1991-03-05 Special Meeting380
MINUTES OF SPECIAL MEETING, MARCH 5, 1991
ASSEMBLY
The New Hanover County Board of Commissioners held a Work
Session on Tuesday, March 5, 1991, at 2:00 o'clock P.M. in the
Conference Room of the Resource Recovery Facility, Highway 421
North, Wilmington, N. C.
Members present were: . Commissioners Jonathan Barfield, Sr.;
Robert G. Greer; William H. Sutton; Vice-Chairman E. L. Mathews,
Jr.; Chairman Fred Retchin; County Manager Allen O'Neal; County .
Attorney Robert W. Pope; and Clerk to the Board, Lucie F.
Harrell.
Chairman Retchin called the meeting to order.
County Manager 0' Neal presented an overview of the Work
Session and requested the Board to tour the Resource Recovery
Facility and New Hanover County Landfill.
MEETING RECESSED TO TOUR THE RESOURCE RECOVERY FACILITY AND NEW
HANOVER COUNTY LANDFILL
Chairman Retchin recessed the Work Session to tour the
Resource Recovery Facility and the New Hanover County Landfill
from 2:00 o'clock P.M. to 4:30 o'clock P.M.
NOTIFICATION OF MARCH INVENTORY TAX REIMBURSEMENTS BEING CUT BY
THE STATE
County Manager O'Neal stated notification has been received
from the N. C. Association of County Commissioners of further
reductions in the State Budget for FY 1990-91. Governor Martin
has officially announced that due to faltering state revenue
collections, further reductions in state expenditures and
transfers will have to be implemented immediately. A $29.7
million reduction in the impending March payment of
reimbursements for inventories is among the items to be cut in .
the current budget year. A 63% reduction in reimbursement of
inventories to New Hanover County would be approximately
$1,197,000 and a 10-15% reduction would be $150,000 to $200,000.
The Budget Officer is now looking at the curr~nt budget to see
where departments can reduce their budgets. The Board will be
informed of actions necessary to prepare for the predicted
shortfall.
REVENUE ALTERNATIVES FOR TIPPING FEES
Assistant County Manager Dave Weaver presented the following
revenue alternatives for reducing the tipping fee:
1. Utilization of State Prisoners to Work at the Landfill:
State law prohibits prisoners from working; however,
the County Attorney is serving on a committee which is
in the process of drafting legislation to change the
State Statute. If the proposed amendment does not
receive approval, the County can seek a local bill to
allow prisoners to perform community service work in
New Hanover County.
2. Utilization of Community Service Workers: Request
judges to sentence community service workers to serve
their time at the Landfill. Due to transportation,
supervision, and safety costs, staff will have to .
determine if these factors will outweigh the benefits
received.
3. Possibility of Obtaining Out-of-County Customers for
Dumping in the Landfill and Burning Trash in the
Incinerator. In order to pursue this alternative,
Unit 3 must be operating satisfactorily, and figures
on the County's needs and available capacity must be
accurately calculated. Pursuing commercial accounts
would allow tipping fees at several times the rate
charged to County customers.
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MINUTES OF SPECIAL MEETING, MARCH 5, 1991 (CONTINUED)
381 ~
4. Increase in the Room Occupancy Tax: A 1% increase
would generate over $400,000 of revenue. In com-
paring room occupancy taxes in other counties, Wake
County is proposing an increase from 3% to 6%;
Mecklenburg County is charging 6%, and overall the
counties throughout the state are charging from 3-6%.
5. Implementation of a food and beverage tax.
.
Discussion was held on increasing the room occupancy tax
wi th the general consensus that this revenue source should be
pursued.
