MINUTES OF THE

METRO COUNCIL REGIONAL ENVIRONMENTAL MANAGEMENT COMMITTEE MEETING

February 3, 1998

Council Chamber

Chair Morissette called the meeting to order at 11:00 A.M.

1.  REGIONAL ENVIRONMENTAL MANAGEMENT DIRECTOR’S UPDATE

Bruce Warner, Director of Regional Environmental Management, gave the Regional Environmental Management Director’s Update. Among the topics discussed were: the SWAC rate ordinance discussion; recognition of Jim Quinn, Hazardous Waste Program Supervisor; completion of tri-state mediation; transfer station spills; and internal education. A copy of Mr. Warner’s report is included as part of the meeting record.

Councilor McFarland asked whether the problem with the defective liner installment at St. Johns Landfill had been corrected. Mr. Warner said REM staff believes the problem has been solved.

2.  ORDINANCE NO. 98-720, FOR THE PURPOSE OF AMENDING METRO CODE CHAPTER 5.02, REDUCING DISPOSAL FEES CHARGED AT REGIONAL SOLID WASTE FACILITIES, ESTABLISHING A PERFORMANCE AND INCENTIVE-BASED REGIONAL SYSTEM CHARGE CREDIT, ESTABLISHING A TRANSACTION CHARGE, AND MAKING OTHER RELATED AMENDMENTS

Mr. Warner reported on Ordinance No. 98-720, which would amend Metro Code chapter 5.02 regarding disposal fees. Mr. Warner said he would recommend that the committee continue discussion of this item to the February 17, 1998 committee meeting, and postpone taking action until that time. He said although the ordinance is essentially complete, it needs some refinements and changes, due to last week’s discussions.

Councilor McFarland asked for a point of order. At question was whether the ordinance needed to be moved prior to discussion of the matter at today’s meeting. Marvin Fjordbeck, Senior Assistant Counsel, said the committee could agree to move the ordinance today or wait to move it at the next meeting, when a vote on the matter is anticipated. Chair Morissette announced the committee would wait until the next committee meeting to move the ordinance.

A slide presentation accompanied REM staff’s remarks, hard copies of the slides are included as part of the meeting record.

Mr. Warner reported that REM staff, the executive officer, the Rate Review Committee, the Budget Committee, and the Solid Waste Advisory Committee have all been involved in drafting the ordinance. He said the ordinance represents the second major reduction in Metro tipping fees within a one year period. The ordinance provides incentives to preserve post-collection recovery of materials and it reorganizes the current rate section of the Metro Code to make it more logical and understandable for the lay person.

Mr. Warner said the reason for the recommended continuance of consideration of the ordinance is to allow staff to address four areas for potential engrossment. One, minutes of the Rate Review Committee reveal that language should be more specific. Two, SWAC recommends that the definition of “direct haul disposal charges” currently in the ordinance be modified. Currently the ordinance establishes a charge for direct haul, however, it does not empower anybody to do it. Three, a sunset provision should be added to the performance-based rates to signify the intent of the Council to review the effectiveness of the new program in a year. Four, Mr. Warner said staff recommends changes to the performance based rate section of the ordinance to reflect staff’s latest thinking, as well as the input received last week from SWAC.

Mr. Warner said it was his intention to have a staff proposal out to stakeholders for discussion early next week, in order to reach consensus prior to a REM agenda being published for the February 17 meeting.

Roosevelt Carter, REM Business and Regulatory Affairs Manager, reported the ordinance will reduce the solid waste tipping fee from $70 per ton to $62.50 per ton at Metro’s transfer stations. It will establish a transaction charge of $5 per transaction at Metro’s transfer stations, resulting in an effective rate of $63.50 per ton for residential collection vehicles. It will make adjustments to other fees and credits for overall consistency, will establish a new methodology for assessing yard debris, wood waste, and tire disposal charges that will result in lower rates to these customers, and will establish a regional system fee that is linked to the recovery performance of solid waste facilities. It will incorporate certain form and style amendments to Metro Code 5.02 for ease of use.

