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HomeMy WebLinkAboutCOM 0550.002 2010-2012 ATLAS RECYCLING CENTERS, LLC 30 Maka'ala Street Hilo, Hawai'i 96720 ~� Phone 808-935-9328 * Fax 808-961-3535 atlas @hawaii.rr.com I a< Transmittal a To: County of Hawaii County Council Members 25 Aupuni Street Hilo, HI 96720 Att: Councilman Dominic Yagong Date: 2/9/2012 From: Michael J. Allen Owner Re: Response to DEM's Written Remarks for Fully Funded Diversion Grant Program Enclosed please find: Attachment "A" Attachment "B-1 thru B-4" Attachment "C" Copy of DEM letter dated 1/31/2012 •:r„n�. ���. 550. 1. Ref. 7o: Ref. Date FFR 1 n 2f117 Atlas Recycle Center P.O.B. 5294, Hilo, HI 96720 Phone: 808-935-9328 County of Hawaii Department of Environmental Management Acting Director, Dora Beck, P.E. Hawaii County Council Finance Committee Chairman Yagong, and Hawaii County Council Environmental Management Committee Chairwoman Smart, and Honorable Council Members Subject: Response to DEM's Written Remarks on Atlas Recycling Proposal for a Fully Funded Diversion Grant Program. Aloha, Please find below my written response to the DEM critic on the Atlas Recycling proposal for a Fully Funded Diversion Grant Program. DEM's response had almost nothing positive to say about the Atlas proposal. It is not only unbelievable but quite disheartening since a considerable amount of time and energy was put into a proposal that is both comprehensive and cost effective program for the County and taxpayers. Required by the State, the County of Hawaii's IRSWMP was drafted by local recycling businesses, individuals, and professionals who determined the best transfer station solution was to develop a 2-Bin Mixed Recycling system. The 2009 IRSWMP was approved by Council as recommendations and options and can be altered through Council action. The IRSWMP states in section ES. 7: Potential Future Directions, "(Plan) outlines the future direction for County programs...It is expected that other opportunities will no doubt arise that the County may find advantageous to pursue." As stated in the IRSWMP; Goals: "It was recognized that selected programs must be both implementable and sustainable in order to be successful." The IRSWMP defined `sustainability', "To ensure that programs and actions meet environmental, economic, and social equity needs of the present without compromising the ability of future generations to meet their own needs." Fully Funded Diversion Grant Proposal Page 2 And finally, the IRSWMP recommendation to implement a Pay-As-You-Throw system, which earmarked nearly $two million in revenue annually, was later harshly turned down by the general public and at this time removed from further consideration and development. DEM falls back on the IRSWMP defense of their 2-Bin system in order to make it seem critical to hang onto. DEM is out of touch with both the realities of recycling, the costs to implement recycling programs, and the recycling needs of the community. As the owner of Atlas Recycling, I have over 27 years of experience in the recycling industry on the Big Island, providing recycling services aimed at benefitting the community and working hand-in-hand with past administrations and councils to expand recycling opportunities. I have diverted more recyclable material, created more opportunities for the business and residential sectors, and significantly increased the diversion tonnage on the Big Island. The Atlas Recycling proposal is a sound and realistic approach to meet the Zero Waste goals. Thank you for your time and consideration and hope you'll agree that the Fully Funded Diversion Program should become a focal point of the County's recycling efforts. Response to DEM remarks 1-7 Facts: 1: Fact—The County records clearly show that the Landfill Diversion program's annual contracts are consistently 6 months late and overdue for contractor's signature (Attachment A). Each year contractors operate for 6 months WITHOUT a contract and no guarantee the County will pay for tonnage collected during that period. Although the current landfill diversion program has had some success it is time to fully fund a new program and make long-term commitments to the recycling industry so it can have the stability and commitment it needs from the County to radically improve recycling efforts directed at small business and the residential sector. 2: Fact— Let me be quite clear about this. Atlas requested a copy of the 2010 survey, but DEM has not contacted our office with notice that they found a copy for us to read. We did find a survey conducted in September 2009 indicating that a total of 19 people who accessed the DEM's hawaiizerowaste.org website responded to a survey on the 2-Bin system. Acting Director Dora Beck referred to this survey on January 20, 2012 when she mentioned that 85% of transfer station users participate in the 2-Bin system. Fully Funded Diversion Grant Proposal Page 3 For DEM to extrapolate any useful information from a survey population of 19 participants, further limited to those that accessed the County website and to put forth that information as fact is a gross over statement at the least and a clear attempt to misrepresent information to the Council. It is agreed that 85% of the residents may use the transfer station for rubbish disposal. The County further maintains in their critique and based on a 2010 survey, that 80% use the 2-Bin transfer station Mixed Recycling system. If the latter were true, the annual mixed recycling tonnage would be much greater than it currently is. The fact is a small percentage of transfer station users are voluntarily utilizing the 2-Bin recycling program. Further, the 2-Bin system excludes any competition, limits the activities to one company, and offers the community only one outlet for their recyclables, eliminating financial rewards and incentives. 