MINUTES OF THE METRO COUNCIL

REGIONAL ENVIRONMENTAL MANAGEMENT COMMITTEE MEETING

Tuesday, November 17, 1998

Council Chamber

Chair Morissette called the meeting to order at 11:01 AM.

1.  CONSIDERATION OF MINUTES

2.  REGIONAL ENVIRONMENTAL MANAGEMENT DIRECTOR’S UPDATE

Bruce Warner, REM Director, reported that a Metro South Hazardous Waste Program employee, Eric Koellner, had found a way to save Metro $50,000 a year by recycling 5 gallon yogurt buckets he found a food service company was disposing of another way. The latex paint processing program will use the buckets to distribute recovered paint. He said they would now able to have 5 gallon buckets of paint rather than the 55 gallon drums that were hard for a number of folks to utilize. He predicted they would use about 23,000 of the 5 gallon buckets a year.

Councilor McFarland asked if Mr. Koellner was rewarded for this money saving idea.

Mr. Warner said not yet but they were considering several different ideas that would be appropriate for such a reward.

Councilor Washington commented that if an employee saved that much money, Metro should at least take him to lunch.

Mr. Warner answered that they had not yet decided what, but they were going to do something for him.

Councilor Washington thought recognition of an employee who saved such a substantial amount of money should be noteworthy, perhaps a meal at a nice restaurant, and not McDonald’s.

Mr. Warner continued that the household hazardous waste program employees had been active in promoting the “Pass It On” program. He reported that Denise Hays and Kim Liebich had been particularly aggressive. The program had sent an average of 2,000 pounds of reusable material per month to schools and others in FY 1997-98, including reusable cleaning supplies and woodworking materials for school shop programs. He said the program had been very well received.

He noted discussions with Clark County regarding their paint and hazardous waste. He said once the latex paint processing building was completed next spring, Metro would have the capacity to deal with Clark County’s latex paint also and it would be good for everyone. They continued to negotiate a price.

Executive Officer Mike Burton thanked the Chair for taking his request to speak to agenda item #8, Resolution 98-2735, out of order as he had another commitment. He said the resolution basically addressed the question of the request of Waste Management for consent on its merger with USA Waste. He explained that in March 1998 Waste Management had entered into a merger with USA Waste and its subsidiaries. At no time was there ever a request to Metro for consent of that merger. He felt under their contract, not receiving that consent constituted default. He asked council to deny the request from Waste Management in the best interests of Metro policy and their ability to move forward.

3.  ORDINANCE NO. 98-783, FOR THE PURPOSE OF GRANTING A FRANCHISE TO WASTE MANAGEMENT OF OREGON FOR THE PURPOSE OF OPERATING A SOLID WASTE FACILITY AUTHORIZED TO RECEIVE PUTRECIBLE WASTES, DELIVER THEM DIRECTLY TO METRO’S CONTRACT DISPOSAL OPERATOR, AND TO CONDUCT OTHER ACTIVITIES.

Mr. Warner pointed out that as a result of council’s adoption of the new code, there were new standards and criteria established for potential direct haul of putrecible waste to Metro’s landfill contractor in lieu of having that material go through the transfer stations. He felt the essential portion was the cost savings available to the region’s rate payers from the transportation savings due to not having to move the material twice between the facilities, and ultimately to the disposal site in Arlington. He said the code was clear about the standards for judging applications and staff had gone through the applications to answer basic questions like was the applicant qualified, did the proposed franchise comply with the Regional Solid Waste Management Plan, what were the cost savings, and could the applicant comply with all other regulations. He said they would be recommending a franchise for all of these facilities because they felt all three met the tests.

Specifically to Ordinance No. 98-783, he said this would grant a franchise to Recycle America in Troutdale to begin accepting mixed putrecible waste, authorize them to accept source separated organics for direct haul to the composting facility in Arlington, authorize them to direct haul mixed putrecible waste to the Columbia Ridge landfill under Metro’s disposal contract, and establish a 50,000 ton limit at Recycle America on the waste disposed of, both wet and dry. He said it also reauthorized Recycle America’s acceptance and processing of dry waste material and certain specified special waste as in the current operation. Staff believed this would reduce the overall system costs as well as traffic at the transfer stations and would provide additional material recovery. He pointed out that this action would deny the variance the hauler had requested to transport waste in tarped trailers rather than in sealed containers.

