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HomeMy WebLinkAbout2000-02-17 Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 774 ASSEMBLY The New Hanover County Board of Commissioners held a Work Session on Thursday, February 17, 2000, at 1:00 p.m. in the Assembly Room of the New Hanover County Courthouse, 24 North Third Street, Wilmington, North Carolina. Members present were Commissioner Buzz Birzenieks; Commissioner Ted Davis, Jr; Commissioner Charles R. Howell; Vice-Chairman Robert G. Greer; Chairman William A. Caster; County Manager, Allen O’Neal; County Attorney, Wanda M. Copley; and Clerk to the Board, Lucie F. Harrell. Chairman Caster called the meeting to order and welcomed everyone present. He explained that this was a special Work Session to discuss the management of solid waste. He requested County Manager O’Neal to start with the items on the agenda. County Manager O’Neal reported that two years ago the Solid Waste Advisory Board was appointed by the Board of County Commissioners to review the New Hanover County Solid Waste Integrated Management System and the future of the WASTEC Facility. The Advisory Board was charged with the task of preparing sound, sensible, and practical strategies to accomplish solid waste management goals as outlined in the 10-year plan. During the past year, a Financial Analysis Report of the Integrated Solid Waste System was performed by McGladrey and Pullen, LLP as requested by the Board of County Commissioners. This report has been completed and the New Hanover County Finance Director, Bruce Shell, will comment on the findings. REVIEW OF THE MCGLADREY AND PULLEN FINANCIAL ANALYSIS REPORT Finance Director Shell explained that the financial report was based on the County’s numbers for FY 1998 and presented on an accrual basis. This is different from a normal budget review process. The accrual basis is essentially taking the investment made in environmental management, equipment, buildings, etc, and spreading them over a period of time via depreciation. The benefit of the accrual basis process is to reflect the full cost based upon assumptions to provide a more accurate financial report. The McGladrey and Pullen report reflects a tipping fee of $53 per ton at the WASTEC Facility in 1998 and a tipping fee of $16 per ton at the New Hanover County Landfill. The objective was to reduce the cost down to a per ton basis so the Commissioners would know the exact cost per ton. The same procedure was used for 1999; however, there were costs at the Landfill that were not included in the 1998 figures due to hurricane expenses and utilization of Cell 1A. When these figures are blended together, the blended rate is $24.76 per ton for the WASTEC Facility and $19.00 per ton for the Landfill. The purpose of the McGladrey and Pullen report is to provide financial figures to help the Commissioners determine whether it is sensible to continue to operate an integrated system consisting of the WASTEC Facility, New Hanover County Landfill, and Recycling Program, or whether the WASTEC Facility should be closed with New Hanover County moving to a Landfill System with some waste going out of the county. A spreadsheet was presented removing the interest expense and depreciation showing the variable costs, tonnages used and fixed costs for operating a Landfill System. After review, it was felt that very little was gained from closing the WASTEC Facility since the bond debt had to be paid. Chairman Caster requested Finance Director Shell to explain how the blended rate of $24.76 per ton was calculated on the spreadsheet. Finance Director Shell explained that numbers from 1998 and 1999 were pulled together to create the blended rate. The rationale behind this process was that 1998 figures were too low and 1999 figures were to high. If figures for the past 10 years had been used, the $24.76 rate would be in line. General discussion followed on the definition of an Integrated Solid Waste Management System. Finance Director Shell explained that under an integrated system, the following disposal methods are used: The New Hanover County Landfill; the WASTEC Facility, and the Recycling Program. Very simply, trash is burned in the WASTEC Facility and the remaining ash is used as a landfill cover. Vice-Chairman Greer passed out a spreadsheet on figures prepared by McGladrey and Pullen on the FY 1997-98 Solid Waste Operations. He expressed concern about the blended figure presented by the Finance Director, and he requested the Commissioners to look at the line item on the left side of the NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 775 spreadsheet showing On-Site Operating Expenses at $2,077,581 and Other Operating Expenses at $2,840,041 for a total cost of $4,917,559. When looking further down the left side of the page, there is an additional $370,728 for Administration Costs. If the debt service and depreciation are removed, the basic cost of operating the WASTEC Facility is approximately $5,288,287. The only revenues that are generated from the WASTEC Facility are steam and electricity sales at $1,716,000. The difference between the $5,288,287 cost to operate the WASTEC Facility and the $1,716,056 in revenue is $3,572,231. This is the cost of disposing of 128,929 tons of waste not including the capital costs, expense costs, and interest costs. Dividing the actual costs by 128,929, the basic rate per ton is $27.71. This shows that it cost twice as much to use the WASTEC Facility as the Landfill. If the waste is carried to the Landfill and the $12 McGladrey and Pullen figure is not used, the cost per ton would be $17.00. This means that burning trash at the