3: Fact—That's true, but that program has too many short comings as is explained in greater detail in other sections of this response. The County consistently fails to provide timely Diversion Grant contracts for signature. The 2-Bin contractor is not guaranteed payment for the mixed recyclables if the County does not have the money available for the following year. 4: Fact- That's true, but in other years it was much greater. This is a purposeful response to hide the true cost of their program. 2010 was a strong year for recycling commodities, resulting in lower diversion grant payments. However, as you may know, the commodities market goes up and down, and in poor economic times the fluctuations increase. The County states, "In 2009 the average diversion payment per ton was $102. Let's take a closer look at these findings. According to County records; the County's payment per ton unit to Business Services Hawaii (BSH) in the first quarter of 2009 (Jan-Mar); $132.50 per ton for cardboard $172.00 per ton for mixed recyclables $560.00 per ton for#1 & #2 plastic $520.00 per ton for#4 plastic $160.00 per ton for glass bottles The first quarter of 2009 averaged $308.90 per ton diversion payment. ➢ In 2009 the annual average diversion payment paid out to BSH amounted to $209.35 ➢ In 2010 the annual average diversion payment paid out to BSH amounted to $130.83 Fully Funded Diversion Grant Proposal Page 4 Plus, the County continually fails to add in the $100 and $200 additional per ton payments it pays under the hauling contract for the 2-Bin transfer station program. For the record, calculating 2008-2010 period of the 2-Bin Mixed Recycling program, the average cost, including diversion payments and hauling costs, to the taxpayer was $230.00 per ton. (Attachment 8) 5: Fact-Again, DEM continues to cherry pick their numbers and refuses to include the respective $100 and $200 per ton hauling costs. The $100 is substantially lower than their true cost of the 2 bin transfer station program. The Atlas proposed $100 per ton number was established without regard to market conditions. It's an evaluation based on creating an efficient, comprehensive and cost effective program that when fully established will also result in an economic incentive. Whether the markets are up or down, this program will have the ability to survive long-term. That means that as the markets fluctuate we'll see our revenues fluctuate. Over time, however, we'll have the stability we need because of the extra volumes coming in with the success generated from this program. 6: Fact - DEM continues to beat a dead horse. Yes, 85% of the residents may use the transfer stations, but DEM has not motivated 85% of the community to recycle even with their"convenience" approach. This argument they put forward of people having to drive all over creation to recycle under our program is ridiculous. The Fully Funded Diversion program will be more convenient because the outreach will be greater. The fact is, if people want to recycle at the transfer station they can continue that costly program if they choose. The improved diversion program will be cheaper and over time will draw enough people away from the transfer station that that program will eventually be scaled back. 7: Fact—There are two important points; first, with the greater volumes at these aforementioned transfer stations, it would be quite reasonable that recycling under the Atlas proposal would continue. The high volumes generated along with their close proximity to established processing centers would create competition for this material even at $100 per ton. (Remember the DEM has argued that at times their landfill diversion fees were as low as zero). With respect to the smaller communities, a comprehensive outreach to schools, churches, and other community groups will fill that void. However, if the choice is to continue the higher cost 2 bin transfer station program in these communities then the County can decide to do so. The fact is, as the fully funded diversion program becomes established and the outreach grows, less material will be generated at the transfer stations which will result in less hauling and therefore less costs to the County. Fully Funded Diversion Granf Proposal Page 5 PART II Response to DEM's remarks on Atlas Recyclings' claims on the "Problems" of the 2-Bin system. 1) Again, we agree that 85% of residents use the transfer stations for disposal of rubbish. If that 85% of the transfer station users all recycled then we wouldn't need this conversation. The fact is a small percentage of transfer station users are voluntarily recycling at the transfer stations. Add to that the inefficiency of the collection method, the light loads being hauled, and the exorbitant cost of retrofitting the transfer stations to name a few, and you have a program that gets very little `bang for the buck'. If you include the fact that it excludes any competition, limits the activities to one company and offers the community only one outlet for their recyclables, eliminating financial rewards and incentives, your left with a program that falls far short of our Zero Waste goals. Stating that funding other locations in addition to the transfer station offers no advantage is purely ridiculous. Our proposal offers more efficiency, less cost, and more opportunity by expanding outreach. That's a tremendous advantage for the taxpayer and the recycling community. 