He was concerned about the variance applied for by the applicant. He did not believe they had presented sufficient information to support the variance. He said if the ordinance were adopted as is, it would not permit tarping of the containers.

In response to a question from Councilor Washington, he said from a financial standpoint it would have very little impact to the overall Metro system. There would be approximately $46,000 less revenue coming into the solid waste fund this year and in fiscal year 1999-00 about $87,000, somewhere in the neighborhood of 4¢ - 9¢ on the tipping rates.

Councilor McFarland asked procedural questions regarding the variance.

Marv Fjordbeck, General Counsel, said the procedures were set forth in the code approved earlier this year and council was required to make findings based on material submitted by the applicant. With regard to whether the variance had to be on all the applications, the answer was no, this was a particular variance sought by one of the applicants for direct haul authority. Lastly, if the council desired to not follow the staff recommendation, it could amend the ordinance to grant the variance. It would make the findings required in Metro Code Section 5.01.110 and having dealt with those amendments, would then deal with the full ordinance.

Councilor McFarland felt they needed to put this on the table to see if they wanted to move the variance for Ordinance No. 98-783, since they were the only one asking for a variance.

Councilor Washington felt they were dealing with two separate issues and he was not willing to take action on both of them at this time. He did not see how they could be treated separately.

Chair Morissette opened a public hearing.

Gary Penning, District Manager, Waste Management of Oregon, said they were asking for this variance because they believed incurring the costs of a compactor would be passed on to rate payers. He said they had worked with STS to review criteria for high level standards for doing tarped trailer hauls. They had a trailer inspection form for every trailer to be inspected prior to and after loading. The tarp would be inspected also and any needed repairs would be made prior to transport. He reported discussions with the Friends of the Gorge, in particular, Michael Lang. Mr. Lang had been faxed the standards and the proposal for this pilot project and in answer to his initial question about how many more trucks would go through the gorge, we were able to tell him no more trucks. They reviewed the tarping system that would be used and Mr. Lang indicated that he didn’t see a problem doing this pilot. Waste Management had made contact with Mr. Lang and their attorney since then, and to date there were no concerns from the Friends of the Gorge to try this pilot which would demonstrate some alternatives to hauling should there be a catastrophic failure of the compactors and the trailers needing to be loaded through the compactor could not be used, like during the 1996 floods when there was concern at one point about losing the compactors at Metro South. He felt if they could prove the tarps met the standards and criteria of the Friends of the Gorge, it would be much easier in emergency situations to use the top loaded trailers. He thought it could reduce and hold down costs to ratepayers.

Councilor McFarland said though not recently, she had seen the new tarps and how effective they could be. She felt 6 months was a sufficient trial and they could assume the tarps would continue to work well after that. She thought if they worked, it could be duplicated by others and would obviously save time and energy. She said she had always been put off by the fact that the garbage was hauled first to the transfer station on the river in west Portland and then back to Arlington. She said they could come back in 6 months to review the project and okay it’s future or not. She pointed out that dry waste had been hauled like that for a long time without garbage flying out in the gorge. She thought the variance should be granted.

Councilor Washington was not ready to debate the issue but wanted to relate his concerns about changing this when the council had already voted that everything going up the gorge should be in sealed containers.

Mr. Warner said when Ordinance No. 98-762C was adopted it was quite clear that council intended to prohibit the use of tarped containers for long haul transport of putrecible waste. He said staff position was so clear because they believed there was no ambiguity in the direction from the council by the adoption of that ordinance.

Councilor Washington clarified that what they were asking today was an amendment to overrule what the council had voted on.

Mr. Warner said council had the ability to grant a variance.

Councilor Washington asked if the committee voted in favor would it then go back to the full council for another vote on the amendment.

