MINUTES OF THE

METRO COUNCIL REGIONAL ENVIRONMENTAL MANAGEMENT COMMITTEE MEETING

February 17, 1998

Council Chamber

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

1.  CONSIDERATION OF MINUTES OF FEBRUARY 3, 1998

2.  REGIONAL ENVIRONMENTAL MANAGEMENT DIRECTOR’S UPDATE

Bruce Warner, Director of Regional Environmental Management, gave the Regional Environmental Management (REM) Director’s Update. The following items were updated: solid waste enforcement activity, the annual waste transport services report, a paint return program, commingling recyclables, and a DEQ meeting.

Marvin Fjordbeck, Senior Assistant Counsel, was asked to discuss the Jack Gray Transport (JGT)/ Specialty Transportation Services, Inc. (STS) sale. Mr. Fjordbeck reported that on January 20, 1998, the Metro Council adopted a resolution authorizing Mike Burton, Executive Officer, to approve and consent to the assignment of former the JGT contract to STS, provided he determined that the provisions of any financial agreements were similar in nature. Based upon legal counsel’s advice, Mr. Burton determined there were no substantial modifications to the financial agreements presented to Metro’s Regional Environmental Management department. The agreements were executed and the final copies arrived at Metro last week. Mr. Burton advised Mr. Gary Goldberg, of STS, of this outcome in a letter dated January 30, 1998. The agreement is now complete and the operations have been transferred from JGT to STS.

Councilor Washington asked Susan Keil, Director of Sanitation, city of Portland, to discuss further the topic of commingling. Ms. Keil said the city of Portland intends to use the two yellow bins presently in use to handle the materials currently eligible for recycling. One bin will be used for scrap paper and newspapers (including milk cartons), and the second bin will be used for mingled plastic, glass, and metal containers. Haulers will have the option of replacing their trucks, and about 80% of the trucks in the system are due for replacement. She said with the sorting technology now available, the collection cost at the curb can be reduced by requiring less sorting by the haulers and less time going off-route to unload. Some processing costs will be added because some sorting will be required on the back end, however, the net reduction in processing costs is very good. No change is expected in that cost, however, some trade-offs are expected.

3.  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 the Metro Code to reduce disposal fees, establish a performance- and incentive-based regional system charge credit, establish a transaction charge, and make other related amendments. A staff report and executive summary contain the factual background and analysis of the ordinance, and are contained in the meeting record. Mr. Warner said consideration of this ordinance has been held over until today in order to develop changes that will accomplish the following four things: 1) revise the definition of direct haul disposal charges so that Metro does not inadvertently prohibit facilities from utilizing the existing transportation operator to transport waste directly to the Columbia Ridge Landfill; 2) clarify and narrow the definition of recoverable materials at transfer stations to apply only to wood, yard debris, and tires; 3) add a sunset clause to the performance-base incentive curves effective July 1, 1999 at which time the REM committee and the Council will review the effectiveness of the program; 4) revise the performance-based incentive curve.

Councilor McFarland asked about the status of wood, yard debris, and tires in the current program. Mr. Warner said the current code establishes a fee for those materials, which will be collected at the door when they arrive at the transfer station. In the original proposed ordinance, the definition governing what recovered materials would receive the charge was found to be too broad. Following a review of the minutes of the Rate Review Committee, as well as the Solid Waste Budget Advisory Committee, staff has determined that the charge should be applied to wood, yard debris, and tires only. A new definition has been included in the ordinance that will limit the definition to apply only to these materials.

Chair Morissette asked if any additional changes had been proposed since the last time he had discussed the ordinance with Mr. Warner. Mr. Warner said there were no additional changes.

