Memorandum To: Frank Gifford, Director, Jefferson County Department of Public Works Ken Clow, Director, City of Port Townsend Department of Public Works From: Al Cairns, Solid Waste Coordinator, Jefferson County Department of Public Works John Merchant, Operations Manager, City of Port Townsend Department of Public Works Date: May 21, 2007 Re: Yard Waste Costs to City and County City/County Yard Waste Issue Paper Executive summary Under an Interlocal Government Agreement between the City of Port Townsend and Jefferson County, signed and dated October 8 th, 1992, the City manages a Biosolids Composting Facility at the County Transfer Station Facility. The facility utilizes yard waste (which includes residential yard waste, commercial landscaping waste and large-scale land clearing waste) as feedstock for its biosolids operation. County and City residents generate yard waste brought to the facility on a roughly equal basis. The amount of yard waste materials being received has exceeded that needed for the composting facility operation since about 1999 and has continued to rise until 2006. In 2006, 43% of all transactions and 35% of total tonnages recorded at the scale facility were for yard waste. This has created a financial burden for the County in terms of accounting, scale facility maintenance and upgrading costs and for the City in terms of material handling and grinding costs. Responsibility for addressing the issue is shared by City and County staff due to the nature of the Interlocal Government Agreement and because yard waste is being generated by a nearly equal split of city and county residents. In accordance with the Agreement, there has been no fee charged by the City initially for yard waste received at the facility. At the time of the facility s start-up, City and County residents were encouraged to bring yard waste to the facility. The Agreement does not prohibit establishing a fee. The Agreement does mandate that the City and County must agree upon a proposed fee structure if a fee is established. The County and City Public Works staff suggests that a fee be charged for the dumping of yard waste at the Compost Facility in order to offset these expenses and to encourage a reduction in yard waste dumping. 1
In order to analyze potential fee schedules the following goals and/or outcomes were identified by County and City staff: Obtain revenue to offset the City s cost of handling and grinding yard waste. Obtain a revenue share from each yard waste transaction to contribute to the anticipated costs of upgrading and operating the county s scale facility and operation to handle increasing number of transactions. Reduce the gross tons of yard waste brought to the biosolids facility each month by encouraging alternative methods of disposal (e.g. home composting, on-site grinding and use, or private enterprise composting operations). Reduce the number of customers passing through the scale facility and traffic congestion around the transfer station by encouraging consolidation of small yard waste loads and/or alternative methods of disposal. Encourage a shift in yard waste handling and composting to private business, which will require a tip fee sufficient to create a level playing field. Several alternative fee and revenue distribution models structures have been analyzed and are listed below: A tonnage fee with a minimum charge A tonnage fee on commercial loads only A tonnage fee on all loads over a specified minimum weight A per transaction fee Discontinue accepting yard waste County and City staff propose that a tonnage fee with a minimum charge would be the best means of achieving an equitable City/County split of revenues that would be used to offset operational costs associated with managing the excessive inflow of yard waste. This fee schedule is favored because it models the fee structure for solid waste. The corresponding spreadsheet shows the staff-recommended fee schedule and distribution of revenue as Model A and shows two other models for comparison. The County s current cost analysis shows that a rate schedule of a $5 per load minimum up to 200 pounds and $48 per ton should cover the County s and City s yard waste management costs as of 2007. 2
Background The Port Townsend Biosolids Composting Division is managed by the City s wastewater utility. It began operation in December 1993 as the repository for the biosolids from the City s wastewater treatment facility (WWTF). The facility is responsible for further treatment of biosolids from the (WWTF) as well as accepting septage from the pumping of septic tanks and composting these two waste streams with yard waste to produce a Class A exceptional quality compost as defined in the EPA 40 CFR 503 and WAC 173-308 regulations for beneficial use. The facility has become an important component of waste reduction efforts in Jefferson County and of proper waste management (e.g. biosolids, septage and yard waste). Because the City accepts septage from County residents, the City receives use of its site at the Jefferson County Waste Management site rent-free. The mission of the composting facility is to: Provide a method for recycling biosolids from the City s wastewater treatment facility. Provide a site for handling septage wastes from the Olympic Peninsula (mainly Jefferson County). Provide a site for disposal of yard wastes that are needed in the compost operation and thereby reduce the amount of waste going into the County s transfer station and eventually landfill. Generate additional income to help offset the cost of running the facility by charging for waste handling and selling of the compost product. Provide an environmental service to help reduce the amount of waste material going to landfills by continuing to explore opportunities to accept other wastes that may be compatible with the compost facility operations. Treat stormwater runoff and septage liquids in an environmentally friendly manner and in accordance with local, state, and federal regulations. Work cooperatively with local, state and federal agencies so that all benefit from the facility. The composting facility has received an excess of yard waste needed for its operation since 1999. Based on the mass balance sheet, the facility was designed to process approximately 8,800 cubic yards of fresh yard waste materials annually at full capacity. The 2006 yard waste quantity coming into the facility was 6,728 tons. Assuming a density of 600 lbs. per cubic yard there was approximately 22,426 cubic yards received or nearly triple the designed facility capacity. City Costs and Issues Associated with Yard Waste Management: The following is a break down of the City s costs to handle yard waste materials at the facility for the year 2006: Labor: 2006 direct labor cost was $142,389 (2 full time operators plus 25% of Operations Manager s time.) Yard waste cost allocation was 30% of total or $42,717. 3