Mr. Warner believed it would be a recommendation to change the ordinance. He said between now and then staff would need to put findings together for council to review.

Chair Morissette noted that per the letter they received this was a pilot project proposed by Waste Management of Oregon to take tarped vehicles through the gorge in conjunction with STS Trucking. He assumed that the STS Trucking contract held the requirements they had to meet.

Mr. Warner said the contract with STS specifically defined the type of trailers they would utilize and those were totally sealed containers per the ordinance passed a few months ago. He said this variance would be for trailers hauled by the same contractor but not under the same contract. They would be contracting directly with STS to haul to Arlington in tarped containers which were not in conformance with the standards in Metro’s contract.

Chair Morissette asked whether the contract with STS had the flexibility to allow the variance.

Mr. Fjordbeck said nothing in the carriage contract for Metro’s waste prohibited the variance which simply would not be the same as that required by the governance carrier.

Chair Morissette asked if it was Metro’s requirements on STS that required sealed containers.

Mr. Fjordbeck said for purposes of a direct haul transport, it was the provision in the Metro code which said containers using tarps were prohibited.

Councilor Washington asked if there were two different sets of criteria.

Mr. Fjordbeck said there was only one set of criteria. He understood Waste Management’s proposal was asking for an exception from that criteria which was the same set of criteria set forth under the direct haul provisions of Metro Code section 127.

Councilor Washington asked if the direct haulers could only haul for Waste Management if council agreed to the variance.

Mr. Fjordbeck said the only way they could do it was to follow the code in which tarps were prohibited or to obtain a variance from council to that requirement.

Councilor Washington wondered if a no vote would kill the ordinance or just the variance.

Councilor McFarland answered that the first vote was on the variance, and then they would go back to the original ordinance for a vote.

Councilor Washington was concerned about the variance language and about changing something that council had already established. He said the only way he would support this would be if they sent it to council with no recommendation so council could discuss it which could mean that council might vote it down. He wanted the discussion to take place at the council so they would not feel that once they had made their wishes known that they could be circumvented. He asked to see evidence from the Friends of the Gorge that they did not object to the exception before any council action.

Chair Morissette commented that the purpose behind variances was to look at potential options but under no circumstance would it not be fully debated in front of the full council.

Councilor McFarland responded that Councilor Washington’s remarks had touched on a concern of hers. She said when they had originally done the work on this it was brand new. They had tried to stay within limits of what they thought would work. She said they had been particularly tight with their demands for transporting the waste through the gorge because a lot of people were concerned it was in trucks at all and others were concerned there would be a string of goo through the gorge. They made extremely stringent rules about the hauling and set standards that were the highest they could set but as they learned more about hauling she thought they might want to try alternatives that would achieve the same results without the all the regulations they originally had thought were necessary. She did not feel a variance was anything against the vote of the past people because as things came up, they needed to be tried to best serve the need.

Councilor Monroe shared Councilor McFarland’s concerns as well as her appreciation of the gorge. He said he had the opportunity to visit the Troutdale facility last summer to see how the tarps worked and thought they looked very secure. He didn’t foresee any problems with it and was satisfied that a 6 month trial could assure the strict codes could be adhered to. He said he had become a supporter of the variance.

Chair Morissette closed public hearing.

Mr. Fjordbeck explained that the council could either grant a motion for a 6 month variance of the performance standards or find that compliance with the provisions was inappropriate due to special physical conditions or other conditions beyond the control of the applicant. He said staff would need direction as to which finding they would be making.

Councilor McFarland believed the second finding would be most appropriate. She said she would like an opportunity to work with the applicant a little more but believed that the variance could be advantageous.

Chair Morissette said Mr. Houser might want to add comments to the findings that the technology and the comfort level had changed over the period since the original requirements.

Councilor Washington asked Councilor McFarland if she was willing to put it forth with no recommendation to the council.

Councilor McFarland said that was what she said she would do and what she would do.

Mr. Fjordbeck pointed out an oversight in the caption of the ordinance that did not make clear the item had an emergency clause. He said it would be helpful if the committee would direct the title to refer to that emergency clause.