Doug Anderson, REM Waste Reduction and Outreach Manager, appeared before the committee to discuss the proposed revisions to the performance-based curves and the implementation of the new rates. He said the Solid Waste Advisory Committee (SWAC) was attempting to achieve the following objectives with its suggestions: 1) To match credits with effort by giving credit for the system fee early on when the effort was the greatest. 2) To recognize recovery, even at low levels; SWAC’s curve goes as low as 5% recovery. 3) To have one curve apply to all facilities and address all administrative issues. 4) To provide a big incentive for high levels of recovery to urge people to achieve progressive improvement. 5) To draw a strong line between MRFs and reloads to provide a big disincentive for backsliding. 6) To issue a penalty against any MRF that drops below a minimum recovery rate.

Mr. Anderson then displayed several graphics which are part of the official record of the committee meeting. His comments are summarized below. [Editor’s note: Due to the interactive nature of his visual presentation, only those comments that can be accurately summarized are included.] He said SWAC had envisioned giving 60% of available credits at the 30% recovery rate. Staff proposes to give 25% of available credits at the 30% recovery rate, and to give 80% of the additional credits at the 30 to 45% recovery levels.

Mr. Anderson reported SWAC desired to recognize recovery even at low levels. Their curve was to apply to all waste, either wet or dry. Their projection of the curve begins at 5%. Staff’s curve begins at 20%, and is a dry waste curve. He said the recovery rate is not intended to apply directly to wet waste, however, Metro proposes that a facility having both wet and dry waste under the same roof, be given credit for gleaning recyclables from wet waste. He reported that one curve will apply to all facilities, and will target the recovery activity, not the reloading activity. Mr. Anderson reported the SWAC curves actually dips below the “make-whole” line. Their curve would make facilities better than whole at a 25% recovery rate. This would provide an incentive for facilities to stay at 25%. Staff is proposing a new curve that will result in a make-whole line at approximately 35% to 40%.

Mr. Anderson reported that SWAC had recommended instituting penalties if recovery dropped below an unspecified minimum recovery rate. This would continue the policy of differentiating between MRFs and reloads. He reported this is a franchise issue, not a rate issue. Metro is reluctant to discuss penalties because it would soon become apparent that MRFs would have a greater penalty on reloads, and this would discourage MRFs.

Councilor Morissette opened a public hearing.

1. Jeanne Roy, SWAC, spoke in favor of the amendments addressed by Mr. Anderson. She said the region needs to maintain a distinction between reloads and MRFs so that recovery of mixed waste is not compromised. She expressed opposition to the amendment pertaining to the transaction charge of $5 per load at transfer stations. She said the decrease in disposal fees will have a negative impact on source-separated recycling, and will keep Metro from meeting its recycling goals. She said Metro should, one, set up a task force to study how to strengthen recycling programs, and two, allocate money in the budget for source-separated recycling. She said she would prefer to see funds go to source-separated recycling, rather than post-collection recovery.

Councilor McFarland referred to the sunset clause in the ordinance, stating Council could review Ms. Roy’s concerns at that time. Ms. Roy responded that the proposed sunset clause pertains only to the subsidy for the MRFs. She said the tip fee reduction is a separate issue. Mr. Warner concurred with Ms. Roy that the clause pertains to the incentive-based program, and does not affect any other components of the ordinance. Councilor McFarland asked Chair Morissette if Metro can use the clause for whatever purpose it chooses. Chair Morissette said that in 1999, the sitting Metro Council can review whatever elements of the ordinance they choose. He said, however, he does not believe the rates are directly tied to the sunset clause, and that they will remain until a future Council chooses to review them.

Councilor McLain referred to a letter she received from Ms. Roy pertaining to the content of her testimony at today’s meeting. She asked that copies be provided to other committee members, as well as to staff. She asked that staff respond to Ms. Roy’s letter, in the form of a written or oral report to committee. Mr. Warner said staff received a copy of Ms. Roy’s letter last week; and staff agrees with most of the points made in her letter. He said her recommendation for a task force is a good idea, however, the department is not in a position to fund such a group.