PERSPECTIVES ON BUDGETING AND FINANCING
Finance Director, Andrew J. Atkinson, presented and
discussed the revenue and expenditure patterns for operation of
the Resource Recovery Facility from 1988-1991. Due to
construction during the past year, the boilers were not running
as projected; therefore, 1991 electric and steam sales are
drastically down. At present, the facility is $1 million short
in revenues projected; however, electric sales in the amount of
$300,000 should be received in Mayor June, 1991. Operating
expenditures were projected at $1.6 million, but expenditures
have exceeded that figure by $600,000 to $700,000 due to related
costs of designing landfill cell closures. He stated the
combination of reduced tipping fees, reduced revenues, and
increased costs for cell closures has created the $1 million
deficit for this fiscal year.
Finance Director Atkinson stressed the importance of
accumulating funds in the Resource Recovery Fund in order to
offset costs for constructing and closing of landfill cells. At
present, the project has a million dollars of unauthorized bonds
which could be issued to pay for a reduced size landfill cell,
tractor, and maintenance building.
.
Environmental Director, Ray Church, cautioned earmarking the
$1 million of unauthorized bonds until all expenses have been
paid for completion of the expanded Resource Recovery Facility.
Further discussion was held on the usage of the Landfill
Cells. The following chart was presented:
Lined Landfill Cell Actual Usage Data
Cell No. Size Date Used Years Rate/Yr.
1 10 acres Nov.'81 - April '86 5.5 1.8 acres/yr
2 7 acres May '86 - Nov. '88 2.5 2.8 acres/yr
3-A 7 acres Dec. ' 88 - Sept. -90 1. 75 4 acres/yr
* 3-B 7 acres Oc t. ' 9 0
*Cell No. 3-B will be approximately 1/2 full in April 1991, only
7 months = 3.5 acres = 5.8 acres/yr.
0.6 yrs.
Director Church stated the projected landfill usage of 6.41
acres left in July 1992 versus the actual usage deficit of 2.8
acres has produced a net loss of 9.21 acres at $140,000/acre
totaling $1,289,400 not including the cell closure cost.
.
Commissioner Sutton inquired as to why the tipping fee did
not keep up with increased costs? Finance Director Atkinson
stated the tipping fee does provide the necessary revenue;
however, the budget has been balanced yearly with no opportunity
to increase the tipping fee to accumulate money for construction
of landfill cells which has escalated within the past two years.
Discussion was held on reducing the usage of the lined
landfill by increasing burning with the expanded Resource
Recovery Facility. Environmental Management Director Church
stated staff is currently considering construction of a 7-acre
lined cell instead of a 14-acre cell due to increased burning.
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/" .. - MINUTES OF SPECIAL MEETING, MARCH 5, 1991 ( CONTINUED)
( 382
Discussion was held on debt service.
was presented:
The following report
Landfill Debt Service (Principal & Interest)
(1) December 1, 1995 - Bond Issue 85336002 $208,821.00
Balance due July 1, 1991 - $987,500 to be retired
in 1997.
Installation Lease Payments
( 2 )
June & Aug. 1986
Landfill Equipment
$ 24,740.03
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(3) July 1, 1987
Construction of Cell #3 492,498.52
(7/1/91 Balance $474,353 -
to be retired July 1, 1993.)
(4) April 15, 1988
273 acres landfill property
Balance 7/1/91
$409,100
retired 7/1/94
Total
$755,825.67
$964,646.67
TOTAL DEBT & LEASE PAYMENTS
Environmental Management Director Church stated Cell #4 must
be constructed and the question to be answered is whether to pay
for the cell construction at one time, which will raise the
tipping fee by $5.00 for a 7-acre cell, or should the payment be
spread out over a number of years? If the County should decide
to construct and pay for a 14-acre cell, the tipping fee will be
increased by $10.00.
Commissioner Greer expressed concern for the proposed
increase in the tipping fee. Finance Director Atkinson stated
due to the decrease in the volume of garbage, revenues have
decreased; therefore, in order to operate the facility, the
tipping fee will have to increase to cover expenditures.
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Commissioner Sutton inquired as to the variables creating
the reduction in tonnage. Environmental Management Director
Church stated due to the recession, recycling programs, and
reduction in building permits, the tonnage has been reduced from
a projected 426 tons per day to 350-375 tons per day.