Chair Morissette assigned Councilor McFarland to carry the ordinance to the full Council.

4.  ORDINANCE NO. 98-784, FOR THE PURPOSE OF GRANTING A FRANCHISE TO WILLAMETTE RESOURCES, INC., FOR THE PURPOSE OF OPERATING A SOLID WASTE FACILITY AUTHORIZED TO RECEIVE PUTRECIBLE WASTES, DELIVER THEM DIRECTLY TO METRO’S CONTRACT DISPOSAL OPERATOR, AND TO CONDUCT OTHER ACTIVITIES.

Mr. Warner reported that this proposed action would authorize WRI to begin accepting putrecible wastes and hauling them to the Columbia Ridge landfill under Metro’s disposal contract and the standards already adopted in the Metro code. It would establish a 50,000 ton limit for disposed waste, combined wet and dry, and reauthorize WRI’s acceptance and processing of dry waste which they have done for a number of years. He said it was very similar to the previous ordinance in that there were cost savings available for the rate payers of the region and it would reduce traffic at Metro South by about 24 trucks per day. Staff found the same financial impact for this facility as for the previous one which amounted to about a 4¢ - 9¢ impact on the tipping rates this year and next year.

Councilor Washington asked for an explanation of the $46,000 savings.

Mr. Warner said they had taken the total from all three ordinances and divided by three to get $46,000 for each ordinance. He said it was actually a loss of revenues to the solid waste fund but since there were also so many less expenses, this was the net change. The total savings was $46,000 times 3.

Chair Morissette opened a public hearing

Merle Irvine, Willamette Resources, Inc., 10295 SW Ridder Rd, Wilsonville, OR highlighted some issues for the record. He said the land use granted them by the City of Wilsonville allowed them to receive up to 196,000 tons a year of municipal solid waste. Under the terms and conditions of this proposed franchise, they would receive about a third of that amount. Another issue was compliance. He said they had been operating for over 3 years, had many inspections by Metro and DEQ and had never been found in violation of any permit requirements. They had also not had any complaints from neighbors. He assured the committee that they would continued to work under the same operating philosophy. He said they had entered into an agreement with STS who would provide them with trailers similar to those provided to Metro South and Metro Central for reloading using a preload compactor. STS would then haul the waste to the landfill in Arlington. Their history of hauling material through gorge was a good one and they would continue using STS as their contract hauler. He said during the reload debates there were concerns about cost savings being passed to rate payer. He noted a letter to Chair Morissette from the City of Wilsonville saying that earlier this year the cities of Wilsonville and Tualatin had lowered the rates they allowed their haulers to charge anywhere from 7% to 19% depending on the type of service.

Chair Morissette closed the public hearing.

Chair Morissette assigned Councilor Washington to carry the ordinance to the Council.

5.  ORDINANCE NO. 98-785, FOR THE PURPOSE OF GRANTING A FRANCHISE TO PRIDE RECYCLING COMPANY FOR THE PURPOSE OF OPERATING A SOLID WASTE FACILITY AUTHORIZED TO RECEIVE PUTRECIBLE WASTES, DELIVER THEM DIRECTLY TO METRO’S CONTRACT DISPOSAL OPERATOR, AND TO CONDUCT OTHER ACTIVITIES.

Mr. Warner said this was exactly like the previous ordinance. He believed it would provide cost savings and additional material recovery as well as reduce the traffic at the station by 24 trucks a day. He said the financial impact was the same as the last. The Executive Officer and staff recommended granting the franchise.

Chair Morissette opened a public hearing.

Mike Leichner, Pride Disposal Co., PO Box 820, Sherwood, OR 97140, appeared before the committee to answer any questions they might have. He felt staff did good job on the proposal.

Chair Morissette closed the public hearing

Chair Morissette assigned Councilor Washington to carry the ordinance to the full Council.

6.  RESOLUTION NO. 98-2727, FOR THE PURPOSE OF PROVIDING RECYCLING BUSINESS DEVELOPMENT GRANT FUNDS FOR UNITED RECYCLING, INC.

