EVALUATION OF IVY MATERIAL UTILIZATION CENTER

Transcription

1 EVALUATION OF IVY MATERIAL UTILIZATION CENTER Prepared For: County of Albemarle Department of Community Development 401 McIntire Road Charlottesville, VA October 1, 2012 Prepared By: DAA Project Number: C11123B-01 A/E Term Contract # Project Order # 1

2 Draper Aden Associates (DAA) prepared this document (which may include drawings, specifications, reports, studies and attachments) in accordance with the agreement between DAA and Albemarle County. The standard of care for all professional engineering, environmental and surveying and related services performed or furnished by DAA under this Agreement are the care and skill ordinarily used by members of these professions practicing under similar circumstances at the same time and in the same locality. DAA makes no warranties, express or implied, under this Agreement in connection with DAA s services. Conclusions presented are based upon a review of available information, the results of our field studies, and/or professional judgment. To the best of our knowledge, information provided by others is true and accurate, unless otherwise noted. DAA's liability, hereunder, shall be limited to amounts due DAA for services actually rendered, or reimbursable expenses actually incurred. Any reuse or modification of any of the aforementioned documents (whether hard copies or electronic transmittals) prepared by DAA without written verification or adaptation by DAA will be at the sole risk of the individual or entity utilizing said documents and such use is without the authorization of DAA. DAA shall have no legal liability resulting from any and all claims, damages, losses, and expenses, including attorney s fees arising out of the unauthorized reuse or modification of these documents. Client shall indemnify DAA from any claims arising out of unauthorized use or modification of the documents whether hard copy or electronic.

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4 TABLE OF CONTENTS 1.0 INTRODUCTION OBSERVATIONS OF THE EXISTING OPERATIONS Tonnage Received at the Ivy Facility Tipping Fees, Revenues and the Transfer Operation Operations Transfer Operation (MSW/CDD/Commercial) Operations Other Activities Recycling Operations (exclusive of scrap metal and white goods) Summary COMPETING REGIONAL OPERATIONS Private sector landfill operations Regional private sector transfer material recovery operations Fluvanna Transcyclery Zion Crossroads MSW Materials Recovery Facilities Summary Public sector facilities OPTIONS TO THE EXISTING SYSTEM Goals of program Current transfer operation Private Sector - Operations Public Sector - Options Option 1 No change in system Option 2 Elimination of transfer operations Option 3 Construction of new transfer facility Cost allocation for Administrative Services Expansion of collection or recycling operations throughout the County RECOMMENDATIONS...41 RPT Albemarle Co. - - Preliminary Findings - LPK i

5 TABLES Table 1: FY Tonnage Summaries MSW/CDD... 4 Table 2: FY 2012 Tonnages All Categories of Waste Received... 5 Table 3: Projected Revenues from Tipping Fees and WMX Payments... 7 Table 4: Historical Material Tonnage Report Recycling FY 2009 FY Table 5: Republic Services Annual and daily average tonnage Table 6: Van der Linde Recycling annual and daily average tonnages Table 7: Annual tonnage selected public facilities Table 8: FY 2012 Tonnage At Transfer Facility By Category Table 9: Options For The Ivy Operations Table 10: Summary of Current Customer Base Table 11: Estimated Costs For Convenience Center Operations Based On FY 2013 Budget Table 12: Transfer Stations By Tonnage Table 13: Operational Cost Adjustments Based On FY 2013 Budget (Exclusive of Personnel) Table 14: Estimated Operations Budget New Transfer Station Table 15: Cost Allocation Administrative Services RWSA FY 2013 Budget PHOTOGRAPHS Photo 1: Aerial View Ivy MUC... 1 Photo 2: Off-loading into transfer station hopper... 4 Photo 3: Collection roll off - tagged bags Photo 4: Off-loading into Ivy trailers... 8 Photo 5: Transfer trailer - direct load Photo 6: Rolloff truck unloading into bottom hopper... 9 Photo 7: Transfer Station Conveyor Photo 8: Transfer Station - Back View... 9 Photo 9: Groove in concrete truck pad for leachate interception Photo 10: Conveyor Photo 11: Clean Fill Material Photo 12: Vegetative Waste Handling Photo 13: Pallets Photo 14: Metal Disposal Area Photo 15: McIntire Recycling Center Photo 16: Current Scale Area Photo 17: City of Bedford - Transfer Station Photo 18: Trailer Storage Area RPT Albemarle Co. - - Preliminary Findings - LPK ii

6 APPENDICES Appendix 1 Appendix 2 Appendix 3 Appendix 4 FY 2013 Tipping Fee Schedule Summary of Private Sector Interviews Transfer Station Concepts County Owned Properties RPT Albemarle Co. - - Preliminary Findings - LPK iii

7 1.0 INTRODUCTION The following report addresses our preliminary findings of our evaluation of the Ivy Material Utilization Center (Ivy facility) as it pertains to potential operation by Albemarle County. It includes our observations of the existing operations, extensive review of the Rivanna Solid Waste Authority (RSWA) budgets, follow up conversations with the RSWA, summarizes information received from our interviews with various private solid waste companies and provides information on potential options for consideration by the County. The Ivy facility includes collection areas for bagged household waste, municipal solid waste (MSW), construction debris (CDD) and bulky materials, a transfer station, and additional collection operations for metals (scrap metal and white goods), tires, and used oil and antifreeze. Operations also include areas for handling vegetative waste collection and mulching, pallet collection and grinding, and clean fill stockpiling. Clean fill consists of soil, block, brick, Photo 1: Aerial View Ivy MUC 1

8 concrete, and other materials defined as inert under DEQ regulations. As such, the operations are complex and interdependent. The Rivanna Solid Waste Authority also operates recycling collection facilities at McIntire and bales paper for shipping at the Paper Sort facility. The RSWA hauls the baled paper directly to the end user so maintains a small fleet of trucks and drivers for this work. Currently the RSWA contracts with Waste Management Incorporated (WMX) for the hauling and disposal of MSW and CDD waste materials delivered to the Ivy facility. This Landfill Disposal Agreement was first negotiated with Atlantic Waste Disposal with the agreement signed on October 14, 1997 for the collection, transportation and disposal of waste within the Rivanna Service area. This Agreement was written for an initial ten year period, with two five year renewals available. Notification of renewal required a 180 day written notice. On March 23, 1999, the responsibilities under the initial Agreement were transferred to Waste Management Inc. (WMI) through the first amendment to the contract. The provisions for transfer and disposal were modified to include the following requirements: WMI would provide the trailers. Rivanna would load the trailers at an average of 18 tons per load or more. Rivanna would purchase and install a Marathon TS 2000 transfer station system. WMI would deliver all waste collected by it in the Service Area to the transfer station and would pay the RSWA a loading fee of $4.00/ton. This fee was subject to annual adjustment through a CPI factor (either up or down). Rivanna would pay WMI for the transfer of waste from the station (exclusive of waste delivered by WMI), a fee of $15.74/ton for 18 ton per load minimums. This fee is subject to annual adjustment using a CPI (exclusive of fuel) and using a DOE adjustment factor for diesel fuel. Rivanna would pay WMI a fee of $15.00/ton for disposal with this fee subject to annual adjustment using a CPI factor. Failure to meet the 18 ton load minimum could impose penalties; exceeding the 18 ton load minimum would provide Rivanna with a discount depending on the average monthly payload tonnage. At this time, the RSWA is paying $48.37/ton for hauling and disposal. The figure below illustrates the annual escalators since the initial contract: 2

9 Per discussions with the County, it is our understanding that the County s primary goal at this time is to determine if there is a more cost effective method for providing the same or similar services at the Ivy facility if the County were to assume some or all of the responsibilities of the operations. The County also wants to verify or consider if the current services are best provided by the public sector or if privatization is a reasonable and appropriate alternative. Since the City of Charlottesville withdrew its use and support of the operations at Ivy, the services at Ivy are primarily utilized by County residents and businesses. By agreement with the RSWA, the County is responsible for any overrun in operational expenses and required to make payment to the RSWA. In FY 2012, this deficit was budgeted to be $414,000 and in FY 2013 this deficit was budgeted to be $517,342. In actuality the deficit for FY 2012 was $203,975. The County pays the estimated deficit quarterly based on the budget and will be provided a rebate for FY 2012 payments. It should be noted that the Ivy Material Utilization Center Programs Agreement, dated August 23, 2011 between the County and RSWA, allowed for two additional one (1) year terms (through 6/30/2014). Notification by the County for renewal upon the first extension was due 5/1/2012 and the second renewal is due 1/1/2013. Thus, by the end of this year the County must determine if it will renew this agreement. 3

