MINUTES OF THE METRO COUNCIL

REGIONAL ENVIRONMENTAL MANAGEMENT COMMITTEE MEETING

Wednesday, November 17, 1999

Council Chamber

Chair Washington called the meeting to order at 1:35 PM.

1.  CONSIDERATION OF THE MINUTES OF OCTOBER 20, 1999

2.  REGIONAL ENVIRONMENTAL MANAGEMENT DIRECTOR’S UPDATE

Terry Petersen, Acting Director of the Regional Environmental Management Department, gave a summary of the department’s recent activities. (The summary is attached to the meeting record.) Items included the following:

•  Uncovered load enforcement has resulted in 124 warnings. From now on, those who have received one warning will be issued a $75 citation. The Oregon City Planning Commission recently renewed the conditional use permit and provided good feedback on Metro’s work on addressing uncovered loads.

•  A draft report on possible new waste reduction incentives titled “New Initiatives in Waste Reduction,” (attached to the meeting record), presents results of a study by a task force composed of REM staff and staff from local government. Mr. Petersen emphasized that this study is unrelated the any discussions on the $60 million savings; however, if any money is available for new waste-reduction efforts, this report will provide the basis for budget decisions.

Councilor McLain asked for clarification on the cost estimates for the initiatives.

Mr. Petersen said according to staff estimates, the total cost for next fiscal year for all the initiatives would be about $1.7 million. However, he said several of the initiatives should be carefully reviewed as they could have implications that would make them impractical to adopt.

Councilor McLain asked for clarification of her understanding that the initiatives represented ideas at this point that have not yet been thoroughly assesses as to feasibility. Mr. Petersen said that was correct.

Councilor McLain asked if the work groups included Metro staff, local jurisdictions, and industry representatives.

Mr. Petersen said this work group involved Metro staff and city and county staff, and in one case the Department of Environmental Quality, but no private industry participants. He said he viewed this as a joint report, not a Metro report.

Councilor McLain verified that the report would be brought before the Solid Waste Advisory Committee (SWAC) to industry would have an opportunity to comment. Mr. Petersen said the report had been distributed that morning at SWAC, with the understanding that REM staff would be discussing this in more detail with the committee in January.

•  The REM department has hired six new employees, five of them working at various waste facilities and one, Tom Chaimov, working in the REM department as the new Economic Analyst in the Business and Regulatory Affairs division. Mr. Petersen emphasized that these new employees had been hired prior to the hiring freeze.

•  The three fall hazardous waste collection events attracted more than 1600 customers and 140,000 pounds of household hazardous waste.

3.  ORDINANCE NO. 99-820, FOR THE PURPOSE OF GRANTING A NEW YARD DEBRIS COMPOSTING FACILITY LICENSE TO CLACKAMAS COMPOST PRODUCTS, LLC TO OPERATE A YARD DEBRIS COMPOSTING FACILITY, AND RESCINDING LICENSE NUMBER YD-0197, AND DECLARING AN EMERGENCY

Mr. Petersen explained that the Metro Code requires that all yard debris-composting facilities in the region be licensed by Metro. Further, when ownership changes, the Council must approve transfer of the license. (More details about this ordinance can be found in the Executive Summary and Staff Report that accompany this legislation in the meeting record.) Mr. Petersen said the new owners are good owners, and he recommended approval.

Chair Washington opened a public hearing on Ordinance No. 99-820 at 2:47 PM. No one came forward to testify, so he closed the public hearing.

Councilor Park will carry the motion to a meeting of the full Council.

At the request of Councilor Park, Chair Washington announced that the presentation of the tonnage forecast, listed as agenda item seven, would be heard next so Councilor Bragdon could participate before leaving for an appointment.

7.  OCTOBER TONNAGE FORECAST

Mr. Petersen explained that the tonnage forecast is updated twice a year, in March and in October. In addition to releasing the new forecast, Councilor Park had raised a question at the budget subcommittee last week. Thus, the presentation contains additional information to address that question.

Paul Ehinger, Engineering and Analysis, REM, said the group routinely prepares semi-annual forecasts of the tonnage of solid waste expected for the current fiscal year and the next one. (Mr. Ehinger illustrated his presentation with PowerPoint, hard copies of which have been attached to the meeting record.)