Discussion was held on landfill space saved due to
incineration. Environmental Management Director Church presented
the following report:
Landfill Space Saved Due to Incineration
July 1984 - July 1990
Amount of Waste Incinerated:
519,803 tons MSW would occupy 15.23 acres
158,055 ash tons occupy 3.19 acres
Total Acres Saved 12.04
12.04 acres x $200,000 per acre = $2,408,000 savings in
avoided landfill construction. This does not include
any additional operating and maintenance costs.
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Discussion was held on environmental regulations.
Environmental Management Director Church presented the following
report:
Effects of Environmental Regulations Since 1986
(1) No permits for new landfills have been issued without
liners since October, 1986. New Hanover County began
lining in 1981. Cost: $125,000 per acre.
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MINUTES OF SPECIAL MEETING, MARCH 5, 1991 (CONTINUED)
383 ~
(2) Landfill Closure (Clay or Synthetic liners)
Cost: $75,000 per acre.
(3) Wastewater Treatment Plant: When opening the landfill
in 1981, additional regulations have been adopted with
a recent change in NPDES monitoring to include toxicity
test requiring ammonia removal. Cost: $100,000.
.
(4) Clean Air Act: Scrubbers and bag house addition and ESP
upgrades. Cost: $2,811,200.
(5) Nitrous oxide control - Cost: $347,000.
(6) Annual cost of nitrous oxide scrubber operation is
$275,000.
(7) Secondary fuel (Natural gas) to pre-heat and post-
heat the boilers. Cost: $60,000 per year.
(8) Underground storage tank regulations will require
removal of the current underground storage tank at the
Landfill with replacement of an above-the-ground tank
with contaminant. Cost: $20,000.
(9) Senate Bill 111 25% recycling goal: How much will this
cost the County? No state funding is available.
(10) Long term (30 years) monitoring of landfill after
closure. No cost projected.
Discussion was held on tipping fees throughout the nation.
Environmental Management Director Church presented the following
report based upon data furnished by the National Solid Wastes
Management Association (NSWMA):
.
Comparison of New Hanover County
Tipping Fees to National Average
Year
NSWMA
Data
NSWMA Average
Increase Percentage
**New Hanover County's
Tipping Fee
1984
1985
1986
1987
1988
1989
1990
1991
1992
$17.26
$23.17
$30.32
$33.64
$39.86
$47.23*
$55.97*
$66.32*
$78.52*
34%
31%
11%
18.5%
18.5%
18.5%
18.5%
18.5%
$20.00
$26.85
$35.25
$38.98
$46.19
$54.74**
$64.87**
$76.87**
$91.09**
* Assumes continued 18.5% increase per year.
**Tipping fees are calculated using the $20.00 New Hanover
County tipping fee established in 1984 compared to Solid
Wastes Management Association's national average increases
since 1984.
.
Commissioner Greer requested Director Church to prepare an
informational letter explaining the purpose of the Resource
Recovery Facility, the revenues generated, expenditures, state
and federal mandates, EPA regulations, and tipping fee rates. He
stressed the importance of better informing the general public on
the need for this facility and the costs involved with disposal
of garbage.
PRESENTATION OF RECYCLING PROGRAMS
Recycling Manager, Tim Cole, presented the following
recycling programs:
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384 MINUTES OF SPECIAL MEETING, MARCH 5, 1991 ( CONTINUED)
OPTION I:
MANNED MOBILE DROP-OFF PROGRAM (CURRENT PROGRAM)
Cost and Recovery Variables
Annual Budget
$190,000
Contract with the City of Wilmington
Salaries
Miscellaneous
$90,000*
75,000**
25,000***
Projected annual recovery rate: 2 tenths of 1%
Projected cost per ton recovered: $550
Potential annual revenue: $20,000#
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*Assuming that the processing fee paid to the City of
Wilmington is the same as last year. At an anticipated
recovery rate of 330 tons per year, we pay the City of
Wilmington $273 per ton processed.
