MINUTES OF THE METRO COUNCIL

SOLID WASTE & RECYCLING COMMITTEE MEETING

Wednesday, July 18, 2001

Council Chamber

Members Present:  Bill Atherton (Chair), Susan McLain (Vice Chair), Rod Councilor Monroe

Also present:    David Bragdon

Absent:    

Chair Atherton called the meeting to order at 3:34 p.m.

1.  CONSIDERATION OF THE MINUTES OF THE JUNE 20, 2001 SOLID WASTE & RECYCLING COMMITTEE MEETING

2.  REGIONAL ENVIRONMENTAL MANAGEMENT DIRECTOR’S BRIEFING

Terry Peterson, Director, Regional Environmental Management Department, reported that the work on the new public unloading building at the Metro South transfer station is almost done; gave details of Parametrix’s monitoring of wastewater at the St. Johns Landfill; explained the effects of HB 3744, which raises Metro’s recycling recovery goal from 56% to 62%; and described the “River Starts Here” campaign to heighten public awareness about the impacts of polluted stormwater on the region’s rivers and streams. (For more detail, see the copy of the Regional Environmental Management Director’s Updates attached to the permanent record of this meeting).

Councilor Monroe asked what had been to promote the newly adopted household hazardous waste policy to not charge for disposal of hazardous waste at the transfer stations.

Dr. Petersen said the fees had been being waived at the permanent facilities so he could not say the exact date the new policy took effect. He reported that the policy had been very well received and appreciated by the customers at the transfer station.

Councilor Monroe asked if there would be a promotion to let the public know about

Jan O’Dell, REM Public Affairs, said all the information being distributed at this time did say the fees had been waived and in the fall there would be a big splash about waiving fees at the facilities, after the last of the round-ups were over with.

Councilor Monroe asked about the current recycling rate.

Dr. Petersen said it was at 43% without counting the 6% for waste reduction. He acknowledged that there was a ways to go to get another 200,000 tons of waste reduced.

Councilor Monroe asked if the legislature had now raised the goal from 56% to 62%.

Dr. Petersen said the legislature had basically adopted the 56% that Metro already had in the Regional Solid Waste Management Plan (RSWMP) for the year 2005. They had not made it any more stringent than Metro had already planned on. He thought the overall goal for the state was 45%. He added that Metro’s standards were more stringent than other places in the state because the market and infrastructure was here, so it was not unreasonable to have a higher rate here than, for instance, rural eastern Oregon.

Councilor Monroe asked about penalties for not reaching the threshold level.

Dr. Petersen said there were penalties that the state could impose. He assumed the DEQ would apply those actions uniformly around the state. He said since SB 66, raising the recovery rates, was put in place five years ago, he had not heard of anyone being penalized for failure to meet the standards.

Councilor Monroe commented that he would hate to see a situation where, because our region was doing very well with recycling rates, other communities in the state were allowed to get off the hook even though they were doing very poorly with their rates.

Chair Atherton asked Mr. Fjordbeck if the 56% recovery rate made a difference with the unfunded state mandate.

Mr. Fjordbeck responded that he would have to check into the matter but would get back to the committee.

3.  Update on Blue Line Contract

Dr. Petersen said the Blue Line back-up hauling contract, entered into in January 2001, was set to expire on June 30, 2001. He said the contract was $5,000 a month to keep them on standby in case they were needed to transport waste to the landfill in Arlington. He said since the assignment of the contract from STS to CSU Transport in May 2001, there had been no operational glitches or problems. He thought it prudent to give CSU another month of operation, so the Blue Line contract was extended for one more month. He reported the first financial monthly report from CSU was due the end of July, and there would be a final decision on the Blue Line contract at that time.

Councilor McLain thought it was prudent to have a back-up. She hoped that at the end of July, if CSU looked healthy and whole, there would be some discussion with the committee on keeping the Blue Line back-up contract for emergencies.

Dr. Petersen clarified that he fully expected to find CSU in good shape and there would be no need for a back-up contract.

John Houser asked Mr. Fjorbeck at what point would staff’s ability to continue the contract on a month to month basis require formal council action under the contracting code.

Mr. Fjordbeck responded that council would have to act if the aggregate cost increase was more than 20% of the original amount of the contract. He said after the one month, staff would be back in front of council seeking the kind of review that Councilor McLain was referring to.

4.  Update on July 11, 2001 Rate Review Committee

Dr. Petersen referred to the memo he had distributed to the committee summarizing the last two Rate Review Committee meetings. He discussed the memo and the comments of the committee. He thought it would be helpful for the Solid Waste & Recycling committee to give some guidance on the rate policies included in the memo to the Rate Review Committee. He said there had been some discussion and they were surprised to find the perception among some of the committee members that the private facilities were paying a disproportionate amount of Metro’s cost. (For more detail, see copy of the July 17, 2001 Memo RE: Update on Rate Review Committee attached to the permanent record of this meeting).

Chair Atherton added that they were quite surprised to find that even if you did put debt service over into the Metro facilities, as opposed to the regional system fee, that there was still a substantial contribution from the agency in terms of regulatory activities on the private sector.

