Loading...
2008-12-10 SWAB MeetingNEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD DECEMBER 10, 2008 MEETING PAGE 1 ASSEMBLY The New Hanover County Solid Waste Advisory Board met on Wednesday, December 10, 2008, at 4:08 p.m. in the Lucie F. Harrell Conference Room at the New Hanover County Government Center, 230 Government Center Drive, Wilmington, North Carolina. Members present were: Chairman Claud "Buck" O'Shields, Jr.; Vice-Chairman Robert W. Mitchell; Martin J. Michaelson; John Richard Newton; David Sims; Deputy County Attorney Kemp Burpeau and Deputy Clerk to the Board of Commissioners Kymberleigh G. Crowell. Others present: David F. Weaver, Assistant County Manager, Environmental Management Director John Hubbard, and Beth Schrader, Senior Budget Analyst. MEETING CALLED TO ORDER Chairman O'Shields called the meeting to order and welcomed everyone to the meeting of the New Hanover County Solid Waste Advisory Board. APPROVAL OF MINUTES Chairman O'Shields asked the members to review the draft meeting minutes of December 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 December 3, 2008. Motion: Mr. Sims MOVED, SECONDED by Mr. Newton, to approve the meeting minutes as presented. Upon vote, the MOTION CARRIED UNANIMOUSLY. DECEMBER 4, 2008 WHQR 91.3 PANEL INTERVIEW Chairman O'Shields presented an overview of the WHQR 91.3 panel interview show that was held on December 4, 2008 on the topic of New Hanover County solid waste. He participated on the panel along with County Commissioner Robert Greer and John Hubbard, Environmental Management Director. Discussion was held on the amount of gas used in the incinerator to burn the trash. In an email, Director Hubbard reported that WASTEC uses natural gas to start the units; once the trash is ignited and up to temperature, the gas burner is turned off. If there are emission issues, the gas burner is sometimes lit to help rectify the situation. The better the boiler availability, the fewer start ups and the less gas used. Additional savings in the form of reduced gas consumption have been recognized with the refurbishment of one of the boilers. Moving efficiency from 62% to 75% has resulted in approximately 50% savings in natural gas consumption. If 90%+ availability were achieved, even less gas would be used. Staff confirmed the natural gas reduction benefit is not included in the 5 year roll forward. Mr. Mitchell feels this is a significant benefit that needs to be captured because the closer the 90% level is reached, the less gas used and it is a hard dollar budget effect. In response to the December 3, 2008 question regarding electricity used on site, Director Hubbard responded the facility has the potential to power 3,500 homes which could prevent emissions of over 145,000 tons of greenhouse gases per year which equates to taking 9,062 cars off the road. Director Hubbard will report back on the question of having a savings or offset to the County by not buying electricity to run the solid waste facility and the dollar value of the electricity being consumed from WASTEC that is not being paid for. Further comments were made that through a contract with Progress Energy, there may be a future flexibility option of offsetting other county electrical expenses, which may be a large difference between selling wholesale and buying retail. DISCUSSION/REVIEW OF UPDATED SOLID WASTE ADVISORY BOARD SCENARIO ANALYSIS At the Board's December 3, 2008 request, Beth Schrader, Senior Budget Analyst, presented the updated Solid Waste Advisory Board Scenario Analysis dated December 10, 2008. The key findings and final recommendations areas were left blank for completion by the Board. Mr. Mitchell clarified that the statements under the key findings, recommendations and further recommendations areas were comments he inserted in an effort to initiate discussion. Discussion was held on the use of anaerobic digestion; it is currently being used in Wisconsin and Minnesota. Mr. Michaelson explained the process stating that it produces methane and reduces the amount of solid waste. It is an emerging technology and may be a future opportunity in order to help reduce what goes in to the landfill. Staff stated that currently, aerobic digestion is used at the landfill and anaerobic digestion requires a different type of landfill structure. NEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD DECEMBER 10, 2008 MEETING PAGE 2 In response to the Board's December 3, 2008 question regarding cost of total shutdown of WASTEC and 100% landfill, Ms. Schrader reported that the base tipping fee would be $35.59; if adjustment was made in the same manner as was done for the other scenarios, the intangible value of the landfill lost due to not having WASTEC, that would be another $3.05/ton for a total of $38.64. In order to accommodate the approximately 1.4 million tons over 5 