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HomeMy WebLinkAbout2014-01-13 14-063 RESOLVECOUNCIL ACTION Item No. 14-063 Date: January 13, 2014 Item/Subject: Resolve, Supporting the Efforts of the Municipal Review Committee to Provide a Regional Solid Waste Solution beyond 2018, and Opposing LD 1483. Responsible Department: Executive Commentary: This resolve states that the City's support for the Municipal Review Committee's efforts to provide a Regional Solid Waste Solution for municipal solid waste beyond 2018, and also states the City's opposition to LD 1483, An Act to Promote and Enhance Staff Policy and Preserve and Support Existing Methods of Disposal of Municipal Solid Waste. The MRC has been actively exploring a variety of options for solid waste disposal post 2018 when the current waste disposal contract at the PERC Plant expires. LD 1483 would impose a surcharge on waste delivered to landfills including PERC residuals, treatment plant sludges and other wastes, adding a significant cost component to municipal budgets from the present to 2018 and beyond. These additional costs would be harmful to Bangor and other participating communities during these difficult economic times. The Council has reviewed this issue in a recent workshop and on January 6, 2014, the Government Operations Committee voted unanimously to recommend approval of the Resolve. Manager's Comments: Associated Information: Resolve, MRC Memorandum, LD 1483 Budget Approval: Legal Approval: Introduced for X Passage First Reading Referral Page _of_ Department Head 01M.1haN ��� City Manager nce Director City 14-063 JANUARY 13, 2014 S' Assigned to Councilor Baldacci ..tom CITY OF BANGOR RESOLVE, Supporting the Efforts of the Municipal Review Committee to Provide a Regional Solid Waste Solution beyond 2018, and Opposing L.D. 1483 WHEREAS, the Bangor is one of approximately 187 municipalities or groups of municipalities (the "Charter Municipalities") which have entered into long term Waste Disposal Agreements with the Penobscot Energy Recovery Company ("PERC") providing for waste disposal needs through March 31, 2018; and WHEREAS, pursuant to the Waste Disposal Agreements, the Charter Municipalities established the Municipal Review Committee, Inc. (the "MRC") to represent them as to matters that arise under the Waste Disposal Agreements and as to other matters related to PERC; and WHEREAS, the mission of the MRC is to ensure the affordable, long-term, environmentally -sound disposal of the municipal solid waste ("MSW") of its members; and WHEREAS, the Waste Disposal Agreements expire on or about March 31, 2018, unless extended; and WHEREAS, the MRC, pursuant to a Resolution adopted by its Board of Directors on December 10, 2009, has been actively engaged in investigating alternative waste disposal arrangements to replace the existing Waste Disposal Agreements after March 312018; and WHEREAS, in furtherance of its mission, the MRC proposes to continue its efforts to extend its mission beyond 2018 by developing one or more alternative solid waste management and disposal solutions for consideration by the legislative bodies of the Charter Municipalities, which alternatives may include potential development of an integrated solid waste management and resources recovery facility to be owned and controlled either by the Charter Municipalities or in partnership with other private partners; and 14-063 JANUARY 13, 2014 WHEREAS, the MRC has issued a Request for Expressions of Interest soliciting proposals for alternative technologies for the sorting, recycling, processing and disposal of MSW and is exploring several alternative sites for such a facility within the MRC Region with a view to securing options on one or more potential sites for this purpose; and WHEREAS, the MRC Board of Directors, serving the interests of the Charter Municipalities at large, has unanimously adopted a Resolution at its annual membership meeting held on December 11, 2013 pursuant to which it plans to take steps to further develop a potential integrated solid waste management and resource recovery facility to accommodate the disposal of MSW originating in the Charter Municipalities after March 31, 2018 including, without limitation, (i) exploring available alternative technologies for the sorting, recycling, processing and disposal of MSW originating in the Charter Municipalities; (ii) engaging in discussions with possible joint venture partners or other third parties with respect to the potential financing, development and/or ownership of an alternative facility either under the control of the MRC or under shared control with other private partners; (iii) securing options or other rights in land on one or more potential sites for such a facility, and (iv) preparing and filing an application with the Maine Department of Environmental Protection for a Determination of Public Benefit in connection therewith (the foregoing elements being referred to collectively in the following resolutions as the "MRC Post -2018 Planning Initiative"); and - WHEREAS, the MRC is seeking an indication of support from its existing membership before proceeding further with its proposed course of action. BY THE CITY COUNCIL OF THE CITY OF BANGOR: BE IT RESOLVED, That City of Bangor supports the MRC's efforts to continue the MRC mission by providing a regional solid waste solution beyond 2018 for the benefit of the Charter Municipalities, including the MRC Post -2018 Planning Initiative; and BE IT FURTHER RESOLVED: That the City of Bangor supports the reasonable expenditure of funds as may be approved by the MRC Board of Directors to support the foregoing efforts and other extraordinary technical, legal, engineering and other necessary advisory costs related to those efforts to be funded from an Operating Budget Stabilization Fund established and administered by the MRC for this purpose; and 14-063 JANUARY 13, 2014 BE IT FURTHER RESOLVED: That, in recognition of the fact that the Charter Municipality of the City of Bangor is a member of the MRC which is working actively on alternative waste disposal and recycling alternatives for the collective benefit of its members for the period beginning in April of 2018, it hereby declares it to be its policy not to enter into any agreement prior to January 1, 2017, that would conflict with or preclude consideration by it of any solid waste management and disposal solution for the post -March 31, 2018 time period that may be developed by the MRC for its membership as an outgrowth of the MRC Post -2018 Planning Initiative, and therefore, for the reasons stated above, the City hereby states its opposition to L.D. 1483. IN CITY COUNCIL January 13, 2014 Motion made and seconded for Passage as d 114 ) � ? 