According to Mr. Carter, REM staff and the Rate Review Committee have briefed the committee on reasons for the proposed changes. He said the regional economy remains vibrant, having a positive effect on the actual and expected tonnage. REM staff is forecasting a nine percent increase in regional tonnage over the current budget. The following circumstances have allowed Metro to offer a substantial rate reduction for the second year in a row: 1) the tonnage increase, 2) savings achieved in the department through such means as the new transfer station operations contract with BFI and Change Order No. 7 to the OWS contract, 3) the fact that fixed costs have remained stable, and 4) the fact that the Unappropriated Fund Balance has continued to grow beyond expectations.

Mr. Carter reported on the new transaction charge. He said currently, pick-up trucks account for 36% of the transactions at Metro transfer stations, while delivering less than 5% of the waste. The proposed transaction cost will more accurately recapture Metro’s actual costs for providing service to these customers than does the current flat tip fee. It will encourage delivery of larger, more efficient loads, which is consistent with other goals relating to congestion and vehicle miles traveled.

Mr. Carter reported that the ordinance establishes a direct haul fee of $24.93. He reported that the minimum weight for self-haul customers will be reduced to $15 per load compared to the $17 per ton charge. The charge for yard debris and wood waste will be lowered, utilizing a new methodology that reflects Metro’s actual costs, including contractual and overhead expenses for handling these materials. This methodology will result in reduced fees, from $54 per ton to approximately $38 per ton plus a $5 transaction.

Chair Morissette asked for verification that the overall cost to the smaller user will be roughly the same. Mr. Carter concurred.

Mr. Carter then reported on style and form amendments to permit for ease in use and understanding of the ordinance. Mr. Carter next reported on the overall budget and financial impacts of the ordinance. These impacts are contained in the staff report and the executive summary to the ordinance, copies of which are included as part of the meeting record.

Chair Morissette asked Mr. Carter if he was comfortable with the proposal as it related to the Fund Balance. Mr. Carter responded affirmatively.

Councilor McFarland asked Mr. Carter whether the new Fund Balance, after the initial shortfall, will still be high enough to indicate that proposed changes to the rate and fee structure will be a good business decision. Mr. Carter said the proposed changes will result in a sufficient Fund Balance. Chair Morissette said he anticipates an increase in Fund Balance, even with the rate reduction.

Councilor Washington asked what the Fund Balance will be after the proposal is adopted. Mr. Carter reported that the portion of the Fund Balance under discussion is the undesignated portion. The current balance will be approximate $13 million, drawing it down $1.6 million will result in a balance of $11.4 million. According to Mr. Carter, the future effect on the overall Fund Balance will be to draw it down to close to zero by the year 2002-3, however, Chair Morissette expressed an unstated, yet different expectation.

Doug Anderson, REM Waste Reduction and Outreach Manager, reported on the performance-based system fee. Mr. Anderson’s remarks closely followed his slide presentation, which may be reviewed for further amplification of his comments.

Mr. Anderson said the purpose of the performance-based approach was the following: 1) To respond to concern about post-collection recovery, and the possibility that recycling rates could lessen as a result of dropping rates. 2) To position Metro for future revision of the regulatory code. The penalty approach to achieving recycling goals will be replaced by an incentive approach. Solid waste facilities are becoming harder to site, therefore, the management plan encourages multiple uses for solid waste disposal sites. 3) To provide flexibility for local conditions, to permit operators to choose an operating range that makes economic sense. 4) To enhance regional recycling goals.

Councilor McLain said in encouraging multiple uses for solid waste disposal sites, Metro should not place itself in a position of encouraging inappropriate use of a facility. She said this is a land use issue that local jurisdictions need to be involved in determining. Councilor McLain said there needs to be more specificity with regard to enhancing the regional recycling goals in terms of the variable operating range for reaching those goals.

