MINUTES OF THE METRO COUNCIL

SOLID WASTE & RECYCLING COMMITTEE MEETING

Wednesday, September 5, 2001

Council Chamber

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

Also present:    

Absent:    

Chair Atherton called the meeting to order at 3:41 p.m.

1.  CONSIDERATION OF THE MINUTES OF THE AUGUST 8, 2001, SOLID WASTE &

 RECYCLING COMMITTEE MEETING

2.  REGIONAL ENVIRONMENTAL MANAGEMENT DIRECTOR’S BRIEFING

Terry Peterson, Director, Regional Environmental Management Department, reported that the Metro South transfer station’s new public unloading area is open for business, talked about three upcoming REM conferences and said that the DEQ Recovery Report for 2000 showed the Metro waste shed recovery rate is up 2 percentage points from last year. (For more detail, see the copy of the Regional Environmental Management Director’s Updates attached to the permanent record of this meeting).

In response to a question from Chair Atherton, Dr. Petersen said the per capita rate of material ending up in landfills is tracked and reported, and continues to go up. He said he would get those numbers to the Chair.

3.  UPDATE ON THE SOLID WASTE ADVISORY COMMITTEE (SWAC) DISCUSSION OF LOCAL

 TRANSFER STATION AND REGIONAL SYSTEM FEE CREDIT PROGRAM ISSUES AT THE

 COMMITTEE’S AUGUST 20 & AUGUST 23, 2001 MEETINGS

Councilor McLain summarized two recent SWAC meetings where discussions took place regarding proposed changes for local transfer stations. (For more detail, see Summary of Key Points, SWAC Discussion of the Proposed Changes for Local Transfer Stations included with the permanent record of this meeting).

4.  COMMITTEE DISCUSSION AND DIRECTION TO STAFF RELATED TO THE

 DRAFTING OF ELEMENTS OF THE PROPOSED LEGISLATIVE PACKAGE

Dr. Petersen noted that SWAC had been told there would be a more specific proposal to react to at their next meeting on September 17^th.

He reviewed the four elements of the legislative package that would be reviewed by SWAC and then come to council in October. The first element is a revision to Chapter 5.05 of the Metro Code, regarding flow control. A draft revision has been completed by Metro counsel and is now being reviewed by an outside bond counsel. He noted the key change would be to better clarify what Metro's interests are in terms of regulating waste that flows out of the district and emphasizing the importance of environmentally sound landfills and associated health and safety issues.

Marv Fjordbeck, Senior Assistant Counsel, responded to a question from Councilor McLain that the focus of this flow control revision was to refine the current revisions of the code so they match up to the current practice involved with flow control.

Dr. Petersen continued with the second element of the package, the revision of the tip fees and the regional system fee. He noted this piece had been discussed several times both at the committee and at the SWAC and the Rate Review Committee and he did not have much to add at this time other than a reminder that the final dollar amount would depend on some of the other policy decisions that are upcoming.

Councilor McLain noted that the Rate Review Committee's advice was that there should be a full regional system fee. They had agreed on the formula as well as the product.

Councilor Monroe said it was very important that this be a balanced package because all of the factors are interrelated and have an impact on each other as well as the function of the system. He said it was critical to move this forward as a package.

Dr. Petersen continued with element three, the regional system fee credit program. He wanted to clarify with the committee that the pieces of this element were to remove the sunset date for the regional system fee credit program, to use the money budgeted to target high priority materials, to cap the total amount of the credit to match the budget appropriation, and to include an opportunity for out of district facilities to be eligible for the credits if they are regulated by Metro through an agreement with their local jurisdiction.

Councilor McLain agreed with all four suggestions for the third element. She felt some further specificity and work needed to be done.

Chair Atherton pointed out that the credit program was tied to the overall tip fee and disposal costs. He asked for comments regarding how to tie those together.

Dr. Petersen remembered that the original intent of the program was to maintain the operating margin at the private facilities so they could still do recovery. He said he had come to the conclusion that it is a useful recycling incentive regardless of whether the tip fee was going to go up or down.

