Broward Resource Recovery Board Interlocal Agreement North Lauderdale City Commission Workshop December 14, 2010
Sandy Gutner, PE Solid waste management consulting for almost 25 years. Consulting across the US in all aspects of solid waste management Project Manager for the RRB and Broward County from 2003 to 2008. Contract administration and negotiation as Owner’s Representative for 15 large mass burn WTEs in the US (combined capacity > 21,750 tons per day).
DISCUSSION TOPICS Components of District disposal costs Uncertainties associated with Proposed District Possible alternatives
Only discussing this part. OVERVIEW RRB County WRS North Lauderdale
CURRENT DISTRICT TIPPING FEE ILA Cities ILA Cities ILA Cities
WHEELABRATOR SERVICE FEE
OVERVIEW OF KEY RISKS The proposed ILA documents contain many uncertainties. Three of the most significant uncertainties include: District Program expenses and liabilities Service Fee Pass Through Costs Change-in-Law risks The potential exists for disproportionate costs to Contract Communities. Risk allocation include many that are more typical of public ownership.
CURRENT DISTRICT TIPPING FEE $30.17 $7.99 $99.20 $77.02
DISTRICT PROGRAM COSTS AND LIABILITIES
PROGRAM COSTS Proposed Programs
Regional yard waste
Construction and demolition debris
Emergency debris processing and disposal
Total Program Costs ????? Current District Programs
Recycled material processing
Closure and post-closure reserves
Public information and education
Household Hazardous Waste
Scrap tire removal
Unincorporated collection services
Research and development
Approximate Cost $30/ton Approximate Cost $????
DISTRICT PROGRAM UNCERTAINTIES District assets and liabilities not determined. New programs envisioned but costs not determined. Code enforcement costs not estimated. No business plan. Plan of operations to be modified after ILA. As an Independent District, all costs borne by Contract Communities. All costs recovered through tipping fees and charges.
WHEELABRATOR SERVICE FEE Service Fee Adjustments:
Pass through costs
Pass Throughs as incurred:
Ash monofill expansion
Non ad valorem
CHANGE-IN-LAW RISKS If a capital modification is needed, the District covers about 2/3 of Wheelabrator’s cost. Capital may be financed by Wheelabrator with a 10% return on equity. If Wheelabrator loses revenue due to C-I-L, District must make Wheelabrator whole. (if air emission changes result in lower energy recovery). If operating and maintenance costs increase due to C-I-L improvements, the District must make Wheelabrator whole. If ash can no longer to be used for daily cover at WM landfill, District must make Wheelabrator whole.
MAXIMIMUM SERVICE FEE ADJUSTMENT(Change-in-Law or Force Majeure) Can be adjusted maximum of 10% in any year, or up to 40% combining all prior adjustments over the Service Fee on the Contract Date. But…. Maximum adjustments exclude Pass Through Costs and inflation adjustments. Service Fee was adjusted mid-year (May 2010) by 11.7% due to Energy Adjustment. Another similar adjustment possible before Commencement Date.
MAXIMUM INCREASE(Excludes inflation, Pass Through Costs
TIPPING FEE RANGE-PROPOSED DISTRICT ILA Cities ILA Cities ILA Cities $12 - $30.17 $65.19-$140.19 $53.19-$110.02
PROPOSED DISTRICT vs. ALTERNATIVE * Cumulative Savings of $58/ton vs. $77.70 Cumulative Savings of $58/ton vs. $65.19 Assumes $1/ton escalated for HHW, e-waste, etc. * Based on Miramar tonnage
WHAT ARE THE ALTERNATIVES?
WHAT DISPOSAL OPTIONS ARE THERE? Wheelabrator North Wheelabrator South Central Disposal Sanitary Landfill Reuters New facilities to be developed
ALTERNATIVES Wait for situation to evolve. As ILA expiration approaches: Negotiate with Wheelabrator directly Issue RFP for disposal Join with other city(ies)
NEGOTIATE WITH WHEELBRATOR
In its current form, the City would be exposed to many undefined risks and liabilities. The City will have limited control over the risks and liabilities incurred by the District. Deadline is creating artificial urgency. The “signing bonus”, offset by the District’s one-time payment is a fraction of known and unknown risks. RECAP