HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/23/2015 - COMMUNITY RECYCLING CENTER OPERATIONAL COSTSDATE:
STAFF:
June 23, 2015
Lucinda Smith, Environmental Sustainability Director
Jeff Mihelich, Deputy City Manager
Susie Gordon, Senior Environmental Planner
WORK SESSION ITEM
City Council
SUBJECT FOR DISCUSSION
Community Recycling Center Operational Costs.
EXECUTIVE SUMMARY
The purpose of this item is to present information about the estimated range of ongoing operational costs of the
new Community Recycling Center (CRC) for “hard-to-recycle-materials” and to discuss options going forward. A
public collection site for hard-to-recycle-materials is one of the City's strategies for achieving its goal of Zero
Waste. Funding has been secured to construct the site and significant progress has been made in preparing to
build the CRC at Timberline/East Prospect.
In 2015, staff and the potential site operator developed a Profit & Loss (P&L) analysis that applies a set of key
assumptions (e.g., number of visits, volume of material collected) and forecasts costs to run the facility. Based on
these assumptions, the net annual operating expenses could be in the range of $200-$300K per year. It was
originally envisioned that a private contractor would be able to operate the site and cover operational expenses by
charging a small gate fee. However, the market for recyclable commodities has changed recently. It is likely that
a small gate fee will not cover all the operational expenses, and City support will be needed to provide this
innovative service to the community.
Staff will seek guidance from Council about its interest in: (A) supporting on-going operational costs,( B) scaling
back the site construction to move existing recycling center only and thereby reduce financial risk, but preserve
future options, or( C) placing the project on hold or terminating it.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does Council have guidance on the Community Recycling Center (CRC), considering unanticipated, ongoing
operating costs?
2. What direction does Council have regarding the three options identified?
A. Support a mid-cycle BFO proposal that would identify ongoing funding, starting in 2016, for operating the
new Community Recycling Center
B. Undertake only as much development on the new CRC site necessary to move the existing recycling
center to the City-owned location, thereby postponing the "hard-to-recycle-materials" area of the CRC
C. Place the project on hold or terminate work on building a new CRC.
BACKGROUND / DISCUSSION
A public collection site for hard-to-recycle-materials is one of the City's strategies for achieving its goal of Zero
Waste and significant progress has been made in preparing to build the CRC at Timberline/East Prospect. The
plan includes two areas where separate activities will occur:
On the east side nearest Timberline Road, the relocated "Rivendell" Recycling Center will operate as
usual (for free, seven days/week during daylight hours, unstaffed). This element of the CRC project has
its own, separate funding for O&M ($66,000 annually, as approved in the 2014 BFO process). The
June 23, 2015 Page 2
Rivendell Recycling center is currently located adjacent to Rivendell School, and accepts “traditional”
recyclables such as paper, cardboard, bottles and cans etc.
Farther back on the property, a completely new facility will operate (open during regular business hours,
staffed, visitors charged a gate fee), which will accept a variety of new materials for recycling, including
several construction and demolition (C&D) wastes, paint and other low-toxicity household wastes, and
old/obsolete electronic equipment.
Permits have been obtained and Connell Resources is prepared to break ground on the 5-acre Timberline
property, which is owned by the City, as soon as notified to proceed. Signage has been planned to notify patrons
of the current Rivendell Recycling Center about the upcoming facility. (Attachment 1)
An original budget of $750,000 for the CRC was approved in 2013. Financial setbacks slowed the project in
2014, when capital construction costs were found to be higher than estimated, bringing the total cost estimate up
to $1.7M. In 2014, Council approved an additional $1.0M for construction in 2015.
Resuming work in December to develop the new facility, staff in ESD and Finance began working in earnest with
the private sector vendor selected through the 2014 RFP process to be the site operator (Waste-Not Recycling).
Several conclusions were reached through this collaborative process. One was the suggestion to increase the
number of vendor employees, from one person to two full-time people, in the interests of providing sufficient
customer service. As a result, expenses to pay site attendants, which represent a significant part of the O&M
costs, were effectively doubled.