Mr. Ehinger said he would present the actual first quarter tonnage compared with what had been forecast last year. He said he would also address Councilor Park’s question about the revenue and financial impacts related to the forecast if Metro were to meet its recycling goals.

He said the first quarter tonnage for the FY 99-00 is down by 1.4 % over the same time period last year. Petroleum contaminated soils (PCS) are down 41.5%, which is a huge drop.

Councilor Park noted that delivery of PCSs is the result of a state law requiring underground tanks to be removed. He noted that the program would soon end. He asked if PCS delivery was therefore expected to remain low from now on.

Mr. Ehinger said yes. He said the reason it had not been forecast as being down earlier is because the data on the number of tanks scheduled to be pulled compared with those that had been pulled indicated a significant backlog. It was assumed that people would be late. But the data indicate a steep drop, with a small increase last May during a period of good weather. He said the stragglers that had the money to complete the project did so last May.

Councilor Park asked if the use of new technology, such as using microbes onsite to decontaminate the soil, had had an impact. Mr. Ehinger said he could not answer for sure. He suspected the technology was not widespread enough.

Councilor McLain said both known and unknown quantities of contaminated soil exist. She said the City of Forest Grove had discovered tanks on property it had purchased that it did not know were there at the time of purchase. She asked if the drop were based solely on the quantity of known

Mr. Ehinger said clean up tended to be project oriented and difficult to predict. He said although delivery tonnage was down, revenue tonnage was up 2.4% over the preceding quarter. He said the reasons was that 11 thousand tons less was diverted at the facilities. Diversion includes recycling and beneficial use of the material at the landfill.

Councilor Park asked what percentage drop the 11 thousand tons represents Mr. Ehinger said about 3% of the total waste stream. Councilor Park asked how that relates to the recycling goal. He noted that Metro was at 43% currently, with a goal of 52% by the end of 2000 and 56% by 2005.

Mr. Ehinger said he did not have that number at hand, but would provide it soon. He said it was important to remember that this number is based on waste that shows up as waste at a particular set of facilities. He said a number of other facilities receive high-grade waste or source-separated waste that do not report that as solid waste. That means that recovery might still be taking place, just not reported.

Councilor Park asked if it would be correct to say that Metro transfer stations were getting more pure garbage. Mr. Ehinger said that was correct.

Councilor McLain said that relates to diversion on the front end. She said some sites had the ability to divert waste on the “front end,” so it never reaches a transfer facility. She said it was important to look at the system as a whole, and that the analysis needed adjust to take into consideration reconfigurations within the system.

Mr. Ehinger said comparing the most recent forecast with the one prepared last April indicates that although Metro predicts growth, growth is expected to be slower. He said of the 20,000 fewer revenue tons are predicted. Of that 20,000 tons, 17,000 tons represents PCSs. The remaining 3,000 tons has to do with material that can be recovered at another facility. At those other facilities, Metro gets paid “out the back door,” meaning it gets paid according to the amount of tonnage that actually goes to the landfill, after all the recyclable and reusable materials have been removed. Metro does that to encourage those facilities to do aggressive recycling.

Councilor Park asked if the revenue tons would follow the trend line shown for total tons. Mr. Ehinger said yes, for the most part.

Mr. Ehinger spoke to the difficult question of how revenues would be affected if Metro were to meet its recovery goal of 56% in 2005 (see hard copy attached to the meeting record). The top line shows the revenue if nothing were to change, and the bottom line shows the effect of reaching 56% recovery.

Mr. Ehinger said recovery would have no impact on the contract savings. The main reason for that is because all the savings were taken on the first 550,000 tons. He emphasized that on the other hand, the tip fee would be much higher if recovery reached 56%. He said the contract assumed a rate of $17.50/ton at the landfill. If tonnage goes up, that rate goes down. If tonnage goes down, that rate goes up. This inverse relationship results in almost the same amount of money in savings under the new contract.