10 2.0 OBSERVATIONS OF THE EXISTING OPERATIONS The following are observations relative to the Ivy operations made during site visits on July 27, 2007 (in conjunction with the GBB study) and on August 11, In addition, Draper Aden Associates has had numerous discussions with RSWA personnel and has reviewed tonnage and budget information provided by the RSWA. Photo 2: Off-loading into transfer station hopper. 2.1 Tonnage Received at the Ivy Facility The tables below provide summary information on the waste tonnages received at the Ivy facility. The information was taken from the FY 2013 budget information provided by the RSWA and the final data reported for FY Table 1: FISCAL YEAR FY Tonnage Summaries MSW/CDD RESIDENTS/ SMALL % WMX (2) BUSINESSES (1)(3) % TOTAL TONS PER DAY (306 days/yr) , % 15, % 33, , % 14, % 33, , % 13, % 28, , % 13, % 25, , % 13, % 22, ,995 (3) 37.9% 13, % 21, Notes: (1) Tonnages identified as Ivy MSW TS including citizen CN (Tag a Bag), Construction-Ivy, and Domestic Ivy categories. (2) Tonnages identified as Contract Loading County and MSW-2. (3) Tonnage identified as MSW or UVA Contract Loading is not included in total. 4

11 Table 2: FY 2012 Tonnages All Categories of Waste Received CATEGORY TONNAGE % of TOTAL Clean fill 6, Pallets Glass Sludge Tires Vegetative waste 1, White goods Subtotal 10, Citizen can (Tag a Bag) Construction 3, Domestic 4, MSW Subtotal 8, MSW-2 (WMX) 13, TOTAL 31, made: Based on the information provided in Tables 1 and 2 the following observations can be 1. While permitted for a maximum daily tonnage of 150 tons per day the transfer station is receiving significantly less than that as can be seen in Table 1. For FY 2012, the daily tonnage averaged 69 tons per day (306 working days per year). In May 2012, daily tonnage ranged from a low of 33 tons per day (Saturdays) to a high of 101 tons per day (the day after Memorial Day weekend). 2. Tonnage records from FY (Table 1) indicate that MSW/CDD tonnage at the Ivy facility has fluctuated annually and, more importantly, has been steadily decreasing. Since 2007, the Residential/Small Business tonnage has decreased 57% and the WMX tonnage has decreased by 14% for a total decrease of 37%. This decrease may be a function of the competition for tonnage in the private sector or a response to the economy. 3. Of the MSW/CDD tonnages delivered to the facility in FY 2012, 7,995 tons were delivered by residents or small businesses (37.9%) and 13,108 tons were delivered by Waste Management Inc. (62.1%). Six years ago the tonnage was more evenly split with residents or small businesses delivering 55% and WMX delivering 45% of the tonnage. 4. In FY 2012, the facility handled 10,014 tons of non-msw materials (31.8%) and 21,448 tons of MSW/CDD (68.2%). Thus a third of the operations is associated with handling the clean fill material, vegetative waste, pallets, glass, sludge, tires and white goods. In 5

12 follows: FY 2013 sludge will no longer be handled at the Ivy facility. This split has remained similar to that recorded for FY 2007 when the split was 38.1% for non-msw materials and 61.9% for MSW materials (not including the UVA tonnage.) The conclusions that can be drawn from these observations can be summarized as 1. The facility is under utilized per its permitted capacity by approximately 50%. 2. With the tonnage steadily declining, revenues have been impacted while expenses have remained relatively constant (See Section 2.2 for further discussion on this). 3. WMX controls the majority of the waste entering the facility and any modifications to the facility must be considered relative to the continued relationship with WMX. 4. The Ivy operations handle significant waste materials that cannot be economically transferred offsite for disposal or handling (e.g. brush, pallets). Any modifications to the facility or operations must address the continued handling of these materials. For the discussions below, the average annual tonnage calculated for the MSW/CDD waste materials for FY 2011 and FY 2012 is used. The average annual tonnage for WMX was calculated to be 13,229 tons, and the average annual tonnage for non-wmx delivered waste (residential and commercial) was calculated to be 8,464 tons for a total tonnage of 21,693 tons. For FY 2013, the RSWA estimated a total annual tonnage for these categories of 22,100 tons which is similar to the averages used in this report. 2.2 Tipping Fees, Revenues and the Transfer Operation There are three separate tipping fee schedules for MSW/CDD waste materials delivered to the transfer facility. Residents that drop a bag of trash pay $2/bag via a Tag a Bag program; residents and small businesses which come across the scales will pay $66/ton during FY 2013; and WMX will pay a fixed fee per ton as negotiated in their contract with the RSWA. For FY 2013, this fee has been set at $7.13. WMX does not pay the full tipping fee as the RSWA is not charged for the transfer and disposal of the waste that has been delivered by WMX to the facility. Appendix I contains the tipping fee schedule for FY2013 for the RSWA. As can be noted this schedule contains a comprehensive list of fees for the other materials collected or services offered at the Ivy facility. 6

13 For comparative purposes Table 3 has been developed to evaluate the revenues potentially generated by the residential/commercial tipping fee of $66/ton and by the WMX fee loading fee of $7.13. It should be noted that the values in the table may not match with audited numbers due to the assumptions made but are useful for discussion. Fees from the Tag a Bag program are not included in the table. For reference, however, in FY 2012, this program generated $23,400 in revenues. Table 3: Projected Revenues from Tipping Fees and WMX Payments FISCAL YEAR RESIDENTS/ SMALL BUSINESSES REVENUE (Estimated) % ($) WMX REVENUE (Estimated) % ($) TOTAL FY 2011 ($66/$6.77) FY 2012 ($66/$6.95) FY 2013 (Est) ($66/7.13) 8,790 (1) $580, % 13,350 $90, % $670,520 8,196 (1) $540, % 13,108 $91, % $632,430 7,857 (1)(2) $518, % 13,229 (2) $94, % $612,885 (1) Adjusted to deduct tonnage for tag a bag program. Actual data was not available so FY 2012 tonnage used. (2) FY 2013 tonnage based on averages not on budget tonnages. As can be seen by this table, the residents and small businesses using the facility generate the majority of the revenue (55%) and hence have the most impact on revenues when the tonnage drops. WMX delivers 61% of the tonnage and generates 15% of the revenue. Additional information on operational costs will be discussed below under sections on each operation. 2.3 Operations Transfer Operation (MSW/CDD/Commercial) The following section focuses on the operations related to the collection and transfer of residential and commercial waste off premise for disposal. This section does not address the other operations which are discussed in a separate section. 7

14 The transfer operation consists of three operations. The first is the Tag a Bag program where the citizens pay for their tags, and drop the bags of waste into a 20 CY roll off located near the recycling trailers. Citizens using this system do not need to go across the scales. The roll off is later weighed and unloaded into the transfer station and the waste compacted into the transfer trailer. The second operation is located in the transfer area and consists of the hand-loading of large transfer trailers from the loading dock. Citizens or businesses bring their waste to these trailers and off load into the trailers as directed by the attendant. One trailer is reserved for CDD materials and one for Photo 3: Collection roll off - tagged bags Photo 5: Transfer Trailer - Direct Load Photo 4: Off-loading into Ivy trailers MSW/bulky items. Because of the inherent inefficiency in the off-loading and loading operations, waiting lines can form during busy periods. Once full, these trailers are removed from the loading dock and stored in the trailer storage area for later transport by Thompson Trucking who is under contract with WMX for the hauling. These trailers because of the method of loading, tend to be lighter when full averaging between tons per load. 8

15 The third operation is the open air transfer station where the larger commercial vehicles back up and dump their waste materials onto the loading conveyor. This unloading area is small and can accommodate only one vehicle at a time. The receiving area is likewise small Photo 6: Rolloff truck unloading into bottom hopper and frequently waste spills off of the conveyor creating delays while the waste is cleaned up and placed in the loading conveyor. The conveyor lifts the waste up to a hopper where a ram pushes the waste into the loading trailer. When the trailer is full it backs away from the loading area and the doors are closed. A Photo 7: Transfer Station Conveyor significant amount of waste spills out of the back of the trailer prior to final closure of the doors and housekeeping in the area is a constant demand on the operations. These trailers, because of the compaction, can carry tons per load. The transfer station and unloading area are uncovered and as such subject to the weather. As mentioned, the material is transferred into the trailer via a conveyor. From our observations as supported through conversations with the operating personnel, CDD and bulky materials can bridge across the conveyor requiring personnel to make field corrections. Because the system is mechanical Photo 8: Transfer Station - Back View 9

16 and open to the elements, maintenance is frequent and costly. Leachate is handled through a small trench and flows into a tank. As the facility is not covered, leachate frequently mixes with storm water increasing the collected wastewater. The trailers being loaded may not be water tight and as such can leak creating another potential source of pollution. Photo 9: Groove in concrete truck pad for leachate interception. Based on our experience in the waste industry and having designed multiple transfer stations, it is our opinion that the operation is a potential safety hazard (with personnel unbridging materials), labor intensive (maintenance and repairs) and an environmental liability (fluids handling). Given that storm water can contact waste materials and that storm water management is difficult given the configuration of the Photo 10: Conveyor system, it is our opinion that this facility would probably not be permitted today under the current Virginia Solid Waste Management Regulations for transfer station operations. Review of the FY 2013 budget indicates that the transfer operations are costly given the labor intensity of the operations and the costs for transfer and disposal. Our observations follow: 1. Waste materials are transported by Thompson Trucking under contract to WMX to the WMX Maplewood landfill located in Amelia County for disposal. The distance to this facility is between miles one way with MapQuest indicating a travel time of approximately 1.5 hours. For FY 2013, the RSWA will be billed $48.37 per ton for its waste unless further adjusted for fuel. Tonnage delivered by WMX to the facility is not assessed the transport and disposal fee. The contract with WMX allows for a CPI index increase plus a fuel surcharge escalator. 10