Secondly, the City team created a detailed P&L spreadsheet for the CRC's income stream (gate fees and rebates
from saleable commodities) and expenses, including the vendor's overhead and freight/trucking costs. Modeled
estimations for a range of net operational costs were identified to be between $200,000 and $300,000. A worst-
case-scenario could result in as much as $400,000 per year in the unlikely event of several worst case variables
occurring simultaneously. Negotiations with the vendor have not yet concluded, and staff feels there are several
potential operational cost reductions that can be implemented.
The P&L modeling was undertaken to reduce the City's financial risks, to the extent possible, that come with
innovations such as a drop-off center for hard-to-recycle materials. Unfortunately, few examples exist for Fort
Collins to use as comparable models; although some communities in the US have built this type of facility,
information was hard to obtain about how they finance the O&M costs. A non-profit organization, Ecocycle,
operates a Center for Hard-to-Recycle-Materials (called "CHaRM") in Boulder. Differences in which materials are
accepted vary significantly, but the project does clearly demonstrate how usage grows (from 15 trips/day in 2002
to 115 trips/day in 2013) and how it also gives Boulder the ability to expand the types of materials accepted
locally, as viable markets for recycling emerge. The CHaRM started off accepting two materials, and now collects
14 materials due to additional markets and relationships built with local small-scale manufacturers.)
The unknowns/inherent risks of running a CRC that will influence net operational costs include:
Difficult to estimate the number of customers who will use the site, especially at first while people learn
about it
Impossible to accurately estimate how much volume of material people will bring with each visit
Gate fees modeled at $5/visit (excludes those dropping off paint) and proposed volume-based fees for
green waste and wood do not offset expenses
Prices from sales of recyclable commodities cannot be reliably predicted to offset expenses because of
market volatility
Currently commodities are at all-time lows; while income from sales of materials such as scrap metal are
anticipated to rise, it is much lower than estimated just one year ago
If large amounts of low-value material (e.g., green waste and wood waste) are received at the CRC, it
skews operational expenses because of these materials' higher handling/disposal costs, compared to
commodities that have value (e.g. scrap metal, cardboard.)
Another discussion item that emerged during Q1 of 2015 is the proposal to host the City's biannual Household
Hazardous Waste collection events at the CRC. Staffed by Utilities, these events have been held since their
June 23, 2015 Page 3
inception in 2009 at a parking lot on the campus of Colorado State University (Lake and College). Due to CSU's
development plans, the Lake Street parking lot is no longer available for the City to use and a new location needs
to be found. In collaboration with the Environmental Services Department, Utilities has agreed that the Timberline
CRC would be a good venue for holding the HHW collection days, once the new facility is open.
Summary of Benefits
Based on staff’s 13 years of experience running the Rivendell Recycling Center, it is anticipated the CRC will be
highly used and appreciated, just as Rivendell has been very popular, an asset in which many citizens seem to
take great pride of ownership. There are a number of strikingly similar circumstances between development of
Rivendell in 2001 and today's efforts to build an expanded recycling center.
The Rivendell facility was built about 15 years after recycling was introduced to the Fort Collins community in the
mid-to-late 1980s. A goal of 50% waste diversion had just been adopted in 1999, and the public's growing
interest and demand required the City to respond to citizen expectations for greater opportunities to recycle. Now,
with passage of another 13 years, the City is gearing up to respond to even higher expectations for recycling
more types of materials, and for meeting new goals aimed at sending even less waste to landfills.
In 2002, the City had little idea of how much growth in usage (currently 400 visits on average daily) and tonnage
(1,500 tons/year) would occur at Rivendell. At the CRC, advanced recycling opportunities that are in high demand
by citizens will be accessible and actionable, providing more avenues to achieving Zero Waste goals and
implementing the Climate Action Plan (CAP). Initially, the CRC may experience low levels of usage, but from
staff’s experience seeing how much citizens of Fort Collins respond to expanded opportunities to recycle, it is
anticipated the number of visits would likely grow rapidly, to as many as 100 per day.
In drawing further comparison, the Rivendell Recycling Center costs approximately $66,000/year to operate
(which includes $16,500 lease payments to the school). With 1,500 tons/year now being conservatively modeled
for the CRC, the amount of material recycled at the CRC, at minimum, will be equal to the amount recycled at
Rivendell.