2. Sue Keil, Director of Sanitation, city of Portland, spoke in favor of the tip fee proposed by Metro. She said last year’s reduction enabled the city to keep rates flat. Rate payers have indicated that they would like to see the benefit of the savings; and the city intends to pass through the decrease to its customers. Ms. Keil said her department believes rate payers behavior is influenced by factors other than cost, and she said options such as commingled recycling and commercial dry waste policies make it easier for customers to recycle. She said the city has almost completed its rate review process. Ms. Keil said the proposed performance-based curve accomplishes SWAC’s objectives.
3. David White, Oregon Refuse and Recycling Association, asked where the concept of gleaning materials from wet waste is described in the ordinance.

Councilor McFarland said she believed Mr. Anderson had stated that the gleaning concept will be dealt with in the franchising process for individual facilities. Mr. Anderson said this is an implementation detail, and it will be left to the executive officer to interpret the policy. Mr. Warner said this matter is covered in the proposed amendments, but that staff needs to add some specificity in the franchise documents about what tonnage recovered means. Mr. White said he wants recovery to be recognized at low levels.

Councilor McLain said there is enough specificity in the new language to have a framework in place, however, details addressing the differing facilities need to be addressed. Since one definition will not fit all facilities, this portion should be addressed in the franchise language or by other administrative language. Mr. Warner agreed that this is how he interprets the proposed ordinance. Councilor McFarland said basic rules will be in place, but each facility will be considered individually because of their differences. Mr. Warner added that certain elements will be consistent across the franchises. Chair Morissette said Metro should have clear, consistent rules throughout the process and, if something doesn’t work, that will need to be considered separately. He said the process must be understandable.

Mr. White said he did not see where the reload/MRF waste shift would be recognized in the ordinance. He said the formula should be applied equally; and as long as the intent for equal application is on the record, people can work to make it happen.

4. Aleta Woodruff, MCCI, appeared before the committee to speak as a private citizen. She complimented staff on the recycling event in Troutdale. She said in light of the lowered tip fee, a small reduction in rate payer’s fees would be beneficial, particularly to retired and disabled individuals, as well as to single parents.
5. Mel Irvine, President, Willamette Resources appeared before the committee to speak in favor of the ordinance and amendments. He said the reduction in tip fees is not beneficial to MRF operators because the tip fee is their major source of revenue. He understands Metro probably has no option but to lower the rates. He said his company, WRI, takes in about 2,400 tons per month of mixed material, and of that amount, it recovers more than 1,000 tons. This equates to a revenue loss of about $12,000 to $13,000 per month, or about $150,000 per year. Mr. Irvine said his company does not have the bottom line to handle that kind of loss.

Although Mr. Irvine questioned the validity of MRFs in Metro’s system, he said Metro staff has developed very innovative ways to address the problem. He said WRI had no way to reduce its costs in the way Metro reduces its rates. He believes the curve will be successful, and will provide incentives to MRFs. He does not view this as a subsidy. Rather, it is an opportunity for the MRF operator who works hard to generate a higher recovery rate to lower his or her costs substantially. He said it takes a lot of effort for a MRF to reach the “make whole” level of between 35% and 40%. The curve takes away the “stick” and provides the “carrot.” Currently, if Mr. Irvine’s operation goes below 45%, he is assessed fines, and is deemed to be in noncompliance with his permit. This means Metro can cancel or refuse to renew his permit. He guards carefully against this situation, because of his $3 million investment.

6. Garry Penning, Division Manager, Waste Management, Inc. said his company supports the rate measure. He asked about the petroleum-contaminated soils or special wastes that some facilities are allowed, or are seeking to be allowed to handle.

Mr. Warner said staff is looking at Metro’s transfer stations as a test. Metro does not deal with special wastes, so staff will establish that the 10% will not include special wastes, industrial wastes, or contaminated soils. He said this would put Mr. Penning at an extreme disadvantage in the discussion.

Chair Morissette said he realizes Waste Management did not need to negotiate with Metro for lower rates. He said that in good faith, and to help the region, Mr. Penning’s company did so, however. This has allowed Metro to lower rates, and he hopes local jurisdictions will be a partner in what he believes will positively affect the citizens of the region. He said Metro’s charges need to be as close to costs as possible.