2) Quite the contrary, the Atlas proposal does nothing to eliminate voluntary recycling. As I've stated before, 72% of all material collected at the transfer stations is done at six sites: Kealakehe, Keauhou, Waimea, Pahoa, Keaau, and Hilo. I can guarantee that voluntary recycling will continue at those locations. The remaining transfer station sites, under our proposal, will continue with significant reduction in transportation costs. The volumes collected and the close proximity to processing centers in Hilo, Keaau, and Kailua-Kona (which will result in low transportation costs) will attract plenty of interest. In Hilo, Kona, and Waimea there are full-time private recycling centers that offer much better convenience than the transfer stations. The argument of a `one stop' dump-off for rubbish and recyclables has not resulted in higher recyclable volumes of collection at the transfer stations. My argument for "one stop" is the hundred's of people on the island that visit local recycling centers to drop off HI-5 material. Imagine if they could now drop off other items like newspaper, tin cans, magazines, cardboard, plastic and glass bottles...etc. As I said before, those that want to visit the transfer station can continue doing so. Expanding locations and therefore opportunity is what the Fully Funded Diversion Grant Program is all about. 3) Allowing small businesses to use the transfer stations for a fee will not result in much recycling. Most small businesses have commercial rubbish bins provided by commercial haulers like Pacific Waste. Hauling their own rubbish is Fully Funded Diversion Grant Proposal Page 6 not what the small business community is asking for. What they do want is access to their local recycling businesses or recycling services as part of their refuse service. By creating an economic incentive as our program provides, it will stimulate the commercial haulers to offer recycling pick-ups because they'll be paid for the material they collect. There is no current incentive for the commercial haulers to become fully supportive of recycling. They are reluctant to reduce the "waste" they haul because less waste hauled (which they charge a fee for) reduces revenue. 4) The claim that the private 2-Bin contractor is managing contamination and moisture, and that they are providing covered bins and compacting is just plain false. The overwhelming majority of transfer station bins (roll-offs) are not covered, contain contamination, and are subjected to the elements which results in rain soaked paper, bottles and cans which will collect moisture, and contamination of material. That's a fact. The taxpayers are paying for heavier rain soaked loads which also when weighed drives the diversion rate upward and essentially the numbers for diversion are not fairly represented. Our program would eliminate moisture and contamination. We would utilize fully enclosed containers and since certified recycling businesses is buying the material from the collectors they would be responsible for following the guidelines for collection and storage or their payments would be reduced. An example: when someone brings in HI-5 aluminum cans in a black plastic bag, company workers would continually verify their quality and substance as a condition of payment. That same process for purchasing other items would certainly follow. 5) We agree that managing solid waste through the transfer stations is a must. You obviously cannot have landfills in each island community. To carry this argument over to include recycling is ridiculous. Where do you think the community was recycling prior to the transfer station program. There are nine privately operated recycling centers on the island not including other locations served by mobile recycling programs or promoters. To eliminate their efforts by concentrating only on the transfer stations damages the potential of recycling. Hundreds of people each day visit private recycling businesses to turn in Hl-5 commodities. Schools, non-profits, and community groups that reach out to thousands of members and their families can form the groundwork for community based programs. Community members starting niche businesses collecting recyclables for additional income should be encouraged. These are just some of the areas for expansion that will go far beyond and have an increased impact on waste diversion that the transfer station program does not reach. Acting Director Dora Beck states, "Transfer Stations will be in our island's future for many years to come." Ms. Beck reasons that residents use the transfer stations to dispose of rubbish and the 'one stop' convenience allows the Fully Funded Diversion Grant Proposal Page 7 residents to voluntarily participate in recycling. But this is contrary to our zero waste goals. The Council in 2007 adopted resolution 356-07 to embrace the principles of zero waste as a long-term goal and to eliminate waste by emphasizing a closed-loop system. A zero waste philosophy reduces the need for residents to go to transfer stations to dispose of rubbish in the near future and instead focuses on the primary development of recycling throughout our communities. 