The CRC will support goals adopted in the 2013 Road to Zero Waste, not only by diverting a conservatively
estimated 1,500 tons/ year of new material from landfill disposal, but by providing positive experiences for citizens
that motivate them to take even further action to reduce waste. The amount of additional greenhouse gas
emissions (GHG) that will be avoided, 2,350 tons estimated in the first year, will help support goals adopted for
the 2014 CAP.
The CRC is one of the primary tactics identified in the 2015 CAP Framework Plan, as a way to recycle more
materials (thereby reducing GHG emissions from energy required to manufacture new products and avoiding
emissions caused during mineral resources extraction), help people gain confidence in their ability to undertaken
even greater sustainability practices in their daily lives, and divert waste from being landfilled (a disposal method
that generates methane emissions, a significant source of GHG).
The CRC will give citizens more ability to appropriately manage the types of household hazardous waste (HHW)
that are generated at the residential level. On a year-round basis, four materials (antifreeze, batteries, oil, and
paint, or ABOP for short) can be brought to the recycling center. On two occasions each year, the CRC would
function as the host site for residents to bring all types of residential HHW during the Utility's popular HHW
collection days (the May 30 event this year broke previous years' attendance records, with well over 1,000 visits).
The CRC's year-round activities to collect ABOP would reduce costs for the biannual HHW round-ups, and
therefore the Utility Department foresees having $25,000 available annually to help support the recycling center's
operations and maintenance costs.
Staff suggests that providing annual funding for operating the CRC will provide social benefits to the community,
support the culture of recycling that is critical to achieving progress on zero waste goals and the Climate Action
Plan Framework, and preserve the site for the unique opportunities it presents for future development of small
scale waste-to-energy or expanded resource recovery. If directed, staff is prepared to develop a budget "offer" to
introduce into the process for making mid-cycle BFO revisions. To ensure a budget is adopted that is sufficient to
June 23, 2015 Page 4
address the uncertainties inherent in new and "uncharted" initiatives, staff recommends an initial annual budget of
$300,000 to cover anticipated net operating expenses.
To control costs, staff submits the following ideas for consideration:
Limit the amount of green/wood waste accepted at the CRC
o establish policy of charging an amount (i.e., $7.00 per cubic yard fee when customers bring
green/wood waste (it is important to note that the public already has the option of using one of the
two local businesses that accept woody/organic materials for less than $7.00 per yard)
o these are the materials for which management/dispose costs are highest
o disallow use by commercial landscapers or arborists
Establish a policy that limits the volume of materials that are more costly to process (green waste and
yard waste).
o For example, customers could be limited to 2 cubic yards of these commodities.
o until it is established how much usage the CRC can absorb, setting limits for customers will help
prevent being overwhelmed by volumes
Expenses to operate the CRC facility will receive close scrutiny by staff in partnership with the contractor, Waste-
Not Recycling. Starting at the outset, joint monthly financial meetings will be held to enable fast adaptation for
most efficiently managing the site. As a highly experienced company with a long track record as a successful
recycling business, Waste-Not will be committed to helping find ways to reduce costs such as freight charges, and
to improve commodity values (e.g., by installing a baler for cardboard), as well as developing opportunities to
expand the list of materials that people can bring to the CRC as recycling markets open up for them.
Pros and Cons of Options Identified by Staff
A. Mid-cycle BFO proposal that would identify ongoing funding, starting in 2016, for operating the new
Community Recycling Center
May provide sufficient degree of assurance to proceed with construction and to open the CRC now, if it is
known that Council's approval is likely to be given in November for costs of O&M in 2016
Enables staff to spend $68,000 of state grant money by deadline of June 30 for purchase of CRC
equipment (collection bins) if City is confident that construction of the site will proceed as described in the
grant application
Meets the aspirations and desires of the community and helps address adopted City goals
Provides greatest return on the City's investment of time and resources already made, to date, in
developing and planning the project (approximately $175,000, including $70,000 on engineering costs,
$41,000 on project manager salary, and $28,000 for tree-moving)
Provides host site for City's highly successful collection events for household hazardous waste, in
collaboration with the Utilities Department
Annual O&M costs defrayed by $25,000 from HHW collection events budget
Opens up options for contracted operator to host other discretionary, special-material collection events,
e.g., block Styrofoam, on occasional basis
Leaves opportunities open for developing future phases of CRC on west-most portion of site, e.g., pilot
project to demonstrate waste-to-energy technology such as bio-digester system that could potentially fuel
a nearby recreational facility.
