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2008-09-10 SWAB MeetingNEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD SEPTEMBER 10, 2008 MEETING PAGE 1 ASSEMBLY The New Hanover County Solid Waste Advisory Board met on Wednesday, September 10, 2008, at 4:10 p.m. in the Lucie F. Harrell Conference Room 601 at the New Hanover County Government Center, 230 Government Center Drive, Wilmington, North Carolina. Members present were: Martin J. Michaelson; Robert W. Mitchell; John Richard Newton; David Sims; Deputy County Attorney Kemp P. Burpeau and Deputy Clerk to the Board of Commissioners Kymberleigh G. Crowell. Chairman Claud "Buck" O'Shields, Jr. arrived at 4:15 p.m. Others present: Assistant County Manager David F. Weaver and Environmental Management Director John Hubbard MEETING CALLED TO ORDER The meeting was called to order at 4:10 p.m. APPROVAL OF MINUTES Chairman O'Sluelds asked the members to review the draft meeting minutes of September 3, 2008 for any needed corrections and/or changes. Hearing no comments, Chairman O'Shields called for a motion to approve the meeting minutes of September 3, 2008. Motion: Mr. Sims MOVED, SECONDED by Mr. Michaelson, to approve the meeting minutes as presented. The MOTION CARRIED UNANIMOUSLY. APPROVAL OF SOLID WASTE ADVISORY BOARD MEETING CALENDAR Chairman O'Shields asked the members to review the proposed Solid Waste Advisory Board Meeting Calendar for any needed corrections and/or changes. Hearing no comments, Chairman O'Shields called for a motion to approve the Sohd Waste Advisory Board Meeting Calendar. Motion: Mr. Newton MOVED, SECONDED by Mr. Michaelson, to approve the meetmg minutes as presented. The MOTION CARRIED UNANIMOUSLY. REVIEW OF REQUESTED FINANCIAL INFORMATION, FRANCHISE AGREEMENTS AND THE LANDFILL GAS TO ENERGY PROJECT FEA5IBILTY STUDY FOR THE NEW HANOVER COUNTY LANDFILL Financial Information Review Director Hubbard reviewed the requested financial information provided to the members. In response to the question of the cost per ton to put trash in the landfill with and without WASTEC, he will provide the information at the September 17`~ meeting. The following points were made: • Additional capacity at landfill is generated by using three inches of ash cover versus six inches of du-t: 148 cubic yards per 16,000 square feet (daily cover -six days per week); • Most of the administrative costs are due to salaries; • Cost to close a cell is between $180,000 and $200,000 per acre. Cost may vary due to such items as when the work is done, economy and the size of work being done; • FY07 operating efficiency was 63.4% with efficiency being considered as the percentage of the year the boilers were operating; o If efficiency was at 95%, revenue stream at WASTEC would have been approximately $6,583,000 in tipping fees and $1,500,000 in electric sales; • Progress Energy contract does not have a minimum amount requirement to be provided. To meet FY09 projected budget, WASTEC must bum 333 tons of waste per day which equals to 67% of capacity; • From 1984 to date, 850,162 tons of ash have been delivered to landfill; assuming one ton of ash is equal to one cubic yard, that equates to 1,700,324 cubic yards of dirt that would have been used from the borrow areas at the landfill; landfill is already borrowing from unpermitted area and as NEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD SEPTEMBER 10, 2008 MEETING PAGE 2 such, rt can be said the landfill would already be purchasing dirt for daily cover and construction and closure of cells; Director Hubbard further explained that the facility is not through the first permitted area in the landfill and already borrowing from the unpermitted area so, they would have been buying dirt by now because they would not have enough; a lot depends on the size of footprint of the unpermitted area; permitting process has been put on hold for southern area due to reduction of waste and having a revenue issue; not expecting to enter area unti12018 and if business stays normal; contract is written and has been put on hold. Assistant Manager Weaver stated that the new State law should not prevent obtaining a permit for activating that area due to being grandfathered. • $2 disposal per ton fee is only charged to the New Hanover County landfill; the fee is charged on waste that goes to a transfer station that hauls waste out of state. In response to questions on information provide for the allocation of administration costs for FY07, Staff responded that the Environmental Management department is split into 4 divisions for purposes of budgeting; administration is the only division that does not have a product, rather it provides support to other three divisions; costs primarily for salaries. Assistant Manager Weaver provided examples of positions classified as administrative; explained employees do not breakout on tirriesheets how much time is spent on any one division. He further explained that the Environmental Management fund is set up specifically as an enterprise fund and is accounted for separately from the General Fund for all other departments. In comparison, the Inspections Department fees are designed to support and pay for the Inspections Department to operate but is not setup as a separate enterprise fund; fees m this department do support administration of department just as tip fees support administration for Environmental Management. In response to additional questions, Assistant Manager Weaver stated that the County does not take a portion of the monies from Environmental Management and put it in the General Fund to defray costs elsewhere, any excess monies generated at Environmental Management