HomeMy WebLinkAbout07/19/2011, B2- GREEN WASTE PROCESSINGcounci lj acEnaa nEpoat MeetinDge July 19, 201 1
Item Number
:Oa
C I T Y O F S A N L U I S O B I S P O
FROM :
Carrie Mattingly, Utilities Directo r
Prepared By :
Ron Munds, Utilities Conservation Manage r
SUBJECT :
GREEN WASTE PROCESSIN G
RECOMMENDATIO N
1.Approve the use of green waste material as Alternative Daily Cover at Cold Canyo n
Landfill for green waste processing .
2.Direct staff to apply the associated costs of using green waste as Alternative Daily Cove r
in the solid waste rate analysis for the proposed solid waste rate increase submitted b y
San Luis Garbage Company.
3.Direct staff to reevaluate the green waste processing method on an annual basis as part o f
the solid waste rate setting process .
DISCUSSIO N
Backgroun d
The City has a long history with San Luis Garbage Company dating back to the 1940's . The City
Council, expressing a high level of satisfaction with the services provided to the community b y
San Luis Garbage Company, approved a fifteen year renewal of its three franchise agreements fo r
solid waste, recycling, and green waste services in July 2010 .
Due to odor complaints, San Luis Garbage Company must change the way it processes its gree n
waste . As required by the franchise agreement, the garbage company has proposed alternativ e
methods of green waste processing . Council must select one of the methods .
The City and garbage company utilize a rate setting methodology for which an overview i s
provided in this report . The garbage company has submitted its annual rate application per th e
rate setting methodology, but before staff can evaluate if for completeness and conformance wit h
rate setting policies, the issue of how the City desires to process green waste must be resolved .
Green Waste Processin g
In August 2010 Cold Canyon Landfill was directed by the State of California to cease operatio n
of its green waste composting operation . The closure was a result of odor complaints to state
compost facility regulators by residents with properties adjacent to or near the landfill . The
property owners claimed that odors from the facility exceeded state standards . The State ruled in
favor of the property owners which resulted in the closure of the green waste compostin g
operation .
B2-1
Green Waste Processing
Page 2
Since that time, Cold Canyon Landfill has been grinding the green waste material and using it fo r
cover on the landfill face . Landfill operators are required to cover the active face of a landfill at
the end of every day to prevent odors and risks to public health . The traditional material used fo r
this purpose is soil but other materials, such as processed green waste and tarps, can also be use d
for this same purpose . These different cover materials are called alternative daily cover (ADC).
Under the California Integrated Waste Management Act of 1989 (AB 939), the state's wast e
reduction and recycling law, the use of alternative daily cover is counted as recycling, and th e
materials are not considered "landfilled". Using green waste as ADC is not the preferable, long -
term option to recycle green waste and is in conflict with the City's adopted Source Reductio n
and Recycling Element (which identifies using collected green waste to produce usable compost )
but it is a viable short-term alternative . Cold Canyon Landfill is exploring the possibility o f
building an enclosed anaerobic digestion green waste processing facility. This type of facilit y
would minimize odors thereby addressing the current composting odor concerns .
According to the City's Green Waste Services Agreement with San Luis Garbage Company, i f
the company is unable to deliver the City's green waste to the designated green waste facility (i n
this case Cold Canyon Landfill composting operation) the company shall propose alternative s
and the related costs . The City shall select the alternative to be used . San Luis Garbage Compan y
has provided the City with two alternatives .
Alternative 1.Using Green Waste as Alternative Daily Cove r
Using green waste material as ADC involves grinding and applying the material on a daily basi s
to the landfill face . While not a preferable long-term solution (composting is preferred), it i s
currently an allowed method when calculating solid waste diversion by the state regulatin g
agency, Cal Recycles . The downside of using green waste as ADC is that it impacts landfil l
space . It is estimated that if green waste was used for ADC over a twenty year period, it would
result in the loss of about two to three percent of the available landfill space over that period o f
time .
Alternative 2. Trucking the Green Waste to Santa Maria for Compostin g
The green waste can be transported to Engel and Grey, a company that specializes in green waste ,
food waste, and biosolids composting . The City currently contracts with Engel and Grey for it s
biosolids composting .
Green waste material would be deposited at Cold Canyon Landfill then loaded into transfer
trucks for the transport to Engle and Grey's facility in Santa Maria . It is estimated this woul d
require a minimum of 230 truck trips per year plus the cost to construct a transfer facility at Col d
Canyon Landfill . While composting the green waste material is the preferred long-term solution ,
trucking the material out of the county presents sustainability issues with the environmenta l
impacts associated with the number of truck trips it will take to move the material to Santa Maria .
Green Waste Processing
Page 3
This alternative would also shift the green waste tipping fee revenue from Cold Canyon Landfil l
to Engle and Grey . Offsetting this loss in revenue may require higher landfill tipping fees in the
future .
