HomeMy WebLinkAboutAgenda - 11-04-1996 - 8k 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
Action Agenda
Item No. 8—k
ACTION AGENDA ITEM ABSTRACT
Meeting Date: November 4, 1996
SUBJECT: Landfill Tipping Fee Revisions
DEPARTMENT: Public Works PUBLIC HEARING: YES: NO: X
BUDGET AMENDMENT: YES: NO: X
ATTACHMENT(S): INFORMATION CONTACT:
10/23/96 Memo from County/Town Managers Wilbert McAdoo, ext 2625
TELEPHONE NUMBERS:
Hillsborough -732-8181
Chapel Hill -968-4501
Durham -688-7331
Mebane -227-2031
PURPOSE:. To approve a change to the tipping fee schedule for solid waste disposal at the Orange
Regional Landfill.
BACKGROUND: During recent years,the Orange Regional Landfill has typically received for
disposal over 30,000 tons of coal ash from the UNC Power Plant annually. A sizable portion of the
Landfill's annual revenue stream has been derived from this disposal arrangement. Recently, UNC has
reached agreement with another operator to receive its coal ash, beginning January 1, 1997.
The Landfill Fund, administered by the Town of Chapel Hill on behalf of Carrboro, Chapel Hill, and
Orange County, expects a revenue shortfall of approximately $357,000 for FY 1996-97 as a result of
UNC's no longer delivering coal ash for disposal. The attached memorandum provides additional
background on this situation, and the recommendations from the County and Town Managers to the
Landfill Owners' Group(LOG)about how to compensate for the anticipated shortfall.
At its meeting on October 23, 1996, the LOG approved a recommendation to the three owning
governing boards that this shortfall be addressed by the following combination of approaches: 1) use
of$235,000 in undesignated Landfill fund balance; 2) savings of$17,000 by eliminating publication
of the Spring 1997 issue of the WasteLines newsletter; and 3) additional revenue of$105,000 that
would be generated by a$2.00 per ton increase in the tipping fees for mixed solid waste and
construction& demolition debris, effective December 1, 1996. If approved,these fees would increase
from$31.00 to $33.00 per ton.
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Under the agreement between the three owning governments, all changes to landfill fees must be
approved by all three governing boards before they can be implemented. During the remaining seven
months of FYI 996-97, Orange County's expected tonnage for disposal at the landfill is in the range of
6,000 - 8,000 tons. If all three governing boards approve the tipping fee increase, this could lead to
unanticipated additional solid waste disposal costs of$12,000 - $16,000. It is possible that this
additional cost may be able to be absorbed in the Public Works budget, so no appropriation from
contingency funds is recommended at this time. However, it is possible in view of higher than
anticipated tonnages during the first part of the fiscal year(e.g. food spoilage from Hurricane Fran),
that staff may have to recommend a contingency appropriation later on in the fiscal year to cover the
increased costs of solid waste disposal for the balance of FY 1996-97.
RECOMMENDATION(S): The Manager recommends that the Board approve the increase in the
mixed solid waste and construction& demolition debris tipping fees from$31.00 per ton to $33.00 per
ton, effective December 1, 1996.
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Post-it"Fax Mote 7671
To 5 S ii; From M f�va
CoJOW. CO.
m Phone r Phony r
TO: Lartdm owners Group am r Fax
From Robert Morgan,Carrbory Town M8nev..
Calvin Horton,Chapel Hill Town Manager
Eric Swanson,Hillsborough Town Manager
John Liralc,Orange County ty Manager
t October 23. 1995
IML Landfill Fund Anticipated Revenue Deficit Related to Coal Ash
At them September 11, 1996, meeting. the Landfill Owners Group requested that local gavemmerrt
managers meet to develop alternatives for overcoming an armed revenue shortfall in the landfill
AM. The shortfall is due to the University's planned diversion of coal ash from the Orange Regional
Landfill. This memorandum details the financial impact of ttus action on the Landfill lured, presents
several alterna fives for overcoming the resulting revenue deficit, and presents the managers.
I SRI
9adir�oe�nd
This past spring,the University of North Carolina sought proposals on aitematives to landMI disposal
of dwk coal ash. Recently,the University announced Vial they had awarded a 1 year colrad(with W
1 year options) to Reuse Technology Inc, of Kennesaw, Georgm Beginning January 1, 1997, the
University will no longer deliver ash to the Orange Regional Landfill.
The timing of the ctxvb t award aroxmcernent was mfotxnate given the recent approval by the
State for benteAdal ash rouse at the Ian M. and its occurrence at the start of a new fiscal year.
Although the Owners Group was aware of Me potential for the University to divert t1m ash,theca was
no way to detem*m U they world actually award a contract. Thus,they adapted the 1996-97 ftxul
year t.antdffil Budget Inclut"prgeded mvmws for coat ash.
viscumdm
The estbnated finances impact on the Landfill Fund for 1996.97 is as follows:
Remwe Tormem
Original Budget Estirna<e $W'000 38,000
Revised Estir6e $289,000 17,000
Revenue ShoAfaN $357,000 21,000
The revised esbnete amm mes the January 1, 1997, art-off of deliveries and takes into account a
noticeable reduction in oust ash In the 1" quarter of this fiscal year.
The options for madcug up the arrant year$357,000 revenue sftodfall are:
• using undesignaded or designated landfill reserves,
raising the tipping fee cmid year,
ur[ ti Memorandum
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Ccngxna*w OfAbove Ondans
At recent LarOM Owners Group meetings, the members have expressed an interest in utilizing a
combination of larKW reserves and a tipping fee Increase to overcome the revenue defer. The
following table shows the range of options assuming an Wmase in tipping fees on December 1, 1997.