Location provides potential for industrial symbiotic system, whereby businesses in adjacent industrial park
or artisan village could use material collected at CRC to make products
B. Build the site to a level of construction that allows staff to proceed with moving the "Rivendell"
Recycling Center to the City's property on Timberline Road
Altered plan would complete all preliminary work except paving for the west portion, allowing Center for
Hard-to-Recycle-Materials to be built at later date
June 23, 2015 Page 5
Allows the City to initiate the CRC project at a known level of O&M that is already funded, the "Rivendell"
activities were included in the 2014-15 budget
Saves the City $16,500 in annual payments to the Rivendell School from which property is leased
Encourages the public to become acquainted with location of new City drop-off site, therefore, in the long
run an expanded drop-off site is more familiar for people to use
Activates project to construct the site using:
o fully engineered plans
o permits that are already obtained
o funding already in-hand to pay for earth-moving, electrical installation, drainage, and paving work
Postpones expenditure of roughly $150,000 of the budget for doing the paving work
Allows time to further evaluate costs and funding mechanism to pay O&M for the "hard-to-recycle-
materials" portion of the CRC in future BFO processes
Relatively undeveloped area on west side of site could function as space for holding special-material
collection (such as Styrofoam etc.) events conducted by contracted operator.
C. Place the CRC project on hold, or terminate it
Prevents staff from expending more time working on the CRC
Helps City avoid risks associated with change and innovation
Leaves implementation of this important new measure to reach Zero Waste goals and Climate Action
Plan goals unfulfilled
Incurs disappointment among members of the public who have been looking forward to completion of
the CRC
Represents lost investment of staff time and other resources that have been expended during 2013-15
Guidance from City Council will determine next steps for the CRC.
ATTACHMENTS
1. Banner for Rivendell Recycle Center (PDF)
2. Staff memo, May 1, 2015 (PDF)
3. Staff memo re: Household hazardous waste collection events at CRC, April 23, 2015 (PDF)
4. Powerpoint presentation (PDF)
Watch for more details at
fcgov.com/RecyclingCenter
WE’RE MOVING
& IMPROVING!
WE’RE MOVING
& IMPROVING!
TIMBERLINE RD
PROSPECT RD
RIVERSIDE AVE
You Are
Here
New
Location
N
IVEEE IIIIIII IVE VE V VEE VVVE VVVV E
FORT COLLINS POLICE NANCY GRAY AVE
ATTACHMENT 1
Environmental Services
215 N. Mason
PO Box 580
Fort Collins, CO 80522
970.221-6600
970.224-6177 - fax
fcgov.com
MEMO
DATE: May 1, 2015
TO: Darin Atteberry, City Manager
Jeff Mihelich, Deputy City Manager
Mike Beckstead, Chief Financial Officer
THRU: Lucinda Smith, Environmental Services Director
FROM: Susie Gordon, Sr. Environmental Planner
RE: Community Recycling Center: Update
On April 6, staff met with the City Manager to discuss final questions about the Community Recycling Center. In preparation
for a meeting on Monday, May 4, we have summarized responses in this memo to those questions, and documents that are
attached here may be referenced for more details.
1. Costs of Operations - Amount of City Subsidy Needed
A matrix of six operational scenarios is attached that shows a range in annual costs for running the new hard-to-
recycle-materials facility. Staff has identified two scenarios that seem to represent the most optimal models for the
City to consider applying. Once we have input from City management about key variables, we will finalize proposals
for how Waste-Not Recycling will conduct operations.
2. Operations Contract
Staff has spent the past three weeks refining contractual elements of an agreement with Waste-Not Recycling and a
final draft is ready to be sent to the company for negotiation. These elements reflect a variety of "wants" that have
been expressed by City management. After we have input with respect to key operational "variables" (item 1, above),
we look forward to reaching mutual agreement with Waste-Not Recycling about serving the needs of the community.
3. Use of the Site for household hazardous waste (HHW) collection
See a recent memo (attached) from Errin Henggeler, Environmental Regulatory Specialist, describing agreement and
intent to use the Community Recycling Center for bi-annual HHW collection events starting in spring of 2016.