years that would be put into the landfill, the County would need additional equipment and staff and step-ups in the expenditure levels would also occur. Mr. Mitchell stated he was unsure the advisory board would want to take this route and in review of scenarios 2 versus 3, looking at the 5 year total cumulative tons, landfill tonnage was very close in both. Essentially, if scenario 2 was optimized to the same step up point as in scenario 3 there should be more going to the transfer station, about 70,000 tons less to the landfill, and since transfer station cost is less than the combined landfill cost the tipping fee should be slightly driven down and hence, prolonging the life of the landfill further. At the Board's request, Ms. Schrader will work with Director Hubbard to look at a variety of scenarios to see at each step up level the different equipment, personnel and operational costs requirements. She will also look at the step down differences from current numbers to see if there are optimizations. If there are she will then look at when accounting for sending more to the transfer station versus what is saved or not, what has to be spent or delayed in terms of cell construction or facility operational costs, as well as looking at the effects and if there are any savings in there or how much. In response to additional questions, Ms. Schrader stated that basically under scenario 3 the less sent to the landfill the higher the tipping fee would go up, you are at the maximized amount and there is a step down that occurs. Scenario 3 was somewhat optimized for the transfer station scenario, and looks a bit different when adding in WASTEC. Further discussion was held that it is a nonlinear function, a step function, and at certain levels not much is cut while at other levels you can actually add a lot more waste. In response to the December 3, 2008 request for employee termination costs information from the Human Resources department, staff reported that the document is still in preparation. Director Hubbard reported that in his discussion with Cathy Morgan, Human Resources Director, she stated the worst case scenario in terms of separation is $1.7 million for more than 13 positions. Staff is starting from aone-year old document Director Hubbard provided and applying the new rules, creating sections for WASTEC, Administration, etc., and providing several options in the document to allow for alterations to be made. Unemployment is set at 26 weeks and if the Federal legislation is approved to provide 52 weeks, then that particular number doubles. The County will have to absorb this cost because it is self insured. None of these amounts are factored into the tipping fees and the cost would have to be added in. In response to the December 3, 2008 question on costs to demo WASTEC, Director Hubbard reported that his research, when compared to aWaste-to-Energy plant shut down last year, indicates that the cost is approximately $500,000 with the current market for commodities. As previously discussed, the market has dropped significantly for recycling commodities and not much is received for generators. Comments were made that this information needs to be noted in the document, as with the severance pay, because although these are onetime events that don't affect the tipping fee, they are onetime events that are hard dollars. Discussion was held about the further recommendations area which lists landfill gas, C&D and recycling. General theory is that whatever scenario is chosen, there will be changes to manage and only so many changes can be managed at any point and time. Of the items, the County would have ability to control the landfill gas project and manage it as a project. If the decision is made to have a C&D facility, it can also be controlled and managed in the same way because the waste is coming in and it is simply a case of building the process to sort it out. However, recycling involves more uncontrollable or external factors such as educating the public and building momentum for it. Currently, the listing is suggesting only adding more collection sites. Essentially, the thought is that landfill gas and C&D projects should each provide revenue which could help offset some other expenses and with those revenue streams, there may eventually be support for more recycling alternatives beyond additional pickup points. A suggestion was made that there is always the option for apublic/private partnership for recycling. In response to questions, Director Hubbard stated that the current recyclables market for items such as construction debris has dropped significantly. A brief discussion ensued about profiting from recycling, that the prices are commodity driven and it truly is a green action as total use is to save landfill space and that may be the premise that has to be put on recycling, Chairman