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HomeMy WebLinkAbout1981-06-03-SWAC-rpt.pdf ""Vt99 June 3, 1981 Board of Selectmen Town of Lexington Lexington, MA 02173 Gentlemen Attached please find the Report of the Solid Waste Advisory Committee for 1981 The report is the culmination of over ten years of work by many Townspeople on all aspects of Lexington's solid waste problem. In recent years, we have concentrated on the NESWC Project as our primary program, while staying aware of progress attained on the 128 West Project and on a multitude of alternate choices and concepts The Solid Waste Advisory Committee unanimously recommends the NESWC Project to the Board of Selectmen for commitment (by contract with Mass. Refuse, Inc , a division of UOP) of a large fraction of our tonnage to this project. As outlined in the body of the Report, there are many advantages to this Project as compared to other such. schemes There are, however, a few remaining unresolved issues These we trust shall be resolved shortly Notwithstanding these issues , we recommend this Project unanimously to the Board for Lexington's participation Respectfully, iLased- '" Dr J P Reilly, Chairman W Empey W. Tonaszuck M. Hanlon F Bailey S Solomon R. Hauser SOLID WASTE DISPOSAL - COURSE OF ACTION In April of 1979 the Solid Waste Advisory Committee reported in a document entitled "Solid Waste Disposal Options of Town of Lexington, Massachusetts" a recommendation to TownMeeting to authorize the Board of Selectmen to commit the Town's solid waste to a resource recovery fariiity for implementation of a long range solution to solid waste dis- posal. This was adopted. The concepts developed in that report for the North East Solid Waste Committee (NESWC) resource recovery project in North Andover are preserved in the recommendations presented herein. The Solid Waste Advisory Committee recommends the NESWC project to the Board of Selectmen for the following reasons: a) This project is the nearest term project available to Lexington which offers long-term economic solution to solid waste disposal. b) The technology is proven. The use of mass-bunting technology is being used extensively in Europe and Japan and there are two fariiities of the sane basic design in this country. c) The_New. England Power Company (NEPCO) has signed a twenty-year agreement to purchase electric power produced by the NESWC project. The comities will receive 89 5 percent of the revenues Ilan the sale of energy. NEPCD will p rchase power at 90 percent of avoided energy costs. d) The mated project will be operated by a UOP subsidiary, Massachusetts Refusetech, Inc. (MRI) whose performance will be guaranteed by MOP. UOP will take an ownership position in the project through NRI and will share the tax benefits of ownership through a special credit to the communities. e) The facility will be designed for 1500 Tons per Day, (465,000 Tons per year) rather than the original 3000 Tons per Day. _It is estimated that 900 Tons per Day will be contracted from Municipalities, while the re- maining 600 Tans per Day will be generated from private contractors. Provisions are made for future expansion. f) Shared Transportation costs have been formulated which will subsidize Lexington's impact of transportation. g) The disposal fee for a fully utilized facility is pro- jected to be competitive with existing landfills and to be quite attractive because of the revenue-sharing feature of the contract. 1 Revised 6/2/81 SOLID V1ASTE DISPOSAL - COURSE OF ACTION s Risks are borne by the participation communities in m conjunction with accepting the yolential rewards of lowered tipping fees. Mitre Corporation has prepared estimates for energy reveir s and those cost elements for which camnutities are responsible and has reviewed the construction and operating costs guaranteed by UOP and considers them to be reasonable and comparable to costs of similar facilities. h) OOPguarantees 1. Energy output 2. Tonnage processes 3. Metals recovery 90% ferrous metals 60% aluminum 40% heavy non-ferrous metals 4. Environmental compliance i) Legally acceptable to Ropes & Gray Bond Counsel and Palmer & Dodge, attorneys for the Town of Lexington. j) Communities may continue or establish source segre- gation/separation/recycling programs in accordance with the provisions of the Service Agreement. Same matters are yet unresolved such as a) Backup landfill - Ropes and Gray has been retained by the Bureau of Solid Waste Disposal to negotiate the acquisition of an interim backup landfill in Peabody for the NESWYC Project. The State is committed to provide a backup land- fill for the project by December 31, 1981. b) Additional Contract Documents - are required as a condition precedent to the ammencement of financing, design, and construction. Such documents must be approved under the terms of the Service Agreement and associated by laws by the ctntract Community Representative on behalf of and under instruction from the communities who have signed the Service Agreement. c) Project Status will be decided by December 31, 1981 on the basis of having 900 Tons of municipal contracted solid waste by that date. Projection for schedule of operation of the plant is 1985. d) Resolution of the issue of potentially permanent over/under supply penalties built into the contract due to the annual .cyclic variation of refuse generated by the towns and the straight- line averages used in the contract clauses to determine over and under supply penalties. e) Actual number of tons to be committed by Lexington to the Projects. 