WASTEC Facility costs $10.71 more per ton. If the 128,929 tons are multiplied by $10.70, additional revenue in the amount of $1,379,540 would be generated without the use of the WASTEC Facility. This means that if the WASTEC Facility is closed and all trash is carried to the Landfill, additional revenue would be generated in the amount of $1.4 million. This figure does not include the debt service payment; however, the $1.4 million could be used toward payment of the debt. A lengthy discussion followed on the figures presented. Vice-Chairman Greer explained that he used numbers listed under Salaries and Benefits, Other Operating Expenses, and Other Administration costs as basic figures excluding depreciation and debt service; however, $1,700,000 was generated in revenue which should be subtracted from the total cost. The basic cost of operation for the WASTEC Facility should be $3,572,000. If the total cost is divided by the 128,929 tons of trash burned, the cost for operation is $27.71 per ton compared to a Landfill cost of $12.60 to $25.00 per ton. Further discussion was held on the 1998-99 figures in the report. Vice-Chairman Greer explained that in FY 1998-99, WASTEC costs were less and Landfill costs greatly increased. When reviewing the total numbers, in FY 1997-98 the rate per ton at the WASTEC Facility was $53.36, and the rate per ton at the Landfill was $16.39. In FY 1998-1999, the rate per ton at the WASTEC Facility was $52.28 per ton and the rate per ton at the Landfill was $32.95. If these figures are accurate, which is questionable, New Hanover County is paying 50 percent more to operate the Landfill than any other county in the State of North Carolina. Assistant County Manager Dave Weaver explained that the Finance Director was trying to present two issues: (1)The cost of operating an integrated solid waste management system using the WASTEC Facility, Landfill, and Recycling Program. (2)Using only the Landfill for disposal of solid waste. Finance Director Shell advised if the $1,700,000 of revenue received in1998 from energy sales is divided by the tonnage, there is a savings of $7.50 per ton. If you compare the cost of operating the WASTEC Facility and the Landfill compared to operating only the Landfill, the gap narrows because the cost has been reduced by that amount. Vice Chairman Greer asked Finance Director Shell if this means that it costs $27.00 per ton to save that $7.50. Finance Director Shell disagreed with the $27 per ton figure. Commissioner Howell requested Finance Director Shell to explain why he disagreed with the analysis presented by Vice-Chairman Greer. Finance Director Shell responded that some of the analysis presented by Vice-Chairman Greer was correct. The figures presented by Vice-Chairman Greer were calculated by using an operating cost of $4,900,000, adding in an administrative cost of $400,000 to bring the total cost of operation to $5,300,000. At this point, energy sales were subtracted from the $5,300,000 to produce a figure of $3,600,000 as the cost of operation, which was then divided by the tonnage going through the WASTEC Facility to get the cost per ton. The disagreement occurs in switching over to the Landfill and closing the WASTEC Facility because after paying direct costs, the savings will be disappointing. Currently it costs $19.00 per ton to operate the Landfill and $25.50 per ton to operate the WASTEC Facility and the NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 776 Landfill. This represents a difference of $6.50 per ton. If the County shifts to using only the Landfill at $19.00 per ton multiplied by 230,000 tons, the operating cost would be approximately $1,500,000. By taking the lower cost of the Landfill and the higher cost of the WASTEC Facility, based on the McGladrey & Pullen Report and the 1999 report, Staff provided a more accurate blended average. It costs $5,900,000 to operate an integrated system. The operation of the integrated system is losing money because the tipping fee is very low. If the County shifts directly to disposal through the Landfill, the costs will be slightly lower; however, the following issues will have to be addressed: (1) laying off employees and the money involved with severance pay; and (2) the amount of land available at the Landfill. Under the current integrated system, 2.2 acres of landfill space are used annually. If the WASTEC Facility is closed, it is projected that 4.8 acres would be used annually. With the high cost of land per acre for future landfill space and the increasing cost of opening and closing landfill cells, these costs must be considered in analyzing which option to use for disposal of solid waste. Discussion was held on the major fixed cost of the integrated system and the limitations on increasing the tipping fee. Finance Director Shell advised that payment of the debt service was a major fixed cost, and he explained that if the tipping fee is increased, the trash will be carried out of New Hanover County and money will be lost. Further discussion followed on the amount of land remaining at the New Hanover County Landfill. Director of Environmental Management, Ray Church, reported that 130 acres of land have been approved for future use. However, the County owns another 1,000 acres of land that contains a considerable amount of wetlands. This land has not been approved for future use. Within the next year, Staff will approach the State to determine how much of the 1,000 acres can be used for landfill construction. In the FY 2000-2001 budget, funding will be requested to construct a 20-acre cell because the existing 6- acre cell is two-thirds full. Vice-Chairman