost will be
$3 million and is required by DENR. It’s a three year program started in 2013 and has to be completed by June
2016. The leachate treatment system is very unique. It’s a constructed wetland system that is only usable during the
normal growing period for plants. In the winter the system is dormant so a wastewater treatment system has to be
relied on for the balance of the leachate even if the amounts are significantly reduced. This wastewater treatment
system was a DENR requirement to meet new and more stringent discharge limits specifically as it relates to heavy
metals. The current wastewater treatment plant is unable to treat heavy metals to DENR expectation levels. DENR is
allowing 3 years for project implementation knowing this is a significant project. A one-time, no cost 4 month time
extension has already been granted. The project is currently in the bench testing phase and staff is trying to do proof
of concept before jumping into a system that is not proven.
Brief discussion was held by the Board about whether or not to pay more for the airspace, if so, how much
and that a decision needs to be made now so that the funds are available in the future to reach goals set in 20-30
years. County Manager Coudriet noted that each analysis presented to the Board has been based on a 10 year
decline. In response to questions about the $8 tip fee difference in regard to the current budget, Director
Wurtzbacher explained that there is additional revenue that is received but not taken into account. That expenditure
would go down and be netted by other revenue received in areas such as rebates and grants.
Motion:
Commissioner Barfield MOVED that the Board refurbish WASTEC and bring it back on board. No
SECOND was received, therefore the MOTION FAILED.
Chairman White commented that he is unconvinced how either proposal will save money in the long-term
by shipping waste out of the county. Top priorities are saving airspace and keeping costs containable and reasonable
for citizens and businesses that consume services.
In response to questions about proposals appearing to cost more than present operations, Director Suleyman
stated the answer is yes and no, if discussed in terms of disposal capacity vs. disposal capacity it will be cheaper to
cross the county scale and dispose waste on a working face less than a mile away while a third party may have to go
60, 80 or 100 miles round trip to do the same. In regard to this RFP, differences between the two proposals arise
when the additional/optional services are added into the model. To keep an integrated solid waste management
program in place without reduction in service is less expensive for the County than a third party.
Director Suleyman stated in response to questions about approval from DENR for the proposed permit
modifications, the final documents have not been submitted. Once submitted the best case scenario to receive a
response will be four months. Initial feedback about the draft proposal was very positive and there should be no
major issues. He confirmed that the deadline is nearing to begin using the next landfill cell and once that occurs, it
will trigger the requirement to monitor and maintain that cell going forward.
Discussion was held by the Board about a need to further discuss and better understand the differences in
the proposals as submitted by the RFP respondents. While the numbers presented by staff are understood there needs
to be additional clarity given to the RFP respondents’ price differences. As the respondents are not prepared to
answer in writing to the information presented today, the general consensus of the Board was to have both groups
present, if they chose to do so, written information during the next board meeting supporting their proposals.
Director Wurtzbacher was asked to provide the respondents with copies of the work session materials as well as the
materials reviewed by the committee during the prior week. The respondents were asked that information provided
to the Board also be provided to staff to allow staff the opportunity to review and have input.
A copy of the PowerPoint presentation is hereby incorporated as part of the minutes and is contained in
Exhibit Book XXXVIII, Page 8.8.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 33
WORK SESSION, APRIL 21, 2014 PAGE 68
ADJOURNMENT
Hearing no further comments or discussion, Chairman White adjourned the meeting at 12:07 p.m.
Respectfully submitted,
Kymberleigh G. Crowell
Deputy Clerk to the Board