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HomeMy WebLinkAboutConstituent Letter - Read Before Packet - 6/23/2015 - Information From Roger Hageman Re: Work Session Agenda Item #2 - Recycling Center1 Sarah Kane From: Roger Hageman <roger@hecinc.net> Sent: Tuesday, June 23, 2015 2:39 PM To: Sarah Kane Subject: FW: Letters addressing the feasibility of the recycly facility. Attachments: City of Ft. collins Recycle Facility Letter 15.docx Roger Hageman Phone: 970-221-7173 Cell: 970-566-1918 Fax: 970-221-7163 Email: roger@hecinc.net From: Roger Hageman Sent: Tuesday, June 23, 2015 1:48 PM To: 'datteberry@fcgov.com'; 'scane@fcgov.com' Subject: Letters addressing the feasibility of the recycly facility. Hi Darin and Sara, I have attached letters regarding our position on the feasibility of the recycle facility. Would you please forward them to Council for the meeting tonight. Thanks, Roger Hageman Phone: 970-221-7173 Cell: 970-566-1918 Fax: 970-221-7163 Email: roger@hecinc.net June 23, 2015 TO: Mayor & City Council FROM: Roger Hageman RE: Work Session Agenda Item #2 /sek June 22, 2015 From: Hageman Earth Cycle To: Darrin Atteberry, City Manager and Honorable City Council Members Greetings; It has come to my attention that you may be reviewing the recycle center planned for Timberline Road. I would like to comment on the proposal concerning several feasibility issues. There are several things that stand out as potential problems as I see the situation. I do not have perfect knowledge of the plans so my comments may not apply in every area but I do believe the concepts will apply. We recycle yardwaste and branch material and have for the past 20+ years. We have taken all of the material, about 1.6+ million cubic yards, storm damage as well as yearly disposal, that Ft. Collins and the surrounding areas such as Windsor have produced. We charge $6.50 per cubic yard for that service. We also recycle grass and leaves, sod, rock, soil, and construction material among other materials. It is my understanding that the timberline facility will be recycling all materials including yardwaste. As I understand the yardwaste recycling better than the other materials, I would like to comment on the yardwaste recycling part of the proposal. Scenario #1. It is my understanding that you will be charging $3.00 to $4.00 per cubic yard. If so, everyone will be bringing you the branches and you will be paying a recycler/contractor the $6.50+- to accept your branches plus the hauling and or processing. I did not major in economics, but that doesn’t make much sense, logically and or dollar wise. It wastes resources, energy and money. Scenario #2. If you take in branch material and they pay you $6.50 per cubic yard, you will need to process and or haul the branches to a recycle sight, ours possibly being one of them. The processing and or hauling and tipping fee will cost you more than the $6.50 you take in on the drop off. We would be glad to accept the material at our facility but you will have additional costs in the transportation, especially in transporting lose limbs and branches. You will essentially be subsidizing the recycling of branches and other materials and why would you do this. Our customers can just go a mile further east and recycle with us without cost to the City and the City would benefit from the taxes. And they pick up needed landscape materials when they come here. Scenario #3. The same principle applies to all of the yardwaste materials, some more than others. We presently accept some mixed loads as you propose to do at this facility. The people dumping are supposed to separate as they unload and most times they do, but when they don’t it takes time, money and effort to do the sorting ourselves and we absorb the cost as we rarely get mixed loads at our facility. People understand that there are better places to recycle some materials like trash and or electronics and or iron or metal for example. Why would they bring iron to the City, pay the City to take it when they can drive 1.5 miles to Co. Iron and Metal or Metal Distributors and get paid for the metal? I understand that you are about to invest a million plus dollars in this facility and then spend at least $300,000 to operate each year. I personally believe that yearly amount will be much higher. I also understand that our company would stand to benefit from this inefficient system as we are close by and the possibility exists that we may be involved. That does not excite me at all as I do not enjoy being a part of something that is inefficient and wastes money and resources, especially taxes. I know, I have heard the paid experts say how great this is and how much better it will be and there may be some truth to that. However, if it is a drain on finances and resources that accomplish very little, the day will come when it will be abandoned for good cause. A future City Council may say that this is not the best thing for all involved and abandon it as they did the colossal $6 million boondoggle that still exists, built and abandoned some 20 years ago, to the east of our facility. It became inefficient; it did not meet the need and cost too much to operate after only a few years. My question is this. What justifies this expense and use of resources? Unlike some of the experts who have weighed in on this matter, I live here and I do have a good understanding of what goes on, at least in regards to the yardwaste material. As you can see be the following correspondence, we voiced our concern early on in the project but were reassured that it would work. I believe, based upon conversations of other recyclers, that