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HomeMy WebLinkAbout2001-04-10 - AGENDA REPORTS - DIAPER RECYCLING PROGRAM (2)UNFINISHED BUSINESS DATE: SUBJECT: DEPARTMENT: CITY OF SANTA CLARITA AGENDA REPORT City Manager Appro, April 10, 2001 Item to be presented DIAPER RECYCLING PROGRAM PILOT UPDATE Planning & Building Services RECOMMENDED ACTION Direct staff to reject the proposal to purchase a Knowaste Diaper direct staff not to implement the proposed diaper recycling direct P Recycling Processor and P and processing costs. Y g pilot due to significant unfunded BACKGROUND On March 13, the Council approved the negotiated franchise modification package with the haulers. Included in the motion to approve the franchise modification staff to further examine a partnership for the pilot between the Cit and Knowaste separately ,Council directed meetin y and report back to the Council at the y' franchised haulers, g. Some members of the Council also expressed doubt as to the feasibility of the Program, as well as concerns regarding the costs to implement the ro and citywide basis. The issues to be examined included funding for one-time startup during program on both a pilot the pilot, the collection methodology, location of the responsibility of the materials collected costs determination of measures through co , Public education Processor, processing gh which to q and outreach during the pilot, and quantify the success of the pilot. Staff met with representatives from Consolidated, and Knowaste present on Blue BarreUSanta determine how to proceed. The results of he meeting9 to discuss the elements of Clarita De posal, Atlas are as follows: Pilot and to Duration of the ilot. The group minimum of six months. a greed that the pilot should be implemented for a The artici ation tar et was established at 500 - Clarilect neighbences orhoods or developments believed Ito repr50 res'esent the e haulers would areas household in composition to implement the pilot. The goal would be to select areas from which the haulers, Cit average Santa obtain approximately 500 — 750 residences participating. agree that it is reasonable to both the east and west sides of the City. participatin g The pilot area will test The --pilot wm,l,a ..,,.,A . _ _ measure theage uo1 C artici ation and set out. P diaper barrel.peOf those households that the Pilot area Leat elects to anticipation would participate and receive a Participate, the pilot would also Agenda Item : /s track those that actually set material out on a weekly basis, as well as the tonnage collected in total from all of the set -out barrels. The intent would be to quantify and project the actual amount of material that would be collected citywide. Definition of a "successful" ilot and the decision to im lenient cit citywide. The was not able to establish the specific definitions of success, but did determine that quantifiable targets would have to be met in tonnage, the set -out rate group Participation rate to suggest that the programg ' and the City would be responsible for preparintheanalysis of the datd be a and the haulers and Knowaste would have the right to review and provide input. ed Out Yw'de. The Sc o a of the artnershi The pilot partnership will be defined as the financial or in- kind contribution and delegation of responsibility for the pilot as follows: o Haulers - Responsible for provision and distribution of diaper containers, collection of materials (including acquisition of necessary trucks), transport of materials to the processing facility, and payment of "comparable" tipping fees at the processor as would have been paid at the landfill for disposed waste. o City - $250,000 towards one-time equipment acquisition and startup funding, design and implementation portion of the funding for tof an outreach program to the pilot area and a he outreach, and identifying a location to house the diaper processor. o State Assemblyman George Runner - $250,00o acquisition and startup funding (to becontractually actually obligated by June 30, 2001). o Kno�te — At this time, Knowaste has not committed any funding for any component of the partnership pilot. Knowaste has expressed a willingness to discuss sharing the expenses for the public outreach in the pilot area, and willingness to discuss funding the net difference between tipping fees at the Processor and tipping fees at the landfill for all tonnage disposed during the During the meeting, Knowaste expressed their interest in exploring the housing the processor at the BLT Recycling Center in Burbank (City of Burbank -owned facilit possibility of Y)• Knowaste informed staff and the haulers that the potential processing site was pursued due to the following concerns: Quality Papers was no longer considered as a Possible location, the hauler MRF is between two and four years out in the future, the City has not yet identified an alternative (existing MRF -like facility) location within the City, and costs for the program/pilot would be prohibitive if the diaper housed at a standalone facility. In addition processor were to be would presentedthencommhe unities that housing the processor in a regionally central location would afford other communities with a better Opportunity to participate and share in the costs of the program. Knowaste informed the City and the haulers that they had begun approaching neighboring municipalities with the program and the proposed Burbank location; however, no other municipalities have confirmed their interest in participating as of the writing of this agenda report. Staff at the City of Burbank informed City staff that there is not likely to be room at the facility