Councilor McLain thought that exercise pointed out that both private sites and public facilities do get benefit from the regional system. She said the philosophy she heard was a support of the regional system. She felt it was a reaffirmation that the regional system had meaning to both the general public and to Metro and the private sites.

Councilor Monroe supported the idea of one regional system fee to pay the total regional cost including the cost of administration and the bonds, and not be subsidized. He felt Metro ownership of the transfer stations was an important part of the regional system and control for a number of reasons. For instance, they set a standard for the private facilities and give opportunity to provide services to self-haulers, and a place to do recycling of household hazardous waste.

Dr. Petersen commented that he had extracted these highlights from the Rate Review Committee. He reported there would be another meeting on August 1. He understood they would be reviewing other assumptions for calculating the rate at that meeting. He asked for direction to staff regarding policies.

After discussion, Chair Atherton and the committee gave the following direction to staff regarding the policies noted on page 3 of the memo:

Policy 1: Fixed Costs: the committee agreed that staff should look for other costs that could be appropriate to include in the Transaction Charge.

Councilor Monroe cautioned that should the transaction fee go up significantly, it could be a disincentive to self-haulers to properly dispose of their material.

Councilor McLain agreed with the philosophy of reviewing fixed costs on regular basis. She said there were many non-public facilities that not only did not have good self-hauling facilities, they did not necessarily want to have self-haulers. She thought the regional system should be used to balance that.

Policy 2: Variable Costs: the committee agreed that renewal and replacement costs should continue to be treated as variable costs at the Metro facilities.

Policy 3: Regional Services: the committee agreed with the staff recommendation to continue to allocate costs of regional services to the regional system fee.

Councilor Monroe said it should also include the recycling credits as well.

Policy 4: Revenue Bonds: the committee agreed that they should continue to allocate bond debt service to the regional system fee.

Policy 5: Overhead: the committee agreed that Metro should return to the policy in place in FY 1997-98 and allocate support costs to the regional system fee per that policy.

Councilor McLain said this was another example of where Metro was trying to make the regional systems fee reflect the whole cost. She supported that idea.

Chair Atherton and Councilor Monroe also supported it.

Councilor Bragdon thought the procedure they were following was worth the time spent. He suggested a paragraph justifying and explaining the background for the other councilors would be helpful to them.

Chair Atherton said they would welcome any comments at the Rate Review Committee.

Dr. Petersen discussed page 5 of the memo, Other Policies that Affect the Calculation of the FY 2002-03 Rates. He asked for guidance on issues that had an impact on revenues, costs and rates. For example, the undesignated fund balance and rate stabilization account; the regional system fee credit; waste recovery at local transfer stations; and expanded access to local transfer stations to increase market competition and achieve broader metro policies such as reduced vehicle miles traveled.

Councilor McLain appreciated that Dr. Petersen had noted the interconnectedness between the rate and other elements in the system. Regarding the undesignated fund balance and rate stabilization account, she said the committee had indicated that it was extremely important to keep those two funds at the appropriate rate as discussed in the past: keep it both financially prudent and have something built in for unexpected expenses. In regard to the Regional System Fee credit, she noted there were two different types of credit systems because of the downward movement of the tipping fee and other issues. She felt it was important, as they reviewed the rate, the tipping fee and the funds in the stabilization accounts, that they have updates on the status quo of those credits. She thought the sunsetting issue should not be ongoing, but should either be made permanent or done away with. She said they had discussed the caps and whether they should be different for wet or dry waste. She was pleased with the handout bringing all the items together.

Councilor Monroe commented that there should be reasonable reserves.

Chair Atherton agreed with the direction. He wanted the outcome to be easier to understand than it was currently.

5.  ORDINANCE NO. 01-913, FOR THE PURPOSE OF AMENDING METRO CODE CHAPTER 5.02 TO MODIFY THE DIRECT-HAUL DISPOSAL CHARGE AND TO FACILITATE PAYMENT BY PERSONAL CHECK FOR DISPOSAL SERVICES AT METRO TRANSFER STATIONS

Dr. Petersen explained that facilities authorized by Metro to directly haul wet waste from their facilities to the Waste Management landfill in Arlington haul their waste there and bill Metro. Metro then bills the facility. Currently, the code has a dollar amount which Metro bills the facility but the price Metro gets charged for disposal is a function of tonnage delivered. This ordinance would change the code language from a dollar amount to a formula based on the actual charges Metro is billed. It would also allow personal checks at the local transfer stations without a check guarantee card which many banks no longer issue.

Chair Atherton opened a public hearing on Ordinance No. 01-913. No one came forward to testify so he closed the public hearing.

Mr. Houser asked to what extent the tonnage fluctuated because the amount being charged at a given time would be based on what occurred during the previous 3 months, which might make peak season charges be the lowest rate.

Dr. Petersen said it seemed like the right time period because of the seasonal variations in tonnage. The reason he did not want to do it on a month to month basis was because they would be billing widely varying prices. By going quarterly, the price is averaged out. He said it was correct there would be a lag, but it was far better than currently, which does not reflect the actual price at all.

Mr. Houser asked if there had been any reaction from the parties involved.