17 2. For FY 2013 the total annual budget for the transfer operation is $1,056,909 of which $472,781 is estimated for transfer and disposal of the Authority s waste. In addition, each operation is theoretically assessed a portion of the administrative allocation which covers the Rivanna Water and Sewer Authority (RWSA) expenses related to the administrative services associated with the solid waste operations. Although this assessment does not show up under the budget for the transfer operation, it is added here for discussion. The allocation assessed the transfer operations is $81,778. If the transfer and disposal costs are subtracted from the total budget cost and the allocation added in, the average operations cost per ton of throughput for the transfer operation is $665,906 or $30.69/ton using the estimated average annual tonnage of 21,693 tons. This cost is high when compared to other transfer operations that we have worked with in Virginia. 3. As noted previously, WMX is only assessed a charge of $7.13 per ton for their waste delivered to the facility. This is estimated to generate $94,323 for FY The WMX fee does not cover the average operational cost per ton and the difference must be made up by the RSWA. Thus the actual cost of operations per ton to RSWA for non-wmx waste is $67.53/ton. (($665,906-$94,323)/8464 tons). 4. Using the information from Items 1 and 3 above, the cost per ton to the RSWA for operations plus transfer and disposal on non-wmx waste is theoretically $115.90/ton ($ $48.37/ton) which well exceeds the tipping fee. 5. Given the information above, the transfer operations without considering other revenue sources such as service fees will not breakeven. An estimate of the deficit can be made as follows: Total projected revenues (Table 3) for FY 2013 are $612,885. Total projected costs for operations for FY 2013 with allocation added are $1,138,687. The projected deficit (Operations Revenues) is $525, Operations at the Ivy MUC are a complex mix of personnel with a significant overlap between transfer operations, other waste handling operations, recycling and landfill environmental operations. The FY 2013 budget indicated a total of 13.5 full time equivalent personnel for all operations with a total personnel cost including benefits of $835,536. This equates to $61,892/FTE (average). The budget for personnel for the transfer station is $405,526 which equates to approximately 7 FTE using the average personnel cost. Per the Authority this includes the administrative positions at the scale house. Personnel costs represent 61% of the budget exclusive of the transfer and disposal costs or $18.69/ton of total waste (21,693 tons) through the station. 7. Maintenance, equipment repairs, and depreciation (equipment replacement costs) total $133,000 for FY This represents 20% of the operating budget exclusive of transfer and disposal. This is high for transfer operations because of the equipment required for loading the trailers (e.g., conveyors, hydraulic ram). 11

18 8. The transfer station facility appears to be nearing the end of its useful life per discussions with RSWA personnel and the Marathon equipment representative. The CIP budget includes $90,000 for compactor and conveyor repairs in FY 2013 and $250,000 for compactor and conveyor replacement in FY However the Marathon equipment representative indicated that the replacement cost of the equipment may be significantly higher than budgeted in the CIP because the current equipment is no longer manufactured by Marathon. New technology by Marathon would be needed that would be considerably more expensive ($700,000 on a similar project recently constructed). It is possible however that other manufacturers may have similar equipment to that currently used that could be used for replacement at a lower cost. Based on the discussion and observations above, the system as currently operated appears to be inefficient, costly and significantly underfunded. It should be noted however that the operations have evolved over a long period of time and it appears that the RSWA is doing the best that it can without overhauling the system 2.4 Operations Other Activities Other activities at the Ivy facility include receipt and handling of clean fill material, receipt and grinding of vegetative waste and pallets into mulch, tire handling, white goods collection, scrap metal, and collection of used oil and antifreeze. These operations process approximately 10,000 tons per year of waste materials. Observations based on review of the budget, discussions with RVRA personnel and site visits include the following: Photo 11: Clean Fill Material 1. Clean fill materials consisting of concrete, asphalt, brick, rock or clean soil can be brought to the facility by residents or commercial businesses. The tipping fee for this material is $8/ton and is projected to generate $44,000 in revenue in FY The materials are deposited in the old borrow area where it is worked into place periodically. The material is also sold back to citizens or businesses that may need the soil. This operation requires one equipment operator and a loader. This operation provides a service to contractors in the County and requires limited operations by the RSWA. Elimination of this service would require final stabilization of the borrow area which could be a significant capital expenditure and may only impact personnel and fuel costs in a minor way. As a side note, the equipment loader is split between the vegetative waste and pallet operations and post closure care of the landfill. The RSWA has considered crushing the concrete for recycling but has not implemented this operation. Other localities are doing 12

19 this for a cost of $4.50/ton for crushing but with a return of $12.00/ton for sale of the crushed material. 2. Vegetative waste is collected and ground into mulch. It is assessed a tipping fee of $48 per ton. This operation generates revenues from tipping fees and the sale of mulch. The cost to grind the vegetative waste budgeted for FY 2013 is $22,000 (grinding is bid on the pile or tonnage of materials in place) and the revenues projected at $106,800 (Mulch is sold at $16/ton). One equipment operator is required for this operation who assists with the grinding and who also loads the mulch for those wanting to purchase it. The RSWA will also deliver mulch for a fee. Photo 12: Vegetative Waste Handling This operation appears to generate more revenue than the expenses incurred and provides a service to the community for handling materials generated not only under normal circumstances but also under the extreme conditions of natural disasters. Without this service, citizens, the County, VDOT, ACSA, the power company, and commercial businesses would be required to find alternative disposal facilities that could be more expensive for the County s citizens. 3. Pallets are assessed a tipping fee of $48 per ton. The material makes up a very small percentage of the operation and requires minimal handling. The pallets are ground at no charge by the same company who grinds the vegetative waste and this company takes the material away at no cost. This material is used for dyed mulch materials. In the future, the pallets could be sold for fuel. Providing this Photo 13: Pallets service helps the community and eliminating this service would not impact the cost of the operations. 4. Glass is collected from McIntire and crushed at the Ivy facility. It is used for road beds. 5. Oil and antifreeze may be disposed of at the Ivy facility by the public at no cost. A private company is contracted to take the fluids away. The cost for the program is minimal at $99/year and provides a valuable service for the community. 13

20 6. Whole tires cannot be transferred to a disposal facility and so tires that enter the Ivy facility must be collected and disposed of appropriately. In the FY 2013 budget $12,500 is allocated for tire disposal. The tonnage collected in FY 2012 was 158 tons for a handling cost of $79/ton. The tires entering the facility are assessed a tipping fee either by ton or by item and the revenue for FY 2013 is anticipated to be $30,400. Elimination of this service could create illegal dumping of the tires and given that the revenues more than offset the cost of handling, it would not appear likely that this service could be eliminated. 7. Metals are collected at the Ivy facility and loaded into a large 80 CY container provided by Cycle Systems. This service requires an equipment operator to periodically sort the materials and to load the scrap metal into the container. The container can carry 8 9 tons of metal which is hauled by Cycle Systems Photo 14: Metal Disposal Area directly to their shredder. Metals require limited operations and are anticipated to generate $21,000 in FY 2013 depending on the market prices. In FY 2012, 217 tons were collected and sold. This operation should not be eliminated if operations continue at Ivy as it produces revenue at a limited operational cost. 8. The total FY 2013 budget for the Ivy Operations for the non-msw waste materials is $418,391 including an $81,778 allocation for the RWSA. Personnel costs are 53.6% of the total cost and are budgeted at $180,453. Assuming an average FTE cost of $61,892, this would equate to approximately 3 employees although RSWA has indicated that only one person is needed for the clean fill, vegetative waste, and pallet operations. Personnel overlap with the other operations at the facility. 9. The cost to handle the materials assuming a total tonnage of all materials of 8,996 tons (including the scrap metal) (recognizing that some materials are charged by the item and hence not included in the tonnage), is $46.50/ton. The operation is anticipated to generate $257,380 in revenues (tipping fees, hauling fees and sale of materials) in FY 2013 so the net cost of the operation is $17.90/ton. This appears to be a reasonable cost for handling the variety of materials and provision of the service to the County. 10. The Ivy operations require multiple private contractors for final disposition of the materials including the wood grinding operation, tire disposal, metal collection and used oil/antifreeze handling. These contracts would need to be evaluated for transfer to the County if the County were to assume the operations. 14