**Includes Recycling Manager's Salary.
*** Includes administrative costs not directly associated with
the program.
# Currently, all revenues from material sales go to the City
of Wilmington.
Mr. Ed Fare, Recycling Manager for the City of Wilmington,
stated he did not feel the City would charge the County $500 per
ton since the expansion of the recycling facility has been
completed.
OPTION II: A combination of the present program with manned
mobile/semi-permanent drop-off sites. Two manned
mobile sites and two manned semi-permanent sites.
MANNED MOBILE/SEMI-PERMANENT DROP-OFF PROGRAM
Costs and Recovery Variables
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Annual Budget for First Year
$380,000
Contract with the City of Wilmington
Salaries
Capital Outlay
Miscellaneous
$ 90,000*
152,000**
61,000
77,000***
$380,000
Projected annual recovery rate: 3/tenths of 1%
Projected cost per ton recovered (first year): $760
Projected cost per ton recovered (second year): $638
Potential annual revenue: $30,000#
*Assuming that the processing fee paid to the City of
Wilmington is the same as last year. At an anticipated
recovery rate of 500 tons per year, we would pay the City
of Wilmington about $180 per ton processed.
**Includes Recycling Manager's Salary.
***Includes administrative costs not directly associated with
the program.
#Currently, all revenues from material sales to the City
of Wilmington.
OPTION III: 4 sites opened 5 days per week
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MANNED SEMI-PERMANENT DROP-OFF PROGRAM
(Contracted out)
Cost and Recovery Variables
Assumptions: (1) 4 donated sites*; (2) operated by private
contractor; (3) collect glass containers, news-
print, and aluminum**; and (5) no site prepar-
ation costs will be incurred.
Contracted services budget
$161,880
Labor
contained rental
$124,800
4,620
MINUTES OF SPECIAL MEETING, MARCH 5, 1991 (CONTINUED)
385
Hauling costs
32,460
$161,800
Projected annual recovery rate: 1/2 of 1%
Projected cost per ton: $216
Potential annual revenue: $28,560
Projected cost per ton after revenue: $178
*If the County has to purchase properties for the sites, the
cost of this option would increase dramatically. Prime com-
mercial properties may cost from $25,000 to $100,000 per
acre.
**Plastic may not be accessed if a private contractor is used.
OPTION IV:
UNMANNED DROP-OFFS
Costs and Recovery Variables
Assumptions: (1) 4 donated sites;* (2) County-operated; (3)
collect glass containers, newsprint, aluminum
cans, HDPE, and PETE; (4) program can be in-
tegrated with City of Wilmington's processing
system; and (5) no site preparation costs will
be incurred.
Budget for First Year
$390,000
Contract with the, City of Wilmington $ 90,000
Capital Outlay (28 containers & truck) 200,000
Salaries 75,000**
Miscellaneous 25,000***
$390,000
Projected annual recovery rate: 1/2 of 1%
Projected cost per ton recovered (first year):
Projected cost per ton recovered (second year):
Potential annual revenue: $45,000#
$520
$253
*If the County has to purchase properties for the sites, the
cost of this option would increase dramatically. Prime com-
mercial properties may cost from $25,000 to $100,000 per acre.
** Includes Recycling Manager's Salary.
***Includes administrative costs not directly associated with
the program.
# Currently, all revenues from material sales go to the City of
Wilmington.
OPTION V:
CURBSIDE RECYCLING
Cost and Recovery Variables
Average cost per household per month for curbside
recycling in North Carolina
$1.93*
Approximate minimum operating or contracted
services budget
$250,000+
Approximate capital costs for a curbside program
operated by the County
$500,000+
Projected annual recovery rate: 1-4%**
Projected cost per ton recovered: $50-$165***
Potential annual revenue: $90,000+#
*Based on data developed by the North Carolina Solid Waste
Section, Department of Environment, Health & Natural
Resources, October, 1990.
**Recovery rate dependent upon targeting of yard waste for
recovery.