The tipping fee would be dramatically affected by an increase in the recycling rate (see hard copy titled “Metro Tipping Fee,” attached to the meeting record). If the goal is reached, the tipping fee climbs to about $72.00. He pointed out that not all of that relates to the disposal contract, but a large portion relates to fixed costs that must be recovered—i.e., the same fixed costs must be recovered by less tonnage, so the rate per ton must go up.

Mr. Petersen said none of the forecasts include use of the rate-stabilization account. He said he would recommend using that account to mitigate the steepness of the increases.

Councilor Park said he regretted that these relationships had not been noted early on, when the policies about what to do with the savings were first being discussed. He said his conversations with industry people indicate they had overlooked these relationships, also. The fact that they had been overlooked brings up the importance of examining the assumptions that underlie predictions. He noted that allowing 10% diversion, as mentioned in SWAC, would make the forecast scenario even worse.

Mr. Petersen said the staff had not missed the assumptions; perhaps they were remiss in communicating the assumptions built into the forecasts. He also noted that other factors might well lower the tonnage from a “midpoint” forecast, such as a turndown in the economy or greater recycling. Likewise, the tonnage could be greater if the recycling markets drop or an upturn in the economy. He emphasized that this is a mid-range forecast.

Councilor Park said he thought is would be important from now on to note those assumptions that represent Metro aspirations, such as the recycling goal. Otherwise, there could be a disincentive to achieve the goal if it hurt Metro financially. He asked if the tipping fee forecasts also represented a middle ground.

Mr. Petersen said yes, they were a mid-range forecast. He pointed out that the majority of the costs are tied to the major contracts—transfer, transport, and disposal. They are closely linked to the tonnage forecast.

Councilor McLain said this was not new information to her, as she was accustomed to having the forecasts presented as mid-range. She noted that the mid-range scenario had, in the past, turned out to be true. She asked about the rate-stabilization fund. She said when the data were originally being presented, the idea was that the amount needed in the stabilization fund would hold the tipping fee stable for three or four years. She said projecting this at the worst-case scenario, what would the rate-stabilization fund need to keep the tipping fee stable?

Mr. Petersen said all the rate stabilization account would be needed in the fourth and fifth years to stabilize the rate at $64/ton. He said the account currently has about $3 million. That assumes no replenishment of that account. If the rate-stabilization account were not used or if it were replenished, then the rate increase would be closer to $66 (the dotted line in the graph).

Councilor McLain said that suggested the yearly decision would be a budgetary one—i.e., how much money is put into the rate-stabilization fund to keep the rate closer to $65/ton.

Mr. Petersen agreed that the decision would be made year by year. He said in 2002-2003, the Council would need to decide whether to let the rate rise to $64 or $66/ton and whether to use the rate-stabilization account.

Councilor Park said in his view, a mid-range for a recycling goal would lie between the current 43% and the goal of 56%. He said he had asked at the budget subcommittee whether the projections had been based on the lower figure—the 43%—for a 10-year period. He asked why all the money would be spent to increase recycling if increased recycling had not been projected? He said that had not been clear to him. He had assumed the 10-year projection included the assumption that the 56% goal had been reached.

Councilor McLain said in her view, the important thing was to ensure adequate money remains in the rate-stabilization fund to avoid either a steep increase in the tipping fee or being caught short. She said the opportunity to do that remains.

Mr. Ehinger addressed the difference between the revenues, based on the April forecast, between 43% recycling and 56%. He said in the year 2004-05, there would be about $2.4 million less available in excise tax revenues. This is based on the ordinance recently passed dealing with the per-ton excise tax rate.

Councilor Park asked how much of the savings would be available in total, not just in excise tax.

Mr. Petersen reminded the committee that the amount of savings would remain about the same, due to the fact that the savings had been taken out of the first 550,000 tons.

Councilor Park said in view of that, his reading of the graph indicates that in 2005, $3.6 million total would be available if the recycling goal of 56% were achieved. He said that the 40-60% split enacted by the Council would leave $1.3 million for solid waste. He said he had understood that REM needed $2.3million in the first year, just to keep things stable—adding no new programs. He said $2.4 plus $1.7 yields $3.1 without allowing for inflation.