21 The services outlined above are considered to be essential support services as tires cannot be disposed of in landfills, vegetative waste is light and bulky and difficult to transport economically, and the clean fill material is needed to re-grade the borrow area. The elimination of these activities would not significantly impact the deficit and should be maintained. 2.5 Recycling Operations (exclusive of scrap metal and white goods) The RSWA oversees three recycling operations: one at the Ivy facility where mixed paper and cardboard are collected; another at McIntire where metals, paper, glass and plastics are collected; and at the third at the Paper Sort facility where paper products collected at McIntire are baled and stored for hauling to a final end user. Per RSWA, there is a part time contract attendant at McIntire, a driver that works 16 hours per week pulling containers to the Paper Photo 15: McIntire Recycling Center Sort facility and 24 hours a week delivering the baled products to the end users, and a laborer that works 24 hours per week at the Paper Sort facility and 16 hours per week at the transfer station assisting with the maintenance of the equipment. Thus there are 2 FTE employees associated with recycling although time is shared with other operations. The RSWA currently leases the building for the Paper Sort facility on a monthly basis. The lease has expired and is running month to month with a 3 month notification required for termination. The annual rental cost is $34,000. The following table summarizes the recycled materials for FY 2010 FY 2012: Table 4: Historical Material Tonnage Report Recycling FY 2009 FY 2012 MATERIAL FY 2009 FY 2010 FY 2011 FY 2012 Newspaper 1, Cardboard - Corrugated Mixed paper File Stock Phone books SUBTOTAL 2,797 1,982 1,613 1,554 15

22 MATERIAL FY 2009 FY 2010 FY 2011 FY 2012 Glass - All grades Metal cans Plastic SUBTOTAL 1, TOTAL 3,934 2,683 2,114 2,047 As can be observed from this table, the tonnages for recycling have been steadily declining especially when the City of Charlottesville initiated curbside recycling and with other competition in the private sector for materials. Tonnage between FY 2009 and FY 2012 has decreased by 48%. The decline in materials has been significant in all categories. Per the Local Government Support Agreement for Recycling Programs, dated August 23, 2011 between the City, County and RSWA, the County is obligated to 70% of any deficit funding and the City to 30%. This agreement included two one year renewals (through 6/30/2014) upon written request by the City and County. Such request was received for FY The costs included in the total RSWA recycling budget are paid for by the sale of recyclables, other revenue generated by RSWA with any deficit made up by the County and City. Review of the FY 2013 budget allowed the following observations relative to the operations: 1. The total budget allocated to recycling is $298,533 or $363,956 with the RWSA allocation. The tonnage collected was 2047 tons. Thus the cost to handle the materials as recycled was $178/ton. This includes only those paper materials collected at Ivy and the materials collected at McIntire. 2. Personnel costs are 34% of the operations and have been budgeted at $101,973 for FY This is equivalent to 2 employees using the average cost for 1 FTE. This supports the operational information provided by RSWA. 3. The total projected revenues including the Encore area ($18,000), and other materials ($275,000) is $293,000 thus the net cost for the program is nearly breakeven if the RWSA allocation is not included or a deficit of $70,956. This equates to a net handling cost of $34.67/ton. This system is a key component of the operations as it is a high priority for the citizens that use the facility. RSWA has approached the City and County about relocating the Paper Sort facility to Ivy. They estimated a one-time cost of $30,000 - $40,000 for the relocation. At this time they have not received support for this recommendation. 16

23 It may be that this is one operation best privatized as discussed below. 2.6 Summary In summary, the following conclusions can be drawn from our observations: 1. The transfer operations are operating at a deficit due to high personnel costs, high maintenance and repair costs, and high transfer and disposal fees. WMX is not paying the average cost of the transfer station operations but is paying only approximately 22% of the costs. The cost to RSWA is too high to break even through an increase in tipping fees so revenues are being raised through other sources such as the additional operations, service charges and direct payment by the County. The transfer operations are in need of a major overhaul from an operational perspective as well as from a contractual perspective with the private disposal company. 2. The other operations at the Ivy facility appear to be vital to the community and operating near breakeven. Personnel used in these operations also support landfill post closure care as well as the transfer operation. 3. Recycling tonnages have declined significantly over the past several years. While there are significant revenues generated by the operation they do not cover the operational costs. This is probably one operation that could be readily privatized to continue to provide the service to the citizens at a reduced cost to the RSWA or County (per conversations with the private sector.) Evaluation of the Paper Sort Facility was not part of this scope. However, it seems likely that if the recycling program is privatized, this operation will no longer be needed. 4. Any changes to the operations at the Ivy facility which impact personnel, must consider the current unfunded actuarial accrued liability being carried by the RSWA relative to the Virginia Retirement System. Per the FY 2011 Comprehensive Annual Financial Report, this liability was estimated to be $565,506. Further information on the VRS obligations can be obtained by consulting Note 7 (Page 31) of the FY 2011 Comprehensive Annual Financial Report or as noted in the FY 2012 report once published. 17

24 3.0 COMPETING REGIONAL OPERATIONS 3.1 Private sector landfill operations Annually landfills and transfer stations in Virginia are required to report their tonnage to DEQ by filing their Solid Waste Information and Assessment form (Form 50-25). Based on the information compiled from these forms and provided in the DEQ annual reports, tonnages at landfills in Virginia have been declining over the past 5 years, most probably in response to the slump in the economy. The graph below illustrates the dramatic decrease in tonnage in the private sector. This decrease has led to a very competitive environment in both the private and public sectors as facilities try to capture additional market share. This is leading to competitive pricing and expanded services. 3.2 Regional private sector transfer material recovery operations Within the region surrounding Albemarle County there are two major private sector transfer/material recovery facilities that are aggressively vying for waste tonnage in the current market place and which have been historically in competition with the RSWA. These facilities are briefly described below. 18

25 3.2.1 Fluvanna Transcyclery This facility is owned by Republic Services and was originally permitted as Permit by Rule #099 in 1996 and has under gone several minor amendments in 2008 and It was originally owned by BFI/Allied Waste Industries. The facility has a maximum daily capacity of 950 tons per day and operates 6 days per week being closed on Sunday. The permit describes the operations as including recycling, resource recovery, processing, and transfer of nonhazardous, non-liquid solid waste and recyclables. Materials that cannot be recycled are hauled away from the site on a daily basis. Though permitted for a maximum of 950 tons per day, the facility has received the following tonnages at the facility (information from DEQ SWIA forms): Table 5: Republic Services Annual and daily average tonnage YEAR ANNUAL DAILY AVERAGE TONNAGE TONNAGE (tpd) , , , , , Note that the daily average tonnage is based on an operating year of 312 days per year. Review of this information indicates that this facility has lost a significant amount of throughput over the past 5 years Zion Crossroads MSW Materials Recovery Facilities This facility is owned and operated as indicated in the permit by Zion Crossroads Recycling Center, LLC although the owner is commonly identified as van der Linde Recycling. There are two facilities operating within the site under two separate permit by rules (PBR 531 and PBR 561). PBR 561 was permitted in Per the permit, waste materials are tipped on to a recycling floor, where large items are sorted. The remaining materials are then loaded into a hopper-fed machine for additional sorting prior to a final manual sorting operation. Materials that are not able to be recycled are hauled off-site daily to a permitted solid waste facility. 19

26 Both facilities are permitted for a total maximum MSW throughput of 1,000 tons per day. The table below provides information on the reported tonnages received at the facility for the years indicated (information from DEQ SWIA forms): YEAR Table 6: ANNUAL TONNAGE Van der Linde Recycling annual and daily average tonnages PBR 531 PBR 561 DAILY AVERAGE ANNUAL TONNAGE TONNAGE (tpd) DAILY AVERAGE TONNAGE (tpd) , , , , , , , Note that the daily average tonnage is based on an operating year of 312 days per year. Review of this information indicates that the throughput has increased significantly over the past 3 years as the facility has expanded. 3.3 Summary The purpose of providing the above information is to highlight the competition currently throughout the state and within the region for waste. Any modifications or reconfiguration of the operations at the Ivy facility must take into account the impact of this competition. 3.4 Public sector facilities The table below provides annual tonnage data for a selected number of public sector facilities in the general region. The decline of tonnage is ubiquitous and also a potential source of competition. Table 7: Annual tonnage selected public facilities YEAR Greene Co. Madison Co. Culpeper Co. Orange Co. Louisa Co. TS TS TS LF LF ,779 8,243 57,783 37,638 23, ,534 8,422 50,691 33,729 20, ,775 6,468 35,771 32,817 16, ,837 5,940 33,242 28,916 16, ,139 6,019 30,912 22,825 16,400 20

27 4.0 OPTIONS TO THE EXISTING SYSTEM Draper Aden Associates was requested to consider options to the existing system if the County was to consider taking over the operations and to either operate them with their own personnel or to privatize the system(s). This section provides an overview of potential options and our findings. It provides a summary of our conversations with private solid waste and recycling companies as well as development of concepts and costs for modification of the transfer operation. 4.1 Goals of program Critical to the evaluation of options relative to the existing system is the determination of the ultimate goals for the operations at the facility. After discussions with the County, our understanding is that the operational goals are as follows: 1. Provision of a location for citizens to drop off residential MSW, bulky waste items, and construction/demolition materials. 2. Provision of a location for small businesses and small local waste haulers to drop off residential MSW, bulky waste items and construction/demolition materials. 3. Promotion of recycling by providing collection facilities for either source separated or comingled materials. 4. Provision of a location for citizens, governmental entities, and businesses to drop off vegetative waste, clean fill materials, and pallets. 5. Provision of mulch and clean fill materials for use by residents or businesses in the County. 6. Collection point for residential tires. 7. Collection point for scrap metals. 8. Collection point for waste oil and antifreeze. 9. Collection point for waste generated during Amnesty Days and for periodic Household Hazardous Waste collection. As the County would like to continue to provide these services, the question becomes whether or not this can be handled by the County in a more economical way. As the information included in Section 1.0 and 2.0 has clearly indicated the current operations are operating at a deficit and without changes the County will continue to incur direct expenses for their operation. 21