4. Memorandum of Understanding - Utilities will lease site for CRC
See attached MOU, written in February, 2014, whereby Utilities agrees to allow Environmental Services to use the
property on Timberline as a CRC for 10 years at no cost.
5. Future Expansion (narrative)
Two areas of the CRC have been earmarked to be used for future expansion (see stippled areas on attached site
plan). One section is in the for-free recycling portion of the site (10,000 ft.2), and one is in the west-side, hard-
to-recycle-materials area (15,900 ft.2). According to construction plans, these sections will be a gravel surface
with the possibility of installing an asphalt surface as budget allows, but otherwise will be in an "unfinished"
condition, ready when we decide to use them for more than temporary parking.
Combined, these two areas would increase the size of the operating portion of the property by 76% (from
33,900 ft.2 of working area to 59,800 ft.2), expanding the CRC's capacity to provide recycling to the public.
ATTACHMENT 2
2
Expansion could occur to respond to a variety of needs, such as: City decision to add one or more types of
materials to the list of accepted recyclables. For instance, we anticipate the breweries in Fort Collins will soon
approach the City after the CRC is built with a proposal to create a bulk glass-only collection "bunker" so that
their quality-defect bottles can be aggregated into large loads for delivery to the bottle-making plant in Wheat
Ridge (and possibly even Windsor's bottle plant). We may find more volume of materials than we currently
anticipate will be received, requiring us to add more collection bins, or we may decide to provide a space for
distributing ground mulch to the community from Forestry's arborist/pruning activities the same way we
currently offer the public to load wood mulch at Rivendell Recycling Center. It could turn out that our
contractor makes a compelling suggestion to improve the way we prepare materials for delivery to recycling
plants such as baling cardboard (which increases the value of the cardboard and reduces transportation
expenses) or separating certain types of plastic from the "commingled bottles/cans" bin because they can be
used by local manufacturers/industry. Any one of these decisions could easily come up within the first year or
two of opening the CRC.
The entire CRC is being designed to have conduits installed throughout the site, with extra electric lines stubbed
out for future possible expansion if/when power is needed to operate more equipment or provide lighting, etc.
Ultimately, there is another section of the 7-acre property on the west-most side that could also be developed if
there is a need for even more space to conduct recycling/waste diversion activities. However, this portion was
not included in the Proposed Development Plan, and therefore will remain in an undeveloped condition for now.
5. Exit Strategy (narrative)
It is conceivable that something could happen that makes the City decide to close the hard-to-recycle-area of the
CRC, such as: worsening prices for materials or other economic considerations such as excessive O&M costs;
our contracted operator decides to quit; or, the public shows insufficient interest in participating in recycling.
There are choices the City could make to close the new, hard-to-recycle-materials operations on the west side of
the Timberline property (for the sake of this narrative, we are making the assumption that the "Rivendell"
portion of the CRC would not close). The following actions could occur in some combination, such as:
announce closure to the public within a minimum 2-month timeline so people aren't caught by surprise; provide
information to the public about what their recycling options are to replace the CRC; physically close the site and
lock the gates to the west-side area to prevent public access.
If closure were to occur, the west-side of CRC's paved area and infrastructure would then revert to usage by
Light & Power as the owner of the property; it is likely that L&P would be willing and able to put this
developed site to use for their own operational purposes.
6. Work that is underway
- community education plan and public information campaign for the CRC, with signage, is underway
- trees on the Timberline site were transplanted to locations designated on the landscaping plan
- RFP has been issued to obtain quotes on equipment that will be purchased using state grant of $698,000.
7. Other Pertinent Information
Budget: $1,700,000
Value engineering propositions were integrated into the design and $500,000 was removed from the earlier projected cost of
construction, bringing the price within budget. Upon recommendation from the Chief Financial Officer, the budget now
includes full payment of Street Expansion Fee ($82,400), rather than deferring the payment until next phase of expansion to
CRC. The budget also includes an allocation of $80,000 to pay costs for operations and maintenance within the first year.