Greer advised that the WASTEC Facility had constantly struggled to maintain the trash flow in New Hanover County so the incinerator can operate at peak capacity to reduce the cost per ton. At one time the tipping fee for this facility was $60 per ton to cover the costs of operating the incinerator and Landfill. When the courts ruled that flow control was illegal, the tipping fee at WASTEC had to be reduced to keep the haulers from carrying trash out of the county. As landfills are opening around the State, with the closest one being in Sampson County, there are other avenues to explore for disposal of solid waste in environmentally sensitive ways. He expressed concern for trying to keep the flow of waste in the County so that a mandatory trash collection system can be implemented to keep the incinerator open. He questioned why this burden should be placed on the taxpayers when there are less expensive ways to dispose of solid waste. General discussion was held on the limits placed on the sale of electricity. County Manger O’Neal explained that New Hanover County was in the sixth year of a 15-year contract with Carolina Power & Light Company to sell electricity; therefore, the County is limited in the amount of electricity that can be sold. Finance Director Shell presented slides showing operating revenues, operating expenditures, revenue over expenditures, debt service, and the deficit for the past five years. The deficit condition is due to the annual debt service. Money has been transferred from the general fund in the past to pay the annual payments; however, in 1999 the fund balance accrued to $4,700,000 with $1,600,000 paid for a landfill cell. Finance Director Shell closed by saying that he felt comfortable with the numbers presented. If the County shifts to a Landfill operation, the costs will be similar to the existing integrated solid waste management system. The difference will be that instead of having 50 years of landfill space, the County will have 25 years. An accrual basis does not reflect this cost to the Landfill because land cannot be depreciated by the general accounting theory. When you acquire a building on land, the building can be depreciated and the land is assumed to have the same residual value because its useful life has not changed. Once the Landfill is filled, it will become a liability that will have to be monitored and maintained for a period of 30 years. Finance Director Shell stated that he felt it would be a mistake to close the WASTEC Facility. Commissioner Howell commented on two scenarios presented and he asked if there are other options that should be considered. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 777 Finance Director Shell responded that another option to consider would be maintaining the Landfill on a minimal basis with a large portion of the waste being carried to an out-of-county landfill; however, the County would lose money because of debt service payments. Commissioner Howell noted that most people are concerned about an increase in their taxes, an increase in their trash bills, and where trash will be placed in the future. He said as a County Commissioner, he would like to know the best way to handle the disposal of solid waste in New Hanover County. If overall taxes can be lowered by closing the WASTEC Facility or changing the method of waste disposal, everyone should be in favor of this option. Commissioner Birzenieks asked what assumptions, if any, have been made on the market value of the incinerator if this facility is closed. Finance Director Shell responded that he did not make any assumptions on the value of the incinerator; however, he feels it would be difficult to find a market for selling parts or components of the WASTEC Facility. This was the case in Mecklenburg County, and when their facility was mothballed, it was necessary to carry insurance in the amount of $60,000 annually to maintain the facility. With past history on incineration, it would not be wise from an investment point of view for the County to decide to build this type of facility today. In the future, the ash from incineration could be considered a hazardous waste and stricter regulations could be placed on emissions, but environmentally less waste is placed in the ground. On the other side, the use of the County Landfill or out-of-county landfills can become a problem. An example is the Flemington lawsuit and the small amount of waste deposited in Nash County, which has resulted in New Hanover County becoming one of 800 partners responsible for cleaning up the site. When waste is carried to an out-of-county landfill, New Hanover County has no control over the operation and the county can become liable for any type of violations. All of these issues need to be considered when rendering a final decision on the best way to dispose of solid waste in New Hanover County. County Manager O’Neal spoke on it being difficult to forget the history of New Hanover County and the situation that faced the County when deciding to construct the WASTEC Facility. The County was out of landfill space and had no place to put trash. In his opinion, the County has the best of all worlds with an integrated solid waste management system comprised of the WASTEC Facility, Landfill, and a Recycling Program. Many counties throughout the State would like to have control of solid waste disposal. In concluding this item, Chairman Caster stressed the importance of everyone understanding that the Commissioners want to decide on the best solid waste management system for New Hanover County and its citizens. He emphasized the importance of Director Church and his employees