28 4.2 Current transfer operation The current transfer operation is permitted for 150 tons per day although it has been operating well below this tonnage. It is our understanding that because of agreements with the surrounding residents, the throughput tonnage of the facility may not be increased. In FY 2012, the transfer facility averaged approximately 70 tons per day with the waste streams tracked as follows: Table 8: FY 2012 Tonnage At Transfer Facility By Category MATERIAL TOTAL TONS TONS PER DAY(1) Citizen (Tag a Bag) 143 Domestic 4,800 MSW 344 SUBTOTAL 5, Construction 3, MSW 2 - WMX 13, TOTAL 21, (1) Tons per day based on 306 operating days per year. Options must consider the nature of the waste material, its source and the method of delivery. For the existing facility, over half of the waste materials brought to the facility are delivered by WMX and future planning must consider the impact on any new option of the continued usage of the facility by WMX. Options must also consider the suitability of the continued use of the existing transfer station. As indicated previously the current transfer station operation (although permitted) is inefficient, does not meet the current regulations for transfer station design as it is exposed to weather, requires significant maintenance and is a potential safety hazard for the operating personnel. In addition, loading of the other two trailers through the back with residential and small commercial waste materials is time consuming creating waiting lines and is inefficient given the low haul weights of the trailers. The transfer station equipment is nearing the end of its useful life and replacement of the existing equipment with similar equipment may be difficult and installing a new system expensive. 22

29 4.3 Private Sector - Operations The table included in Appendix 1 provides a summary of our conversations with the private sector (WMX, Republic Services, and van der Linde Recycling) relative to operation of the Ivy facility. Key findings from these interviews are provided below: 1. Waste Management was interested in the continuation of a transfer operation at the site but was not interested in use of the existing system. If necessary WMX indicated they might consider constructing a new facility but would require a long enough contract period to assure recouping their investment. In addition, they indicated that they would need guarantees about the subsurface conditions and release from any waste or pollution conditions encountered during construction. The ownership of the facility and the relationship of this ownership to the property would be key contractual concerns. 2. Republic Services and van der Linde Recycling were not interested in continued transfer operations at the Ivy facility and would only want to operate an enlarged convenience center. Given the commercial use of the Ivy facility, provision of only a convenience center may be problematic to handling other waste haulers that currently use this facility. DEQ permitting requirements may impact commercial usage. 3. Republic Services had no interest in handling all the other operations (e.g. clean fill, tires, vegetative waste, pallets, household hazardous waste, etc.) believing that these operations could be contracted more economically with specialized companies. Van der Linde Recycling indicated that they could handle the other wastes but may prefer to do so at their facility. 4. Both Republic Services and WMX indicated that they would provide facilities for comingled recycling. Republic Services would transport the materials to Tidewater Fiber in Chesapeake, Virginia while WMX would transport the materials to Recycle America in Sterling, Virginia. Republic Services did not want to handle glass while WMX would accept glass. 5. Van der Linde Recycling indicated that they would provide source separated recycling at the Ivy facility to accommodate those citizens that like to do so and would accept glass. In addition, collected waste materials would be run through the MRF at Zion Crossroads and recyclables separated out. 6. Van der Linde Recycling indicated that they would want autonomy in operating the facility. They would not charge the County a fee for operation but would continue to charge the current tipping fee for those crossing the scales. 7. All agreed that an RFP should address basic waste collection and transfer operations and either address the other services as supplemental or not at all. They all agreed that using the proposal process would be better than using the bidding process. 23

30 The interviews were useful in assessing interest in the Ivy facility by the private sector and for providing insights into procurement of these activities. However to gain firm information on the potential to contract operations the County would need to proceed with a Request for Proposal or Bid. It should be noted that there are several challenges with privatization of the Ivy facilities especially if the operations are solely controlled by the private sector. These include the following: 1. Relationship with residents: Maintaining relationships with the adjacent property owners and other residents in the vicinity of the Ivy facility is an important consideration. Currently the RSWA works closely with these residents to keep them informed through monthly citizen meetings. In addition, RSWA has made informal agreements with the residents on the hours of operation, litter control and other aspects of the operations. It is unclear how this communication would be maintained if the operations were fully privatized or if assumed by the County. 2. Ownership of property - Scales: If the private sector is contracted to only run a larger convenience operation, the scales may or may not be needed. If needed, it would need to be determined who would take on ownership of the scales and their operations including billing. 3. Ownership of property Convenience center/transfer station area: Because some of the area under existing operations may have been filled with waste, transfer of ownership of the property to the private sector will not be possible even if it was preferable. Liabilities associated with the subsurface conditions would need to be addressed contractually. In addition, the private sector may wish to demolition or mothball the existing transfer station equipment. 4. Other potential areas: There are several areas within the RSWA property, away from the immediate operations, which do not have waste fill. These greenfield areas may be suitable for use as a new transfer operation and the property potentially sold to the County or private sector. 5. Hours of operation: The County and/or the RSWA may need to maintain control of the hours of operation to honor agreements previously made with the residents in the area. While this could be agreed to upfront in a contract, a strong mechanism for enforcement must be identified. Photo 16: Current Scale Area 24

31 6. Assessment of tipping fees: If the system is privatized, the private sector will want assurances that it can assess fees adequate for covering the operational costs, overhead and profit. The mechanism for controlling fees would be outlined in the contract. 7. Permitting of a transfer station: If a transfer station is included in the operations (whether use of the existing facility or a new facility), the facility must be permitted with DEQ. If owned and operated by the private sector a new permit will be needed. If owned by the County or RSWA but operated by the private sector, compliance and violations must be addressed in the contract. 8. Environmental liability: A waste collection system whether convenience center or transfer operation has the potential to generate litter, leachate, and contaminated storm water as well as the potential for spills or disposal of unacceptable materials. Environmental liability must be addressed contractually. 9. Ownership of waste: Once waste is disposed of in the receiving receptacles whether these containers are roll offs at a convenience center or transfer trailer, the ownership of the waste must be clear not only during transport but also at the receiving facility. This must be addressed contractually as neither RSWA nor the County could accept any liability for waste spilled in transport or waste improperly disposed of at the receiving facility. 10. Continued RSWA Administration Costs: Even if the operations are privatized the RSWA may continue to incur administration costs. These costs could be associated with administering the private contract, communications with citizens or VRS obligations. These costs would still fall the County for direct payment. The County needs to assess privatization of the facilities as it relates to their goal to provide economical waste handling services to the western part of the County and to provide the additional operations such as the clean fill disposal, vegetative waste handling and tires for the entire County. Only the procurement process would allow the County to gain a complete understanding of the level of service, fees and potential contractual requirements and allow it to assess the benefits of engaging the private sector on its own for the operations at the Ivy facility. following: 4.4 Public Sector - Options The options available to the County for operation of the Ivy facility include the 25

32 Table 9: Options For The Ivy Operations OPTION TITLE DESCRIPTION 1 No changes to system 2 Eliminate use of Ivy waste transfer system by commercial sector 1. RSWA continues to operate system although operations could be transferred to County. Given the overlap in the personnel, this may be difficult to do effectively. 2. RSWA notifies WMX in December (per Agreement) that contract will not be renewed. 3. RSWA bids the transfer and disposal operations in February for implementation on July 1, Short term contract while reconfiguration of the system is considered. 4. Tipping fees charged at scale house are revised. Under new contract, minimum tipping fee must equal cost per ton of operations of the transfer facility. 5. RSWA continues to provide operations for ancillary operations in conjunction with post closure care of landfill. 6. RSWA bids recycling to determine if privatization can enhance operations. 7. Evaluate RSWA administrative costs to determine how changes may impact these costs. 1. Without commercial sector using facility, the transfer operations can be eliminated reducing costs. 2. Commercial sector must transport waste to other facilities probably in Zion Crossroads or another local government in the region. 3. Convenience center can be reconfigured to handle citizen wastes including MSW, bulky waste and CDD materials. Installation of compactor to handle MSW with open top roll offs provided for bulky and CDD materials that cannot run through compactor. Use existing transfer station area after existing equipment is removed. 4. RSWA or County operates scales. Citizens pay at scale house. No tag a bag program. Fee determined by cost of private sector to handle materials. 5. Consider if an annual sticker based program is feasible to collect citizen fees for MSW disposal. 6. Convenience center operations staffed at all times and potentially privatized. Materials hauled by private sector to facility of choice. 7. RSWA continues to provide operations for ancillary operations in conjunction with post closure care of landfill. 8. RSWA bid recycling to determine if privatization can enhance operations and reduce costs. 9. RSWA still incur administrative costs to be passed on to County. 3 Reconfigure 1. Design and construct new transfer station for open top 26