O'Shields commented that the members need to decide whether to recommend mandatory trash collection as well as mandatory recycling. Concerns were raised that based on the population density, mandatory curbside recycling pickup, may not be what the County needs right now. This proposal could be placed under the future recommendations area as part of a 5 year plan with a statement that the County should do everything possible to expand the current recycling program. In the short term, a positive step would be additional recycling drop off facilities. The County needs to move slowly on recycling because if scenario 1 or 2 is recommended there will be a NEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD DECEMBER 10, 2008 MEETING PAGE 3 large financial impact. In response to questions, Deputy County Attorney Burpeau confirmed that the Sheriff's department has an environmental division that investigates illegal dumps and issues citations. A brief conversation was held about the key question being which scenario the Board recommends, beyond having a general consensus about the current statements listed on page 2 of the document. The thought is that the scenario Ms. Schrader has been asked to run on scenario 2 for next week, depending on the expenditures reductions, may show a reduction in landfill tonnage, an increase in transportation's tonnage up to a breakpoint and some modest decrease in the base tipping fee because more is being sent out directionally. In response to questions about the possibility of shutting down the landfill but being able to keep the permits, Director Hubbard responded that the landfill would have to be capped; this has not been done typically and really has not been done in the state. Staff further commented that there is a risk of not being able to reopen or reopen in a timely fashion if this occurred. Members are not proposing this route to be taken; just wanted to know what may occur if the action was taken and essentially, it is impracticable, particularly in a storm situation. David Pepper, Waste Industries Landfill Division Operations Manager, commented that Waste Industries' proposal for mothballing was to keep the permit active by putting in a minimal amount to the landfill and could do what was needed during a storm situation to receive an increased amount. Mr. Michaelson asked Waste Industries representative Mr. Pepper why they did not come forward when the price of gas dropped dramatically to offer at least the May-March scenario with regard to price as opposed to the $40 and change the scenario in their current presentation. Mr. Pepper responded that when the presentation was put together it was before the prices went up to the May-March time frame so some of that expense was already factored into the pricing. Mr. Michaelson stated that for the record that he has dealt with the solid waste industry for 24 years as a county commissioner of solid waste and all three of the presenters have criminal histories in their background. The County has to understand that anytime they get involved with people from Waste Industries, Waste Management, or Republic/Allied Waste there is the potential to be involved in Federal litigation. Further discussion was held that the Waste Industries proposal was based on an assumption of a rate for fuel and the inclusion of an escalation/de-escalation clause based upon the movement of fuel pricing. Mr. Pepper further commented that pricing clarification was provided by Mr. Carter in a subsequent meeting after the presentations and as he understood the language on fuel increases, for every four penny increase in fuel cost there would be a one penny increase in cost per ton. Chairman O'Shields stated that he liked scenario 1 with the first premise, first paragraph, no staffmg change, further commenting that through setting a tipping fee that allows the Environmental Management program to operate as it should, means that there will not be a need to play catch up from past years. A brief dialogue was held about the base tip fee and adjusted tip fee. Ms. Schrader explained that each scenario's base tip fee is based on what is considered the scenario's premise where it is stated capital avoided. It's essentially stating that money didn't have to be spent, so it is already backed out in that base tip fee. The tip fee needed to be charged in order to do everything needed within each scenario is the base tip fee of $62.71 under scenario 1, $66.18 for scenario 2, or $52.08 under scenario 3. These are the real tip fees in order to balance expenditures based on the assumption of approximately 284,000 tons a year on average over the 5 year period. In response to questions, Ms. Schrader confirmed that these are the hard real dollar costs that are going in and out and as such, the base fee has to be charged. The adjusted fee is the theoretical