understanding that discussion at this meeting is no reflection on the job being performed by the Administrative Staff and the employees at the WASTEC Facility and Landfill. Chairman Caster commented on innovative projects that have been implemented by the Environmental Management Department and he expressed appreciation to the employees for excellent work. Director Church expressed appreciation to Chairman Caster for the remarks. REVIEW OF SOLID WASTE MANAGEMENT IN NEW HANOVER COUNTY Director Church reported that in 1978 the Flemington Landfill was located on US Highway 421 North. Due to a lawsuit filed by the citizens in 1978, the landfill could not be expanded because of alleged groundwater contamination. In response to this lawsuit, the County had to install a water system to serve the Flemington community. A group was formed and a $500,000 groundwater study was performed with the findings concluding that no health or environmental dangers existed in the groundwater throughout this area. With the closing of the Flemington Landfill, another site had to be found. In 1978 New Hanover County contracted with Waste Management to operate and dispose of waste in the Pleasure Island Landfill located off Dow Road outside Carolina Beach. In 1980 the Corps of Engineers filed a lawsuit against the County and the court cited there was a better use for this property. The County lost the lawsuit and another landfill site had to be found. In 1980 the County decided to use county-owned property on Blue Clay Road as a landfill site. The County contracted with Waste Management to operate the landfill. A citizen filed a lawsuit over NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 778 zoning uses, and the Judge limited the use of this site to one year. The County attempted to locate landfill sites in surrounding counties; however, legislation was enacted by the N. C. General Assembly prohibiting New Hanover County from locating a landfill in surrounding counties, so the county was forced to look for a local site. In November 1981, the first double lined secure landfill was constructed on property located on US Highway 421 North. The cost of the landfill was $2.2 million, which included the cost of the 10-acre parcel plus construction of roads, the lagoon and other support facilities. The County contracted with Waste Management to operate this landfill from 1981-1986. On July 1, 1986, the County took over the operation of the Landfill. In 1981, the first Solid Waste Advisory Task Force was formed. This Task Force recommended construction of a waste-to-energy facility, a permanent long-term landfill, and development of source- separation and recycling programs. In 1982, a bond referendum for the waste-to-energy facility and the landfill was passed by a 14-1 margin. In 1984, the 200 ton per day steam plant came on line. It was the first waste-to-energy facility in the State that reduced the waste by 85% in volume and weight. The State allowed the County to use the ash as a daily cover for the landfill, and the County immediately realized a significant savings in landfill space. In 1986, a second group was appointed by the Board of County Commissioners known as the Citizens’ Solid Waste Task Force. The purpose of this group was to evaluate and recommend short and long range plans for waste disposal, litter control and waste collection. This group recommended the following actions: (1) increase capacity of the Steam Plant; (2) suggest that the City of Wilmington go to once a week collection; (3) establish a mandatory collection system for all residents; (4) fund a franchised collection system through the tax base; (5) assign two deputies to the Environmental Management Department for litter and illegal dumping issues; and (6) install scales at the Landfill. In 1989, the N. C. General Assembly passed Senate Bill 111, known as the Solid Waste Act which consisted of the following requirements: (1) establishment of a waste management hierarchy; (2) establishment of waste reduction goals; (3) establishment of a ban on tires, yard waste, lead acid batteries, waste oil, antifreeze, and appliances from landfills; (4) requirement that counties develop recycling programs; and (5) requirement that counties develop solid waste plans. In 1991, a Waste To Energy Advisory Committee was formed. This committee recommended an independent annual audit of the Waste Management Facility to strengthen and expand management, to strengthen community support, to increase efforts to attract steam customers, to provide competitive salaries, develop and maintain a fund balance of $5,000,000 for capital improvements and unexpected expenditures. Director Church presented the following responses to recommendations of the advisory boards and to Senate Bill 111: (3)1981 Solid Waste Task Force: All recommendations were adopted. (4)1986 Citizens’ Solid Waste Task Force: All recommendations were adopted except for the franchise collection system. (5)Waste-to-Energy Advisory Board: Environmental Management now has competitive salaries and the recommended fund balance of $5,000,000 is at $3,800,000 of which $1,600,000 was used for landfill construction costs. 6.Senate Bill 111: The waste reduction goals have not been met. Many counties have made better progress. When reviewing a survey of trash out put per capita, New Hanover County is over 8 pounds per person with many other counties below 5 pounds per person. The County is going in the wrong direction. Discussion was held on the reasons for not meeting the waste reduction goals. Chairman Caster asked if hurricanes during the past three years, or the influx of tourists during summer months had impacted the per pound per person figure in New Hanover County. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 779 Director Church stated that hurricanes have played a part in this figure; however, the waste reduction goal in the New Hanover County Solid Waste Plan was 10% by 2000, which will not be attainable. The State recommended a waste reduction goal of 40%, which has now been recognized by the State as unreasonable. New Hanover County is making limited progress in waste reduction because in 1993, the intent of the yard waste ban was to remove yard waste from the waste stream and produce a beneficial product such as compost or mulch. In January 1991, Waste Management found a loophole in yard waste ban legislation and argued that yard waste should be burned in the incinerator to create additional revenue. The County argued that with a sufficient amount of waste, there was no need to burn yard waste. Burning yard waste provides a low BTU fuel value, causes problems in the charging chutes of the incinerator, and impacts the nitrous oxide controls. Director Church presented the following events that produced limited progress in reducing the waste steam: 1.In July 1993, Waste Management opened a transfer station that removed 30,000 tons of trash, which resulted in a loss of $1,800,000 in revenue. At this time, the Board of County Commissioners decided that up to 15% of a load coming to the WASTEC Facility could be yard waste. Vice-Chairman Greer stated that he was a County Commissioner when the decision was made to allow yard waste to be burned in the WASTEC Facility. This was a way to provide a method for disposal of small amounts of yard waste without imposing another form of collection on the citizens. 2.In September 1993, a Flow Control Ordinance was passed by the New Hanover County Board of Commissioners. On November 19, 1993, Waste Management filed a temporary restraining order against the County, charging that New Hanover County did not have the legal right to control the flow of waste. 3.In November 1999, the tipping fee was dropped from $60 per ton to $25 per ton. As of this date Waste Management continues to remove waste out of New Hanover County. Before the tipping fee was reduced, the $60 fee covered the debt service and operating cost of the WASTEC Facility and Landfill. Due to the loss of revenue from the reduction in the tipping fee, the budget for the Environmental Management Department had to be supplemented by the general fund. Staff was instructed to investigate alternative funding. 4.In January 1994, a collection system was proposed and the haulers agreed with the residential portion of the agreement, but they never agreed to the commercial collection system due to the loss of customer confidentiality. The plan was abandoned, and the budget was balanced by the general fund for the remainder of the year. 5.In May 1994, the Carbone Flow Control Supreme Court case was settled. The Court ruled that flow control was unconstitutional due to the Interstate Commerce clause. Waste Management won a restraining order against the County, and took 40,000 tons of waste out of the County that year, at a cost at $25 per ton which amounted to a revenue loss of $1,000,000. 6.In January 1995, there was a proposal from BFI, the Sampson County Landfill, to close the WASTEC Facility and send all our trash to Sampson County. At that time, the Board of County Commissioners decided to raise taxes to pay the debt service on the WASTEC Facility instead of closing the facility and sending trash to the Sampson County Landfill. 7.In May 1995, Staff recommended, based on an engineering study, to develop a buy-back recycling facility to promote recycling and waste reduction. The facility was to be operated under a contract with Keys for vocational training. This presentation was interrupted by Waste Management and other local companies saying that New Hanover County was becoming a recycling competitor. Funding in the amount of $1,400,000 was allocated from Special Obligation Bonds to pay for the buy-back facility. These funds were later used to build landfill cells. Shortly, after it was decided not to develop a buy-back recycling facility, Waste Management stopped offering curb side recycling in unincorporated areas. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 780 8.In 1997, the County became the recycling processor. Bids were solicited for recycling. The County determined it could process materials more cost effectively by using inmate labor and entering into a public/private partnership with a company to provide a baler and purchase recovered paper products. 9.In 1998, the County eliminated the tip fees for bulk loads of cardboard in order to reduce landfilling of cardboard and to encourage its recovery. Waste Management began delivering cardboard from outside of New Hanover County, including Jacksonville, N. C., in order to take advantage of the zero processing fee. Director Church reported that recently, there was a news report showing that the WASTEC Facility burns recyclables. Two Waste Management drivers were interviewed regarding this issue, and they think this was a deliberate attempt to discredit the Environmental Management Department and the WASTEC Facility. Last week, a violation was found, and Staff sent a letter to all waste haulers informing them that on December 15, 1999, out-of-county waste would not be accepted at the WASTEC Facility. Yesterday, February 16, 2000, two Waste Management trucks were found delivering waste from Pender County. In concluding his presentation, Director Church stated the question to answer is whether the County will focus on waste