6) The County has cherry picked 2010 as the basis to argue cost effectiveness. (Please find Attachment B for a copy of the diversion payment schedule to BSH as reported from the County DEM for the 2008 through 2010 and for the hauling cost of the 2-Bin transfer station Mixed Recycle program). The real facts are that the program over that period cost the County taxpayer an average of$230.00 per ton. 2010 was a strong year for recycling commodities, resulting in lower diversion grant payments, however, as you may know, commodities go up and down. As an example, in the first quarter of 2009 (Jan. — Mar.) the County paid out $132.50 per ton for cardboard, $560.00 per ton for plastic bottles, and $172.00 per ton for mixed recyclables. An average over the contract life, as we've done, is a truer indication of the overall cost realities. For the record, the $230.00 average includes the hauling costs and the Diversion Grant contract between 2008-2010. I don't want to be accused of misinformation. 7) The Fully Funded Diversion Program is not an advanced disposal fee. It is a financial assistance program to help advance the goals of recycling. By creating the economic climate that can result in a vast expansion of viable recycling programs and projects. Although the program does not lay out a payment schedule for participants, it does create efficiencies and economies of scale to allow for private recycling businesses to pay for participation. The competitive nature of the business will dictate what rates the participants will receive. 8) There's no doubt that participation increases with convenience, but it increases in greater numbers with a financial incentive. Across the country convenience failed to achieve high participation levels, so now convenience is coupled with financial incentives as rewards for participation. Convenience advances recycling to only those that want to voluntarily recycle and do so because of the convenient component. Let me be quite clear, not only will the Fully Funded Diversion Program offer greater convenience by now having schools, non-profit and other organizations, and the like involved but it will also expand convenience because now along with Hl-5 recyclables, which are experiencing an 85% diversion rate, the overwhelming amount of people participating in that program can now add paper, plastic, tin cans, magazine, glass bottles...etc. to their recycling efforts. Again, the current landfill diversion program has limitations that prevent the creation of stable recycling programs by private business. 9) This is absolutely ridiculous. Whatever, one zone or two, the financial investment to bid on this contract will absolutely limit participation in the bid. The County has made a claim that over 25 prospective bidders have inquired about this bid. Plenty may inquire but the fact is there will be very limited participation. Each zone will require an investment in hauling equipment alone of over $400,000 (25 roll-off containers minimum per zone and at least two roll-off trucks with towable roll-off trailers). There are two companies on the Big Island (Business Services and Pacific Waste) that currently have the equipment needed, and require virtually no further capital investment. This fact will eliminate any other bidders because these two companies will have an overwhelming advantage. These two companies will also have direct access to the recycling equipment needed to process the material, which creates a further superior advantage over any competitor which will have to also invest hundreds of thousands of dollars in recycling equipment. This bid and this program specifically is not competition driven. It limits the bidders to the largest companies and creates no competition in the recycling industry. Other Excerpts: Fact—The current diversion program does have a sliding scale for payments. That scale has been as low as `$0', but it has also been as high as $560. Let's be clear about that. The price is just as likely to $560 as it is to be $0. The markets create that; the true indication of price should be over a five year period. The fact is, the current landfill diversion program funds are overwhelmingly paid for material recycled from large commercial chains; KTA, Longs, Foodland/SacknSave to name a few. Cardboard accounts for 80% of the diversion funds paid by the County (excluding glass — it is a State funded program). Because the County limits funding and provides no long term contracts (landfill diversion is a year to year program) the recycling centers are forced to concentrate their efforts on this material and shy away from costly and risky programs benefiting the small businesses and general public. That material is more expensive to handle and collect. A long term (3 year) fully funded diversion program that provides a fixed payment of$100.00 per ton will result in substantial changes in how recycling businesses structure their programs Fully Funded Diversion Grant Proposal Page 9 towards the small businesses and residential sectors resulting in greater effort, participation and diversion. With respect to large retail accounts such as Walmart, Costco, Home Depot, Target...etc. these companies are able to participate in the corporate National recycling programs for one important reason — FREE SHIPPING. Because of the amount of shipping of containers into Hawaii that these companies generate, and the competition for their business, the shipping companies (Matson, Horizon, NYK, Maersk) have provided