Councilor McLain commented positively on the process of the past several months, and congratulated all parties for working together toward a better refinement of the system. She thanked Oregon Waste Management on the wonderful service they have provided, as well as their excellent partnering efforts. She thanked citizens; WRI; other councilors; staff; Browning-Ferris Industries, whose contract with Metro nets the agency about $800,000 in savings each year; Jack Gray Transport; and other parties involved in the process.

Chair Morissette closed the public hearing.

Councilor Washington complimented staff on their efforts, and said the key to the success of this project was the willingness of interested parties to leave their interests at the door, and to work together toward the interests of the region. Chair Morissette questioned how it is truly possible, if one cares deeply about a particular situation, to leave all interests outside.

The ordinance then became Ordinance No. 98-720A.

4.  ORDINANCE NO. 98-725, FOR THE PURPOSE OF GRANTING A YARD DEBRIS PROCESSING FACILITY LICENSE TO MISINGER’S FLORAL NURSERY, INC. TO OPERATE YARD DEBRIS COMPOSTING FACILITY

Mr. Warner reported on Ordinance No. 98-725, which would grant a yard debris processing facility license to Misinger’s Floral Nursery, Inc. He said because the company is quite small, the ordinance would waive the annual $300 fee, and would waive the requirements for quarterly reporting.

Chair Morissette opened a public hearing. No one appeared to speak with regard to the legislation. Chair Morissette closed the public hearing.

Councilor Washington will carry the ordinance to full Council.

5.  RESOLUTION NO. 98-2610, FOR THE PURPOSE OF AUTHORIZING RELEASE OF RFB #98-6-REM FOR THE CONSTRUCTION OF A LATEX PAINT PROCESSING BUILDING AT METRO SOUTH STATION

Mr. Warner reported on Resolution No. 98-2610, which would authorize construction of a latex paint processing building at Metro South Station. A staff report and executive summary to the resolution contains the factual background and analysis of the resolution and are included as part of the meeting record.

Councilor McFarland asked if this facility will be built above the flood line. Mr. Warner said it will be above the flood line. He said it is in the area of the one-hundred-year flood. The building will be located at the highest part of the property, and the heating, ventilation and equipment will be above floor level. He said the existing tunnel where paint is processed is prone to flooding. Chair Morissette said that by putting the equipment higher and locating the building as far up on the property as possible, Metro has addressed the potential problem as much as possible.

Councilor McLain said REM staff needs to work with Metro’s Growth Management staff to ensure that the structure complies with Title 3 requirements. She said if Metro expects other parties to comply with Title 3, it needs to do so as well. She said building the facility on the highest point of the property will not be sufficient for her to recommend Council adoption, that she will need the assurance that Title 3 requirements are met.

Chair Morissette stated he believes Title 3 applies to new development. Councilor McLain agreed that Title 3 deals with new construction. However, she said the committee needs to determine how improvements to, or replacements of, existing buildings are affected by Title 3. She said because this is not new development, Metro could well be in compliance, however, it needs to be checked out.

Chair Morissette said Title 3 matters should be taken up in Growth Management Committee rather than REM, and that the issue should be acknowledged at the time that Council votes on them. Councilor McLain said she would be glad to have Council vote on the matter, however, she needs to have staff provide her with the pertinent information before voting at Council.

6.  RESOLUTION NO. 98-2611, FOR THE PURPOSE OF AUTHORIZING AN EXEMPTION FROM THE COMPETITIVE BID PROCESS AND AUTHORIZING ISSUANCE OF RFP #98R-5-REM FOR THE REPLACEMENT OF COMPACTION SYSTEMS AT METRO SOUTH STATION

Mr. Warner asked to stand on his previous testimony with regard to this resolution.

Councilor McFarland said she was unhappy with the continuing propensity to authorize exemption from the competitive bid process. That being said, she said the competitive bid exemption is justified in this case. She said she will continue to consider requests for exemption carefully in future.

