Transcript No Slide Title

Responding to the Downturn
in Recycling Markets
Municipal Waste Association
February 5, 2009
Presentation Outline
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History of Residential Blue Box
System Net Costs & Funding
Municipal Funding under BBPP
MIPC’s Actions re Commodity Markets
Historical BB System Costs
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Year 1 (2004)
– Limited 2002 data on net system cost
– AMO & SO agreement on net system
cost
• Year 2 (2005)
– Based on actual reported 2003 costs
Historical BB System Costs
2001 Data for
Feb – June 2004
Fees
2002 Data for
July - Dec 2004
Fees
2003 Data for
2005 Fees
Tonnes recovered
693,547
726,726
779,844
Agreed net cost
$62.5 m
$84.0 m
$117.5 m
Industry funding
$13.0 m 1)
$21.0 m 2)
$58.77 m
1)
5/12ths of annual funding
2) 6/12ths of annual funding
Historical BB System Costs
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Years 3 & 4 (2006 & 2007)
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WDO Cost Containment Plan implemented
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Reasonable cost bands applied to 2004 & 2005 costs
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ODRP tonnes, costs & revenues deducted for 2007
funding
Year 5 & 6 (2008 & 2009)
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Based on actual reported 2006 & 2007 costs
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As reported costs were within Best Practices report cost
model range for system best practice costs
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ODRP tonnes, costs & revenues deducted for 2008 &
2009 funding
Historical BB System Costs
2004 Data for 2005 Data for
2006 Fees
2007 Fees
Tonnes
recovered
2006 Data for
2008 Fees
2007 Data for
2009 Fees
823,635
861,313
937,979
902,498
$194.54 m
$200.97 m 3)
$223.38 m 3)
$256.39 m 3)
Reasonable
cost band
$10 m
$14 m
na
na
3 year rolling
average
revenue
$73.61 m
$76.88 m 3)
$90.34 m 3)
$ 91.61 m
Agreed net cost
$110.9 m
$110.1 m
$133.05 m
$157.05 m
Industry funding
$55.46 m
$55.05 m 3)
$66.52 m 3)
$78.525 m 3)
Gross system
cost
3)
Adjusted to exclude wine and spirits containers under deposit. For 2007 & 2008,
LCBO contributed $5 m less steward obligation for non-deposit Blue Box materials
to municipalities.
BBPP Funding Calculation
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Verified reported gross costs
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Plus
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Including amortized capital
Operating costs (except reported administration)
Calculated administration costs
Calculated interest on municipal capital costs
Equals
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Total gross municipal BB system cost
BBPP Funding
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Total gross municipal BB system cost adjusted for
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Prior year corrections
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ODRP for 2007, 2008, 2009 funding
Less
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Results of municipal Blue Box audits
Corrections arising from WDO verification
Errors reported by municipalities
3 year rolling average revenue
Equals net system cost
Multiplied by 50%
= industry obligation to municipalities
BBPP Funding
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Industry obligation to municipalities
– Less CNA/OCNA in-kind contribution
– Less CIF contribution
= cash available for distribution
Pending Changes to 2009
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LCBO $5 million annual contribution
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Less steward obligation on non-deposit materials
Remaining funds distributed to municipalities
In 2007 & 2008; does not continue into 2009
LCBO not exempted as Blue Box steward for
deposit wine & spirits containers by regulation
Stewardship Ontario notified LCBO of obligation
under BBPP in 2009
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As part of annual notification process
Including wine & spirits containers as not exempted
Pending Changes to 2009
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Stewards must report by March 31
If LCBO submits report re ODRP data
– 2009 municipal funding will be adjusted
Costs of Wine & Spirit Deposit Containers in 2007
System
Less Three-Year Average of W&S Revenue
$7,729,914
$769,292
Net Costs of Wine & Spirit Deposit Containers
$6,960,622
50% Stewards Share
$3,480,311
MIPC’s Actions
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MIPC’s actions re commodity markets
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Clarified with MOE that composting of paper
fibres considered diversion
Liaised with SO re eligible BB system costs
to include
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Stockpiling costs
Composting costs
MIPC’s Actions
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Arranged for correspondence from WDO,
SO & AMO to Mayors/Members of Council
dated January 22
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take every opportunity to market materials to
recycling markets, even at reduced revenues
where marketing materials, even at reduced revenues,
is not an available option
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market materials to recycling markets that charge a tip fee,
making every effort to minimize tip fees paid
MIPC’s Actions
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Arranged for correspondence from WDO,
SO & AMO to Mayors/Members of Council
dated January 22 (continued)
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for paper fibres
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where it is not feasible to market materials even at reduced
revenues or tip fees
direct materials to permitted composting facilities
where composting facilities are operated by municipalities
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make every effort to market the resulting compost for revenue
MIPC’s Actions
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Arranged for correspondence from
WDO, SO & AMO to Mayors/Members
of Council dated January 22
(continued)
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for non-paper materials
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where it is not feasible to market materials even at
reduced revenues or tip fees
hold materials pending increased market demand
Changes to 2008 Datacall
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Able to report
– Quantity stockpiled
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All materials not just glass & plastics
Quantity disposed
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Not processing residue
Changes to 2008 Datacall
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Stockpiling costs
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Report under Blue Box Costs Processing tab
Under ‘Deduction of Stockpiling Cost’ as
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Warehousing & transport costs for stockpiled materials
Stockpiled costs deducted in 2008
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Will be added in 2009 if materials marketed
Disposal costs
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Not eligible
Do not report in Blue Box Financial Datacall
Changes to 2008 Datacall
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Able to report market tip fees paid
Added to Section 6.2 costs
WEEE
Contacting
WDO
Email
Executive Director
Datacall
MHSW Report
BBPP Review
Telephone
Fax
Website
[email protected]
[email protected]
[email protected]
[email protected]
416 226 5113
416 226 1368
www.wdo.ca