would go into an administrative reserve line item which has not been done lately; County does support the Environmental Management fund indirectly. Franchise Agreement In reviewing information provided on franchise agreements with solid waste haulers, Deputy Attorney Burpeau stated rather than using a formal application form, a copy of the ordinance is given to the applicant with instructions to review ordinance as a checklist. At the County's request, franchise applicant is to provide financial information with the understanding that the County will keep confidenrial financial information in accordance with public record laws. The Board of Commissioners has to vote on the application twice and once this step is complete the franchise letter is issued. Landfill Gas to Energy Project Feasibility Study for the New Hanover County Landfill In review of the Landfill Gas to Energy Project Feasibility Study for the New Hanover County Landfill, Director Hubbard noted that the appendices were not included in the packet distributed to the Advisory Board as they were extensive; will provide them at the Board's request. Rather than a conclusion, the study provides options for landfill gas: • Flare it; • Send it to an end user; • Bring it to turbines; or • Take to generators to generate power to sell it. Staff noted that one issue with landfill gas and its use is the quality of the landfill gas -the level of sulphur in the gas. If the sulphur level is high, it's more expensive to clean it or it may not want to be used by people; some places have been able to clean it to where it can be used in natural gas lines. In response to questions from the Board, Director Hubbard stated that companies such as 1NVISTA would burn it as boiler fuel, if used in a generator it has to be cleaner and cleanliness level needed depends on the use; considered green if it is taken to a generator and electricity is sold and would receive a premium for it. He reiterated that North Carolina is one of the few states in the country that does not recognize trash being a renewable resource; this could provide additional revenue if this recognition could be changed by legislation. Further discussion was held on the legislation aspect and instead of waiting until December, as the legislature will be back in session in January 2009, Chairman O'Shields suggested NEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD SEPTEMBER 10, 2008 MEETING PAGE 3 the Solid Waste Advisory Board proceed with making a recommendation to the Board of Commissioners that they immediately seek legislation to recognize New Hanover County's trash as a renewable resource and classify WASTEC as a green system, for generating electricity. Staff is requested to research existing legislation in order to prepare the wntten recommendation for the Commissioners to consider. Hearing no further comments, Chairman O'Shields requested direction from the Board. Motion: Mr Suns MOVED, SECONDED by Mr. Mitchell, for the Solid Waste Advisory Board to proceed with making a recommendation to the Board of Commissioners that they immediately seek legislation to recognize New Hanover County's trash as a renewable resource and classify WASTEC as a green system, for generating electricity. The MOTION CARRIED UNANIMOUSLY. Deputy Attorney Burpeau will bring any pending legislation in the North Carolina legislature on this matter to the September 17~' meeting and draft a formal letter of recommendation for submission to the Commissioners. Staff noted that New Hanover County has not received recognition in the past because of environmental groups thinking WASTEC was not environmentally sound. In response to Board questions regarding the study, Director Hubbard explained process for how facility currently handles methane gas; methane needs to reach a certain threshold and then it has to be destroyed. He explained how carbon credits can be sold for what is destroyed even if the gas is flared; credits are attainable if a facility can show that the proper records are being kept and an outside independent source can verify the volume and being destroyed. This process is not in place at this landfill which is the reason for the study. In response additional questions about option of flaring the gas and what is needed to perform that process, Director Hubbard stated that it is a complex issue; with the study it is thought the Renewable Energy and Efficiency Portfolio standards will not come into effect until 2020; between now and that time the facility could be selling carbon credits. If another company comes in to do it and puts in the infrastructure, that company would pay the County facility a royalty for the carbon credits and a royalty for the fuel. If cost effective, this could be a revenue stream and study reflects items such as production volume and what is needed to clean the gas. In response to Board questions, Director Hubbard stated in connection with the study staff is in final stages of developing a Request for Proposal (RFP) document. He explained the flaring process and noted that $1 million was included in the proposed budget for FY08 for process development; it was cut for budgetary reasons. Facility would receive royalties if project went to outside company; would not provide as much revenue but the County would not have to invest in the infrastructure. SCS Engineers is currently developing RFP for companies interested in providing a proposal for building the infrastructure and what may be received as revenues. The methane would be used as an alternate energy use; some companies such as INVISTA would use it as boiler fuel and gave description of process to pipe it directly to 