Business Cost Analysis for High Point, NC
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Business Cost Analysis for High Point, NC

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Waste Management propoal that I presented for Elected Officials and City Management of High Point, NC. This contract was competed out. I lost; but came very close to obtaining contract.

Waste Management propoal that I presented for Elected Officials and City Management of High Point, NC. This contract was competed out. I lost; but came very close to obtaining contract.

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Business Cost Analysis for High Point, NC Business Cost Analysis for High Point, NC Presentation Transcript

  • RDR LLC
    • The purpose of this presentation is to attract an investor / partner who believes in our vision of providing a single-stream curbside recyclable collection service for municipalities within the North Carolina Triad area.
    • By the end of this presentation you will understand the opportunity and profit potential that exists for an investor who will partner with RDR LLC to provide recycling collection services for the City of High Point, North Carolina.
    RDR LLC
  • 20% of the City of High Point’s Environmental Services Budget Goes to Recyclable Collection Services
  • City Cost Savings for outsourcing RDR LLC Thousand Year
    • Year 1 : $ 210,000
    • Year 2 : $ 221,000
    • Year 3 : $ 204,000
    • Year 4 : $ 202,000
    • Year 5 : $ 210,000
    Five Year Savings $ 1,047,000
  • How will RDR LLC do it ?
    • The City annually expends $219,000 for miscellaneous expenses associated
    • with its Curbside Recycling Collection program.
    • RDR LLC will expend an average of $100,000 for miscellaneous expenses......
    • that is a yearly difference of $119,000
    • The City annually expends $227,000 for motor vehicle expenses associated
    • with its Curbside Recycling Collection program.
    • RDR LLC will expend an average of $100,000 for motor vehicle expenses…….
    • that is a yearly difference of $127,000.
    • Our ability to cut costs in these areas and others will save the City a yearly
    • average of $209,000
    RDR LLC
  • How does RDR LLC operate so efficiently ? 60,000 60,000 60,000 60,000 $ 60,000 ** Gas & Maintenance 160,000 140,000 140,000 140,000 120,000 Investor / Loan 55,000 50,000 50,000 45,000 45,000 Profit Sharing 91,000 86,000 81,000 77,000 75,000 Federal / State Tax 100,000 100,000 100,000 100,000 100,000 Miscellaneous $ 1,205,800 18,000 18,000 8,460 42,000 150,000 495,000 $ 16,800 Year 5 $ 16,800 $ 19,800 $ 16,100 $ 26,100 Office Rent 18,000 15,000 12,000 12,000 Education & Outreach 18,000 15,000 12,000 12,000 Marketing & Website $ 1,169,800 $ 1,167,800 $ 1,149,100 $ 1,145,100 Total Expenditures 8,460 8,460 8,460 $ 8,460 Expenditure / month per truck 42,000 42,000 42,000 50,000 *Fleet 150,000 150,000 150,000 150,000 Insurance Fees 495,000 495,000 495,000 495,000 Employee Salary / Benefits Year 4 Year 3 Year 2 Year 1 RDR LLC Expenditures
  • More City Benefits
    • Earn an extra $ 12,000 – 20,000 / per year for recycling awareness programs
    • Reduce Greenhouse Gas Emissions by 3% in High Point, North Carolina
    • RDR LLC will hire 3 employees from the city who are dislocated due to the execution of this
    • public- private partnership: $95,000 annual savings for Environmental Services Department
    • Conduct the first public-private partnership with a minority-owned Environmental Service
    • vendor in the Triad area and outperform Guilford County’s African-American MWBE
    • Participation expenditure by 100%
    • The city will no longer have to allocate 4 trucks for recyclable collection, each city recycling
    • truck costs an average of $100,000: that is a potential $400,000 cost savings without including
    • gas and maintenance costs
    • RDR LLC will use it’s reporting mechanisms to give the city an idea of what sector of the city
    • needs to increase their recycling participation efforts
    RDR LLC
  • Operation Area
  • What does RDR LLC want from me ?
    • A $500,000 investment in the form of capital, equipment or
    • supplies
    • Partnership as we expand operations in North Carolina
    • Knowledge of industry tactics, costs, & pitfalls
    • Assistance as we apply for grants, loans & other forms of
    • capital
    RDR LLC
  • RDR LLC Financials
    • 5 -YEAR REVENUE / EXPENDITURE PROJECTIONS
    Profit Loss * Investor Cash Inflow 84,249 1,205,800 1,290,049 3,000 3.10 33,711 432,758 Year 5 $ 517,007 363,762 355,220 405,243 * $ 500,000 Opening Cash Balance 1,238,796 1,176,343 1,099,076 $ 1,050,343 Total Revenue 1,169,800 1,167,800 1,149,100 $ 1,145,100 Total ** Expenditures 68,996 8,543 50,023 $ 94,757 Earnings after expenditures 3,000 3,000 3,000 $ 3,000 Recyclable Processing Revenue / month 3 2.87 2.70 $ 2.60 Monthly Charge per unit 33,411 33,111 32,811 32,511 Units Final Cash Balance Year 4 Year 3 Year 2 Year 1 RDR LLC
  • What’s in it for me ?
    • 30% equity in RDR LLC.
    • Annual average internal rate of return of 30% over 5 years.
    • Investor Claw Back Initiative
    • Opens opportunity to conduct Electronic Recyclable Collection Program (NC State Bill 1030)
    • Boost City MWBE Participation rate and sets precedence for other public-private partnerships with Triad municipalities and prime contractors
    • Expenditures increase at a modest 3 % per year
    • Opens opportunity to bid for $400,000 contract to collect recyclables at attached units in High Point, NC, (In year 4)
    • RDR LLC will hire 3 employees from investors management team
    • 1.5 times the original investment of $500,000 by year 5
    RDR LLC
  • Opportunities & Considerations
    • Municipalities located in the Triad area make an annual investment of at of least $25 million to their cities waste management programs
    • Because we will form a North Carolina LLC, our company will be a separate entity from the owners and shareholders. If our company is named in a lawsuit, there are legal provisions to protect the owners, directors, and shareholders from personal liability.
    • NC Senate Bill 1030 : A county in North Carolina that amends its solid waste management plan to include a section on recycling electronic devices and implements an electronic devices recycling program is eligible to receive distributions from the state Electronics Recycling Account.
    • The current system for municipal waste management services within the Triad area pick up computer monitors only. Municipalities and corporations (i.e. Dell Computers) do not have a collection service for electronic circuit boards, batteries, and color cathode ray tubes (CRTs) that contain hazardous materials such as lead and mercury.
    • Citizens will view these partnerships as a good-faith effort by municipalities and big business to involve minorities in the community development process.
    • During the 2005 legislative session, the North Carolina General Assembly passed House Bill 1518 , requiring holders of certain specific ABC permits (liquor licenses) to recycle all beverage containers.
    • Self-Help , North Carolina’s community development banking group, administers the Recycling Business Loan Component of its Environmental Business Loan Fund. Loan deals have ranged from $10,000 to more than $1 million (with an average loan size of $75,000).  Self-Help has extended more than $6 million in finance recycling business’s.
    • N.C. Division of Pollution Prevention and Environmental Assistance ( DPPEA ) has a Recycling Business Development Grant. For Fiscal Year 2006 - 07, DPPEA committed $300,000. Applicants may request any amount of funding up to a maximum of $30,000. Applicants must provide at least a 50 percent cash match to the requested amount.
    • Carolina Environmental Systems (CES) has dedicated mechanics and a 23,000 sq. ft. service facility to effectively serve waste management service needs. They could be a good partner and service provider.