33 OPTION TITLE DESCRIPTION transfer operation to improve efficiency loading with elimination of mechanical equipment. Maintenance, repair, and personnel costs to be reduced. 2. If possible and economical, design transfer station so waste materials can be separated into CDD and MSW with the ability to transfer these materials to different facilities for final processing/disposal. 3. County or RSWA own transfer station and continue to operate scale house. 4. Operation of transfer station could be privatized but could also be handled by RSWA personnel on-site for post closure care of landfill and ancillary operations. Small local contractor could operate the station. 5. Provide small convenience center to separate citizens from commercial vehicles in transfer station during busy periods. 6. Consider bidding transfer separately from disposal contract to allow flexibility in facilities to be used. 7. Consider bidding disposal separately from transfer contract to allow consideration of public facilities for disposal that would not be able to provide hauling. 8. RSWA continues to provide ancillary operations in conjunction with post closure care of landfill. 9. RSWA bids recycling separately to determine if privatization can enhance operations. 10. RSWA still incur administrative costs to be passed on to the County Option 1 No change in system Option 1 considers improvements to the economics of the system through rebidding the current transfer and disposal operations which have become increasingly expensive through the use of annual escalators. (Current fee is $48.37 for transfer and disposal.) In addition, it considers revamping the tipping fees to assess a minimum fee on all users that will cover the cost of the facility operations. (Currently the operations cost is estimated to be $30.69/ton with WMX paying a loading fee of $7.13/ton.) Changes to the fee structure relative to WMX cannot be done unless the contract is terminated or renegotiated by the end of June The risk of this option is that there may be limited interest by the private sector in the operation, bids may be higher, and/or modification of 27

34 the fee structure may reduce usage of the facility by the private sector. However, if Option 3 is to be considered as discussed below, Option 1 will need to be implemented for the short term General discussion Option 2 Elimination of transfer operations Given the County s goal to service small businesses and local waste haulers at Ivy, Option 2 would not be a viable alternative even if the convenience center is reconfigured and enlarged because a convenience center by regulation cannot receive waste from private waste haulers. DEQ has verified that any facility receiving waste materials from a hauler that has collected from more than one household or receives materials that must be placed on a pad prior to loading into a collection box, must be permitted as a transfer station. The RSWA cannot provide specific information on the customers using the facility. However, they did provide the following information on their customer base which excludes WMX: Table 10: Summary of Current Customer Base FY 2011 FY 2012 No. of No. of Tickets Tons Accounts Accounts Tickets Tons CONSTRUCTION Cash Customers - 6,150 2,519-4,068 1,860 Local/State Agencies Non-Agency Accounts 178 2,149 1, ,623 1,177 Total 185 8,358 3, ,722 3,052 DOMESTIC/MSW Cash Customers - 22,459 3,639-21,146 3,806 Local/State Agencies Non-Agency Accounts 179 2,479 1, , Total ,215 4, ,508 4,800 Several conclusions were drawn from this information: 1. Elimination of the transfer station would probably impact all the Non-Agency Accounts, assuming that these are commercial haulers of one form or another. In FY 2011, this would have been 357 accounts (2,471 tons); in FY 2012, this would have been 358 accounts (2,061 tons). 28

35 2. RSWA indicated that most (but not all) cash customers are residents. It was assumed that this tonnage would continue to be disposed of at Ivy through the convenience center. The average for FY 2011 and FY 2012 was 3,700 tons for Domestic/MSW and 2,200 tons for CDD. 3. It was assumed that local and state agencies would be routed away from Ivy. This would impact accounts. 4. For the cash customer category, there was a total of 28,609 transactions in FY 2011 (approximately 90+/day) and in FY 2012 there were 25,214 transactions (approximate 80+/day). The decrease was primarily in the construction category. Thus, is that there will continue to be a significant number of transactions and these will involve the exchange of money. Methods to stream line this operation should be considered. 5. Average tonnage/ticket for construction is approximately 0.5 tons (4 loads would fill a typical 40 CY roll off (at 2 tons/load). The average tonnage/ticket for Domestic/MSW is approximately 0.2 tons (50 loads would fill a typical compacted 40 CY load (at 10 tons/load). This information is important for design of the convenience center when considering traffic flow and equipment requirements. For evaluation of costs it was assumed that the tonnage for cash customers would run through a convenience center. The average of FY 11 and FY 12 was used as follows: CDD MSW Total 2,200 tons 3,700 tons 5,900 tons The Ivy facility does have more than sufficient space available should the County consider operating an enlarged convenience center in conjunction with enhanced recycling. Staffing would be required to assure proper usage and disposal of materials by the citizens. Funding of this option would need to consider the use of the scales as the Tag a Bag program would not be practical for bulky or residential CDD materials Estimated costs Costs for implementation of this system were estimated after discussions with the Marathon equipment representative and consideration of the FY 2013 annual budget costs for personnel. For this operation it was assumed that personnel could be reduced to 4.5 FTE employees with one manager, one attendant, one driver and 1.5 personnel in charge of the scales and billing for an estimated annual cost of $278,

36 Operations were assumed to be open 6 days per week and the costs were estimated to be $23,000, (half of the amount estimated below for a revised transfer operation). A 3 cubic yard compactor with a box was assumed to cost $26,400 delivered to the site (based on a quote from Marathon which included a $4,500 discount) with open top boxes estimated to cost $4,000 per box. Installation was assumed to cost $30,000 including some site work. The system would require 1 compactor unit, two compactor boxes and three open top roll offs. Total costs for equipment and installation was estimated to be $78,400. If financed at 3% for 10 years the annual debt service would be $9,200. Optionally, the private sector may be willing to invest in capital improvements as a component of their proposal/fee structure. It was assumed that a compacted load would weigh 10 tons and that an open top would weigh 2 tons. Tonnage was estimated as determined above (3,700 tons/year for MSW; 2,200 tons/year for CDD). Based on this it was estimated that 3,700 tons would run through the compactor and 2,200 tons would be deposited directly into the open tops. This would equate to approximately 1, 470 hauls per year (rounded up). Hauling was assumed to be to a facility at Zion Crossroads a one-way distance of 25 miles at a cost of $2.00/RT mile or a cost of $100/pull. It was assumed that if the material went to one of the private facilities, a tipping fee of $30/ton would be paid but it could be less once negotiated. The total operational costs can be estimated as follows: Table 11: Estimated Costs For Convenience Center Operations Based On FY 2013 Budget BUDGET ITEM FY 2013 COSTS Personnel $278,500 Operations $23,000 Equipment debt service $9,200 Hauling (1,470 $100) $147,000 Disposal (5,900 $30/ton) $177,000 TOTAL $634,700 Projected tipping fee at $66/ton $389,400 Estimated Deficit $245,300 The cost per ton of throughput for this operation given the assumptions above, is estimated to be $108/ton. When potential revenues are considered the cost is $42/ton. It should be noted that since the larger components of the estimated annual cost are directly related to the 30

37 tonnage for hauling and disposal, the actual costs could vary significantly from those assumed above. In particular, personnel could be streamlined. Also the ability to collect a fee of $66/ton may be difficult depending on the billing format and may drive users away. This operation may also be readily privatized which could save significant costs Option 3 Construction of new transfer facility Option 3 acknowledges that the current transfer system, if transfer is to continue, must be replaced. For this discussion a state of the art facility is considered. By state of the art it is meant that the facility should contain the following elements: Ability to top load trailers as a passive system, i.e. without the need for conveyors, rams or other mechanical equipment (except for a rubber tire loader); Ability to segregate wastes into separate haul trailers if practical or economic for transfer to separate disposal facilities (e.g. CDD separated from MSW); Ability to separate out some recyclables but not to the extent of a MRF; Pre-engineered metal building covering the transfer operation and loading area; Push walls to protect sides of the structure and to assist in directing the waste into the haul truck; Enclosed leachate and wash down water collection system; Hopper to direct waste into the haul truck if direct load is designed into the system; Ability to operate the system with 2 FTE employees including equipment operator and laborer; Sufficient queuing space or efficient layout to reduce waiting times for users; and Sufficient trailer storage to allow flexibility with the hauling company on timing of trailer hauls. The sizing of a transfer facility is dependent on the overall function of the facility including tonnage throughput, potential recycling and material separation, and funding considerations. In the past 20 years 38 transfer stations have been permitted in Virginia in the following tonnage ranges: Photo 17: City of Bedford Transfer Station 31