tipping fee after credits are given for the value of reduction in landfill amounts. She provided additional clarification about what was covered within each scenario and the capital avoided/reduced section of the graph. She noted that in all 3 scenarios the exact same assumption in the total waste tonnage was made in order to provide a true comparison. While the draft is useful for analysis in comparing each scenario's differences while looking at the implications of each, there is nothing worked into any of the scenarios as to what happens if the amount(s) is exceeded. Concern was expressed about the County's options flexibility that may not be available in contracting with a private company to do certain things and that scenario 2 provides the most flexibility but is most expensive. For scenario 2, the optionality is what is being bought and it is inherent under that assumption which is part of what makes it more expensive relative to scenario 1. Mr. Mitchell stated that under key findings statement #3, he tried to capture this concept and feels scenario 2 gives the future county boards the greatest number of alternatives. He further commented that it is better to look at shorter time horizons because they provide flexibility and this draft analysis is only for 5 years rather than 30 or 40 years; based on his experience optionality/flexibility is an important thing to offer a Board. Additional discussion was held that in looking at the hard numbers, scenario 2 is the most flexible and may be worth it because it is $14 more than scenario 3. Staff noted that the one item not captured nor discussed is the landfill gas project; not all these scenarios from a future potential revenue source are equal or the NEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD DECEMBER 10, 2008 MEETING PAGE 4 same. It's a function of the amount of trash that is in the landfill which is what makes the project attractive. It doesn't mean it can't be done, it's just the degree of economic benefit from this kind of scenario would be different and it's a trade off in cost. Additional comments were made that in looking at scenarios 1 and 2, the difference is roughly $3.50 a ton in tipping fee for flexibility and the largest difference is between scenarios 2 and 3 when looking at the harder numbers. Staff reminded the Board that in considering scenarios 2 and 3, at some point the southern property will have to be built out and the administration building will have to be moved. Even though these two items occur after the 5 year horizon and the associated costs do not show up in the minimum base tip fees, they do have to be acknowledged and addressed and are a matter of timing. The Board discussed the possibility of including a recommendation that the acreage available at INVISTA be bought by the County for future expansion. Staff commented that the discussion held with INVISTA was verbal; nothing was put on paper and would cost approximately $600,000 for 12 acres land. After a brief discussion, general consensus is for it to be included under the further recommendation portion of the document. Further statements were made that it is important to remember that this is an enterprise fund and if trash is not generated, nothing is being paid and it is not a tax. This process is an attempt to develop a recommendation that is a long term benefit to the citizens of New Hanover County which may result in paying a little more money earlier in the process in order to have the flexibility down the road while further extending the landfill. Staff stated that for curbside recycling, additional recycling programs, recycling education programs, etc., there is nothing built into the scenarios' tipping fees and should be considered for a long term basis as well. In theory, funds would be reserved to pay for some of these elements and would also encourage participation. From ongoing maintenance standpoint, funds should be reserved for future needs. While commodity prices from the sale of these items may fluctuate, by starting to reserve ahead of time, there is the ability to also pay for and plan for dealing with those eventual cycles of up and down. There is also the opportunity to take advantage of them when the prices are high and still have the ability to opt to offer the service when the prices are less favourable, making it become a little more resistant. The whole purpose is preserving the life of the landfill and there is an argument of maintaining flexibility for the Commissioners to have in the future as things evolve, which is an easy concept to understand but a hard one to value. Discussion was held about the November 19, 2008 vote to support WASTEC. Mr. Michaelson stated that he feels the number one issue to emphasize is that everything will involve the necessary funding to get WASTEC up to spec and continue to maintain