Dr. Petersen said they had notified Waste Management that this was coming up.

Chair Atherton assigned Councilor Monroe to carry the resolution to the full Council.

6.  STRATEGIC PLAN DISCUSSION (Final Draft, Action Plan Concepts)

Janet Matthews, REM Program and Policy Manager, reviewed the draft strategic plan 2001-02. (For details, see the copy of the Metro Regional Environmental Management Department Strategic Plan 2001/02(draft) included in the permanent record of this meeting.) She felt the plan affirmed the priorities in waste reduction and providing efficient and environmentally sound disposal.

Chair Atherton suggested going through the committee’s questions to see what changes, if any, would be recommended. His wondered whether tonnage and percentages were the real issue or if the focus should be on mercury switches, cathode ray tubes, old computers, and other hard to dispose of hazardous items.

Ms. Matthews responded that she did not think it was a question of one being more important than the other, but responding to both mandates in as progressive a manner as possible. She noted page 12 of the plan, which laid out the number one goal as reducing the need for hazardous waste services while ensuring the availability of such services throughout the region. She said reducing toxicity was certainly paramount, but they had to recognize it was one of two requirements of the state. She added that there was a lot more detail to follow up with in the department about working with DEQ to not only get them to count a number of things that we do, like diverting food for animal and human consumption. They don’t count that kind of reuse in the recovery rate. She had not had it clarified yet if there was credit for the recycled paint. She said 80% of the hazardous waste collected was recovered for energy or recycled or reused in some way so perhaps some further credits should be advocated with DEQ for that work. She said florescent light tubes would be accepted at the transfer stations in the very near future.

Councilor Bragdon thought the changes going on in the industry now, corporate consolidation and other changes, made for some new alliances that could have a real impact on the local regulators. He also felt it may not be just a matter of the fee, but what the fee is being asked to cover. He said the plan needs to reflect that those things are being thought through in a strategic way.

Chair Atherton said the whole subsidy issue needed clarification.

Councilor McLain said the language should reflect that what was counted for recycling credit was appropriate and complete. She noted problems with the chart on the bottom of page 6 and hoped the layout could be reviewed.

She asked Ms. Matthews to review her notations from the SWAC meeting to be sure their questions were responded to regarding Metro’s role in the solid waste system. She felt there was a lack of emphasis regarding the fact that both tonnage and target were being considered, and that there should be more emphasis that they were not just about simple reduction and numbers, but also targeting the hard to deal with recyclable waste streams and markets.

Councilor Monroe reflected that when the tip fee was cut down to $62.50 in 1997, the recycling credit system was put in on temporary basis because they knew it had a negative impact on recycling. He said the decision to extend the credits at least another year, to 2002, has been made, and now they were looking at the whole fee structure. He said if the decision was made to raise the tip fee, then perhaps it would be appropriate to adjust the credit fee as well because the two drove the same thing. He said they certainly needed to be concerned about hazardous materials, but recycling other inert products, like aggregate, was important as well. He added that there is a shortage of aggregate in this region that is going to get worse as Ross Island is closed down. He said used aggregate can be recycled as a useful product and thought it was better to recycle it than to haul it all the way to Arlington to dump it in the landfill. He hoped whatever changes were made to the recycling credit and/or the tip fee, the decisions would enhance and increase the efforts of recyclers in the region.

Chair Atherton asked where it stated that their agreed upon strategic direction was to keep the “burial cost” of garbage high to encourage recycling.

Ms. Matthews said it did not specifically say that, but one of the goals was to increase waste reduction and another was to have reasonable rates. She said they took the goals for reasonable rates and adequate, stable revenue straight from the Regional Solid Waste Management Plan (RSWMP).

Councilor McLain supported the Chair in trying to insert a sentence recognizing that balance. She acknowledged that the had already stated that if they want recycling to go up, they needed to make it more important to recycle. There was also a commitment to make sure the industry was committed to rate stability. She felt having that phrase included would make a stronger document.

Dr. Petersen said there was language in the plan about a strategy to stop subsidizing the regional system fee that gets the full cost of landfilling over on the landfills.

Chair Atherton said he had been working under the assumption that the higher the tip fee, the more illegal dumping happened, while with a lower tip fee, there was not so much recycling. He wondered if their strategic direction to use that tipping fee as a key driver in the recycling movement or were they going to use more a complicated system of incentives and subsidies.

Ms. Matthews said it was not in the strategic direction of the plan to use the tipping fee at the Metro facilities to drive recovery. It was addressed in a number of different ways, including the 25% recovery of dry waste at local transfer facilities. She had not heard, as they went through the process, that anyone was prepared to say they should assert that they would use the tipping fee to drive recovery.

Councilor McLain thought there was a reason for it not being in the strategic plan. Even though they knew they got better recycling results with a higher tipping fee, it was not the only way, or even the best way to get those results.

ADJOURN

There being no further business to come before the committee, Chair Atherton adjourned the meeting at 5:11 p.m.

Respectfully submitted,

Cheryl Grant

Council Assistant

Attachments to the Public Record for the

Solid Waste & Recycling Committee Meeting of July 18, 2001:

Testimony Cards:

None.