them with free freight returns which results in a savings of up to $100 per ton on their cardboard bales. This is a tremendous advantage and makes it impossible to do business with them on a local scale. Fact— It's possible that at times the current diversion rates are lower than a $100 per ton average. All we've discussed, the current landfill diversion rate is based on a sliding scale. What DEM fails to explain, the transfer station 2-Bin program also pays out a hauling fee of$100 and $200 per ton which results in an average payment well over $100 per ton (Attachment C: 2007-2011 period, hauling charges averaged $147.83). Our program asks for the lowest 2-Bin per ton hauling fee, $100. That $100 per ton will be used to create a more comprehensive, efficient, and less expensive diversion program. It will also establish the most important component, financial incentive, which will result in a greater motivation to recycle. Fact— I applaud the County for its efforts with the 2-Bin system. What I don't understand is their continued reluctance to implement the Fully Funded Diversion Program we've put forward. Our program, if put into place, will expand recycling to sectors of the island communities that the 2-Bin system and the current landfill diversion program fail to reach. The Fully Funded Diversion Program will increase outreach, participation, and effort. It will absolutely result in more diversion. The 80% will be less than half of the four and a-half year average of $230.00 that the 2-Bin system has created. What's more important, the $100.00 per ton can create the economic incentive that the County admits is important, but lacking from their program. Sincerely, Michael J. Allen Owner • - -- --- • William P.Kenoi d..." • Nancy.E. Crawford •Mayor Director .-?/:• . . . ---- Deanna S.Sako Deputy Director ci*0\'Qj Benevides County of Hawaii ( • Purchasing Agent . PURCHASING DIVISION DEPARTMENT OF FINANCE • - 25 Aupuni Stieet,Suite 1101 fib 0_41,r.9 arr79 December28,2011 • • Mr. Michael).Allen • • ATLAS RECYCLING CENTER,LLC. • 30 Makaala Street Hilo, HI 96720 .• • SUBJECT: REQUEST FOR PROPOSAL NO 2298: FURNISHING LANDFILL DIVERSION INCENTIVE . PROGRAM FY •2007-08 FOR THE SOUD WASTE DIVISION, DEPARTMENT OF • . ENVIRONMENTAL MANAGEMENT,COUNTY OF HAWAII - . . Endosed herewith is Supplemental'Ag - - •-‘17. for the subject proposal which I- the Contract for an additional 180 day period begin ing July 1, 2011, and.ending December 31, 2011. is 'document must be properly sexecuted before•- . • — the • Agreement to our office. Please do not date document as it will be dated at the time it is executed by the. Mayor of the County of Hawaii. Our records indicate that the insurance certificate we have on file for General Liability coverage •expires January 23, 2013, Automobile Liability expires on October 20, 2012 and .Proof. of Workers Compensation expires on March 29, 2012 All insurance required in the bid specifications must be kept current and effect during the life of the contract(including any and all extension periods). • Our records indicate that we do have a copy of your corporate resolution.on file. Therefore, unless there have been changes in authority and/or corporate structure it will not be necessary for you to provide another rescilution. • - • . • Upon completion, please return the Ag - to our office. Thank you for your cooperation; if you have any questionS or Problems completing the ve .‘ease co me at(808)961-13440. • • c1LB ;ENEVIDES •• •• • Agent • Enclosure cc: DEM • • • Hawaii County is an Equal Opportunity Provider and Employer Ord(kit 2011 Mix Recycling 2-Bin Program TONNAGE MxR$200 MxR$100 MxRTotal OCCZon1 OCCZon2 OCCTotal Glass News Month 243.76 69.17 312.93. 34.02 52.84 86.96 116.2 3.65 Jan 197.2 62.48 259.68 29.96 38.49 68.45 98.18 7.13 Feb 226.76 69.27 296.03 35.84 63.78 99.62 92.23 3.66 Mar 220.82 65.72 286.54 30.49 42.2 70.69 81.47 3.53 Apr 241.24 75.65 316.89 34.69 50.57 85.26 98.56 5.78 May 227.74 82.92 310.66 35.24 44.9 80.14 91.56 0 Jun 214.53 70.29 284.82 32.75 45.22 77.97 84.39 0 Jul 224.96 70.49 295.44 34.47 38.6 73.07 66.12 0 Aug 201.75 65.9 267.65 29.27 44.02 73.29 95.88 0 Sept Oct Nov Dec 1,998.75 631.89 296.73 418.72 2,630.64 715.45 824.59 23.75 4,194.43 Ott' raj artetell A-6 � 2-Bin Hauling Cost per Ton $200 $100 $100 $100 $100 2-Bin Hauling Cost 399,750 63,189 71,545 82,459 2,375 619,318 76 2010 Mix Recycling 2-Bin Program TONNAGE MxR$200 MxR$100 MxRTotal OCCZon1 OCCZon2 OCCTotal Glass News Month 224.85 44.69 269.54 30.24 31.4 61.64 95.08 24.4 Jan 192.11 37.38 229.49 26.73 38.81 65.54 73.03 22.66 Feb 239.76 46.77 286.53 31.47 74.29 105.76 102.94 26.64 Mar 221 45.29 266.29 29.65 23.58 53.23 91.42 29.6 Apr 228.22 43.68 271.9 31.27 49.48 80.75 80.18 27.65 May 231.05 50.45 281.5 31.95 45.85 77.8 85.11 34.49 Jun 229.41 43.98 273.39 30.76 48.05 78.81 84.65 29.39 Jul 209.14 48.12 257.26 31.19 50.98 82.17 91.91 26.74 Aug 201.31 41.78 243.09 26.45 63.38 89.83 76.15 25.39 Sept 216.28 66.04 282.32 31.81 46.73 78.54 75.53 2.67 Oct 211.05 64.33 275.38 32.11 37.92 70.03 93.49 3.56 Nov 264.15 80.95 345.1 40.71 63.51 104.22 81.72 5.83 Dec Tons 2,668.33 613.46 374.34 573.98 3,281.79 948.32 1,031.21 259.02 5,520.34 Landfill Diversion Incentive Costs- BSH Jan-Mar $$$Costs $97.50 $57.50 $160 $57.50 Qtr. Tons 785.56 232.94 73.7 Total $ 76,592.10 1,324.80 4,237.75 April-June $$$Costs $50 $10 $160 $10 Qtr. Tons 819.69 211.78 91.74 Total $ 40,984.50 2,117.78 917.4 July-Sept $$$Costs $65 $25 $160 $25 Qtr. Tons 