Mr. Anderson responded to Councilor McLain’s first concern, stating that Metro is not planning to encourage multiple use, but rather to accommodate it when appropriate.

Mr. Anderson said currently, if a facility recovers 35%, it avoids charges on the 35% recovered tonnage. Under the proposed scenario, if a facility recovers 35%, it will pay $6.60 per ton on the residual, rather than $14 per ton. He said the reduction in fee will increase in proportion to the percentage of recovery. He pointed out no extra credit is awarded for recovery rates up to 25 or 30%. The benefit levels off at approximately the 50 to 60% range, where staff will begin to question why this nearly-source separated quality material is not upstream in a source-separation program.

Mr. Anderson reported on the main elements of the critique of the original version. These include the following: 1) The ordinance is moving in the right direction, but it does not go far enough. There is still too much impact on operating margins. 2) It may work against source separation by not recognizing a good job at a poor waste stream. 3) There are implementation concerns regarding tracking individual waste streams and maintaining operational flexibility. 4) Metro should create incentives for all recycling. Even at low rates, recovery is better than landfilling.

Mr. Anderson said the ordinance version would have begun to reward recovery at lower rates, while preserving operating margins in the middle range. The proposed version would not change the policy with regard to higher levels of recovery. However, Mr. Anderson reported that a critique of the ordinance version revealed that rewards would be distributed inequitably. He said the easy efforts would be rewarded at a greater level than the difficult effort. At the very low levels, each additional point of recovery would be worth about $.40 per ton. When recovery levels reached 45 to 50%, the additional value would be reduced to about $.20 per ton. He said the rewards start too early, thereby rewarding easy recovery efforts. The result could be that it would encourage MRFs to be conduits to landfills, basically dry waste reloads. It was felt there would not be enough economic impact to prevent “backsliding” on recovery.

Mr. Anderson reported that at it’s January 28, 1998 meeting, SWAC developed the following objectives: 1) to match credits with effort, 2) to recognize recovery, even at low levels, 3) to apply one curve to all facilities, 4) to provide a big incentive for new investment at high recovery, 5) to make a greater distinction between MRFs and reloads at 25%, and 6) to add a penalty if MRFs drop below 25%. Mr. Anderson said the proposed penalty has not yet been specified.

Mr. Anderson reported that staff’s objectives are to implement SWAC objectives, but without the unintended consequences currently inherent in the proposal, and to ensure that credits go to recovery efforts, not reloading. He reported the next steps are to fine-tune the curve and implementation issues. This report will be completed this week and distributed to committee members as well as stakeholders at least one week before the next REM Committee meeting.

Mr. Anderson said his remarks comprised staff’s response to the issue of post-collection recovery. He said all commitments of the REM department and the RSWMP are to post-collection recovery; but more importantly, staff has concerns about the impact of rate changes on source-separated recycling. He said the recommended practices contained in the RSWMP rely heavily on avoided disposal costs to achieve some of its goals. If this goes down, Metro needs to be concerned about its ability to achieve those goals in the future. He reported that Metro had asked Donovan Enterprises, with subcontractors Willow Creek and Harding Lawson, to examine the potential impact on source separation programs. The consultants report will be published and distributed later this week.

According to Mr. Anderson, the conclusion of the consultants is that after examining existing source separated programs, the price impact is not great on the residential side, and the situation is fairly secure. However, the consultant recognizes a reason to be concerned and vigilant over commercial and demolition source separated recycling. The consultant feels that under the current rates, Metro can hold the line. Mr. Anderson said the report contains a good deal of uncertainty about what will happen in the future, and he urged caution. The report indicates “holding the line” is not sufficient. In order to reach goals, new bites need to be diverted out of the waste stream into recycling. A big challenge is that new materials such as organics, roofing, gypsum, and non-bottle bill containers, are very heavy in weight, and have big impact, however, their recycling economics are very marginal.