reduction programs and make a concentrated effort to reduce the waste stream. The Board of County Commissioners will be responsible for making this decision. Vice-Chairman Greer asked if any other companies had been caught bringing waste in from other counties. Director Church responded that two employees perform waste screening to determine whether waste is being brought in from other counties. No other companies have been caught violating this regulation. The two employees who perform waste screening are present and will be glad to address this issue. The bottom line is that the present rate of $28 per ton at the New Hanover County Landfill is the cheapest game in town. With landfills in Pender County at $54 per ton and Brunswick County at $30 per ton, contractors are taking advantage of the construction and demolition landfill in New Hanover County, and a public contractor continues to bring in residential and commercial waste against our wishes. Vice-Chairman Greer requested an explanation of why the Landfill disposal cost was reduced to $28 per ton. Director Church stated this action was taken last year because of the continued threat of trash being carried out of the county. Vice-Chairman Greer stated that he could not understand this statement when he has been told the facility receives more trash than it can handle. Director Church explained that the facility is now receiving trash from outside the county which is in violation of the County’s permit. The State has been notified about the violation of our permit because the Landfill is not permitted to take out-of-county trash. The State Law specifically states that when waste is received from another county, it has to be reported to the County Manager in written form showing the number of tons and the name of the county bringing in the waste. Waste Management has not reported to the County Manager as required by law. Commissioner Davis requested Director Church to explain the cost involved with carrying trash to the Sampson County Landfill. Director Church responded that the cost per ton varies in the Sampson County Landfill. After Hurricane Floyd, the rate was $23.50 per ton. Large haulers receive a better rate, and the Sampson County Landfill is permitted to receive waste from up to 100 miles away. When the transfer station fee is added to the rate charged per ton, the fee is approximately $28.00 per ton. Vice-Chairman Greer commented on having to perform waste screenings to be sure waste is not coming in from another county, and he stated if the WASTEC Facility was not in operation, the County could establish a reasonable tip fee and regulate the amount of trash received in the Landfill. The fair NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 781 market could take over and the person with the best deal would receive the trash. In the County’s present situation, the WASTEC Facility needs a tremendous amount of trash to operate the incinerator at peak capacity in order for it to be cost effective. Commissioner Davis disagreed and stated that as required by state and federal regulations, waste screenings are needed to prevent hazardous waste or banned waste materials from being placed in a County facility. Regardless of whether the WASTEC Facility remains open or closed, the County will be responsible for operating a waste disposal system for the citizens of New Hanover County. Director Church noted that State Law requires counties to get a handle on reducing the waste stream. Presently, the State is targeting 10 counties that produce 50% of the waste stream. New Hanover County is one of those counties. The State will expect New Hanover County to promote programs such as recycling, disposal of yard waste, and disposal of household hazardous waste. The Environmental Management Department is called daily about funding these types of programs. Commissioner Birzenieks requested Director Church to briefly summarize his recommendations to the Board. Director Church requested the Board to consider the following items: (1) focus on waste reduction programs; (2) respond to the citizens that request collection systems; (3) reduce illegal dumping; and (4) establish a user fee based system as the source of funding. BREAK Chairman Caster called a break from 2:15 until 2:35 Finance Director Shell advised that he had reviewed the information presented and realized that an error had been made in his figures. He apologized for the error and stated that he agreed with the figure presented by Vice-Chairman Greer which shows the Landfill can operate at approximately $1,500,000 less than the current integrated system. Discussion followed on the cost of future landfill space. Finance Director Shell stated after analyzing the cost of Cell 4-A, it was found the actual land cost was $360,000 per acre. When the County purchases landfill space, it depletes the amount of available land that can be used for other purposes and at the same time decreases the tax base. Commissioner Howell noted that land in New Hanover County is an irreplaceable asset. Commissioner Davis requested County Attorney Copley to comment on whether it is unconstitutional for the County to control where waste haulers carry trash. For example, if the County on March 1, 2000, stopped the current system and went to a county-wide waste collection system, and a waste hauler wanted to contract with the county under this system, could a contract be negotiated to require the trash collected to go to New Hanover County disposal facilities. County Attorney Copley responded that when bids are prepared, a condition of the contract can be to require the waste to go to New Hanover County