38 Table 12: Transfer Stations By Tonnage 2011 TONNAGE RANGE NUMBER OF FACILITIES 1 5, , ,001 15, ,001 20, ,001 25, ,001 50, , TOTAL % Based on this information at 70 tons per day (21,400 tons/year), the Ivy facility would fall within the same tonnage category as 60% of the facilities permitted in Virginia. Loss of WMX waste would put the facility in the same tonnage category as 26% of the facilities permitted in Virginia. Recognizing that construction of a new facility will be subject to available funding, considering the tonnages for FY 2012 including consideration of the peaks observed in the May 2012 data, and based on our experience, a new transfer station at Ivy could be relatively small ranging from 6,000 7,000 square feet. To illustrate the variability in transfer station sizing, Westmorland County operates a transfer station that is 4,400 square feet. This facility received 14,800 tons in 2011 as reported in the DEQ SWIA forms for an average daily tonnage of 48 tons per day. Bedford City operates a transfer station that is 6,900 square feet and was designed for 8,000 tons per year or 25 tons per day. Appendix 3 contains two potential layouts for a transfer facility of 6,300 square feet (Option A) to 7,800 square feet (Option B). Option A assumes that the waste is segregated into MSW and CDD to allow use of two separate facilities. Option B assumes that all waste is comingled into a single trailer. Costs for the construction of the facilities are also included in the Appendix. The opinion of probable cost (OPC) for the Option A concept is $579,300. The OPC for Option B is $612,700. Site work, engineering and permitting would need to be added to these costs. 32

39 Trailer storage will not be a concern for this facility as there is sufficient storage in the existing operational area as has been used previously. Considering the tonnage for FY 2012, and assuming an average tonnage of 20 tons per loaded trailer, this would equate to approximately 4 transfer trailers a day. Two potential locations were identified for a small transfer facility at the Ivy site as discussed below. Photo 18: Trailer Storage Area Option 1 Located to east of operations building The first option is illustrated in Figure 1 contained in Appendix 3 and is based on the following assumptions: Facility will be located either on an area that has not been filled or, if over a fill area, will be built up minimizing excavation into the underlying waste fill material (if stable). Facility will maximize the use of the existing infrastructure and be placed close to existing activities. MSW and CDD would be separated into separate trucks (Option A). Construction of the new facility will not interfere with existing operations; and To meet the criteria above, design of the Figure 1 facility had to minimize the grade break between the tipping floor and the haul truck loading pad. In a typical open top load facility where waste is pushed directly into the haul trailer, a 16 grade break is required with footers extending below this. In the attempt to minimize excavation in the southeast corner of the building, this grade break was reduced to 12 with an internal wall set at 4. Waste will need to be lifted over the wall and into the haul vehicle. This adds an effort to the operation but saves on concrete wall construction and grading. Option 1 also minimizes the amount of road work and is integrated with the existing operations. This layout requires approximately 15,900 square feet of pavement including the user entrance, access pad, haul truck entrance and exits, and bypass road. 33

40 Based on this layout we would estimate this facility to cost $779,300 (building at $579,300; site work at $200,000) excluding engineering design, bidding and construction phase services. If 15% is added for these activities a total conceptual cost of $900,000 is estimated. If financed at 3% over the life of the facility (assumed to be 25 years) this would equate to an annual debt service payment of $51,700. Optionally, as discussed in Section 2, the private sector may be willing to invest in capital improvements as a component of a long-term contract Option 2 Located to west of operations in vicinity of employee parking Option 2 is illustrated on Figure 2 in Appendix 3 and is based on the same assumptions above but considers the construction of a direct load facility with a 16 grade break. Its location was moved to the west to an area which we believe to be a green field site. For this evaluation it also considers a single load facility of 7,800 square feet. This option requires additional road work and grading but allows for a more efficient direct push operation. The total estimated pavement for this option is 19,100 square feet. Based on this layout and the Option B building design we would estimate a construction OPC for this facility to be $872,700 (building at $612,700; site work at $260,000) excluding engineering design, bidding and construction phase services. If 15% is added for these services a total conceptual cost of $1,000,000 is estimated. If financed at 3% over the life of the facility (assumed to be 25 years) this would equate to an annual debt service payment of $57,600. Again, private sector participation may be an option. With either of these options, the existing facility could remain in operation while the new facility is under construction. Once construction is completed, the existing transfer station could be demolished and the transfer area modified into a more efficient recycling facility and/or citizen drop off facility Advantages of reconfiguration of the transfer area The advantages of considering reconfiguration of the transfer area are as follows: 1. Traffic flow and waste material handling are more efficient and operational costs can be reduced. 2. Mechanical systems are eliminated and maintenance and repair costs will be reduced. 34

41 3. Some sorting of recyclables can be completed on the tipping floor as the floor will be covered. 4. The existing transfer station area can be reconfigured and an enhanced recycling collection system implemented. 5. Control of fluids will be enhanced as the tipping floor is covered with appropriate drains installed Operational costs for the new facility The FY 2013 budget was evaluated to determine how the operational costs for transfer might be reduced with a reconfigured system. As indicated previously using an average FTE cost of $61,892/year, it was determined that the current transfer operation utilizes 7 people. For a revised operation and based on our discussions with other transfer facilities, we believe that this could be reduced to 4.5 people as follows: Manager 1.0 FTE Scalehouse and clerk 1.5 FTE Equipment operator 2.0 FTE Given the overlapping responsibilities with the other operations, some of the administrative costs of the scale house and clerk might be shifted to the other operations. This would reduce the personnel costs from $405,526 per year to $278,514 using the FTE average. It is probable that the actual personnel costs would be even lower. Relative to the operations of the new facility operation costs were adjusted as follows: Table 13: Operational Cost Adjustments Based On FY 2013 Budget (Exclusive of Personnel) BUDGET ITEM FY 2013 ADJUSTED COSTS COSTS MODIFICATION Other personnel costs $6,400 $6,400 No change Other services and charges $24,000 $15,500 Reduced utilities by one third. Communication $3,300 $3,300 No change Information technology $4,200 $4,200 No change Vehicles and equipment maintenance $36,000 $12,000 Eliminated equipment maintenance, cut fuel by 50% Supplies $2,500 $2,500 No change Operation and maintenance $32,200 $2,200 Eliminated facility maintenance Depreciation $70,000 $0 Eliminated new 35

42 BUDGET ITEM FY 2013 COSTS ADJUSTED COSTS TOTAL $178,600 $46,100 MODIFICATION structure with 25 year life If it is assumed that the transfer station costs $1,000,000 and is financed at 3% for 25 years, a debt service cost of $57,400 is calculated. If a new loader is purchased for a cost of $350,000 and financed at 3% for 10 years the annual cost would be $56,000. Thus, the costs for the operations if the same transport and disposal fee as well as RSWA administration fee are assumed can be summarized as follows: Table 14: Estimated Operations Budget New Transfer Station BUDGET ITEM ESTIMATED COST COST PER TON EXPENSES Personnel $278,514 Operations $46,100 Building debt service $57,400 Equipment debt service $41,000 Allocation for RWSA $81,778 SUBTOTAL $504,792 $23.27 (total tonnage) Transfer and disposal at $48.37/ton $409,400 $48.37(RSWA tonnage) TOTAL (for RSWA) $914,196 $71.64 REVENUES FY 2013 WMX revenues at $7.13 $94,323 Tipping fees at $66/ton $518,562 SUBTOTAL $612,885 Estimated deficit to RSWA $301,311 $ Total tonnage for non- WMX waste assumed to be 8,464 tons/year (average 2011/2012) 2. Total tonnage with WMX assumed to be 21,693 tons/year. This table assumes that RSWA is not charged for the hauling and disposal of WMX waste and that WMX continues to pay only $7.13/ton. If WMX was assessed the full operational cost of $23.27, the deficit would be as follows: Total Cost: $914,196 WMX Payment: ($307,839) Tipping Fee Payment: ($518,562) Deficit $87,795 36

43 For the transfer station to break even a tipping fee of $71.64 would need to be charged ($914,916 - $307,839 = $606,357 / 8,464 = $71.64), assuming WMX continues to utilize the facility. For comparison under the current budget the operational costs are $30.69/ton and the deficit projected at $525,802 so some improvement in the deficit has been made with Option 3 especially if WMX is charged the full operational cost. Given the reduction of costs, the facility could pay for itself in 4-5 years. Further improvements could be made through evaluation of the allocation for the RWSA, personnel costs, the fee charged WMX which does not cover operations, and the costs for transfer and disposal Summary of Option 3 operations and contracts If a new transfer station is constructed the following contractual arrangements could be considered: 1. Construction of the transfer station: Under Option 3, either RSWA or the County constructs the transfer station with either of these entities responsible for contracting for services. Private sector investment may be possible but may require a long-term contract or even expanded use of the facility. 2. Operation of the transfer station: The operation of the transfer station (which will reduce personnel costs) could continue under RSWA or with the County, or could be privatized to a local contractor. Operation of a transfer station requires limited technical experience although a licensed operator is required and hence the need to contract through one of the major waste haulers is not necessary but could certainly be considered. Privatizing the operation of the transfer station if combined with hauling and disposal puts the burden of haul weights directly on the private sector. However, privatizing the operations will require careful contract language to assure that the concerns of the residents in the area are addressed. 3. Transport of waste: The transport of the waste from the facility could be contracted separately if the RSWA or County wants to maintain flexibility in its choice of disposal facilities. To do this would mean that the disposal facility would need to be identified first for haulers to provide competitive bids. Alternately, the transportation could be linked to the disposal facility as it is now. Transportation could be procured as a bid. Fuel escalators must be considered very carefully and should be linked directly to fuel consumption and not increased on a CPI percentage basis. 37

