This document summarizes a presentation about alternatives to joining a proposed Broward Resource Recovery Board Interlocal Agreement for solid waste disposal. Key points include: - The proposed agreement contains many cost uncertainties and risks that could result in disproportionate costs for contracting communities. - Tipping fees under the proposed district could range from $12-140 per ton depending on various program costs and pass-through fees from the operator. - Alternatives worth considering include negotiating directly with the current operator, issuing a new RFP for disposal services, or joining with other cities. The current proposal exposes cities to many undefined long-term risks and liabilities.

1. Broward Resource Recovery Board Interlocal Agreement North Lauderdale City Commission Workshop December 14, 2010

2. 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).

3. DISCUSSION TOPICS Components of District disposal costs Uncertainties associated with Proposed District Possible alternatives

4. Only discussing this part. OVERVIEW RRB County WRS North Lauderdale

5. CURRENT DISTRICT TIPPING FEE ILA Cities ILA Cities ILA Cities

6. WHEELABRATOR SERVICE FEE

7. 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.

8. CURRENT DISTRICT TIPPING FEE $30.17 $7.99 $99.20 $77.02

9. DISTRICT PROGRAM COSTS AND LIABILITIES

11. Regional yard waste

12. Construction and demolition debris

14. Recycled material processing

15. Closure and post-closure reserves

16. Environmental compliance

17. Public information and education

18. Household Hazardous Waste

19. E-waste recycling

20. Scrap tire removal

21. Unincorporated collection services

22. Research and developmentApproximate Cost $30/ton Approximate Cost $????

23. 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.

25. Change-in-Law

26. Capital

27. O&M

28. Lost revenue

30. Leachate disposal

31. Property tax

33. 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.

34. 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.

35. MAXIMUM INCREASE(Excludes inflation, Pass Through Costs

36. TIPPING FEE RANGE-PROPOSED DISTRICT ILA Cities ILA Cities ILA Cities $12 - $30.17 $65.19-$140.19 $53.19-$110.02

37. 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

38. WHAT ARE THE ALTERNATIVES?

39. WHAT DISPOSAL OPTIONS ARE THERE? Wheelabrator North Wheelabrator South Central Disposal Sanitary Landfill Reuters New facilities to be developed

40. ALTERNATIVES Wait for situation to evolve. As ILA expiration approaches: Negotiate with Wheelabrator directly Issue RFP for disposal Join with other city(ies)

41. NEGOTIATE WITH WHEELBRATOR

42. ISSUE RFP

43. 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