Councilor Monroe said clearly a high tip fee made some recycling marginally productive that would not be with a low tip fee. He felt the system fee credit program could not be entirely divorced from the tip fee.

Dr. Petersen agreed. He said if the idea was to use the money to target materials that would not otherwise be recovered, in theory that would change over time as the market and the tip fee changed. It would have to be revisited on an ongoing basis.

Councilor Monroe said whole system would have to be revisited over time. He said it would have to be in a constant flux because it is a dynamic process.

Chair Atherton asked how they could address the issue of a company that had invested in equipment and employees with the expectation of doing more recycling and then finding they were locked out.

Dr. Petersen said first, the industry had to be involved. He said he heard from them that they could deal with change, but not unexpected change. They would need lead time to adapt and incorporate any changes.

Councilor McLain commented that being dynamic did not necessarily mean you should change more often, but at the appropriate time. She felt the process was important.

John Houser thought the current program recycling rate for facilities inside the district was based on everything that went through the facility, not just material that came from inside the district of the facility.

Dr. Petersen said the recovery requirement was on dry waste, so it was not all material through the facility. However, it does not matter where the material comes from.

Mr. Houser asked how they would figure the percentage of weight on that truck was recycled.

Dr. Petersen suggested requirement to regulate the facility meant that the facility would meet our requirements and standards as if they were inside the boundary.

Mr. Houser said his concern was their ability to segregate their own waste from Metro’s and how Metro could have assurances that they were not paying a credit for their local waste stream.

Easton Cross, BFI, said the out of region facilities charge more for Metro material than they do for material coming from out of the region. He said that differential in cost was about the same as the regional user fee. He was concerned that Metro was losing money on those propositions because of the lack of auditing procedures.

Dr. Petersen responded that there may not be a formal auditing relationship but the waste that flowed out of the region was carefully tracked. He said they did follow up on waste going out of the region.

Mr. Houser asked if there would be any flow control implications if such a program was implemented on interstate program.

Mr. Fjordbeck said it did not appear there was likely to be greater impact on interstate commerce than would outweigh the benefit of the program.

Dr. Petersen said the fourth element of the legislative package was the regulation of the local transfer stations. He suggested taking the concept of having no restriction on the amount of dry waste going to these facilities, with the goal in mind of increasing the recovery from dry waste, and having an increase in the minimum recovery rate from 25% to 35%.

Councilor McLain asked for statistical information on what those sites were doing right now.

Dr. Petersen did not have those numbers with him, but said the average recovery rate for all facilities was around 40%. He said the minimum any facility in the last 6 months was close to 30%. He felt it was not a huge increase in the requirement but insured that they did not slide backwards as they made other changes.

Councilor Monroe asked if they would only receive the credit for the excess above 35%.

Dr. Petersen said if they were below the 35% it would be a compliance issue. He said recycling percent that is calculated was used to determine the per ton credit on the residual. He noted the chart on the handout from SWAC.

Chair Atherton asked about the percentage of wet waste allowed in a dry load.

Dr. Petersen said they had allowed a minimum of 5% insignificant wet waste in a dry load in the past. He said the facilities did a good job of making sure it did not get out of hand. He said the enforcement group was always looking at that issue.

Councilor Monroe restated question, what would prevent the changeover of a difficult dry waste load to a wet waste load. He felt the answer to that was the reason why they should continue to have caps on wet waste.

Dr. Petersen said the next part was taking back to SWAC the concept that there would be a cap on wet waste. That cap would be calculated based on the amount of wet waste in a service area defined by distances. The third component of that piece would be the requirement to serve the local area so that the franchised hauler next door to a local facility could not be turned away so the owner could bring in waste from further away.

Chair Atherton asked how the cap would be set.

Dr. Petersen said using distances to the facilities to define waste sheds or service areas and then estimating the amount of waste in that area was the basic process.

Chair Atherton said one of their principals was to foster competition. He asked if that could happen using the waste sheds.