44 4. Disposal of waste: Disposal could be bid and could include transportation of the waste to the facility. The large private disposal companies have strong ties to trucking companies for provision of these services. However, consideration of the use of other public disposal facilities in the region is complicated as the public facilities are not in the transportation business. 5. Recycling: Recycling should be bid to determine the level of interest in the private sector relative to the RSWA current operations and potential expanded operations. This could include evaluation of the relocation of the McIntire operations, leaving the McIntire operations where they are and expanding the recycling opportunities at Ivy, adding recycling collection facilities throughout the County on property owned by the County, and/or elimination of the Paper Sort Facility. While this could be linked to the transfer and disposal contract, given the potential expansion opportunities it may be best if procured separately. The County or the RSWA could hold this contract. 6. Tires: Tire disposal should continue as a separate contract held by the RSWA. The cost for handling would need to be offset by fees for acceptance at the facility or the County would need to cover the deficit. 7. Scrap metal: Scrap metal should continue as a separate contract held by the RSWA. Costs for operation are minimal and the revenues potentially significant which could be used to offset other program costs. 8. Waste oil and antifreeze: Collection and handling of waste oil and antifreeze should continue under a separate contract held by the RSWA. 9. Amnesty days: Amnesty days could be held at the transfer station and the expense paid for from the General Fund of participating localities based on tonnage or items delivered. 10. Household hazardous waste or electronic collection events: Household hazardous waste or e-waste collection could be handled in a manner similar to Item Vegetative waste, clean fill, pallet handling: RSWA should continue to operate these activities in conjunction with the post closure care of the landfill. Fees for usage and costs for handling would need to offset each other or the County would need to cover the deficit. The Ivy operations will continue to be a complex series of activities. 38 Given the complexity of the contracting arrangements and the experience of the RSWA it may be more effective to allow the newly configured system to remain with the Authority. However, it may also be effective for the County to control the operations and to contract with the Authority to

45 run the operations. This needs further internal discussion especially in light of potential VRS liabilities and continued RSWA administration costs. 4.5 Cost allocation for Administrative Services A significant amount of information on the RSWA operations was reviewed in preparing this report. The operations at the Ivy facility are a complex series of interrelated operations with personnel cross trained to work in a variety of roles as needed. It is doubtful that the County could inherit the existing operations as currently configured and reduce the costs except for a potential reduction in the costs associated with administration of the program by the RSWA. Currently the RSWA is allocated costs for administrative services as provided by the Rivanna Water and Sewer Authority for a total of $327,113. These services include accounting and billing, audits, communications (citizen meetings, website, etc.), insurance, safety programs, legal support, VRS, and other as needed from time to time. These costs are allocated between the programs (although not directly charged to the programs) as follows: Table 15: Cost Allocation Administrative Services RWSA FY 2013 Budget PROGRAM ESTIMATED COST % Ivy operations $81,778 25% MOU Environmental $98,134 30% Ivy Transfer/MSW $81,778 25% Recycling $65,423 20% TOTAL $327, % Excluding the MOU and recycling costs, the Ivy operations and transfer are assessed a total administrative cost of $163,556 for a per ton cost of $7.64/ton (based on total tonnage). The County would need to assess their internal administrative costs against the costs allocated by the RWSA as well as personnel costs assigned to each program to determine if the County could reduce the costs administratively using their own personnel. 39

46 4.6 Expansion of collection or recycling operations throughout the County Appendix 4 contains information on properties owned by the County identified from the County records. The scope of this study did not address the siting of additional facilities so this information is provided for use by the County should it continue in these discussions with the private sector. The private sector has expressed some interest in expanding residential collection and recycling through convenience centers, but the question to the County will be one of cost. Currently citizens contract directly for collection or transport their waste directly to one of the receiving facilities (either the RSWA Ivy facility or to one of the Zion Crossroad facilities). The County bears no cost for this collection. 40

47 5.0 RECOMMENDATIONS As indicated above, it is improbable that the County could inherit the current Ivy operations in their existing configuration and significantly reduce the operational costs. The high costs for the Ivy operations are related to personnel costs associated with the transfer operation, the maintenance and repair costs related to the transfer equipment, the high cost of hauling and disposal due to years of CPI adjustments, the reduced fee assessed WMX, and the administrative costs allocated by the RWSA for services in support of the Ivy operations. This is a complex network of interrelated activities, including overlapping responsibilities with the post closure care of the landfill and recycling. The fee structure must carefully balance the service with expense and evaluate public sector operations against private sector opportunities. Based on our understanding of the Ivy operations and budgets, we offer the following recommendations for further consideration by the County: 1. Renewal of WMX Contract: RSWA should inform WMX in December that their contract will not be renewed for another 5 years given that a reconfiguration of the system is under consideration. In lieu of termination, RSWA could negotiate with WMX and offer WMX a short term 1-2 year renewal while reconfiguration of the system is considered. 2. Bidding hauling and disposal: If WMX does not accept the short term renewal, RSWA should bid the hauling and disposal in February for implementation in FY This should provide the RSWA five months to formalize and negotiate a new contract. The hope of this activity is that the costs will right themselves after having been inflated with CPI and fuel escalators for so many years. This contract should be for 1 2 years if the construction of a new transfer station is considered as design, permitting, and construction will require 2 years. More importantly, operational fees must be adjusted to adequately reflect the true cost to operate the transfer station. Thus if WMX is awarded the bid, it must realize that it will no longer be assessed the reduced fee of $7.13/ton but will need to pay its fair portion of the operational fees on a per ton basis. If WMX does not win the bid, it will pay the full tipping fee (unless other contract arrangements are negotiated but at a rate not lower than the true operational cost of the facility). By bidding this, the RSWA and County may be able to assess the potential for WMX to redirect its waste away from the transfer station. 41

48 3. Construction of transfer station: The County and RSWA should evaluate the construction of a new transfer facility at the Ivy facility in greater detail including the potential to reduce operational costs, improve separation of materials, and the benefits of moving the contract to the County. Simultaneously, the RSWA should determine replacement requirements for existing equipment as it has been indicated that the existing equipment is no longer manufactured and cannot be replaced. As it seems to be accepted that the existing equipment is coming to the end of its life the cost to replace this equipment should be evaluated against the construction of a new facility. We believe that the construction of a top load facility is appropriate if the County wants to continue to support its commercial businesses in the western part of the County (including those not directly associated with WMX deliveries). The risk is that with the majority of the tonnage being delivered by WMX, if WMX chooses to redirect its waste away from the transfer station, the RSWA and County may not be able to economically operate the facility and to cover the debt. 4. Convenience center: If a transfer station is not of further interest, the RSWA and/or County should consider installation of equipment for a convenience center. This operation could be privatized with considerable savings anticipated. There is more than sufficient space at Ivy to construct and operate a full service convenience center (MSW, bulky and CDD materials, recycling) and RSWA could oversee these operations if still involved with the other operations. Assessing a fee for usage of this facility could continue as a tag a bag/tipping fee operation or be supported by the General Fund. As scales must be present for the other operations, it is probably effective to continue to assess tipping fees for the bulkier items entering the facility. However, the administrative costs for this effort may outweigh the benefits of any revenues. 5. Recycling operations: The RSWA (or the County) should bid the residential recycling operations to evaluate the potential to privatize the operations at McIntire, expand operations at Ivy, eliminate the Paper Sort activities, and to add additional recycling collection points in the County. It has been indicated that the private sector may be interested in handling these operations under a no-charge or minimal charge contract. The County could bid these operations and then compare them against the costs and tonnages currently recycled by RSWA if it is considering taking on the contract directly. The County, after further discussions with the private sector should consider the best locations for outlying collection facilities. 6. Evaluation of goals of program: The County and the RSWA must carefully assess the goals of the program at Ivy and to determine if all services are needed. Based on our evaluation it appears that all the ancillary operations (tires, scrap metal, clean fill, vegetative waste and pallet grinding, used oil/antifreeze collection) are necessary and provide a valuable service to the community. In addition, operations like the vegetative waste grinding can provide a backup for disaster clean up. These activities also appear to be operating on a relatively breakeven basis and improvements in 42

49 efficiencies in these operations do not appear to be needed nor could the costs be reduced significantly if the County were to assume them. Our recommendation is to leave these services with the RSWA. 7. Competition: Given the volatility and competition within the solid waste industry in this region, the County must assess its efforts in regards to entering this market with the ownership and operation with the private sector may shed light on this situation. Likewise re-procuring transfer and disposal will provide additional insights. 8. RSWA Administrative costs: Further evaluation of the options above must be considered in relationship with the RSWA and its administration activities and associated costs. Questions relative to financial/legal support, insurance, safety, communications and VRS liabilities must be answered. 43

50 APPENDIX 1 FY 2013 Tipping Fee Schedule

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52 APPENDIX 2 Summary of Private Sector Interviews

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57 APPENDIX 3 Transfer Station Concepts

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65 APPENDIX 4 County Owned Properties

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68