Doug Anderson, REM Waste Reduction Planning Manager noted the executive summary and staff report in the agenda packet. He said the purpose of this resolution was to authorize the Executive Officer to grant funds to United Recycling, Inc. This grant had a moral obligation to repay which was triggered by the success of the company so it was not a true grant. The idea was to recycle the funds so they could be available to future applicants. This grant fell under the recycling market development program that had been around since 1994. It operated by supporting certain businesses who used recycled material. He said they wanted to support recycling markets with this unique program. This grant would specifically support a local recycling market which recycled sheetrock coming out of construction projects. He said staff had reviewed the request and an independent committee had evaluated it as well. Both groups recommended approval of the grant.

Councilor McFarland asked if they brought the little bags for the committee to see.

Mr. Anderson said yes, big bags and little bags and Mr. Ormsby would distribute them.

Councilor Washington asked for the names of the committee members.

Mr. Anderson said the committee consisted of Bill Bree from DEQ, Lela Culley of the Oregon Economic Development Department, Jerry Powell, a recycling guru, David Williams of the Bank of the Northwest, John Houser, council analyst, and himself as chair.

He continued that United Recycling was located in Washington County and had been in business since 1989. He said they accepted sheetrock from construction sites and material recovery facilities and manufactured a highly regarded fertilizer product from the gypsum which they called Gypril. He noted that scrap sheetrock was a very high weight, low value commodity that would likely be landfilled if it weren’t for recycling markets. Fertilizer brokers have said they could move 800 tons of Gypril a month if United Recycling could produce it but they were constrained by obsolete equipment and could not meet the demand. Their current production is less than 500 tons a month. The issue here was that the fertilizer industry tended to look elsewhere if their orders could not be committed on demand. United Recycling’s production constraints put them at risk of losing those markets, which meant most of the scrap sheetrock in the region would end up being landfilled. They were requesting this grant to finance the purchase or upgrade of equipment to increase the throughput. He said the equipment was listed in the grant agreement and was designed to get them 800 - 1000 tons of Gypril a month which would generate the cashflow necessary to attract private capital. He said they were working with the US Small Business Association and a local lender and community development arm toward that goal. This grant would bridge the gap between the owner’s equity in the business and their ability to leverage private capital to really make it work. The public purpose was to support a local market for scrap sheetrock and without the financing the market was at risk. He felt the funds had a good chance to be repaid to metro for recycling to others. He urged an aye vote for this resolution.

Chair Morissette opened public hearing.

Ormond Ormsby, 9624 307th, North Plains, OR 97133 said Mr. Anderson had covered well what they did except to say that the product was used as a carrier base for about half dozen brands of fertilizer and moss control. He said they were anticipating meeting a market demand of over 800 tons a month.

Councilor McFarland asked how this compared to spreading landplaster which was a soil amendment that sweetened the soil.

Mr. Ormsby said he was not familiar with that terminology but limestone was used throughout the Willamette Valley to sweeten the soil. He said Gypril was used throughout the 8 western states because the majority of that land was alkaline in nature and needed a slightly acidic substance like gypsum.

Councilor McFarland said in other words this ended up as sulfuric acid and water.

Mr. Ormsby agreed it was a slight derivative of that.

Councilor Washington asked how this product was created.

Mr. Ormsby said the paper was removed through a process of crushing and fracturing the wallboard. It was then sent through a series of crushers and ground to an extremely fine consistency like talcum powder and reconstituted with a commonly available binder in a priller. It then went into a dryer, then to a finishing screen and came out in the two sizes seen in the samples provided. He said the paper had use as a substitute for peatmoss which was considered a non-renewable resource.

Councilor Washington asked if he would have to test his lawn for acidity before he could use Gypril on his lawn.

Mr. Ormsby said the interesting thing about this product was that it was totally edible and about 10 tons a month was used as a cattle feed supplement.

Chair Morissette said this was in budget and they had asked staff to bring forward any recycling items. He closed the public hearing

Chair Morissette assigned Councilor Washington to carry the resolution to the full Council.