it at that level. As a matter of record, Mr. Mitchell commented that he voted against the proposal on November 19, 2008 as he thought the timing of the vote was wrong but now feels the timing is correct and definitely supports keeping WASTEC going. Mr. Sims commented that although he is not taking a position on WASTEC and abstaining from making a decision at this time on this one issue, he is open to all three scenarios. Mr. Mitchell stated that he supported scenario 2 clarifying that scenario 2, while the highest in immediate cost and, particularly if the numbers are rerun and if the reduction in landfill amounts are correct, provides the most flexibility; allows maximization of the capture of methane gas as there will still be a fair amount going into the IandfilI; there is a need to help this scenario through the C&D, which is an additional recommendation and agrees about the timing for recycling and the need for it to take a more prominent role in the long term health of the landfill and given credit once curbside collection and related items arise again for the value it adds to the landfill. From a future tipping fee calculation standpoint, not only is there a need to recoup the capital to keep the plant renovated, there should be a reserve fund built for recycling in a more aggressive way than what is currently done. Motion: Mr. Mitchell MOVED to support scenario 2. Mr. Michaelson commented that a contract can be entered with Waste Industries to haul waste to Sampson County but there may be a need to reserve the right for the County to transport the waste themselves. It may be more economically feasible to hire private contractors to haul waste to Sampson County and is something that needs to be explored prior to entering a contract with Waste Industries. Mr. Sims felt that this was a good point to be made but as everything will have details to work out, the need to proceed on the concept recommendation of sending waste to Sampson County would be appropriate as in what Mr. Mitchell is stating. Chairman O'Shields called for a second to the motion by Mr. Mitchell for the Board to support scenario 2. As no second was received, the MOTION FAILED. NEW HANOVER COUNTY SOLID WASTE ADVISORY BOARD DECEMBER 10, 2008 MEETING PAGE 5 Discussion was held concerning the benefit of rank order voting which would allow each person to vote for the preferred scenario. Concerns were raised that the Commissioners would find this type voting very confusing and as the Advisory Board is close to a final decision, there is the opportunity to bring the preferences together into one recommendation. In response to comments, Director Hubbard confirmed that the Federal government is deciding whether or not to give permission for a bioreactor landfill. It is currently being looked at by Buncombe County and as New Hanover County's landfill is a variation of a subtitle D landfill, the current issue is that liners are different and it may not happen. He commented further about the leachate issue which is not discussed; landfill fires have been put out using the bioreactor scenario, just pumping it and the issue is the leachate then becomes more concentrated. The facility's leachate is treated and sent to the river while some plants just capture it in tanks and ship it off to waste water treatment plants. If there was too much leachate, they could pump and haul it but the way the leachate is handled may also be an issue. Mr. Sims stated that he will not be able to attend the December 17, 2008 meeting and encouraged the advisory board to continue the vote without him. The Board offered to begin the meeting at an earlier time, but Mr. Sims indicated that this would not work. If asked by the Commissioners, he could state his recommendation. After further discussion the consensus of the Board is to put the issue to vote at the December 17, 2008 meeting. A copy of the updated Draft Solid Waste Advisory Board Scenario Analysis dated December 10, 2008 is included herein as Attachment 1. ADJOURNMENT There being no further business, Chairman O'Shields adjourned the meeting at 5:28 p.m. Respectfully submitted, ~~~~ K~fnberleigh rowell Deputy Clerk to the Board ATTACHMENT ~, +'r J'f~-~'' . , ~ DRAFT -NOT APPROVE Memoran um • To: [ ] From: [ ] CC: [ ] Date: [ ] Re: Solid Waste Advisory Board Committee Analyses and Recommendation Background On August 4, 2008, the New Hanover County Board of Commissioners established a 5 person ad hoc committee, known as the Solid Waste Advisory Board (SWAB), to review all relevant information, including private proposals, and to present recommendations about the future of solid waste management for NHC within the context of the environmental and economic consequences. Scenarios Evaluated Over the course of [x] meetings over [y] weeks, the SWAB systematically reviewed relevant historical, public and