Contracted Grinding: The volume of yard waste material being handled has outstripped the City-owned tub grinder s capacity. Material grinding is now done by Hermann Brothers of Port Angeles who operate a tub grinder of a much larger capacity. Material grinding provided by Hermann Brothers cost the City $50,324 for 2006. The estimated cost to process yard waste for 2006 was $113,400 or 11.66/ton. The estimated 2007 cost (assuming same tonnage as 2006) is $13.84/ton. These estimates do not include depreciation costs of facility, overhead costs or other operating expenses. Operations Time Allocation for 2006: The following percentage of time is currently being allocated to three main unit operations: Septage handling: 30%, which includes the SBR operation and maintenance (sampling, adjusting, etc.) Composting Operations: 40%, which includes compost pile building, monitoring piles, moving piles, screening compost, sampling compost and selling of compost. Yard Waste: 30%, which includes incoming yard waste pile maintenance, grinding, moving materials, and monitoring piles. County Costs and Issues Associated with Yard Waste Management: Yard waste constitutes a significant percentage of all materials moved over the County s scales. Yard waste accounted for 43 % of all materials for 2006. Scale attendant labor costs allocated to yard waste (fee collection and recording only), as a percentage of the total tonnage were $22,575 for 2006. The number of yard waste customers has a significant impact on traffic flow to and from the transfer station and on the scale facility operation. Scale replacement and upgrading as well as street approach revisions are a part of the Transfer Station Master Plan design process presently under way. The new design criteria are driven by the increasing number of transactions with yard waste transactions figuring prominently in this increase. The estimate for scale facility replacement and street approach revisions, in 2007 dollars, is $1,402,584.00. The City is using increasing site area for storing and processing yard waste and finished compost outside the area leased to the City. County staff is concerned about the fire liability of yard waste piles. There are a number of financial inequities built into the present arrangement: The County receives no revenue from the City to offset costs to the County associated with receiving yard waste at the facility. The County effectively subsidizes a City operational expense. Those expenses are met in part by county solid waste facility customers in the form of tipping fees for garbage disposal and by City utility ratepayers. 4
City residents pay for curbside yard waste pickup/disposal as part of their solid waste collection service. Additionally, hiding from property owners and developers the true cost of removing vegetative material encourages a general decline in environmental quality. As the Comprehensive Solid Waste Management Plan is presently being amended with Department of Ecology guidance, the overall direction of the County s solid waste management is turning toward a more proactive approach and will look to ways in which the County can influence a decline in solid waste generation. Any fee structure that does not show a true cost relationship between activity and fee will undermine this effort. Alternatives 1. A tonnage fee on commercial loads only No fee for pickups or a pickup/car and trailer combination under a specified weight. Commercial loads would include DM Disposal hauling curbside from the City. The strategy here is to charge for the large commercial loads that add high tonnage while still providing free disposal to the small landscaping businesses and private residences. Acts as a disincentive for large developers to generate yard waste (including material from land clearing.) Benefits small businesses. Benefits private residences. Begins to create a level playing field for private composting operations. Does not encourage alternative methods of disposal (e.g. home composting, on-site grinding and use, or private enterprise composting operations.) A fee schedule that requires the attendant to make judgment calls on either the weight and/or type of vehicle will require additional coding and significantly add to workload and attendant job stress level. Maintains financial subsidies and inherent inequities if transaction fee does not cover all City/County costs. A fee structure that does not show a true cost relationship between activity and fee, as above, will undermine the County s effort to begin to influence a per capita decline in solid waste generation. Hiding from yard waste generators the true cost of removing vegetative material if transaction fee does not cover all City/County costs encourages a general decline in the county s environmental quality. 2. A tonnage fee on all loads over a specified minimum weight This would maintain free disposal for the smaller loads regardless of source, but typically residential. Acts as a disincentive for large developers to generate yard waste (including material from land clearing.) 5