773.74 250.81 81.52 Total$ 50,293.10 6,270.25 2,038 Oct-Dec $$$Costs $57.50 $17.50 $160 $17.50 Qtr. Tons 902.8 252.79 12.06 Total $ 51,911 4,423.80 211.05 Totals$ $219,780.70 14,136.65 164,993.60 7,404.20 403,315.20 2-Bin Hauling Cost per Ton $200 $100 $100 $100 $100 2-Bin Hauling Cost 533,666 61,346 94,832 103,121 25,902 818,867 Total Tons 1,225,182 Cost/Ton $221.93 c 2009 Mix Recycling 2-Bin Program TONNAGE MxR$200 MxR$100 MxRTotal OCCZon1 OCCZon2 OCCTotal Glass News Month 231.86 38.36 270.22 29.65 23.46 53.11 95.29 33.13 Jan 189.15 34.38 223.53 27.68 35.5 63.18 78.15 23.73 Feb 240.08 41.12 281.2 31.98 52.84 84.82 93.97 28.62 Mar 209.65 36.83 246.48 33.03 24.29 57.32 74.78 22.2 Apr 220.61 42.1 262.71 30.66 15.01 45.67 87.96 26.14 May 239.37 43.03 282.4 30.7 71.06 101.76 81.23 37.95 Jun 201.82 40.52 242.34 32.25 25.27 57.52 75.8 19.69 Jul 216.36 37.42 253.78 30.91 9.33 40.24 73.08 24.21 Aug 192.96 37.31 230.27 29.77 40.67 70.44 82.88 24.38 Sept 224.83 38.56 263.39 29.35 55.6 84.95 68.98 28.23 Oct 212.17 44.42 256.59 30.64 34.97 65.61 78.5 21 Nov 242.67 49.53 292.2 36.65 62.64 99.29 92.23 34.2 Dec 2,621.53 483.58 373.27 450.64 3,105.11 823.91 982.85 323.48 Landfill Diversion Incentive Costs- BSH Jan-Mar $$$Costs $172 $132.50 $160 $132.50 Qtr. Tons 774.93 201.11 85.48 Total $ 133,288 26,647.07 11,326.10 April-June $$$Costs $152 $112.50 $160 $112.50 Qtr. Tons 791.59 204.75 86.29 Total $ 120,321.70 23,034.38 9,707.63 July-Sept $$$Costs $125 $85 $160 $85 Qtr. Tons 726.39 168.2 68.28 Total$ 90,798.70 14,297 5,803.80 Oct-Dec $$$Costs $57.50 $97.50 $160 $57.50 Qtr. Tons 812.18 249.85 83.43 Total$ 46,700.40 24,360.38 4,797.23 Totals$ $391,108.80 88,338.83 157,256 31,634.76 668,338.40 2-Bin Hauling Cost per Ton $200 $100 $100 $100 $100 Hauling Cost 524,306 48,358 82,391 98,285 32,348 785,688 Total Tons 1,454,026 Cost/Ton $277.73 2008 Mix Recycling 2-Bin Program TONNAGE MxR$200 MxR$100 MxRTotal OCCZon1 OCCZon2 OCCTotal Glass News Month 170.81 30.03 200.84 24.29 44.65 68.94 85.94 38.34 Jan 180.66 26.86 207.52 27.15 33.11 60.26 60.87 32.16 Feb 183.66 31.24 214.9 27.95 36.65 64.6 59.75 28.66 Mar 174.42 25.61 200.03 26.03 43.82 69.85 72.65 37.67 Apr 184.41 27.68 212.09 27.46 33.56 61.02 72.02 33.32 May 192.05 34.97 227.02 28.25 43.31 71.56 74.17 29.24 Jun 191.41 36.33 227.74 28.39 46.49 74.88 75.27 36.04 Jul 188.43 31.46 219.89 27.42 32.96 60.38 66.85 29.83 Aug 188.14 28.07 216.21 24.82 0 24.82 66.15 25.49 Sept 190.8 33.94 224.74 25.43 7.93 33.36 64.18 32.32 Oct 199.1 33.63 232.73 27.25 0 27.25 75.67 34.57 Nov 254.22 41.42 295.64 34.83 127.18 162.01 93.14 33.07 Dec 2,298.11 381.24 329.27 449.66 2,679.35 778.93 866.66 390.71 Landfill Diversion Incentive Costs- BSH Jan-Mar $$$Costs $60 $20 $160 $20 Qtr. Tons 623.26 193.8 '99.16 Total $ 37,395.60 3,876 1,983.20 April-June $$$Costs $35 0 $160 $35 Qtr. Tons 639.14 202.43 100.23 Total $ 22,369.90 0 3,508.05 July-Sept $$$Costs $55 $15 $160 $15 Qtr. Tons 663.84 160.08 91.36 Total$ 36,511.20 2,401.20 1,370.40 Oct-Dec $$$Costs $75 $35 $160 $35 Qtr. Tons 753.11 222.62 99.96 Total $ 56,483.25 7,791.70 3,498.60 Totals $ 152,760 14,068.90 138,665.60 10,360.25 315,854.80 2-Bin Hauling Cost per Ton $200 $100 $100 $100 $100 Hauling Cost $459,622 38,124 77,893 86,666 39,071 701,376 Total Tons 1,017,230.80 Cost/Ton $215.71 1k4. 1'\fit 4 ' -t' 2-Bin Hauling Cost 2007-2011 2007 2008 2009 2010 2011 Cost per Ton "LA 145.29 143.35 161.95 149.89 146.90 144.38 148.40 148.67 149.17 147.93 140.46 149.91 149.14 145.94 146.11 154.26 145.87 152.31 149.59 149.93 124.26 148.73 152.21 149.56 147.62 147.73 147.85 147.55 148.24 147.29 146.24 151.05 149.20 147.97 149.98 155.29 145.66 152.36 156.56 147.30 146.33 146.18 153.80 150.45 149.26 153.77 150.20 147.70 143.54 146.85 149.20 Averages $142.73 $149.00 $151.08 $148.31 $148.03 Overall Average $147.83 JNTYOi N1 i • William P.Kenoi � ^ Dora Beck,P. E.• Mayor .. \.�.:, / �`, .: • Acting Director William T.Takaba Hunter Bishop Managing Director •r�(' o"•'i',`• • r� i• Deputy Director Crxrndv Patuai‘i DEPARTMENT OF ENVIRONMENTAL MANAGEMENT 25 Aupuni Street • Hilo,Hawai'i 96720 (808)961-8083 • Fax(808)961-8086 http://co.hawaii.hi.us/directory/dir envmng.htm o r7 January 31, 2012 Ms. Brittany Smart, Chair And Members of the Hawai'i County Council Environmental Management Committee c 25 Aupuni Street _o Hilo, HI 96720 Subject: Testimony on Communication No. 550—Discussion Regarding the Possible O "" Implementation of Fully Funded Diversion Recycling Grant Program Dear Chair Smart and Committee members, The Department of Environmental Management(DEM)has been working with the Council on a resolution relating to a multi-year contract for service of hauling recyclable materials from County Transfer Stations. The proposed contract would replace the current contract for these services started in 2007 and is part of the County's 2-Bin Recycling Program. After several meetings and discussions with Council members and the Legislative Auditor, DEM revised the Resolution 202-11 to include recommendations from the Council. At the January 20,2012 Council meeting,the Council postponed voting on Resolution 202-11 and received an unsolicited proposal from Atlas Recycling Center,LLC. Communication No. 550 indicates that the purpose is to discuss "concerns that were presented at the January 20, 2012 Council Meeting"and "during the course of the discussion a diversion grant program was mentioned as a possible alternative to the services described in Resolution No. 202-11." To avoid misinformation,DEM