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MINUTES OF SPECIAL MEETING, MARCH 5, 1991 (CONTINUED)
386
***Excludes capital costs.
# At a $60 per ton tipping fee, lost tipping fee revenues
would negate revenues from materials.
OPTION VI:
POST-COLLECTION FACILITY (MINI-MRF)*
Costs and Recovery Variables
Approximate first year budget
$530,000
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Salaries
Capital Outlay
Contracted Services
Miscellaneous
$230,000**
175,000***
50,000
75,000****
$530,000
Projected annual recovery rate: 1-2%
Projected cost per ton recovered (first year): $175-$350#
Projected cost per ton recovered (second year): $110-$220##
Potential annual revenue: $150,000+###
*This facility would not collect newsprint. Only glass
food and beverage containers, aluminum beverage cans,
and plastic containers would be collected.
**Inc1udes Recycling Manager's salary.
***A grant from the State of North Carolina might help to
partially offset this cost.
#Includes first year capital outlay.
##Excludes first year capital outlay.
###Includes tipping fee revenues at $60 per ton.
The "Mini-MRF" would involve utilization of a conveyor
system with sorting of raw garbage at the Resource Recovery
Center. The efficiency of this system could be enhanced by
utilization of bag base co-collection. Residents would be
provided with colored bags for recyclables which are carried out
with the regular garbage. The bags are collected along with the
other trash in the garbage trucks. At the tipping floor of the
post collection facility, the colored bags are easily identified
and removed from the dumping pit with recyclable contents sorted.
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OPTION VII:
POST-COLLECTION FACILITIES (FULL-SIZE MRF)
Post-Collection Facilities Costs Survey
This option would access the entire waste stream, not just
the residential portion. The following survey was presented:
City/County
High Point
N. C. ##
Capital Costs
$3.2 million
OPerator/Contract
Costs
$10.25/per ton
Size
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650
Cost per
ton re-
covery
$ 41
Davidson Co.
N. C. **
$2 million***
$ 7.50/per bale
500+
$ 60
Halifax Co.
N.C. **
$2 million***
$ 7.50/per bale
250+
$120
0,
\..../
Gaston Co.
N. c. **
$8.3 million
$2.2 mil per yr. 400
$ 85
Omaha
Neb.###
$9 per ton
330
$ 36
Sumner Co.
Tenn.**
$5 million
$ 1 mil per yr.
200
$ 77
MINUTES OF SPECIAL MEETING, MARCH 5, 1991 (CONTINUED)
387 ~
*Throughput, not tons recycled per day.
**Facilities planned or under construction.
***Capital costs absorbed by private firms providing service.
#Assumes that 25% of throughput is recovered. Excludes debt
service and revenues from materials.
##Facility not fully operational as of late February, 1991.
###Facility presently down.
ADDITIONAL RECYCLING OPTIONS:
1. Cardboard Ban: By ordinance place a tipping fee surcharge on
loads of municipal solid waste that are more than 25% cardboard.
The adoption of an ordinance will encourage local industry and
manufacturers to recycle cardboard.
Approximate annual budget (two inspectors) $40,000
Projected annual recovery rate - Buncombe County
reports 12%.
2. Mandated Recycling: By ordinance require all municipalities
within the County to recycle 25% of their waste streams. It may
also be possible to require private generators of municipal solid
waste to recycle 25%.
DISCUSSION OF EXPANDING THE RECYCLING PROGRAM
Environmental Management Director Church recommended
spending money for the design of the "Full-Size MRF" as opposed
to developing semi-permanent locations.
Chairman Retchin recommended utilizing the "Mini-MFR"
instead of the "Full-Size MRF" and waiting to expand the
recycling program until the next fiscal year when the economy is
on the rebound and the bond debt service will be lower.
DISCUSSION OF SENATE BILL 111
Discussion was held on Senate Bill 111. Chairman Retchin
expressed concern for the 25% reduction of the waste stream
mandated by this bill and inquired as to how the County will
reach this goal when the recycling options presented will only
reduce the waste stream by 6%?
