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Session 9 Solid Waste Management Study 2018 and Beyond Southampton County Board of Supervisors Meeting December 15, 2008 Session 9 SCS Scope • Task 1 - Review Existing Regional Solid • • • • Waste System Task 2 - Evaluate Future Technology and Facility Needs Task 3 - Evaluate Institutional Models for Solid Waste Management Task 4 - Facilitation with Chief Administrative Officers Task 5 - Prepare Report and Recommendations 2 Session 9 Fundamentals • Study is forward thinking • Takes a clean slate view – what is the best approach to take for the Region • Not an audit, although current situation carefully considered • Considers institutional, technological, economic, and political challenges and opportunitities 3 Session 9 Evaluation Factors • Technology status and reliability • Institutional status and reliability • System reliability • System flexibility • Funding approach • Ease of implementation • Financial metrics 4 Session 9 Assumed 2018 Conditions • Current system debt retired • In Region disposal capacity • Out-of-region disposal capacity • Transfer station network • Waste-to-energy • C&DD disposal capacity • Solid waste quantities • Feasible technologies • Recycling 5 Session 9 Solid Waste Authorities/Organizations Information gathered on other county/regional solid waste organizations: • Central Virginia Waste • Sanitation Districts of Los Angeles • • • • • • Management Authority Connecticut Resource Recovery Authority Delaware Solid Waste Authority Environmental Cooperative of Main Fairfax County, Virginia Lancaster County Solid Waste Management Authority 6 • • • • County Northeast Maryland Waste Disposal Authority Solid Waste Authority of Palm Beach County Pinellas County, Florida Portland Metro Virginia Peninsulas Public Service Authority Session 9 Solid Waste Authorities/Organizations Evaluate differences in: – Membership – Governance – Day-to-day administration – Operations – Debt management • Applicability of other approaches to Region 7 Session 9 Pro Forma Evaluation • Evaluated various cooperative scenarios • Disposal – New regional landfill – Out-of-Region disposal • WTE – Maintain existing RDF WTE Facility – Expand with mass burn WTE Facility – Abandon existing RDF WTE Facility 8 Session 9 Scenarios Descriptions • Scenario A – All eight communities continue to cooperate for recycling and disposal services similar to existing cooperative model with SPSA – Assumed major debt retired by 2018. – Major variables • New Regional Landfill • Dispose at out-of-region Landfill • WTE (with and without, expand and /or replace) 9 Session 9 Scenarios Descriptions • Scenario B – All eight communities in the region cooperate on a consolidated solid waste management program for all municipally collected solid waste – Variables • New Regional Landfill • Dispose at out-of-region Landfill • WTE (with and without, expand and /or replace) 10 Session 9 Scenarios Descriptions • Scenario C – All eight communities go their separate ways and contract for disposal – Virginia Beach continues to operate its landfill through 2022, contracts for disposal after 2022 – Decommission RDF WTE Facility 11 Session 9 Scenarios Descriptions • Scenario D – The City of Franklin, Isle of Wight County, and Southampton County align to provide recycling and disposal services – The Cities of Chesapeake, Norfolk, Portsmouth, Suffolk, and Virginia Beach align to provide same – Variables • Smaller communities contract for disposal • Same as Scenario A for larger communities 12 Session 9 Scenarios Descriptions • Scenario E – The City of Virginia Beach independently provides for municipal recycling and municipally and commercially collected solid waste disposal services – Other communities align to provide recycling and municipally and commercially collected solid waste disposal services – Variables • Similar to Scenario A 13 Session 9 Landfill • Options considered: – Siting a new publically-owned and operated facility in Region – Contracting with out-of-region landfill for disposal. – Transfer via road haul (rail haul an option depending on final location of facility) 14 Session 9 Waste-to-Energy Options • Expanding, adding an additional 2,000 tpd mass burn WTE Facility • Replacing existing RDF WTE Facility with new 3,000 tpd mass burn WTE Facility • Operating without WTE 15 Session 9 Host Fee • Added host fees for – Landfill – WTE facility • Amount can be easily varied in model 16 Session 9 Current Cost Structure • SPSA costs used in pro forma analysis for: – Administration – Environmental – Transfer Station – Recycling – WTE • City of Virginia Beach 17 Session 9 Financial Metrics • 30-year Net Present Value Analysis 18 Session 9 Net Present Value • Present Value of a cash flow at a given discount interest rate • Allows for comparison of complex alternatives 1 2 3 4 5 Payments, $ 0 19 6 7 8 9 10 Years Session 9 Financial Metrics • 30-year Net Present Value Analysis • System Rate Analysis – $/Total Tons per year – NPV/Total Tons during planning period Total Tons = MSW + YW + Recyclables 20 Session 9 Sensitivity Analysis • Transportation Rate • Location of New Regional Landfill • CPI and Fuel Escalation Factors • Out of Area Tip Fee 21 Session 9 Pro Forma Analysis • Expanding WTE capacity resulted in the highest NPV costs • Cooperating appears to provide longterm value, although in the early years some savings could be realized by individual member communities • Host fees could provide substantial benefit to community hosting landfill and WTE facility 22 Session 9 Pro Forma Analysis • City of Virginia Beach has most flexibility with respect to disposal options and ability to control costs, at least in the short-term and possibly long-term depending on fate of permitting efforts at Landfill No. 2 23 Session 9 Comparative Analysis 2008 Dollars $2,500,000 $90 $80 $2,000,000 $70 $60 $1,500,000 $50 $40 $1,000,000 $30 $20 $500,000 $10 $0 $0 1.1 1.2 2.2 1.3 2.1 1.4 2.3 2.4 A Scenarios - All Region Members Cooperate to Scenario No. Manage Solid Waste System Comparative Net Present Value Results ($1,000) First Year System Rate, $/ton 24 Session 9 Pro Forma Results • Siting a new Regional Landfill