2 SOLID WASTE 'DISPOSAL - COURSE OF ACTION Disposal Cost Analysis With the proposed project at 1500 Tons per Day Table 1 and lA shows the 1985 cost and revenue analysis. A summary of that Table shows: Costs $43.70 per ton Revenues Energy $32 32 per ton Materials 6.05 per ton $38.37 per ton 38.37 Estimated Net Disposal Cost r5755 - A comparison of this cost to various alternates gives these results (See Table 2 for Mitre analysis) Resco: 1981 tipping fee $16.12 per ton. Escalated to 1985 at current 4.5 percent yearly cost increases = $19 00+ 128 West Resource Recovery No contracts available at this time to evaluate revenues. Transportation costs are higher as site location in Plainville is approximately 1/3 greater distance for 1I transportation. Landfill disposal DEQE approved landfill estimated by MITRE Corporation at $7 - $10 per ton 1981. Costs will increase with time and site availability will decrease. It is estimated that 1985 costs will be $15.00 per ton. Table 2 and Table 3 show various assumptions for projecting tipping fees for contracted communities. In all cases the projected fees decrease except for 1995 which steps up because of a depressed pay back of bonds in the first 10 years of the 20 year financing plan, and a higher rate the second 10 years. TRANSPORTATION ANALYSIS The issues of municipal collections, transfer and transportation are options completely open to Lexington to allow the most economical solution possible. A formula has been developed and is included in the contract package for transportation sharing in the form of fee rebates. 3 'SOLID WASTE DISPOSAL - COURSE OF ACTION S CDLlectian The Town of Lexington currently contracts with Browning Ferris Industries for.callection, hauling and disposal -of refuse, for a total FY cost of $510,000. This is a three year contract with price escala- tions of $20,000 for each of the next two years (1982 and 1983) Of a total per ton cost of $29.12 collection is approximately $15.12 per ton. This compares favorably with area communities. No recommendations are proposed for alternate collection methods. Transfer and Long haul Analysis A significant cost not a part of this contract is the transportation of waste to the North Andover Resource Recovery Facility. Meier the a- dopted Transportation Cost Sharing arrangement each participating community pays a $3.00 Fee (See Appendix )., and monies are paid back in propor- tion to distance of transportation up to 20 miles from the facility. It is estimated that Lexington would realize a net rebate of $1.80 per ton, or approxisately $31,500 per year adjusted to the CI index. Based upon 17,500 tons per year 1981 transportation costs would be $124,700. This cost will escalate. The Town of Lexington may deliver its refuse to the facility in one of three ways: direct haul; transfer-haul from a transfer station serving only Lexington; and, transfer-haul from a regional transfer station. Using data fiun Mitre Corporation the following analysis can be made: Cost per Ton (1981 dollars) a) Packer haul with 20 cy packers directly to $11.34 North Andover b) Packer haul with 30 cy packers directly to 5.94 North Andover c) Trailer haul Lunn transfer station within 3.69 Lexington d) Transfer Station Costs (assume 20,000 TPY) 7.25 This analysis is shown graphically in Figure . Packer haul with 30 cy packer direct to North Andover is significantly lower in price to other alternatives although actual prices for this service may vary, and could hasten alternatives as discussed below. A regional transfer station involving Lexington, Burlington, Bedford, Concord and Lincoln would generate 53,000 tons for a transfer station cost of about $5.00 per ton. It is recommended that this alternative be kept open and that a long range decision be made when specific cost data develops. It appears that packer-haul with large trucks is the viable solution for some time. 4 ; , r Cost t * moi. ot.l.Mzs TER itn.% - N u" 4% VI 6` --1 CO ° p - 0 01111p11114 1 vs — Ccs` yZ A �G GC - y \ 10 a am A en iti ,a, n - _ s X . _„ cgs U m O C.> cs, A ! Z • 5v Rox1ill ITV OF �(` 1 I- 0 RESo U12CE 2ECOVEgC , -PLANT A ICS - .