1NVISTA. GE is also interested in it and wants the carbon credits; issue is the distance from GE to the landfill -expense of infrastructure. Director Hubbard noted they would like to work with a company that can use as much product as facility could give them; study breaks down what is anticipated in revenues if County invested in the infrastructure. Director Hubbard explained that one issue is in a study of the methane's actual constituents, it has a high sulphur content; thinks once it was started to be pulled, level would drop; the thinking is that the best route to take would be to pull it, flare it and watch to see if the methane sulphur content reduces; would dictate what type of system needed to be installed to clean it up. INVISTA, with a direct use, does not have a sulphur issue and may be able to take it at a higher level than say GE in agas-to-energy type of system. In response to Board questions, Director Hubbard explained that the sulphur content level in the waste depends on what is put in landfill; facility has taken sludge with a high sulphur content from a company and is unsure if that is the cause; could be just a layer and noted that samples were taken from just certain area(s). In response to question on status of the RFP being compiled by SCS Engineers, Director Hubbard stated that a rough draft is in review at this time, upon approval by appropriate persons it will be sent forward. It was noted that it is being prepared based on an outside company to do the project. In response to questions, Director Hubbard stated GE may be more inclined to partnering with the County to make the project happen for them than INVISTA. 1NVISTA has not voiced an interest in such an arrangement. He confirmed that either company is m the position to respond to the RFP. Discussion was held with Assistant Manager Weaver on the Board's authority to ask the RFP NEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD SEPTEMBER 10, 2008 MEETING PAGE 4 include a look at the construction of the system to be owned & operated by the County. Assistant Manager Weaver stated that as an advisory committee, committee could give any advice it felt was necessary. He noted one of the advantages of going this route is by putting in the wells, the pipe and the basic flare system by the County, it would then be able to see how much gas is being generated and the quality, which would help to market it; would be tough for a company to prepare a proposal without that information. In response to Board questions, Director Hubbard stated there is enough historical data available to predict within certain limits what should be received out of each cell; study contains a chart reflecting this and it is based on modeling. In response to additional questions, he stated that the flare process would be considered a green source of power if sold back into the grid, but if done that way then the only thing a landfill would receive is the selling of the methane; it would not receive carbon credits because it's considered green and the other company is actually using it. He explained the flare process he observed at the Tuscarora plant, near New Bern. In response to questions about carbon credits, Director Hubbard stated that credits are only received while voluntarily performing the process; department is looking at this process now because it could provide twelve years of potential carbon credits; once the resource performance standards are reached, meaning it's required by law, no company gets carbon credits. He noted that methane is interesting because carbon is the standard baseline and methane is twenty-three times that; multiply the tonnage by twenty-three and it will equate to how many carbon credits a facility has. DISCUSSION OF WASTEC PROJECTED FIVE YEAR MAINTENANCE PLAN Staff stated the projected maintenance plan provided is the optinium plan. In response to Board questions, Director Hubbard stated the plan does reflect upcoming mayor maintenance expenses. Some items in plan may or may not have to be done based on inspections. The cost for 2009-2010 will be the basis for the summation of the all the numbers in that particular FY column of the plan; limited by what is approved as the tipping fee and the unknown in planning budget is how much waste will be brought in. Growth has been about 3%. Director Hubbard confirmed that the tipping fee is approved as a budget item. In response to questions, staff confirmed that this is the optimum plan for mayor maintenance; top priority items would include the boilers, tipping floor and fire system upgrade; listed with the assumption the department receives an approved budget; can patch if necessary if funds are unavailable. Director Hubbard stated that the boilers need to be re-tubed if higher efficiency is to be reached; cost of tube replacement depends on tube location inside the boiler (exposure to erosion). In response to questions, Director Hubbard confirmed the numbers in the FY09-10 budget column of the plan relate to efficiency of the boilers; reflects what is essential, with the exception of the sonic horns, for optimum operation of WASTEC; because it is an integrated solid waste program, the tipping fee would probably have to be increased by $3 a ton to generate an estimated additional $2 million in revenue; stated the re-tubing of Units 1 and 3 is absolutely necessary to gain efficiency and would create biggest leap in efficiency. Discussion was held regarding the potential revenue gained through efficiency and the example was given that it would be cost efficient to allocate $75,000 a year for 10 years (which is the cost of re-tubing); there is a potential to generate an