have a good understanding of recycle markets, and although I do not pretend to speak for them, it is difficult for some of them to see the reasoning behind this endeavor. Thank you for your time and let me know if you have any questions! Respectfully submitted, Roger Hageman Hageman Earth Cycle The next two pages are our company’s response to the RFP from the City and our justification of our position. February 25, 2014 To: Susie Gordon, Natural Resources Department John Stevens, City of Ft. Collins Purchasing Greetings: We will not be submitting a per cubic yard price for the Zero Waste site, RFP 7600; however, I am submitting the following as a possible alternative. Here are my suggestions for this site: 1. I am not prepared at this time to make a Per Cubic Yard charge for the material. Here is why. The CY price that is necessary to make the facility feasible economically, would be too high, higher than surrounding recycle facilities currently charge for drop off. Therefore, it is very unlikely that there would be sufficient customers to support the high CY rate. If I were to quote a high rate, and you accept it, then it becomes something I am locked into yet I could not sustain the operation because we would have no customers to make the facility work and yet we would have many expenses. The suggested $3.75 rate for a CY is very unrealistic in our opinion and is unsustainable. 2. If you are insistent upon moving forward with this facility then may I suggest that it be subsidized by the City. Since the current RFP does not specify that subsidizing is a possibility, I am assuming that it is not an option. Government subsidies that allow a business to compete with privately funded companies is not a correct use of tax money, in our opinion. May I suggest that if this was an economically feasible event, it would have already been accomplished by private companies, and it would be a non-issue today. Having made that statement, it seems evident that it may be the only way to accomplish your lofty goal of Zero Waste, and if the City were to cover the major expenses and agree to pay a contractor a monthly fee to operate the facility, I would be interested in that scenario. 3. Some of the major expenses as I see them are; a small loader, dumpsters, portable office/shelter, transportation of materials, and dump fees at other recycle facilities and etc. These expenditures are not sustainable at a $3.75 CY fee and may not be sustainable if the fee were 3 times that amount. 4. The off-setting income to these (City’s) expenses would be the tipping fee and the recycle return from vendors, if any, which the City would retain. 5. All materials should be recycled locally if possible, yet there may be some that require a longer transport distance which will cause the costs to vary. Please contact me if you have any questions. Respectfully submitted Roger Hageman In the interest of facilitating the Zero waste proposal and as per the suggestion from John Stevens and or Susie Gordon, four of our local recycle companies met to consider what could be done to make the site workable and achieve what we understand to be your goals of zero waste. These companies were: John Newman from Waste Not Recycling, Brian Heuer from Rocky Mountain Recycling, Dan and Marty Garvin from Colorado materials, and Roger Hageman from Hageman Earth Cycle. In the interest of non-collusion with other companies, I have summarized my own conclusions from that meeting and these points are my own and not the agreed input of others and they in no way reflect their opinions and or input and are not binding upon them as individuals and or companies. Here are some of my talking points concerning this new facility:  Site location proximity to the landfill and the in-probability of people bringing their material to the drop off site.  There will be an investment in the drop off site even if there is very little usage and it is uncertain whether the payback on the material which brings us to the next point.  In order to make this work, there has to be a substantial payback. If the surrounding recycle companies only accept material from this site for a fee and that fee is more than the rate charged by the proposed drop off site, then the economics will obviously not work.  It is doubtful that a significant number of customers will drop off material at this new site and be willing to pay more just to recycle at a closer location than the landfill especially if the cost is even a little higher. It has been our experience that talk is cheap and price is king in recycling. And any material that is dropped off at this facility and then, because of the makeup of the material, will need to be transported to the landfill, the cost to transport and then pay the tip fee at the landfill would be more than double the tip fee the site might collect. It doesn’t make sense logically and or financially.  Metal drop off seems very unlikely as it does not make sense to pay at the proposed site when one could go to a metal recycling site and get paid for the material.  There are no guarantees of volume and or financial return and with the above scenario in place, there does not seem to be any return financially. Under your current RFP there are no provisions for financial support and or subsidy and an investment without any control over amount of volume that comes in and the amount paid to recyclers it would mandate a fee to be charged that would not in any sense be competitive.  There could possibly be some limited new markets developed for some of the materials; however that possibility may not be reality in time to make this endeavor successful.