Solid Waste Rate Setting Overvie w
While Council is not considering solid waste rates at this time, understanding the background o n
how the rates are set may assist in the decision-making process related to green waste processing .
An integral part of the franchise agreements is the solid waste rate setting methodology, whic h
applies to each of the three agreements . The procedures in the Rate Setting Process an d
Methodology Manual for Integrated Solid Waste Management Rates,adopted by Council in
1994, have ensured stable and competitive rates for the community .
The Rate Setting Process and Methodology Manual for Setting Integrated Solid Waste Rate s
provides a process and schedule for rate application review and binds the contractor and the Cit y
to a method of determining revenue adequacy for the contractor while ensuring the community i s
receiving quality service at competitive rates .
Under the methodology, base year applications are prepared in year one of a three year cycle .
Base year applications require a detailed submittal and review of past, current, and estimate d
future operating expenses . Less detailed interim year applications are required in year two an d
three of the cycle . Interim year applications are intended to adjust for the prior year's consume r
price index changes and changes to the landfill tipping fees (which are considered pass throug h
costs).
The current three year rate setting cycle began with the submittal of the base year application i n
2010 . This application recommended no rate increase based on the formulas and policies in th e
rate setting methodology . On June 24, 2011 San Luis Garbage Company submitted a 201 1
interim year application . This application reflects the rate adjustment for changes in the consume r
price index and has a landfill tipping fee increase component . It also contains the change to green
waste processing that requires City Council direction prior to staff proceeding with evaluating th e
application for completeness and conformance with the rate setting policies .
Cost Comparison s
The preliminary information submitted by San Luis Garbage Company indicates about a on e
percent difference in the rate increase to implement either alternative (Alternative 1 is less
expensive than Alternative 2). The City produces about 5,525 tons of green waste material pe r
year which results in the following rate increase scenarios .
Alternative 1– Alternative Daily Cove r
COLA per agreement 1 .03 %
Green Waste as ADC 0.94 %
Landfill Tipping Fee Increase 2 .64%
Total 4 .61 %
Green Waste Processing
Page 4
Alternative 2 – Composting in Santa Maria
COLA per agreement 1 .03 %
Green Waste composting 2 .07%
Landfill Tipping Fee Increase 2 .64%
Total 5 .74%
The difference in the percentage increase between Alternative 1 and 2 as proposed by San Lui s
Garbage Company is 1 .12%. The impact to the average customer with Economy Service betwee n
the two alternatives is $0 .13 per month .
Summary
It is recommended the City Council chose Alternative 1 and approve the City's green wast e
material be recycled as alternative daily cover at Cold Canyon Landfill . Staff recommends th e
method of recycling green waste be reevaluated on an annual basis . This would ensure that i f
progress towards constructing a permanent green waste composting facility at the landfill site i s
not proceeding in a timely manner, the issue can be brought back to Council for its consideratio n
whether to direct the green waste to Santa Maria for composting or pursue another long-ter m
solution .
CONCURRENCE S
The General Manager of the San Luis Obispo County Integrated Waste Management Authority ,
San Luis Garbage Company, and Cold Canyon Landfill concur with the recommendations in thi s
report.
FISCAL IMPAC T
There is no direct fiscal impact to the City resulting from the approval of the recommendations .
Staff will return to the City Council in September with a full solid waste rate analysis . At that
time the City Council will conduct a public hearing to consider the interim rate application an d
proposed solid waste rate increases requested by San Luis Garbage Company . Although there i s
no explicit legal requirement to do so, City staff is electing to follow Proposition 218 noticin g
and hearing requirements for the proposed solid waste rate increases to ensure the legal validit y
of those rates .
ATTACHMEN T
San Luis Garbage Company Lette r
San Luis Garbage Company AIIACH 1 1EN i
2945 McMillan Avenue • Suite 136 • San Luis Obispo, CA 9340 1
805-543-087 5
The difference between the two is Option #1 involves taking the curbside greenwaste t o
Cold Canyon Landfill to be ground up and used as daily cover on the garbage . It counts
for AB939 credit, its cheaper, and the revenue dollars stay with Cold Canyon . Option #2
involves trucking the curbside greenwaste from Cold Canyon Landfill to Santa Maria t o
be turned into compost . It involves more truck trips and air pollution, its costlier, but i t
adheres to the true recycling intent . Sending the curbside material to Santa Maria woul d
be a $348,000 hit to landfill revenues which would have to made up in garbage tippin g
fees at some point .
I would be more than happy to meet with council for a study session if that is what the y
want . The annual cola percentage is based on the November 2010 Bureau of Labor al l
city average for inflation . The greenwaste percentage is based on the cost of taking it t o
Santa Maria or leaving it at Cold Canyon . The landfill increase is based on a $5 per to n
increase for garbage trucks effective 1-1-2011 . Contractor tipping fees at Cold Canyo n
were raised $15/ton .
Call me with question s
Tom Martin, General Manager