disposal facilities. Commissioner Davis stressed the importance of everyone understanding that a county-wide collection system could be implemented under a contract with the condition that all waste must be carried to County facilities. PRESENTATION BY THE CITIZENS’ SOLID WASTE ADVISORY BOARD Mr. Ed Fox, Chairman of the Citizens’ Solid Waste Advisory Board, reported that for the past two years, the Advisory Board has researched and studied the best way to better manage the disposal of solid waste in New Hanover County. He presented the following recommendation: User Fee System: 1. This option provides a reliable and secure funding mechanism, and it allows for improved long-term planning. It also assures reliable deliveries of waste to New Hanover County facilities. This option will allow New Hanover County to move toward its waste stream reduction goals. The user fee system will allow for the following components of a fully integrated program: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 782 Expansion of existing facilities Commercial recycling Construction and Demolition Processing Facility Household Hazardous Waste Program Residential Collection System Litter Enforcement Officers Increased Education Programs Under the user fee system, everyone pays with no exceptions. Commercial customers are charged by volume. There is a 99% collection rate and the fee will be listed as a non-deductible line item on the tax bill. The advantages of the user fee system are as follows: ? Citizens receive a service level consistent with their expectations. ? Landfill space is saved. ? There will be no incentives for private haulers to carry waste out of New Hanover County. ? The County is positioned to meet state goals and mandates. ? There will be a cleaner community with investigation of illegal dumps and litter enforcement. Mr. Fox stated the user fee system is a win-win situation for the community, environment, haulers and New Hanover County citizens. The Commissioners are being requested to decide in favor of the user fee system and officially support the program. New Hanover County has a responsibility to provide a system for the long term that will be economically effective and environmentally sound for the disposal of solid waste. In concluding his presentation Mr. Fox urged the Board to consider the recommendations presented so New Hanover County will have a fully integrated system comprised of the WASTEC Facility, Landfill, and recycling program that will save landfill space, avoid terminating 55 employees, prevent the loss of a valuable asset, provide a cost-effective system for the citizens, and solve the solid waste disposal problem. Mr. John Hubbard, Plant Manager, presented charts on WASTEC steam production and revenues from utilities. Since 1994, there has been an increase in steam production, and the efficiency has improved because the WASTEC Facility has been able to maintain burning levels in spite of dips in the trash stream. Revenues from utilities average around $1,700,000 per year and have been fairly consistent; however, due to the loss of PCS Nitrogen as a steam customer, 1999 revenues dropped to $1,500,000. The WASTEC Facility is exporting about 5 megawatts of power to Carolina Power & Light Company. It takes about 10,000 pounds of steam to make a megawatt. Discussion followed on the amount of megawatts that can be sold to Carolina Power & Light Company. Mr. Hubbard informed the Board that 7.5 megawatts is the maximum power that can be produced at their substation. The WASTEC Facility averages between 6 to 7 megawatts with all 3 boilers on line. Further discussion was held on more stringent EPA emission control regulations. Mr. Hubbard advised that capital projects have been budgeted for the past three years, and stated that money is available to meet the new emission regulations. In concluding his presentation, Mr. Hubbard stressed the importance of everyone understanding that when a ton of solid waste is burned, this is a ton of waste that will not be the responsibility of future generations. When waste is placed in the ground, it is there forever and has to be continually monitored. The WASTEC Facility alleviates this problem. This facility is not a huge power plant, but instead of using fossil fuel or coal, it uses trash from peoples’ homes which reduces pollution. Ms. Mylinda Jacobsen, Recycling Manager, reported that she has been a County employee for five weeks and stated prior to this position, she worked with the City of Charlotte in the Solid Waste Section and with the Winston-Salem/Forsythe County Utilities Division for five years. She reported that the Department of Environmental Management has been facing significant challenges. Among those are NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 783 increasing demands for services from citizens. In her brief time here, she has received calls from citizens in the unincorporated areas asking us why they can’t get bulky items picked up, and she stated it had been difficult to inform them that New Hanover County does not have enough resources to provide the service. Mr. Jacobsen advised that one solution to these challenges is implementation of a user fee system to provide a reliable and secure funding mechanism that will allow for improved long-term planning. Staff has researched other communities with similar arrangements. Among those were Pinellas County, Florida; Charleston County, South Carolina; Lancaster County, Pennsylvania; and the State of Hawaii. Charleston County has one of the best user fee programs in the nation with a waste-to-energy facility, landfill, materials recycling facility, recycling