Regional Recycling

Project Goals

ACCOMPLISHMENTS TO DATE

The Council requested and received grant funds from the NC Division of Pollution Prevention and Environmental Assistance (DPPEA), and the USDA-Rural Utilities Service's Water and Environmental Programs, to support the development of the project.

 With funding from the USDA-Rural Utilities Service's Rural Development Division, the Council is working with local governments and MRF providers to secure a processing plant within the region.

 With these funds we have:

• Organized a workgroup with representatives from member governments throughout the region

• Surveyed MRFs throughout the state and studied those with similar recycling demographics to our region

• Performed a Region B recycling contract survey of member governments (updated Fall 2002)

• Developed a virtual spreadsheet, public sector, Regional Material Recovery Facility (MRF) model that demonstrates how we can process the region's recyclables stream for the next 10 years under various scenarios

• Drafted a request for proposals (RFP) to solicit and compare private sector offers to provide a similar region wide service against the public model

• Published a full report of our work that is available by contacting the staff

• Solicited interest from private sector service providers

• Identified sites for a MRF

• Currently working with the Region's solid waste stakeholders to negotiate deals with private sector MRF providers.

A Regional materials recovery facility model for Buncombe, Henderson, Madison and Transylvania Counties

Executive Summary

Background and Purpose

At the request of the Land-of-Sky Regional Council Board, our staff have been leading a regional process to maximize benefits to the area’s various recycling programs via regionalization. The logic guiding this process is that if member governments aggregate the vast majority of common recycled materials (glass, plastic, paper, cardboard, cans, etc.) into one central location for processing and shipment to end markets, economies of scale can be realized that will:

• Allow local programs to realize the highest commodity prices for recycled materials, thus maximizing return to each local program and increasing their economic viability

• Expand the region’s options for simplified collection and delivery of recycled materials

• Create stability in local programs by utilizing a reliable, consistent, and long-term recyclable materials acceptance outlet

• Promote increased recycling program participation throughout Region B

• Allow for expansion of comprehensive materials acceptance in programs region wide

• Strategically place our local governments in a stronger position to negotiate better and more consistent recycling service contracts with private sector providers

Project Scope

The research and planning process on this project was performed cooperatively by a group of the region’s solid waste officials, managers, elected officials, NC Division of Pollution Prevention & Environmental Assistance’s waste reduction experts, planners, and others. The project includes:

• Two regional surveys: one on local recycling program operations & another on local government recycling contract obligations

• A detailed analysis of the recycling stream for Region B, including its market financial value

• A state survey of existing materials recovery facilities

• Case studies of selected materials recovery facilities

• Materials recovery facility operational systems research, including equipment quotations and analysis

• The development of a 10-year financial model of a public sector Region B materials recovery facility to be used as part of a "base case" to compare both to current county and municipal recycling operations and to private sector bids

• An analysis of major factors influencing the financial viability of the public sector model

• A list of major issues that must be addressed to implement the public sector model

• A draft request for proposals (RFP) for issuance to the private sector for comparison against the public model

Results to Date

The results of this project are encouraging. The base case model suggests that strong economic and recycling program benefits can be realized by working together as a region to realize economies of scale through cooperative processing and marketing of recyclable materials. The model also suggests that the other project goals listed above, such as improved program stability, collection options, participation rates and strategic position can be enhanced through regionalization.

The authors have attempted to make financial projections in this report as accurate as possible while maintaining a conservative bias. The public sector material recovery facility model is based upon a ten-year "life cycle" (one year of construction and nine years of operation). Maximum capitalization cost is $6.32 million, of which nearly $3.8 million is land and building purchase. Bond expenses and debt service for ten-year revenue bond financing would increase the total capital costs to just over $8.2 million. Materials sales revenues during the nine years of operation are estimated to be in excess of $41 million. Ten-year total expenses, including capitalization, debt financing costs and O&M, are estimated at approximately $24 million. Projected revenues less expenses to local governments and the private sector recycling firms are thus over $17 million. The model would create a minimum of 17 new jobs paying a total of more than $370,000 in salaries and benefits in the first year of operation. The facility is expected to divert a minimum of 437,000 tons of materials over the nine-year operating period.

Recommended Next Steps

The regional recycling group intended the public sector materials recovery facility model to serve as part of a "base case" against which the local governments could compare the following:

• The cost of their current recycling systems

• The cost of any private sector bids received as a result of issuing an RFP

Other parts of the "base case" model that have not yet been developed are those which are unique to each local government in the region, and which represent other components of their total recycling cost. These are:

• The timing and cost of each local government terminating its current recycling contract with its private sector provider to join the public sector model;

• The local government's cost of collecting, pre-processing, and delivering the recyclables to the public sector MRF;

The work group that developed the public sector MRF model recommends the following "next steps" to the full regional recycling group:

1. Review the MRF spreadsheet model, and suggest any "what-if" scenarios the group would like to model;

2. Develop item a) above for each local government (cost of its current recycling system)

3. Decide how to modify the RFP developed in 1999 to elicit bids for regional private sector recycling services that will be comparable to the cost of current systems and to the public sector model

4. Begin to familiarize your governing boards with this project, and solicit their feedback and questions to bring to the group.

5. Each jurisdiction commit to consistently being represented on the regional group.