Mr. Petersen said his understanding was that the actual annual reductions to the contract in terms of payment total $6 million. In the first year, the excise tax rates and increases in solid waste fees will capture that in the first year. However, with the lower tonnage in the out years if the 56% goal is met, those excise tax rates and solid waste fees on a per-ton basis will generate less revenue—whether it’s excise tax revenue or solid waste revenue. Therefore, with no increases in the excise tax rate or solid waste fees, less revenue will be collected in the out years.

Councilor Park said he was trying to figure out what would be available total. He said in 2005, if the recycling goals are met, the $3.6 million would be all that would be available before anything is taken off for excise tax.

Mr. Petersen said that would be true under the current per-ton tax rates just adopted.

Mr. Ehinger said it was important not to confuse savings with what something would have cost under this contract. He said other considerations, such as how long to maintain the current tipping fee—have complicated the picture. He said all that could be concluded here is that based on the October forecast, $10.4 million would have been available in 2004. If the goal were met, that figure would be closer to $8 million in excise tax revenue available. But that also assumes a $70/ton tipping fee.

Councilor Park said he was trying to figure out how much money it would take to take care of the solid waste system before considering excise tax needs. He said from what he could see, if the solid waste system is taken care of and the 56% recycling goal is met, a lot less money would be available to do any other programs to say anything of the excise tax.

Mr. Petersen said that the tipping fee needed to be taken into consideration. If the assumption is to hold the tipping fee at the lower rates, the conclusions is correct.

Councilor McLain said it comes down to the yearly budget decision on how much is kept in the rate-stabilization account. The amount of money available would only be known on a year-by-year basis. She said that is why the $60 million in savings is only a forecast based on what we know today about the recycling rate and the tipping fee.

Mr. Petersen offered to take Councilor Park’s specific concerns back to the department and run analyses based on those.

Councilor Park said he would appreciate that. However, he said it seemed clear that significantly less money would be available than had originally been assumed. He said what was important was the Council had made a decision based upon certain projections of certain dollars being available to solid waste. However, it appears that if Metro does its job, significantly less would be available. That suggests that not as great a percentage should be removed from the solid waste system as originally projected. Under at least one scenario, in the year 2005 the solid waste system would need all the savings money. He thought the projections should be based on the assumption that Metro would reach its recycling goals so it won’t be left high and dry for doing the right thing.

Councilor McLain agreed with Councilor Park, but said all the other assumptions needed to be taken into consideration, also, such as growth factors and economic forecasts.

John Houser, Council Analyst, observed that if you assume the excise tax rate collects an ever-decreasing percentage of the $6 million savings total, unless some other action is taken more money would flow into the solid waste coffers each year because the excise tax portion of the $6 million would be less in real dollars. Thus, by the time you get to 2005, instead of $2.4 million flowing into the solid waste system, it would be more like $4.8 million, just out of the savings. That does not address the other issues of the effect of less total tonnage on fixed costs—that addresses only the savings.

Chair Washington commented on the complexity of this issue. He asked if all the changes and challenges present in the waste-disposal system and in Metro’s internal budget issues would affect the projections.

Mr. Petersen said those issues could impact the tip fee, but they would not affect the tonnage forecasts.

On another subject, Mr. Petersen recognized Mr. Ehinger’s contribution to the contract negotiations. He said it was Mr. Ehinger’s idea to ensure that the savings came out of the first tier. That has ensured some protection if Metro loses tonnage.

4.  RESOLUTION NO. 99-2860, FOR THE PURPOSE OF APPOINTING JENNIFER ALLEN, RON HERNANDES, AND JULIET HYAMS TO THE METRO CENTRAL STATION COMMUNITY ENHANCEMENT COMMITTEE

Katie Dowdall, REM, introduced the resolution by providing the history of the committee and summarizing the qualifications of the applicants. (Details of Ms. Dowdall’s presentation and the applicant’s qualifications are in the material associated with the resolution, included in the meeting record.)

Chair Washington will carry the motion to a meeting of the full Council.