__1,___ c‘-- - N r . A SOLID WASTE DISPOSAL - COURSE OF ACTION 8 Summary & Conclusions The Solid Waste Study Committee has investigateda. number of alternatives in resource recovery, other disposal methods and other technologies. The NESWYC Resource Recovery Project in North Andover offers Lexington a long term economic solution to solid waste disposal that is the nearest term project available to Lexington. The technology is proven, with combustion/power generation and resultant sales of energy reducing costs substantially over the 20 year contract period. Transportation costs are a major contribution to the economic liability of the community and analysis has determined that the current practice of hauling directly by contract to the resource recovery facility in North Andover in 30 cy packer trucks is the most economical solution for some time. The concept of source separation and recycling may be retained by the community but indications are that this will not be extensively participatory and revenues generated by resource recovery may in fact be more financially rewarding to the Ibwn. There is risk involved in this venture. But the rewards of sub- stantially reduced tipping fees and long range commilneut to proven technology make this a viable venture for the Town of Lexington. 5 NORTHEASTERN MASSACHUSETTS RESOURCE RECOVERY PROJECT ESTIMATED NET DISPOSAL COSTS(1) 1500 TONS PER DAY (465,000 TONS PER YEAR) 1/1/85 Dollars 465,000 TPY Communities' Ii $ Per Year Pro Rata Share COSTS (000) $/ton Debt Service $14,464 $31.10 Special Credit i (2,900) (6.24) Operating and Maintenance Costs 4,941 10.63 Other Costs 3,817 8.21 TOTAL COSTS $20,322 $43.70 REVENUES (COMMUNITIES' SHARE) ENERGY Guaranteed $12,241 $26.32 Additional Anticipated 2,790 6.00 Subtotal 15,031 32.32 MATERIALS Anticipated Ferrous Metals 795 1.71 Anticipated Aluminum and Heavy Nonferrous Metals 688 1.48. Anticipated Residue Disposal Cost Saving 1,329 2.86 Subtotal 2,812 6.05 TOTAL REVENUES 17,843 38.37 ESTIMATED NET DISPOSAL COST(2) $ 2,479 $ 5.33 (1) See COST AND REVENUE ASSSUMPTIONS (2) Assumes a plant filled with committed community tonnage. Table 1 4 EXPLANATION OF S \\ OTHER COSTeINCLUDED IN ESTIMATED NET DISPOSAL COST 1500 TONS PER DAY (465,000 TONS PER YEAR) 1/1/85 DOLLARS OTHER COSTS (PASS-THROUGH COSTS) : $/TON RESIDUE DISPOSAL $3.13 HOST COMMUNITY FEE 1.00 BACKUP LANDFILL .76 INSURANCE AND BONDS 2.30 COOLING WATER .33 SITE RENTAL .26 ADMINISTRATION AND MISCELLANEOUS .38 $8,21 �. ESTIMATED DISPOSAL COST 3 30 - 25 - � ® fD cs,00 le O e i 0 9 • ® 0 ® Q► 0 ® ,.-- o co a 15 - � � , - cla se roo 1Q - gam.wsYr-'°fir Ne -- = .ewe. +.n. eN tc 5 - o o N s 0 N d 4 r . 1 I O. 1985 .=947 t 5 N 2000 2005 Sta.+tup Ea- I -5 - y N o U .0 - 73 \ to 0 -15 - coC z -20 - -25 - n Legend: A A= N-ESWC—including energy revenues, revenues from ferrous and nonferrous metals, and credit for avoided residue disposal costs—costs and revenues escalated at 10% annually. B= NESWC—including revenues from energy and ferrous metals only—costs and revenues escalated at 10% annually C= DEQE approved landfill, assuming $7.10/ton cost in 1931—escalated at 10% annually 0= Estimated costs for non-revenue sharing resource recovery projects. Table 2 1 ESTIMATED NET DISPOSAL COST IF ESCALATION IS LESS THAN ANTICIPATED S 30 - 25 - D 20 - � � e o ' • ® to ® to e , ® woe O sr C Q. i5 - - me m a a C a U) i 0 •-• �- .... .." .1.11.. se orak 00 "S 0 5 - � ® = "Netts., F y 0 f I i r © 1335 1990 1r'S 000 005 a- uiartup .. Cl) BN 0 -10 - co CIO Coa -15 - 0 S. 2 -20 - -25 - .30 - -35 — Legend: A= NESWC—including an anticipated revenues—revenues and costs escalated at 5% annually. B= NESWC—including revenues from energy and ferrous metals only—revenues and costs escalated at 5% annually. Table 3 'I. '1 - t a f Y 7 { J APPENDIX P. x - k fi 4' u; i .f .1 -A. Service Agreement Summary - F _. 4.4 NESWC Service Agreement April 8, 1981 ` ' `. B. Solid Waste Disposal Options of Town of Lexington, Massachusetts April, 1979 ! _ C. Fact Sheet UOP Inc. '_- Memorandum of Understanding between "State" and "NESWC" Northeastern Massachusetts Resource Recovery Project Financing Plan P- State Commitments D. New England Power and UOP Inc. Energy Purchase Agreement for the Northeastern Massachusetts Resource Recovery Project Fact Sheet E. Tipping ' Fee and Revenue Analysis l' / -AN, Concept of Estimated Net Disposal Cost to Communities t ,,,,i i F. Townwide Collection, Transfer Station and Transportation Cost Analysis G. Other Alternatives for Lexington _ ii. Letter from Ropes and Gray to Bureau of Solid Waste re Solid Waste Disposal Service Agreement :,:_._" --- -,, -r 't Town of Lexington Solid Waste Disposal Service Agreement review by Palmer & Dodge a s Solid Waste Disposal Service Agreement review by .Peat, Marwick, Mitchell & Co , Certified Public Accountants Letter from Mitre Corporation to Bureau of Solid Waste evaluating Solid Waste Disposal Service Agreement I. Answers to miscellaneous questions regarding Service Contract 5v_ 4