Dr. Stanton Peters, Consulting Engineer, stated counties
throughout the country are looking at source control recycling
such as grocery stores and commercial businesses where 70% of
their cardboard is being recycled, which is being recognized as a
percentage toward the reduction of the waste stream under new EPA
regulations. He recommended that staff perform a survey of
commercial businesses where cardboard recycling is occurring in
order to accurately evaluate the reduction of the waste stream
that can be credited toward the 25% reduction figure mandated by
the state.
Commissioner Sutton expressed concern for the County not
receiving credit for reduction of the waste stream through
incineration which has reduced the amount of garbage being placed
in the Landfill. He recommended approaching the State
Legislature to receive credit for this reduction through the
process of incineration.
County Manager O'Neal stated Assistant County Manager Dave
Weaver will be attending a House Solid Waste Subcommittee meeting
in Raleigh, N. C., on March 6, 1991, to request recognition and
credit for reduction of the solid waste stream by incineration.
A brief report will be forwarded to the Board bn the results of
the meeting.
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(- 38 aINUTES OF SPECIAL MEETING, MARCH 5, 1991 (CONTINUED)
DISCUSSION OF TIPPING FEE
Environmental Management Director Church stated the
projected tipping fee for FY 1991-92 will be $56.87 based on 375
tons per day. If the tonnage should increase to 450 tons per
day, the tipping fee would decrease to $52.66. Additionally, if
the $700,000 cost could be spread over a period of five years,
the fee would be reduced another $5. This figure does not allow
for any expansion of the present recycling program.
Commissioner Sutton urged staff to hold the tipping fee to
$45. Further discussion was held on the cost of the landfill
cells and the expansion of the Resource Recovery Center.
Chairman Retchin instructed staff to find a way to hold the
tipping fee at $45 with development of other revenue sources.
County Manager O'Neal stated he and staff will work diligently to
hold the tipping fee to $45; however, the Resource Recovery
Facility is an enterprise fund and monies from the general fund
cannot be utilized for its operation; therefore, it will be
difficult to set the fee at less than $55. He also placed
emphasis on providing sufficient funding to effectively operate
and maintain this state-of-the-art plant.
Mr. Ed Fare, Recycling Director for the City of Wilmington,
stated some cities are discussing implementing a trash tax, which
is a fee imposed on materials sold in North Carolina.
Mr. Chris McKeithan, representing Waste Management of
Wilmington, expressed concern for imposing a $60 tipping fee
stating residential homes will pay $20 per month for trash
collection. He requested the Commissioners to investigate
alternative methods of generating revenue such as increasing the
room occupancy tax or imposing a food and beverage tax.
Commissioner Sutton commented on the shortfall in burning
materials for the expanded plant and asked if a plan has been
prepared to approach other counties for additional materials if
the capacity is available. County Manager O'Neal emphasized the
importance of ensuring adequate capacity for the County before
offering capacity to other counties. He stated once the needs of
the County are known, a plan will be developed to approach other
counties.
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,
Further discussion was held on public awareness of the solid
waste disposal problem. It was agreed that a video tape should
be prepared presenting the facts and costs involved with solid
waste disposal as well as showing the progress made by the County
in addressing this issue through expansion of the Resource
Recovery Facility. The tape should be offered to civic clubs and
organizations encouraging them to present programs on this
county-wide issue.
Consensus: After further discussion, it was the consensus of the
Board to direct the County Manager and Finance Director to
prepare a report based upon increasing the room occupancy tax and
imposing a one-cent food and beverage tax with those revenues
being used to produce the lowest tipping fee possible for an
efficient operation of the Resource Recovery Facility.
ADJOURNMENT
Chairman Retchin, on behalf of the Board,
appreciation to staff for an excellent presentation.
expressed
The meeting was adjourned at 7:15 o'clock P.M.
Respectfully submitted,
~V~
Lucie F. Harrell
Clerk to the Board
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