is providing written testimony regarding the unsolicited proposal and some of the claims regarding the County's 2-Bin Recycling Program. The 2-Bin Recycling is part of the County's Integrated Resources&Solid Waste Management Plan (1RSWMP) Update that is required by State Law. The IRSWMP Update was developed through many hours of deliberation by volunteers from the community and volumes of documents and research, and the 2-Bin Recycling was determined to be the best option for the County to encourage more recycling for residents. Atlas's Proposal Atlas's proposal is to"develop a comprehensive community based recycling program for the residential sector and small commercial sector on the Bi_ Island through the establishment of a full funded Diversion Grants Program." Comm. Ne. • Ref. To: • County of Hawai`i is an Equal Opportunity Provider and Employer. • Date N 3 I. Fact: The County has been providing a `fully funded"diversion program to encourage recycling which provides funds to Atlas and five (5) other companies who have participated. Over the past four years, 99.12%of all diversion funds requested were granted. 2. Fact: The County already provides a comprehensive community based recycling program for the residential sector. The 2010 survey showed 80%of residents participated in the 2-Bin Recycling. 3. Fact: A fully funded diversion program is already an important part of the current 2-Bin Recycling program. 4. Fact: The current diversion program provides stability for private recyclers by increasing funding during downturns in the market value of the materials. It also protects taxpayers by reducing funding when the values increase. For instance, in 2009 the average diversion payment per ton was$102 and in 2011 it averaged only$36 per ton. 5. Fact: The proposal suggests paying$100/ton for mixed,paper,plastic, aluminum, tin, etc. even when a representative market value of these commodities is high. The County's current program pays based on the market value and has been substantially less than$100/ton for similar commodities. For instance,paper has a high market value and, as a result, the average 2011 diversion payment rate paid by the County for paper was$12.54/ton. 6. Fact: The proposal replicates what is already in place and simply shifts the funds from the 2-Bin Recycling Program at transfer stations (developed through the IRSWMP Update, supported by Council at the time) to another recycling center outside the transfer stations. This does not serve the community when 85%of the residents self-haul their rubbish and prefer the "one-stop" convenience of the transfer stations. Studies consistently support that people prefer the "one- stop"instead of driving to multiple locations. 7. Fact: The proposal states that the transfer stations in the larger populated areas generated the most volume of materials. While this is not a surprise, it does not juste eliminating services to smaller, less populated communities. The proposal does not provide options for servicing smaller, less populated communities. DEM believes all citizens should have equal opportunities to participate in the recycling programs. The 2-Bin Recycling Program accomplishes this. At4as's Claims about the"problems"with the 2-Bin Program: V 1. Limits participation to users of transfer stations Fact: 85%of the residents use the transfer stations and the residents who elect to hire a private hauler for their rubbish can still use the transfer stations for redemption or recycling. Some private curbside haulers do offer curbside recycling which is the best solution. Funding recycling centers at another public location will be to no advantage. 2. Dependent on voluntary recycling Fact: We acknowledge that recycling is voluntary and that mandatory recycling would increase diversion. There is nothing in the proposal that offers any alternative to voluntary. It simply offers a different location which will be less convenient and potentially result in less recycling due to lack of a "one-stop"drop-off for rubbish and recyclables. 3. Fails to reach business community Fact: 2-Bin Recycling was developed primarily for the benefit of residents but there are many small businesses who wish to utilize these services at the transfer stations. The County is in the process of developing a program where small businesses can pay a fee and use the transfer County of Hawai'i is an Equal Opportunity Provider and Employer. station services which will encourage more recycling. The current landfill diversion program is intended to provide incentives for the recyclers like Atlas to provide recycling services to the businesses. 4. Allows for contamination & moisture Fact: Recyclers must manage these issues as part of the contract and can, and do,provide covered bins or compactors where needed. All recycling programs have issues with contamination and the 2-Bin Recycling Program has had very minimal contamination. The recycle bins are routinely inspected by County personnel for contamination. Having the collection sites at private sites as recommended in the proposal does not remove this problem unless there is a paid person(s) at all times searching each customer's recyclables before they are deposited. 