5.  RESOLUTION NO. 99-2870, FOR THE PURPOSE OF AUTHORIZING RELEASE OF RFB #99-40-REM FOR THE CONSTRUCTION OF AN EXPANSION TO THE PUBLIC UNLOADING AREA AT THE METRO CENTRAL TRANSFER STATION

Mr. Petersen introduced the resolution. He explained the need for expanding the public area and the reasons for cost increases from the original estimate. He said with regard to the public that more people have been using the transfer station. As to the increases in cost estimates, those are due to recommended improvements in ventilation and soil testing and the need for a concrete slab to replace some asphalt. (More details about the resolution can be found in the executive summary and staff report that accompany the legislation, contained in the meeting record.)

Chair Washington asked what the total increase was compared with the original capital improvement plan. Mr. Petersen said that was about $170,000.

Councilor McLain said the safety of the public has been a key concern at Metro’s transfer stations. She said the issue of dealing with dust in the public area is important, as the public does not have the clothing or experience working in a closed space.

Councilor McLain will carry the motion to a meeting of the full Council.

6.  RESOLUTION NO. 99-2856, FOR THE PURPOSE OF APPROVING A FY 1999-2000 ORGANIC WASTE MANAGEMENT WORK PLAN, AND AUTHORIZING RELEASE OF BUDGETED FUNDS

Mr. Petersen explained that the resolution was before the committee in response to a budget note that the department present a work plan before any of the appropriated money is spent. He introduced Jennifer Erickson of the REM department, who would explain the work plan further.

Jennifer Erickson, Solid Waste Planner, REM, explained the plan. (More details about the plan can be found in the Executive Summary and Staff Report that accompany the legislation, included in the meeting record.)

Councilor McLain said the task force had been working diligently on their ideas for the general concept. She said some areas present policy choices, as eventually organics facilities will need to be sited, and they are not easy to site. She suggested that the task force be invited to appear before the committee to discuss some of the ramifications of this work plan. She suggested that be done early in the process, to avoid spending time pursuing policies that might be unacceptable.

Councilor McLain will carry the motion to a meeting of the full Council.

8.  TRANSFER STATION SERVICE PLAN

Bill Metzler, Waste Reduction and Planning, REM gave a PowerPoint presentation summarizing progress on the Transfer Station Service Plan. (A hard copy of this presentation has been attached to the meeting record.)

Councilor McLain asked how the criteria of assuring 20-25 minutes travel time one way stacked up against other transfer stations nationwide. How many other metropolitan regions meet that goal?

Mr. Metzler said only one transfer station in the nation—one in King County—met the 20-minute one-way travel time benchmark.

Councilor McLain asked if the areas that indicated more than 25-minute travel times in the Metro region were 30 minutes, not 40 or 60. Mr. Metzler said that was correct.

Councilor McLain questioned the wisdom of changing a whole system based on the assumption that there is a big difference between 25 and 30 minutes, especially at a huge cost. She suggested inserting a slide that addresses that issue or puts it on the list of items to discuss.

Mr. Metzler said that all costs would be studied with any scenario. This study just looked at travel time as a starting point.

Councilor McLain asked if the three components currently required for transfer stations, as stated in the code, would be required of the recovery standards of the direct-haul MRFs if they receive mixed waste. Mr. Metzler said that is correct.

Councilor McLain asked whether the same would be true of the caps were lifted on direct-haul MRFs. Mr. Metzler said that had not been required for those MRFs.

Councilor McLain asked if Metro is willing to spend $690,000 to expand self-haul at Metro Central but the direct-haul MRFs are not required to serve the public, then those MRFs seem to be allowed to take the cream.

Chair Washington said that although that was a good point, Mr. Metzler was presenting only what the subcommittee had outlined, not any decision that had been made.

Councilor McLain said she would still raise that concern in the interest of bringing up questions early rather than waiting until they get to Council.

Mr. Metzler said scenario number 4 actually had generated the most interest among subcommittee members, which addresses Councilor McLain’s concern.

9.  COUNCILOR COMMUNICATIONS

There being no further business before the committee, Chair Washington adjourned the meeting at 3:25 PM.

Respectfully submitted,

Pat Emmerson

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF NOVEMBER 17, 1999

The following have been included as part of the official public record.