Councilors Kvistad and McLain entered the chamber.

7.  EXECUTIVE SESSION, held pursuant to ORS 192.660(l)(h), to consult with legal counsel concerning the legal rights and duties of a public body with regard to current litigation or litigation likely to be filed.

8.  RESOLUTION NO. 98-2735, FOR THE PURPOSE OF CONSIDERING A REQUEST BY WASTE MANAGEMENT DISPOSAL SERVICES OF OREGON, INC., FOR CONSENT TO A MERGER BETWEEN WASTE MANAGEMENT SERVICES, INC., AND USA WASTE SERVICES, INC.

Mr. Warner reviewed the recommendation of staff and the Executive Officer. He said they had sought the advice of legal counsel which noted that the request for consent had not been made in a timely manner and under the current circumstances approval of the request for consent of the merger did not appear to be in the public interest, therefore adoption of the resolution was recommended which denied the request of Waste Management for the consent to a merger.

Chair Morissette opened a public hearing.

Jim Benedict, Cable Huston Benedict Haagensen & Lloyd, 1001 SW 5th, Suite 2000, Portland, OR 97204, represented Waste Management of Oregon. They were very disappointed that Metro declared a default on the contract and appeared inclined to deny the request. He said Waste Management had always considered Metro a valuable customer and had worked hard to maintain a good relationship. They felt one of the most disturbing aspect was that Metro appeared to have chosen not to inform Waste Management of what they considered a default until after the merger had taken place. Waste Management felt they had been very forthcoming when the merger agreement was announced and met with Metro staff to explain the merger in detail and discuss options. He said Metro had not given them any indication they would declare the contract in default. He said Waste Management had been engaged in good faith negotiations with Metro and felt they had made a good offer to resolve the matter. He said that offer combined with other concessions would provide Metro with certain reductions in their disposal costs amounting to approximately $125 million. He said the offer was presently under consideration by Metro. He recognized that both parties felt they had strong cases but said each party should also recognize there were significant risks of loss to either party. He said it appeared that Metro was willing to engage in a “winner take all” approach and forego the certain benefits provided through the offers of settlement. Instead of accepting the benefits they appeared more willing to engage in an arbitration process and the possible risk of loss of those certain benefits along with the loss of time and money that would be incurred through many months of arbitration. He said Waste Management had also suggested an alternative to the mediation process wherein the parties would submit to a third party to save time and money. He said Metro had not expressed an interest in that approach at this time. They remained willing to consider any offer which recognized the realistic risks of arbitration.

Councilor McFarland asked if he said all the parties had notified Metro before merger. She said she had found out about it from reading the newspaper.

Mr. Benedict said there had been 2 meetings with Waste Management and Metro staff and another meeting with former Waste Management representatives shortly after the announcement of the merger agreement to explain it to them.

Councilor McFarland asked if she heard him say they had already announced the merger before those meetings with staff.

Mr. Benedict said the announcement of the merger agreement was in March 1998. He said the merger technically was not final yet until the finalization of the consent decree that was pending. He said the merger agreement had been finalized on July 16, 1998, but the announcement of the merger agreement was in March and that was when they had met with Metro staff.

Councilor McFarland said in other words they had not let Metro staff know prior to announcing there was a merger.

Mr. Benedict said that there was a merger agreement, the merger had not been consummated, it was tentative pending approval of the Justice Department.

Councilor McFarland said they all knew that was lawyer talk.

Chair Morissette thanked Mr. Benedict for coming. He said Metro had a long-standing and positive relationship with both Waste Management and USA Waste and was hopeful a positive solution could be found.

Councilor McFarland called attention to the fact that an aye vote meant no to the request.

Chair Morissette assigned himself to carry the ordinance to the full Council.

9.  COUNCILOR COMMUNICATIONS

None.

ADJOURN

There being no further business before the committee, Chair Morissette adjourned the meeting at 12:44 PM.

Respectfully submitted,

Cheryl Grant

Acting Council Assistant

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ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF NOVEMBER 3, 1998