Mr. Anderson reported that recycling advocates share some of these concerns, and have made good, concrete recommendations. One recommendation is to convene a task force to examine existing programs. Another recommendation is that equal economic consideration be given to source-separated recycling as is proposed to be given to post collection recovery.

Chair Morissette opened a public hearing.

1. Susan Robinson, Government Affairs Manager, BFI, appeared before the committee to comment on the proposed ordinance. She said BFI has been a member of SWAC, and supports the ordinance in general and the rate reduction specifically. She said the following policy changes should be acknowledged. 1) Regarding the curve, BFI recommends a minimum 30% recovery rate for a facility to be eligible for a reduction in the regional user fee. Ms. Robinson said BFI believes without the minimum, facilities will skim loads for an easy 5% recovery, and then send the remaining 95% to the land fill. She said this could actually lead to a reduction in its recycling rate. 2) Ms. Robinson said BFI is concerned about the inevitable effects on the system when large customers begin to redirect their waste to facilities for direct haul to the landfill. This will leave the smaller, more expensive customers in the system, which will ultimately increase Metro’s overall per unit price. She recommended Metro look for ways to economically attract large volume customers, and include them in the discussions to achieve a win-win situation. 3) BFI recommends the development of health and safety standards, as well as standards for accountability at the new facilities. Ms. Robinson says the ordinance will change the landscape of solid waste handling in the region. Metro must develop language and procedures to protect the integrity of Metro’s transfer system and its customers.

Chair Morissette closed the public hearing.

Chair Morissette asked Mr. Warner to bring to his attention any specific language changes that are negotiated. Councilor McFarland asked for this information as well.

Councilor McLain said she agreed with the last speaker in that she approves of the concept, however, she has concerns about the curve itself. She said care needs to be taken not to give too much incentive to the lower end. The energy needs to be placed at the higher end of recovery. She said the specifics should come to the committee at the same time as the ordinance. She pointed out that she had not seen any of the requested reports concerning standards for health and safety and trucking up the Gorge. She asked for a rough draft of this information before these facilities are allowed to change their procedures and/or form.

Councilor McLain was pleased with the work done to date, particularly with the change from penalties to incentives. However, she said the changes are very dramatic, and need to be carefully reviewed for legal and technical ramifications.

Councilor Washington asked whether Metro is considering future siting of transfer stations, given the anticipated growth of the region. Mr. Anderson said his remarks earlier had dealt with the difficulty generally of siting solid waste facilities, however, the RSWMP has considered the service provision issue. He reminded the committee that the Council had three years ago discussed a ten year moratorium on transfer stations. Mr. Anderson said one way to deal with congestion and future growth is to manage demand for new facilities through waste prevention and waste reduction. The current plan relies on private initiative in reloads and MRFs to relieve pressure and feed the transfer stations.

Chair Morissette said he would save his comments for the next REM Committee meeting. He thanked staff for their presentation.

3.  RESOLUTION NO. 98-2598, FOR THE PURPOSE OF AUTHORIZING THE RELEASE OF RFQ #97R-48-REM FOR ANALYTICAL LABORATORY SERVICES

Mr. Warner reported on Resolution No. 98-2598, which would authorize the release of a Request for Qualifications (RFQ) for analytical laboratory services. Mr. Warner’s remarks can be found in the executive summary and staff report to the resolution, which are contained in the meeting record.

Chair Morissette asked how long Metro will be monitoring St.Johns Landfill. Mr. Warner said within the next six months, REM staff will be making its submittal to the DEQ for final closure plan for the landfill. It will probably be a twenty year plan. He said the plan will be reviewed by the committee prior to submitting it to the DEQ.

4.  COUNCILOR COMMUNICATIONS

Chair Morissette asked staff to coordinate their efforts to ensure that the executive summaries get distributed to all committee members.

There being no further business before the committee, Chair Morissette adjourned the meeting at 12:04 P.M.

Prepared by,

Lindsey Ray

Senior Council assistant

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