Benefits small businesses. Benefits private residences. Begins to create a level playing field for private composting operations. Does not encourage alternative methods of disposal (e.g. home composting, on-site grinding and use, or private enterprise composting operations.) Maintains financial subsidies and inherent inequities if transaction fee does not cover all City/County costs. A fee structure that does not show a true cost relationship between activity and fee, as above, will undermine the County s effort to begin to influence a per capita decline in solid waste generation. Hiding from yard waste generators the true cost of removing vegetative material if transaction fee does not cover all City/County costs encourages a general decline in the county s environmental quality.. 3. A tonnage fee with a minimum charge The minimum charge and weight limit would be set to discourage the small loads, with a goal to reduce the number of yard waste customers coming through the facility. Acts as a disincentive for large developers to generate yard waste (including material from land clearing.) Reduces the gross tons of yard waste brought to the biosolids facility each month by encouraging alternative methods of disposal (e.g. home composting, on-site grinding and use, or private enterprise composting operations). Reduces the number of customers passing through the scale facility and traffic congestion around the transfer station by encouraging consolidation of small yard waste loads and/or alternative methods of disposal. Creates an equitable fee arrangement on a pay-as-you-toss basis. Equitably covers County per transaction costs and City quantity of disposed material costs. Best models the current fee structure for solid waste disposal. Maintains financial subsidies and inherent inequities if transaction fee does not cover all City/County costs. A fee structure that does not show a true cost relationship between activity and fee, as above, will undermine the County s effort to begin to influence a per capita decline in solid waste generation. Hiding from yard waste generators the true cost of removing vegetative material if transaction fee does not cover all City/County costs encourages a general decline in the county s environmental quality.. 4. A per transaction fee This could be used in combination with other fees to cover fixed cost elements. 6
The accounting system can easily manage this fee schedule. Reduces the gross tons of yard waste brought to the biosolids facility each month and encourages alternative methods of disposal (e.g. home composting, on-site grinding and use, or private enterprise composting operations.) Begins to create a level playing field for private composting operations. Would need to be used in combination with other fees to cover fixed cost elements, which would add to accounting overhead. Costumer dissatisfaction. Maintains financial subsidies and inherent inequities if transaction fee does not cover all City/County costs. A fee structure that does not show a true cost relationship between activity and fee, as above, will undermine the County s effort to begin to influence a per capita decline in solid waste generation. Hiding from yard waste generators the true cost of removing vegetative material if transaction fee does not cover all City/County costs encourages a general decline in the county s environmental quality. Does not adequately address the cost of handling yard waste. 5. No yard waste accepted The City would purchase feedstock for its facility from an out-of-county source, which it can do for less money than it can grind and manage the yard waste now received. Eliminates overhead costs to City and County. Encourages a reduction in the generating of yard waste. Encourages alternative methods of disposal (e.g. home composting, on-site grinding and use, or private enterprise composting operations.) Creates a level playing field for private composting operations. Eliminates all hidden costs to County and City residents. Lessens demand on City and County surface water management. Enhances county s environmental health. Requires considerable shift in planning and operation for developers, arborists, landscapers and other commercial generators of yard waste. May lead to increased illegal disposal of yard waste (dumping or burning). Requires a shift in behavior on the part of homeowners. Additional Considerations Tipping fees charged by other Western Washington Counties are found in the matrix attached. 7
Conclusions The City of Port Townsend and Jefferson County s Department of Public Works assume substantial operational costs by accepting yard waste at the County Transfer Facility free of charge. The present arrangement creates a number of financial inequities: Solid waste facility customers through tipping fees are subsidizing a City operational expense incurred by the City s biosolids facility. City utility ratepayers are subsidizing City and County commercial yard waste generators through utility bills. The County subsidizes a City operation through continuing facility maintenance/upgrading and accounting services without charge to the City. Responsibility for addressing the issue is shared by City and County staff due to the nature of the Interlocal Government Agreement and because yard waste is being generated by a nearly equal split of city and county residents. City and County staff have jointly analyzed and agreed upon the fee schedule that best serves our goals and intended outcomes. City and County staff agree that alternative #3 -a tonnage fee with a minimum charge- would work best toward the overarching goal of reducing the number of yard waste customers coming through the facility. It also addresses costs as they relate to the City and County, namely that County costs are a factor of the number of transactions whereas City costs are a factor of volume as measured in tons. Models A, B and C in the attached spreadsheet look more closely at options within such a fee structure. Model A charges a minimum fee for loads less than 200 pounds and a per ton fee above 200 pounds with the County recouping costs through a fixed cost per transaction allocation of collected fees. Model B charges a fee per transaction and a per ton fee with the County recouping costs through a fixed per transaction service fee allocation of collected fees. Model C is the same as Model A except that the County would cover recoup costs through a per ton allocation of the collected fees. County staff suggests that Model A -a fee schedule of a $5 minimum up to 200 pounds and $48 per ton- be implemented to defray the County and City s costs associated with yard waste. Model A is preferred because it models the current fee structure for solid waste, because it works best among the options toward our goals and because it provides for the most equitable split between City and County of revenues used to meet the service costs. This fee schedule would also act as a disincentive for developers to generate yard waste from land clearing with savings realized by utility ratepayers and county taxpayers. Additionally, it would encourage alternative methods of reuse and/or disposal, reduce scale facility traffic congestion, and create an equitable fee arrangement on a pay-as-you-toss basis. 8