to house the diaper processor, and that the City isn't parti Processor at their location. cularly interested in housing the In follow-up to the meeting on March 19, staff and the haulers met with representatives from BLT recycling to tour the facility in Burbank and information to assess whether the location could be accepted as an alternative temporary more t mporary g location for the diaper processor. Staff was not able to identify the responsible party for the identified funding gap. It is not clear what the City of Burbank's permitting process would be or whether or not the operator of this Burbank facility was on board with the proposal Yet- They expressed a need to do more analysis. Knowaste has not yet offered any hard financial contribution to this project. They have, however, offered lobb more money from the state to cover one-time costs and to develop a long-term ademption fee. These discussions are only preliminary at this point. Upon receipt of the proposal to house the diaper processor at a facility outside the Santa Clarita Valley, staff identified many issues that would need to be addressed prior to agreeing to the location. Some of the issues to resolve include the portability of the processor at a later date, utilization of General Fund and state funding respective districts, cost sharing with other feasibility of hauling waste to Burbank outside their Participating municipalities, financial rrect idenfiction of Santa Clta pilot waste (measures to ensure that non Santa Clarita waste is not incorrectly at nbuted to the City. In addition, there is a possibility that other cities will wait to observe the success or failure of the program, thus leaving Santa Clarita with all of the startup costs and risks. Lastly, the City of Burbank charges a 16% franchise fee for waste services, which is included in the monthly bill. The revenue collected from the fee pays for the costs to run an integrated waste management program (self -collection, recycling services, administration, and disposal services). It should also be determined whether Santa Clarita would pay Burbank's 16% franchise fee for the use of the BLT Recycling facility. Upon acquisition of the processor, the equipment will belong to the City and the $500,000 acquisition cost is non-refundable. Pursuant to the original proposal, Knowaste guarantees the technology for two years and will provide maintenance during that period. However, if the pilot does not meet the targets established to quantify success and the City elects to terminate the pilot, the City will maintain ownership of the equipment. If the processor must be placed at a stand-alone location for the pilot, total startup costs will range from an estimated $322,828 to $927,323 over the $500,000 allocated currently between the City and the State. The startup -funding ied as funding for startup utilities and connections, additional necessary equipment, and agap can belstructure to house the facility if it is placed at a stand-alone facility. location that currently offers recycling services, and/or has a sewer connection that may be y. If the processor can be housed at a estimate the utilized, the costs are likely to be significantly less. However, staff cannot accurately absorb the cot top ovideup sandtil the site is distribute containers (approximately pilot, the haulers will for the 15 cubic ton collection vehicles, and a portion of the tipping$5/container), the cost Processor (estimated at $28/ton). fees at the diaper The diaper study prepared by SCS Engines estimated that tipping fees would be an estimated $40/ton. Therefore, the minim and what the haulers will a tipping fee difference between the actual fee l this rate will increase depending on whether the proc ssor would alsoneed to amortizerand recover startup costs indicated above. No agreement has been reached on who will have or share responsibility for the net difference in tipping fees. Knowaste acknowledges that supplemental funding will be necessary to fully implement the program, and informed staff that they would consider pursuing additional grant funding. In a previous memo to Council dated January 18, 2001, staff reported that three cities in Canada participated in a pilot program with Knowaste, that the technology worked well, and that ultimately all contracts with Knowaste were cancelled due to high program costs (up to $150/ton tipping fees). ALTERNATIVE ACTIONS 1. Council may direct staff to further refine the scope of the partnership, develop pilot "success" benchmarks, execute an MOU with Knowaste and the haulers, determine the exact location of the processor, and initiate the pilot program without any additional funding from the City. 2. Other action as determined by Council. FISCAL Funds in the amount of $500,000 are currently budgeted for startup and acquisition of the Processor ($250,000 in 3811-8021 and $250,000 in 0001-6714). If no contract or agreement on how the program will be implemented has been obtained by June 30, the grant provided by State Assemblyman George Runner must be returned to the State's General Fund. Similarly, if no agreement or contract is reached by June 30, the $250,000 currently allocated in Environmental Services must also be returned to the General Fund. The grant received from the state was restricted for acquisition of a diaper recycling processor only, and was conditioned upon not increasing rates to residents to offer the program. Thus, any difference in funding must be met by the haulers, Knowaste (or other processor), the City (General Fund) or through a combination of funding strategies. JJL:JAF:CH S:/PBS/F0SSELMAN/E&Diaper/4-10 diaper AR.doc