comparative data. Under the SWAB's direction, staff provided supplemental data to support the Committee's iterative analytic processes. The three (3) scenarios below reflect the continuum of options considered for recommendation. Additional submissions by Waste Management and Republic were considered, but were ultimately discarded either due to lack of sufficientlsufficiently detailed information, misaligned incentives, and / or skepticism at scope of proposal based on subsequent analysis. Scenario 1: Status Quo PUBLIC Premise Invests in WASTEC to bring up to theoretical efficiency Maintains existing operations at Landfill, Recycling, and WASTEC Staffing No change in staffing Capital Avoided / Reduced Scenario 2: Cascade PUBLIC /Private Invests in WASTEC to bring up to theoretical efficiency Guarantees minimum contractual tonnage to Sampson Co., then maximizes tonnage to WASTEC, balance to Landfill Eliminates 13 positions in Admin / Landfill $720K in Landfill equipment $1.3 million new So. Property cell development $l .8 million to move admin. building Scenario 3: Transfer Station PRIVATE /Public WASTEC operations cease; facility closed /dismantled Optimized minimal tonnage to the Landfill, balance goes to Sampson Co. Eliminates 13 positions in Admin / Landfill Eliminates 50 positions at WASTEC $720K in Landfill equipment $1.3 million new So. Property cell development $1.8 million to move admin. bldg. $9.5 million in WASTEC M&R 5-Yr Total Transfer Sta.: (in tons) WASTEC: Landfill: Tip Fee Base: $62.71 Adj.: $55.21 0 Transfer Sta.: 358,750 652,894 WASTEC: 652,894 768,893 Landfill: 410,143 Base: $66.18 Adj.: $60.05 Transfer Sta.: 991,287 WASTEC: 0 Landfill: 430,500 Base: $52.08 Adj.: $55.73 • 1 ~. December 10, 2008 Key Findings (Provided by Bob Mitchell) 1) Artificially Low Tipping Fees -current tipping fees do not provide sufficient funding to complete routine maintenance and repair on WASTEC equipment, keep pace with inflation/operating costs, reserve for future capital needs and/or Landfill expansion. 2) No Credit to WASTEC -past analyses did not give credit to WASTEC for extending landfill life through both burning waste and the lower depth of cover requirements with ash. These must be valued to correctly portray the overall benefit of WASTEC. To replicate the asset today would cost around $125 million. 3) Maintaining Flexibility -Preserving future operating alternatives, where NHC's solid waste disposal process is not substantially committed to any private entity, allows significant flexibility to the Commissioners in an environment where economics of electricity generation, methane gas production sale and sale of REC's, future technologies (such as biodegrade...... ), and recycling may provide substantial offsets to waste fill operations and achieve a "green" objective. 4) Idea generation - in the course of the evaluation, new operational ideas have been generated (biodegrade [ ], GPS driven compaction techniques), a look at future possibilities provided through third party proposals, and new approaches to the methane project, designation of "green" electricity via amendment to state law enhancing future electrical generation revenue from WASTEC, and contract strategies have been suggested. Recommendations (Provided by Bob Mitchell) Throughout the evaluation process, the Solid Waste Advisory Board has framed its discussions, and subsequent analyses on the following overarching principles: • Preservation of a limited and increasingly valuable (and non-replaceable) resource -the NHC Landfill; • Retaining financial and operational flexibility -both for current and future years; • Enhancing the value and productivity of existing assets; and • Allowing for the eventual development and feasible commercialization of new /additional green technologies Based on extensive analysis and review of economic and qualitative factors including, but not limited to, total cost (tangible and intangible), operational control, financial and operational flexibility, impact on landfill life, potential liability, project viability, and the potential for additional future revenue, it is the opinion of this board that [ ]. In addition, it is our further recommendation that NHC [ ] • Landfill Gas -accelerate the RPF process to maximize the capture of REC's before emission regulations dictate it and extend the life of the revenue stream thereby. • C&D Facility - initiate a middle level facility ($3.5 - 4 million) to extract recyclable materials which can be sold and to ship the residual to the private site to maximize "wet waste" which will generate more methane. • Recycling -encourage citizen recycling via additional collection sites until such a time that economics indicate a more rigorous approach. Conclusion and Next Steps It is our sincere hope [ ]... [Discussion of any ongoing advisory /public advisory group?] 2