Tip Fee ftrMte EAL Tip Fee Rev From Fund Bdsnoe TOW Rabe" Rom" t I In 'g l 'I!
10 1 ip I I Find Gdonco%
Find Bdwza of
$D ton = 557.03 31122M 3.0%
$1 PWIM 362'DO x704su :367 S1e3. 43%
s2 ton :106,000 3�5ZOOD 5�7,0� ZM7.>a?9 5.7%
33 tan 5157" s199.MD 5337.00D 327aA M 7.1%
M per ton I S210A00 147= $W.00D 3322M 8.59E
i7 ton 1 3367.MD 10. W— M.420 128%
The table assumes a December 1, 19%. I crease;a January 1, 1997,Increase would result in 57,500
less revenue for each$1 per ton increase. If tipping fees increase on December 1,the fiscal year
1996-97 cost to local govemments for each$1 per ton increase Ir the tipping fee would be as foligm
(based on 1985.96 tonnage):
GOMM&* $1 hrxaese $2 ftAM se $3#x nmm $4#resew .
Cant )= $ 4,000 3 8,000 $12.000 $16,000
Chapel HE $13,300 $26,600 $39.900 $53,200
HWslX upit S 2.500 S 5,000 S 7,500 $10,000
Orange County $ 6,000 $12,000 $18,000 $24,000
Rommmu datlon
In order to overoorne the projected revenue deficit.we recommend utilizing a cornbira ion of tipping
fee ina+eases.program ctds and urdesignated hM balance as maws:
ROM Reconwmx ed Ch RdKW
Tipping t=ee Increases 82Ron Wood SM Waste $66,500
effective 12-1- $$Ron Construction Wemoltiion 338.500
Program Reductions ENT*u to Spring Newsletter $17,000
Etirrtinate Food Waste Program $17,000 Ar-O
Fund Balance (J9e Fund Balance as Revenue $218.000 "Ad
TOTAL $357.000
The m"Ok" wWOdWm ted fund balance, after using the $218,000, is esdmded at $251,929. or
6.896 of the brAN total apanibg budget We believe the$2 per ton Upping fee irtdesse would allow
the !anal$$! to rw.m i. compsltive wNh odw disposal-AwMdes and M* the fiscal kWW on locxt
Bove rin wd and p k#de hmulers. However,we note that for Ing year 1997-98,the absence of ash
and the remaining undesigniOd fiord balance w7 likely Mine the Owners Croup to consider
addibor>al tipping In ink,program reductions,or other potential soi ncos of revenue.
OCT-28-1996 09:39 FROM ORANGE CTY PUBLIC WKS TO 3004
' �ui[sraD memorandum 5
• expenditure andfor program reductions,
• a owthiatfon of the above. -
�ndiq Asar=—daslar7atad and undswa fflOd
As of June 30, 1996,the LandtDI Fund had andesignated reserves of$469,929. The landfii's budget
for operations in 199&97 is$3,806.WO. Undesignated fund balance is about 12.3%of the owational
budget We have typically bed to maintain around 10% undesignated hAW balance. In addition,
designated reserve funds khckude the fallowing:
• Fukm Land Acquisitions and Construction Reserve $ 652,500
• Eubanks Construction Reserve $1,068,500
• Equipment Reserve $ 121,900
The reserve for Eubanks Corrstruc ion will be needed in fiscal year 1997-96 for mmuction of the
ne)d phase of the la WM. The equipment reserve is necessary for ongoing repiacemerd of lWWQ
heavy madwmy. The loge land acquisitions and won reserve may be necessary to take
advantage of oppwtun"to purchase land. to 1995-96,the landfill was able to purchase time tracts
of land sooent to the cement landfill using no reserve. Please we the attached sheet for a detailed
bresi down of landfill fund aWky.
Iha*-Ma FNCt '
Cwtent IW*year 1996.97 tipping fees and wed tonnages are as bWws:
M Tip Fee Est Tars Esbi rimW l4ievenr�e
Mbced Sold Waste $31.000ton 57,0W $1.787,000
Construction&Demolition $31.00/ton 33.000 $1,023,000
A December 1,1M,Upping fee increase of$8.80 would make up the enthe revenue deficit ass<mhing
no reduction in tonnage due to price increase. However,we would anticipate a signtlicant decrease in
non govern nentd waste, especially C&D, deWwW to the hnffA with such a drarndic Up fee
increase. Gove"mumtal waste currently is only 48%of the waste show exCludkhg ash.
Forconqw1w a purposes the Upping fees for neiphb t counties are as follows:
S Miked Vito Fee
Alarnhanoe County $30.87 X2.00 tQ$30.87(dWxxg g upon category)
Chatham County $30.42 $30.42
Druharn County $39.50 $24.00
In addition!o these pudic Paco" there are several privately run fads for the disposal of irWW
debris or nubble that is a subgakWy of rrhbasd construction and dernolitiorh material.
The diversion d cool ash *OM the larr 1 WE not result in any SoriffieWit Cost savings in ka KNM
opefatforhs. qowkwt w0anditure savklgs would require redructiorts in recydirg proW*m orr the
elimi orlon of major projects. The t an=Owners Group has not apeowd an krtereal in reducing
swma in order to make up the deficit; however, we discussed potential proMa n cuts. Vve hove
r+eoonvnerhded program cuts totift $34.000. These khckrde e6nkm Pion of 1 ne"sletih r issue and the
furhdirhg for the proposed food waste collection F roam for fiscal year 1996-97.
TOTAL P.03