3
Schedule
Task 1: Minor Amendment Design & Review – underway, to be completed May 15
Task 2: Contract with Connell Resources to Construct CRC - starts as early as May 31, ends as early as July 26
Task 3: Move Rivendell Recycling Center to Timberline Location – week of August 2
Task 4: Sign Contract with Private Site Operator – negotiations started May 2014, continuing until final agreement
reached in May 2015
Task 5: Open Timberline Site for Operations – could start as early as mid-August
Hard-to-Recycle Materials included (to date):
Wood - dimensional lumber, fencing, tree limbs, non-painted and non-engineered lumber products
Green waste -yard debris such as brush, leaves, tree and hedge trimmings, etc.
Scrap metal - items such as broken tools, most appliances, fencing, aluminum screen doors and window frames, etc.
Aggregates - concrete, asphalt, brick, tile, porcelain and ceramic plumbing fixtures
Bulk (non-compacted) cardboard –large sized packaging such as shipping boxes for appliances, furniture, etc.
Household hazardous waste – antifreeze, batteries, used oil, and paint
Electronic waste – computers and televisions
- 1 -
Utilities
electric · stormwater · wastewater · water
700 Wood Street
PO Box 580
Fort Collins, CO 80522
970.221.6700
970.221.6619 – fax
970.224.6003 – TDD
utilities@fcgov.com
fcgov.com/utilities
M E M O R A N D U M
DATE: April 23, 2015
TO: Mike Beckstead, Chief Financial Officer
FROM: Errin Henggeler, Environmental Regulatory Specialist
RE: Potential Coordination of Household Hazardous Waste Events with the new
Community Recycling Center
SUMMARY:
City Regulatory and Government Affairs and Environmental Services Division staff have
partnered to evaluate the potential for semi-annual Household Hazardous Waste (HHW)
collection events to be held at the proposed Community Recycling Center (CRC). Staff is
recommending that the new CRC host both 2016 HHW events. This approach allows for local
promotion of CRC services and capabilities while reducing the final cost of the HHW event due
to the ability to maximize the management of antifreeze, batteries, oil and paint (ABOP) waste
streams.
EXPLANATION:
Funds were allocated in the 2015-2016 Budgeting for Outcomes process to provide two
Household Hazardous Waste (HHW) collection events per year to City of Fort Collins residents.
The HHW collection events are typically held the Saturdays after Memorial Day and Labor Day.
The budgeted amount to provide two events each year in 2015 and 2016 is $126,625 and
$143,214 respectively. The City was recently informed that, due to planned construction
activities for the new Colorado State University Football Stadium, the current location used for
previous HHW events will no longer be an option. Staff has secured a location for the
September 12, 2015 event but will need to look at different locations in 2016.
HHW and CRC
The Community Recycling Center (CRC) is slated to open in late 2015 and is planning on
accepting a variety of waste materials year round; some of these materials comprise a large
component of those materials accepted at the single-day HHW events, specifically antifreeze,
batteries, oil and paint (ABOP). Approximately 70% of the material collected at each event falls
ATTACHMENT 3
- 2 -
into the ABOP category, however management of the ABOP waste stream represents only about
20% of the total HHW budget. One benefit of holding the HHW event at the CRC is that we
could use the CRC’s existing collection structures and disposal contracts. For example, currently
used oil is bulked with other products and there is an associated fee for disposal; if the HHW
event is hosted at the CRC, the used oil can be placed in the CRC’s used oil containers and sold
as a commodity. Additionally, all architecture paint products collected can be packaged
separately and be managed under the Colorado architecture paint stewardship law that goes into
effect July 1, 2015. The Colorado architecture paint stewardship law will provide some
reimbursement to entities that collect and manage architectural paint products.
Traffic Management and Safety will need to be addressed when planning the HHW events at the
CRC. The CRC is being designed to have a circular traffic pattern-citizens will only be allowed
to enter the CRC from the right and exit to the right. Planned road construction in 2016 could
also be a challenge for suitability of the CRC, but staff will monitor these items before the 2016
HHW events are scheduled.
CONCLUSIONS
HHW event transportation and disposal costs can vary greatly depending on the types of
materials that are dropped off and citizen participation, therefore it is difficult to predict how
much money each event will cost and, in turn, how much will be saved by utilizing the CRC for
the ABOP waste materials. However, considering data from past events, staff foresees having
approximately $25,000 annually available in the HHW budget to help support the CRC.
Hosting the 2016 events at the CRC will help promote what materials will be accepted at the
CRC year round, while still providing world class HHW collection events to the citizens.