collection programs and education programs. With their geographical and regional similarities, the Charleston program provides a good model for New Hanover County. The question has been asked why Charleston County decided to implement a user fee system. Under this system, everyone pays. There are no exceptions. Commercial generators are charged by volume and there is no tipping fee assessed at the scale. Charleston County has a 99% collection rate and the user fee is administered as a non-deductible line item on the property tax bill. Some of the advantages to a user fee system are that citizens receive a service level consistent with their expectations. Under this system, landfill space is saved, there is no incentive for waste to be taken out of the county because the tipping fee is paid in advance and is not assessed at the scale. Charleston County is in the position to meet state goals and mandates, and have a cleaner, more desirable community through litter enforcement. This is a win-win situation for the community, the environment, the haulers and the citizens. It is a real victory for residents in the unincorporated areas of the County. There is a vast difference between what a City of Wilmington resident enjoys in solid waste services compared to residents in the unincorporated parts of New Hanover County. In concluding the presentation, Ms. Jacobsen requested the Board to consider a user fee system because this is a management program that really works. Chairman Caster asked Ms. Jacobsen if there were any disadvantages to a user fee system. Ms. Jacobsen responded that she could not think of any disadvantages. A lengthy discussion followed on how residential and commercial customers will be billed for disposal fees. Ms. Jacobsen explained that New Hanover County will bill the owner one fee as a non- deductible line item on the tax bill for disposal and other programs will be offered, such as recycling, yard waste collection, bulky item, etc. A monthly or bi-monthly bill will be sent by the waste hauler for the collection of garbage only. This bill will be reduced by the cost of disposal which has already been prepaid on the tax bill. The commercial fees are based on volume at a rate per cubic yard. If a business exceeds a certain volume, the tipping fee will have to be assessed. Chairman Caster requested an explanation of how commercial disposal is calculated. He also asked if a small business owner would pay more or less under the Charleston County system. Director Church advised that fees would be the same based on the calculation for the type of business and whether the business is located in the city or county. He stated that in his opinion a business would pay less because haulers routinely mark up the tip fee for commercial accounts by an average of $4.00 per ton. Implementation of a user fee system would eliminate this practice. Discussion followed on the difference between the garbage bill for a resident living in the county and a resident living in the city. Director Church explained that currently the City of Wilmington charges $15.30 per month for once a week garbage collection, curb side recycling, and bulky item collection. A resident living in the unincorporated area pays approximately $18.30 per month for garbage collection with no other collection programs. After further discussion on providing the best and most cost effective system for the taxpayers, Commissioner Davis asked Director Church which system would he recommend. Director Church recommended the Charleston County system. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF WORK SESSION ON SOLID WASTE, FEBRUARY 17, 2000 PAGE 784 Chairman Caster questioned whether the City and County should operate two small systems in a county of this size. Director Church advised that one system would be better. City Councilmember Frank Conlon informed the Board that the City made a proposal to the County when the Strategic Plan was being developed a few years ago, whereby the City would manage the collection of garbage and the transportation with the County managing disposal. The haulers would be required to carry the trash to the incinerator and landfill, and the County would be divided into zones. He offered to discuss this proposal with the Board of County Commissioners at any convenient time. Commissioner Birzenieks commented on the number of items that need to be addressed and stated that he was not ready to make a decision. He stressed the importance of hearing from experts that are neutral and will objectively address environmental issues, the future for incineration, and what is the best long-term solution for the citizens of New Hanover County. Commissioner Davis again reiterated that the obligation of the Board is to do what is best for the taxpayers. He said at this time, he could not make a decision. Vice-Chairman Greer referenced the number of years that he had been dealing with this issue as a County Commissioner and said this is an extremely controversial issue. Regardless of what information is presented in the future, the Board will eventually have to decide if the incinerator should be closed or remain open. County Manager O’Neal expressed appreciation to the Commissioners for taking time to discuss this complicated issue. ADJOURNMENT Chairman Caster expressed appreciation to everyone for attending the meeting, and he called for a motion to adjourn. Motion: Commissioner Birzenieks MOVED, SECONDED by Commissioner Davis to adjourn the meeting. Upon vote, the MOTION CARRIED UNANIMOUSLY. Chairman Caster adjourned the meeting at 4:00 p.m. Respectfully submitted, Lucie F. Harrell Clerk to the Board