Getting the Max out of your MRF: Strategies for Increasing Revenues from Materials Recovery Facilities Contracts

Transcription

1 Getting the Max out of your MRF: Strategies for Increasing Revenues from Materials Recovery Facilities Contracts 2012 County Forum on Innovative Waste Management, May 25 th 2012 Phil Bresee, Broward County Recycling Program Manager

2 Broward County s Recycling Services: MRF Contract Cities provide for municipal solid waste (MSW) and recycling collection services All 31 Broward cities provide some level of residential recycling service County assists 26 partner cities curbside recycling through management of Materials Recovery Facility (MRF) contract Single-Stream since ,000 tons in FY million tons of County recyclables since FY 1994 County rebates cities 2

3 A History of MRFs Birth of modern MRF state legislative actions and local government initiatives Single stream MRFs begin to emerge China becomes major buyer Pre 1980s Late 1980s 1990s ~ Managed source separated material streams...scrap dealers & vertically integrated companies (Weyerhauser, Alcoa, Anheuser Bush) Limited involvement from MSW industry Transitions to dualstream driven by collections efficiencies, need for more through put

4 The Evolution of Curbside Recycling Corresponds with the History of MRFs Photo courtesy City of Minneapolis

5 Single-Stream Recycling: Keep it Simple... Single-stream invariably results in increased recyclables collections Increased participation through resident / customer convenience; no sorting of program recyclables required. Cart and added capacity Outreach and promotion Initially driven by: Improvements in MRF processing systems and technology. Movement towards automated MSW and recycling collections. Demand for recovered paper by Asian markets in last 10-years. 140% 120% 100% 80% 60% 40% 20% 0% Single Stream Tonnage Increases from Select Cities / Counties (in %)* Collier County Denver, Co. Prince Georges Co., Md. Miami Dade County Stuart, Fl Madison, WI

6 Recent MSW and Recycling Trends in Broward County * WTE = Gross amount combusted 6

7 Single-Stream MRF Technology MRFs use a wide range of technologies Recyclables processed using screens, trommels, optical sorting, air knifes, eddy currents, etc. Speed and angles of processing lines calibrated Residue rates decreasing (<10%)

8 Recyclables are Commodities Broward County s Recyclables Average Market Value

9 MRF Services Contracting Evolution All-in, included with recyclables collections (part of per HH fee) Mid 1990s MRF services split from collections Processing fees along with revenue share becomes more common Contracts adjusted pricing/revenue annually (oneyear lags) Multiple variables: Processing price paid to vendor Residue allowance Revenue share Increasing private sector dominance (~70%); DBO contracts less frequent Public ownership-private ownership? Public ownership/private operations

10 Revenue Sharing 101 Advantages Allows for jurisdiction to realize benefits of strong markets Disadvantages Volatile recyclables commodity markets ( ) More risk generally equals greater revenue share Financial incentives to increase quantity Financial incentives to increase quality Unpredictable; more challenging to budget for Increased administration costs Revenues can help offset program costs Enhances avoided disposal fee benefit

11 Revenue Share Mechanisms Fixed $ per ton Revenues based on contractor s sales (vendor must open books ) Market index approach based on % of average market value (AMV) of program recyclables Waste & Recycling News (containers) Official Board Markets Yellow Sheet (paper and cardboard) Threshold-based (x% share at x tons) Host fees

12 What are Your Recyclables Worth? = $ per ton

13 Know Your Recyclables Stream Packaging trends need to be monitored MRFs of the future will manage a different recyclables stream New materials will be targeted for diversion (mixed plastics, film, scrap metals, etc.) Some commodities may morph into one (ONP, mixed paper) Some materials can be culled from residue

14 Know What s in Your Garbage Also know what s in your MRF residue 14

15 Carts are Key Wheels make it easier to recycle New carts have RFID tags for future recycling rewards program (e.g. RecycleBank ) Carts (64 or 96 gal.) hold 2-3 x more recyclables than two 18 gallon recycling bins Footprint of carts similar to two 18 gallon bins Lids keep materials dry and prevent litter More than 200,000 homes with carts by 2013 Broward cities with carts are collecting an average of 35% more recyclables

16 Other MRF Contracting Strategies for Consideration Consider long-term contracts (10 years +) MRF price tags can be ~$20 million Longer contract allows vendor to depreciate equipment Mega-MRFs way of the future Allow for options, including transfer sites Establish residue % thresholds Be realistic revenue share must be attractive to MRF operator too Allow contractor to accept 3 rd party tons Structure contract terms that help weather storms (floor prices) Be assertive at negotiations table big MRF players typically receive more $ per ton than indexed prices but be flexible (e.g. fuel prices)

17 Many Forces at Work Dynamics differ from jurisdiction to jurisdiction. MRF contracts can be influenced by: Procurement/RFP timing Volume of recyclables Regional markets Competition Composition of recyclables Contract term Ownership Dynamics $ MRF Contract

18 Thank you and Q & A philbresee@broward.org