Councilor McFarland will carry the resolution to full Council.

7.  INFORMATIONAL UPDATE: METRO CODE CHAPTER 5.01 -- “SOLID WASTE FACILITY REGULATION”  

Mr. Bruce Warner introduced Mr. Anderson who briefed the committee on the regulatory code relating to solid waste facilities.

Mr. Anderson reported that the code is outdated, and has not been comprehensively revised since 1981. Because of the outdated code, Metro is not positioned for the future, and cannot respond to the many changes that have occurred in the industry. The current Chapter 5.01 code does not reflect the system management principles that were adopted by Metro Council in the Regional Solid Waste Management Plan two years ago. The revised code will be less cumbersome to administer. In addition, SWAC has been doing a number of things that staff wishes to accommodate in that code. Finally, the new code will implement the new rate structure.

Mr. Anderson reported that Council had earlier expressed concern over the large number of variances that needed to be approved with each franchise or license. He said this is because the current code is based on the assumption that most solid waste facilities will be publicly owned. High entry and exit criteria were put in place because of the assumption that a private facility would be substituting for a role that Metro had contemplated would be operated by a public facility. He said this is not a suitable situation because the RSWMP relies heavily on private initiative for service provisions in the future. The current code also focuses on single-purpose facilities. There is move toward multiple activities under one roof that Metro needs to recognize. He said obligations toward achieving recycling goals are not well spelled out.

Mr. Anderson said the new code will accomplish the following:

1. Recognize certain types of activities such as MRFs and composting that Metro wishes to distinguish from major system elements like transfer stations, landfills, MSW composters, burners, and others.
2. Reduce entry criteria making it easier for private interests to enter the system. The operator will need to demonstrate he or she is competent, capable, etc.
3. Situate Metro to be last in line for approval, so facilities will have received approval from local jurisdictions and/or OSHA before approaching Metro.
4. Require that local operators demonstrate solvency.
5. Retain high level requirements for the major system elements, to ensure public initiative for transfer stations.
6. Require operators to demonstrate adequate plans, capital, and ability to meet obligations before allowing them into the system. This is intended to compensate for the lower entry criteria.
7. Require solid waste operators to receive, store, and recycle solid waste. Applies appropriate definitions to solid waste. Requires source-separated materials to go to recycling markets, not back to landfills.
8. Place less emphasis on nuisances and safety. These facilities are highly regulated by a number of agencies: OSHA, the health department, local land use associations, etc. Most health, safety, and welfare provisions of the code are duplicative. Partners with local jurisdictions in dealing with nuisances, where local jurisdictions are not well positioned, such as with vectors and odor drift.
9. Explicitly codifies performance standards. The current code focuses on how entities operate, and less on setting standards. The change implies a shift from the desk to the field, and will position Metro, in the public eye, as more of a player, and they will turn to Metro for enforcement and answers.

Mr. Anderson reported a draft revision of the code is now in hand. He said Plan A is to complete a comprehensive revision. Plan B is to undertake a patchwork effort in order to meet the June 1, 1998 date for implementation of the rates with the franchises. Further revisions will be undertaken through March, and public comment will begin. The decisions will be finalized through April, and move toward Council action in May.

Councilor McLain said this is a red letter day because many of the people sitting on the committee, and many councilors who have already left have been asking for this code update for nearly seven years. She said Council’s willingness to rethink Metro’s role in the 21st century is what enabled the revisions to take place. She complimented staff on its excellent work. Councilor Washington said it is nice that the Council is finally in a position to accomplish this work. He complimented REM staff for their very good work. Chair Morissette said he was happy with the move toward privatization because it makes sense to him.

8.  COUNCILOR COMMUNICATIONS

None.

There being no further business before the committee, Chair Morissette adjourned the meeting at approximately 12:30 PM.

Prepared by,

Lindsey Ray

Senior Council Assistant

[Prepared from transcript produced by Metro Staff David Aeschliman.]

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