a significant factor to control costs – provided lowest NPV costs • Regional landfill only scenario (without WTE) lowest cost NPV • Transport and disposal in out-of-region landfill had highest NPV costs 25 Session 9 Pro Forma Results • If contract out for disposal, operating the WTE facility reduces NPV costs compared to eliminating WTE • Operating system with existing WTE facility generally 5 to 8 percent higher costs (assuming Regional Landfill), but allows for significant volume reduction and energy recovery 26 Session 9 Sensitivity Analysis • The further a new regional landfill is located, the more competitive the WTE and contracting out alternatives become • Significant discounts on tip fees and transportation needed to make contracting out disposal cost effective • Reducing escalation factors favors WTE operations, but ranking remain similar 27 Session 9 Cooperation - Pros • Various systems already in place • More efficient development of facilities • Current shortcomings are resolvable • Some joint responsibilities after 2018 • Cost efficiencies, especially relating to siting • • • • a new regional landfill Economies of scale Leveraged purchasing Solid waste planning Achievement of recycling goals 28 Session 9 Cooperation - Cons • Loss of autonomy and control • Reduced flexibility to respond to changes in market conditions • Increased organizational and governance complexity • Interplay of regional politics in implementation of Authority’s mission 29 Session 9 Institutional Recommendations • Scope and function dependent on decision regarding ownership and operation of a regional landfill and the RDF WTE Facility and Mission of the organization • Proportional representation • Board membership qualifications • Debt management • System funding approach 30 Session 9 Remaining Disposal Capacity • SPSA’s Current Regional Landfill – Should confirm expansion potential – Limited unless wetlands issue can be resolved • City of Virginia Beach Landfill No. 2 – Expansion potential exists • Out-of-Region Disposal Capacity – Capacity available through much of 30year planning, but additional capacity would need to be permitted 31 Session 9 Landfill • New Regional Landfill should be sited • Siting approaches – Region performs siting studies, purchases land, permits, and develops site – RFP process for privates to site, permit, and then sell back to Region, with provision for life-of-site operations contract • Schedule tight 32 Session 9 Waste-to-Energy • RDF WTE Facility a valuable asset to the community – Volume reduction – Energy recovery – Hedge against increased transportation costs • Can be maintained and upgraded to serve Region during planning period • Facility extenstion study recommended 33 Session 9 Role of Privates • Collection • Recycling • Transportation • Municipal solid waste and construction, demolition and debris disposal 34 Session 9 Private Sector Contracting • Advantages – Defined service levels and costs – Competitive bidding assures best pricing – Reduced number government employees, equipment, and overhead – Perceived more businesslike approach – Optimal location of facilities – Less political interference – More responsive to market changes 35 Session 9 Private Sector Contracting • Disadvantages – Perceived loss of control by public – Some argue more costly because of profit and taxes included in contracts – Not as responsive to changes in community needs – Higher potential for litigation to resolve issues 36 Session 9 Other Factors Considered • Conversion technologies • Yard waste • Recycling • Rail haul • Transfer station network • Regional disposal asset ownership 37 Session 9 Solid Waste Conversion Technologies Technology Process Output Output Uses Thermal Incineration (waste-toenergy WTE) Steam Power Thermal Gasification, Pyrolysis, Autoclave, etc. Syngas Power / Chemical feedstock Biological Anaerobic Digestion, Aerobic Digestion Compost, Biogas Soil amendment / Power BioChemical Hydrolysis Ethanol Biofuel 38 Session 9 ConversionTechnologies • Large scale implementation of most alternative conversion technologies not proven • Region may wish to consider pilot programs for such things as organics diversion • Of conversion technologies evaluated, mass burn incineration most demonstrated and feasible 39 Session 9 Yard Waste • Should be managed separately from MSW and not disposed in landfill • Process and recover for beneficial use 40 Session 9 Rail Haul • Viable transportation option • Should be evaluated in more detail once disposal option and location determined 41 Session 9 Transfer Station Network • Critical to solid waste system • Long-term viability, status, and capacity of each transfer station should be evaluated • Optimization study recommended 42 Session 9 Recycling • Provisions for municipal recycling critical • Service could be administered collectively or independently (as is case now) • Programs may vary depending on demographics and geography 43 Session 9 System Funding • Several options evaluated • Current tip fee model works at cross purposes with goal of resource conservation and recovery • Consider a waste generation fee approach • Further study needed to assess feasibility of implementing throughout Region 44 Recommendations and Next Steps Session 9 • Review findings of study • Present study to City and County Councils and Supervisors, respectively 45 Recommendations and Next Steps Session 9 • Develop consensus on mission and goals for the Region • Make decision on Regional cooperation and revise governance, policies, board member qualifications, and policies for debt management • Evaluate alternative funding approach 46 Session 9 Recommendations and Next Steps • Maintain key assets • Proceed with siting a new Regional Landfill and study of expansion at current landfill • Resolve sale of RDF WTE – If maintain ownership, conduct life extension study – If sell, revisit pro forma analysis, conclusions and recommendations 47 Session 9 HRPDC Staff & Committee Recommended Actions • Accept the report • Refer report to participating localities and SPSA for consideration • Request comments by Jan. 20, 2009 • Await finalization of SPSA negotiations on sale of RDF WTE Facility 48