Dr. Petersen felt by using a combination of modeling data and actual hauler data, they could get pretty close. He said a third part, which would answer a question from the Chair, was the general concept to rely on market competition to keep the prices reasonable rather than price regulation by Metro, which would mean that within any particular service area there would need to be more than one facility. He thought it should not be open ended, that there should be some time frame for moving to Plan B if there was not another facility to compete.

Councilor McLain said there were a number of different facilities with overlapping waste shed possibilities because of distance. She said you have to make sure that the tonnage is there for potential competition if you want the chance for competition to continue.

Dr. Petersen said distance and waste sheds were being used as a policy mechanism to calculate the tonnage cap, but he was not saying that Metro should be in the business of directing trucks to certain facilities. They would have the freedom of choosing where they would go within the constraints of the tonnage caps at the facility.

Chair Atherton asked the advantage of using travel time or distance.

Dr. Petersen explained that time is associated with cost and distance is associated with the environmental impacts of vehicle miles traveled (VMT). Metro’s policy is to try to reduce VMTs which is related to distance, not time. The practical effect of that is fairly small. He said they had asked at SWAC how well they could disallow longer haul costs in their collection rates and whether or not Metro could rely on that to minimize cross region hauling. He remembered that they thought that would be difficult to do whether it was miles or time and incorporate that into their rate setting.

Councilor McLain said this package takes caps off of dry and increases the caps for wet because they were trying to get the VMTs down and encourage competition and still make sure service is provided equally across the board. She said it is a dynamic process. She guessed the industry would want to know the process for making sure this dynamic package would be reviewed.

Dr. Petersen did not have the details ready to present but if said if the committee thought part of the package should ought to be some kind of accommodation for growth in the future, he needed to have something more specific about how to review the tonnage in the local service areas and accommodate growth before the next SWAC meeting.

Councilor McLain agreed that there was a need for more detail. She felt the package showed they were reaction to growth because they were taking off and increasing caps and trying to deal with waste sheds. She felt the committee needed reaction from SWAC about the growth issue.

Dave White, Tri County Council, said when the local jurisdictions set their rates they look at line items for cost. Disallowing longer haul costs would include fuel, labor, maintenance and disposal. When a company decides to drive to Point A or Point B, they would have to look at those costs. Then, when that rate is set, they look at all the companies in Portland, approximately 40, and set the rate based on an average. Some have higher fuel costs, some have lower. Some have higher labor, some have lower, etc. Once that rate is set for a given year, the company that is close to the transfer station and has lower haul costs is going to have a higher margin and be more profitable in that year. The company that is, by chance, further away from the transfer station has higher costs in that year. In concept it is good but it would be difficult to do.

Dr. Petersen, responding to the Chair, said to adjust the tonnage cap, it is important to distinguish between wet and dry waste. He said the practice in the past has been to encourage as many dry waste recovery facilities as there could be in the region. He felt they should continue that if all the requirements were met. He though the logical conclusion of the package would be that if you don’t want to have excess transfer capacity in any part of the region, then there has to be a limit on the number of facilities that you have doing wet waste transfer in any particular waste shed.

Chair Atherton wondered why the wisdom of the market wouldn’t determine that.

Councilor McLain said there was both public and private industry, and Metro had no plans for adding transfer stations and being that kind of competition for the private, but we do have two public facilities that take on extra responsibilities for service provision, including self haul and hazardous waste events. She said there isn’t really an equal playing ground because we have not asked them to carry on a full menu of services.

Chair Atherton added that on the other hand they did not want to manipulate so much as to discourage competition.

Dr. Petersen suggested that they do not leave it an opened issue but have a time certain that if Plan A doesn’t work, they would move to Plan B.

Chair Atherton reported he had a meeting with a gentleman named Oso who operates a program called FreeGeek which recycles computer debris. Volunteers upgrade the used computers for people. They also have classes. They have received $80,000 in grants, none from Metro so far, to do their work.

ADJOURN

There being no further business to come before the committee, Chair Atherton adjourned the meeting at 5:05 p.m.

Respectfully submitted,

Cheryl Grant

Council Assistant

Attachments to the Public Record for the

Solid Waste & Recycling Committee Meeting of September 5, 2001:

Testimony Cards:

None.