Please let us know if you have any questions.
ec: Kevin R. Gertig, Utilities Executive Director
Susie Gordon, Senior Environmental Planner
Lucinda Smith, Environmental Services Director
Carol Webb, Water Resources and Treatment Manager
Matt Zoccali, Interim Regulatory and Government Affairs Manager
Community Recycling Center
~ Operating Expenses
City Council Work Session
June 23, 2015
ATTACHMENT 4
Direction Sought
2
• Does Council have guidance on the Community Recycling
Center (CRC), considering unanticipated, on-going
operating expenses?
• What direction does Council have regarding the three options
presented tonight?
Community Recycling Center (CRC)
History
3
2013/2014 BFO Offer for CRC ($750,000)
• Planned as Public Private Partnership with private operator
• Envisioned as revenue neutral with a small gate charge
• Found higher than anticipated construction costs
• CRC construction placed on “hold” in 2014
2015/2015 BFO Offer funded ($1M for construction)
($80K for O & M removed)
2015 – Market for recyclables is changing
Current Total Project budget: $1.7 M for construction
(Invested $175K to date)
CRC Vision
4
Vision: One-stop-shop for recycling
• Free area for
“traditional” recyclables
• Fee for “Hard to recycle”
materials
o Scrap metal, aggregate, wood, cardboard
o E-waste
o Green waste
o Antifreeze, batteries, used oil, paint
CRC Vision
5
Supports Road to Zero Waste
o Conservative estimate of 1,500 tons new tons material
diverted in year 1
Supports Climate Action Plan -
o Conservative estimate of 2,350 new tons GHG
avoided in year 1
Residents have requested expanded recycling opportunities
6
Context –
Waste Diversion Rate Increasing
777
Fort Collins Waste Diversion Leadership
Pay-As-
You-
Throw
passes
Card-
board
Ban
Zero
Waste
Goals
Adopted
Rivendell
Opens GHG
goals
increase
1995
2002
2007
2009
2013
2015
Single
Stream
Recycling
E-Waste
Ban
CRC Location
8
9
North
CRC
Original Concept Rendering
….
Timberline
Road
Electric
Substation
10
CRC - Progress to Date
• Construction planning completed
• PDP and amendment approved
• Connell Resources selected as construction contractor
• Financial support from Household Hazardous Waste funding
• Site ready for construction to begin
11
Business Operations
• Site Operator (Waste Not) identified thru competitive
process in 2014
• Operations discussions started in 2014; resume in 2015
• “Profit and Loss” assessment - to examine financial risks
What has changed in last 2 years?
• Market for recyclables has dropped
• Haulers now must pay to tip recyclables
• Increased # of contractor employees from one to two
12
Many Variables Impact Net Operating Expense
• Number of customers
• Volumes of material
• Fee structure
Estimated Net Operational Expense Range:
$200,000 - $300,000/year
Current Operating Assumptions
• Open at least 5 days/week including weekends
• “Rivendell”-like area is still free
• $5 gate fee for most hard to recycle items
• 2 contactor employees needed on site
Basic Operations
13
Operational Cost Considerations
Major Cost Drivers
Expenses:
• Contractor personnel
• Contractor management costs and overhead
• Commodity disposal fee, especially:
o Green Waste
o Wood
Options to Manage Costs
Fee structure or policy to limit wood and green waste
• Policy to limit accepted volume wood and green waste
• Higher fee for Green Waste and Wood Waste
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Options for Council to Consider
A. Consider mid-cycle BFO to cover projected net O & M
• Leverages investment thus far and $68K grant money for bins
• Creates opportunity for additional targeted material recycling
• Provides public service
B. Just move Rivendell now to CRC
• Constructs site ($150,000 savings)
• Preserves land and options for expansion in future
• Reduces City risk (no new O and M costs)
C. Terminate CRC Project or place on hold
• No other large scale project ready to bring forward now
• Future large capital projects may be several years away
• Eliminates City risk
Direction Sought
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• Does Council have guidance on the Community Recycling
Center (CRC), considering unanticipated, on-going
operating costs?
• What direction does Council have regarding the three options
identified?
A. Consider mid-cycle BFO to cover projected net O & M
B. Just move Rivendell now to CRC
C. Place CRC project on hold or terminate it