additional $500,000 per year in revenue to WASTEC through both electric sales and tipping fees. He further stated inefficiency drives all costs up: cost per ton to operate WASTEC, makes facility use more gas and buy electricity. If operating efficiently, it should not have to buy any electricity because as long as it is making more than 1.2 megawatts, electricity is being sold rather than bought. At the request of the Board, Director Hubbard will provide an additional Excel spreadsheet containing this information with the revenue projections and it will be sent via a-mail in addition to hard copy being provided. Director Hubbard related the experience of the 2007 re- tubing and recent cleaning of Unit 2 and the increased efficiency that was attained due to the work. In response to request for comparable tipping fees, Staff will provide a tipping fees history on the two adjacent counties including Sampson County's tipping fee. Director Hubbard noted that Sampson County's contracts are based on the amount of waste brought in so, tipping fees vary; a gate fee is charged, but varies based on amount of waste brought to them. Members felt this type of information, even if a sliding scale, would give them an idea of the costs in making comparisons. Discussion was held regarding any areas that should be reviewed by the Board or presented to the Board during this in-depth look at the Environmental Management program; things that department may want to be doing. NEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD SEPTEMBER 10, 2008 MEETING PAGE 5 Assistant Manager Weaver noted that the long-range plan includes an expanded construction and demolition (C&D) recycling facility. Director Hubbard stated that he thinks the biggest benefit of C&D recycling is saving the landfill. At present time nothing is done with concrete; with an expanded C&D that would go in there. Director Hubbard gave further explanation of what is basically handled: wood, sheetrock, metal and cardboard; a mulch company grinds the wood and remove it at approximately $7 per ton and sends rt to a company for boiler fuel. Discussion was held on aspect that one challenge is valuing the extensions of life of an existing landfill and in order to understand that the Board may need estimate of how much time and what it would cost to replicate a landfill to today's standards. Regarding the cost to landfill with and without WASTEC, Assistant Manager Weaver responded that it's difficult to put numbers on some aspects of this; a value could be put on the land that is used for landfilling but the issue then becomes the fact that when the landfill space is used up, there's no more landfill space to use; does not know of any area in New Hanover County that would be available to develop for use as a landfill under the new standards. Deputy Attorney Burpeau made additional comments that under constraints of Senate Bill 1492, it might not be possible to put a new landfill in New Hanover County; there are some current state laws that restrict New Hanover County from condemning or acquiring property outside the County without the consent of that county. Duector Hubbard noted that in looking at the two adjacent counties, one county only has a transfer station while the other county has a C&D landfill but transfers municipal solid waste. Staff confirmed that the County does not have mandatory recycling and trash collection. In response to questions, staff responded that documents were prepared to enact a collection and recycling system and had the cooperation of the haulers but no program was enacted. Deputy Attorney Burpeau stated there is a provision in the County ordinance stating that people are to participate in trash collection; as the County has chosen not to assign franchises and only discussed the areas such as billing and/or assisting the haulers in billing, rt has not really been in the position to actively enforce that requu-ement. He further confirmed that the City of Wilmington does not have districts but has a mandatory recycling program and trash collection; City of Wilmington traditionally has collected and enforced these services through then water and sewer services, in being able to cut-off water. Due to the creation of a water and sewer authority they have designated that entity to be their collection agency for any delinquent solid waste accounts; it was a requirement for approving the authority; authority can be reimbursed a certain amount of money for that. Director stated that pure cardboard is a good market and the facility takes it for free. INFORMATION REQUESTED BY MEMBERS FOR UPCOMING MEETING Staff is to provide information on the recycling program at the September 17 meeting. In addition to the other information requests for the September 17~` meeting, the Board asked Director Hubbard to prioritize items for each year of the WASTEC projected five year maintenance plan with a subtotal of each priority level, requested an estimate using a hypothetical of if a certain amount of waste is generated then facility can: • operate at a certain budget; and • If additional steps are taken, WASTEC's estimate of additional tipping fees. Deputy Attorney Burpeau reconfirmed with the Board that he will bring any pending North Carolina legislation concerning the green aspects of waste-to-energy and draft a letter of recommendation for submission to the Board of Commissioners. The Board felt that any proposed legislation would have an impact on then decision making process. ADJOURNMENT There being no further business, Chairman O'Shields adjourned the meeting at 5:45 p.m. Respectfully submitted, ~' K mberleigh G. Crowell Deputy Clerk to the Board _