5. Costs the taxpayers millions for infrastructure Fact: During the update of the IRSWMP which considered cost impact to taxpayers, it was determined by the Solid Waste Advisory Committee after 18 months and hundreds of hours of research that managing solid waste services through the transfer stations was the best method and that the cost of converting to curbside services would be prohibitive. Transfer stations will be in our island's future for many years to come. As the IRSWMP Update was being developed, regular public meetings and presentations to Council were conducted with subsequent approval by Council. 6. Is overly expensive-$230/ton Fact: In 2010, the cost for the 2-Bin hauling contract averaged$137/ton. The estimated cost for the diversion or processing in 2010 was$38/ton. Some commodities, like paper fibers including cardboard was at a high market value and the diversion payment was zero. The State funds most of the glass recycling at$160/ton through the Advanced Disposal Fee (ADF) Grant. DEM has requested council approval since June 2011 for a 3-year contract to seek cost reductions as well as using compactors where feasible to further reduce the costs. 7. Creates no financial incentive to participate Fact: DEMrecognizes that offering financial incentives like the HI-5 program would increase recycling. Normally, these types of advanced disposal fees are managed through the State and are not an option for the County to implement such fees. The proposal does not offer financial incentive. Despite offering no financial incentive to participants, 2-Bin Recycling at the transfer stations registered a higher participation rate in the 2010 survey than the HI-5 Redemption Program. 8. Fails to create diversity&limits to mixed Fact: Studies show that participation increases with convenience and most municipalities have moved to single stream or mixed recycling as the norm. Participation increased with the 2-Bin Recycling making it more convenient and easy to recycle. Recyclers do have choices at certain Transfer Stations (e.g. Hilo, Kea`au&Kealakehe have cardboard recycling collection; Kea`au has newspaper too). Source-separated recycling is provided at these larger transfer stations where demand and space is appropriate. Private recyclers like Atlas have been free to establish recycling drop-off of any type of commodities and could have used funds from the Landfill Diversion Program for this purpose. 9. Fails to create competition Fact: Pursuant to State Procurement laws, contract services undergo an open competitive • bidding process and anyone who qualifies can bid. Nothing prevents a private company from competing and offering recycling centers. Establishing at least 2 zones provides the opportunity County of Hawai'i is an Equal Opportunity Provider and Employer. for companies to bid on one or both zones and provides economies of scale with larger material flows. Other Excerpts/Claims in Atlas's Proposal: • It will benefit the County of Hawai'i to upgrade the current Diversion Grants Incentives program and streamline the program to focus on the residential sector and the small business sector, removing the program's subsidies to large commercial businesses that bale and compact cardboard. Baled and compacted cardboard from large commercial businesses can be hauled and processed more economically and should be eliminated from the diversion program. Fact: When market prices are good for cardboard, as they are currently, DEM pays much less than the$100/ton that is being proposed. Sometimes it pays nothing A substantial portion of the diversion program is to encourage recycling from the residents and is paid as mixed recycling. It is important to encourage recycling from all size businesses. Many of the large businesses like Wal-Mart and Costco do not receive any funds from the landfill diversion program—they recycle as part of a corporate national program. • The proposed fully funded Diversion Grants Incentives program would pay a$100 per ton diversion fee to fully certified recycling businesses for all mixed recyclable items including; cardboard, newspaper, magazines, all paper types,tin cans, aluminum foil, and #1,#2, #4,#5 plastic bottles and plastic bags to State-permitted certified recycling businesses. Glass bottles would continue to be paid at a rate of$160 per ton through the State's Advance Disposal Fee (ADF) funds. Fact: The diversion payment rate for mixed recyclables averages much lower than the proposed $100/ton. The values for each commodity are quite different and therefore the proposal to pay "one rate"for all types of materials will result in DEM paying more for high value materials and less for the low value commodities. DEM has continued, and plans to continue, to promote glass recycling through State ADF grant. • This is why the County must look beyond the transfer station program to help achieve its goals of Zero Waste. It is vital to work more closely with the private sector to expand recycling opportunities for all the islands residents and businesses and to do so in the most cost effective manner as to minimize the burdens on the taxpayers. Fact: DEM has continued to provide diversion incentive funding to encourage the private sector to offer more convenient recycling. The 2-Bin Recycling is part of the IRSWMP and is the best opportunity to increase recycling short of mandatory laws and financial incentives like the HI-5 program. Thank you for allowing us the opportunity to provide testimony on this very important subject. Sincerely, Dora Beck, P.E. ACTING DIRECTOR cc: Billy Kenoi, Mayor Bill Takaba, Managing Director Hunter Bishop,Deputy Director Greg Goodale, SWD Chief Linda Peters,Recycling Coordinator County of Hawai'i is an Equal Opportunity Provider and Employer.