4 CITY CLERK LD r 4 6_j 14-063 JANUARY 13. 2014 Dear MRC Members: A public notice was made available on December 23, 2013 announcing a public hearing on LD 1483 on January 9, 2014. Moreover, the Legislature's Environment and Natural Resources Committee has scheduled a Work Session on LD 1483 for possible final action on January 15, 2014. MRC has been made aware by a member community that PERC's general partner USAE has sent some number of MRC members yet another letter dated .December 27, 201.3 regarding PERC's future and LD 1483. The USAF letter states that "it is important for everyone to be well-informed with the facts" and continues by suggesting that this occur by convening an owners meeting in mid to late January to discuss, among other things "the pending legislation (LD 1483)" What USAE failed to provide for information in the letter is that your sole opportunity to be formally heard on the record on January 9 will have already passed by mid to late .January. That is unsettling. Below are facts relating to LD 1483 that illustrate why MRC is opposed and is asking your community to make its opposition heard before January 9: • The landfill surcharge proposed in the bill applies to PERC residuals, which are a pass thru cost to your Tip Fees, which would increase at least $1,500,000 per year over the next four years for the MRC communities — or over an $8 per ton increase to your tip fee. • The landfill surcharge applies to a lot more than just MSW. It would impose steep new costs on municipalities handling C/DD, treatment plant sludges and other wastes besides normal household/commercial MSW. Just on the C/DD alone for a municipality handling 1,000 tons of MSW per year, may handle about 400 tons of C/DD per year. The year one surcharge for this would about $5,600 of new annual costs. • USAE management, with a background in utilities, is the sole PERC partner supporting LD 1483 while PERC's second private partner, FERC Holdings, LLC, whose management has a background in solid waste management, opposes LD 1483. • The landfill surcharge would be collected by the Maine Department of Environmental Protection who would calculate disposal assessments and disbursements to certain municipalities under certain conditions. However, LD 1483 then calls for MDEP to adopt new rules later to deal with this. Moreover, to illustrate further uncertainly, the crafters of LD 1483, call for another process in addition to state rule-making to maximize the use of existing incineration facilities. Then, the MDEP would report its findings to implement more legislation later on. • LD 1483 contains no upper limit on what processing facilities could charge for future tipping fees and therefore removes natural incentives to realize economical operating efficiencies. • LD 1483 will increase our cost to use PERC through early 2018 and won't keep PERC affordable after that time. Given PERC's processing capacity of 300,000 tons per year, we estimate that, even if LD 1483 did cause FERC to be on par- with landfill disposal costs, that less than one-half the tons required to run at capacity after 2018 would be available. PERC cannot economically operate that way, thus, any revenue to MRC communities that LD 1483 seeks to convey will never be realized. 14-063 • In summary, LD 1483 will solve no problems, it will not realize any revenue to MRC .fiA r13,2014 communities, it gets in the way of our communities realizing post 2018 solutions and will cause steep cost increases for MRC member communities. Please take the time to have your LD 1483 opposition known before January 9 by: 1) sending a short letter on your town or city's letterhead stating that you're a member of the MRC and that you oppose LD 1483 because it gets in the way of careful planning for the future and raises costs. You can e-mail this letter to: katie.desfossesnlegislature.maine.gov Or mail it to: Committee on Environment and Natural Resources c/o Legislative Information 100 State House Station Augusta, ME 04333 2) Letting your concerns by known to me directly via email: Flounder a)mrcmaine.org and/or by attaching a short letter on your town or city's letterhead and I will be sure these communications are recognized and entered into the record at the January 9 public hearing. 3) Attend the public hearing on January 9 at 1 PM in Augusta and provide direct testimony Thank you :for your attention to this important matter during this busy season. 14-063 JANUARY 13, 2014 126th MAINE LEGISLATURE FIRST REGULAR SESSION -201.3 Legislative Document No. 1483 S.P. 545 In Senate, April 30, 2013. An Act To Promote and Enhance State Policy To Preserve and Support Existing Methods of Disposal of Municipal Solid Waste Reference to the Committee on Environment and Natural Resources suggested and ordered printed. DAREK M. GRANT Secretary of the Senate Presented by Senator CAIN of Penobscot. Cosponsored by Representative STANLEY of Medway and Senators: GRATWICK of Penobscot, HAMPER of Oxford, Representative: Speaker EVES of North Berwick. Printed nn recycled paper 14-063 JANUARY 13, 2014 Be it enacted by the People of the State of Maine as follows: See. 1. 38 MRSA §2124-A, as amended by PL 2011, c. 655, Pt. GG, §31 and affected by §70, is further amended by adding alter the 4th paragraph a new paragraph to read: Beginning on January 1, 2015 and every odd -numbered year thereafter, the report submitted Under this section must, include an analysis of the solid waste stabilization assessment funds collected pursuant to section 2204-A and disbursed pursuant to section 2201-B and any department recommendations re arding chances to the established levels of per ton assessment and per ton disbursement. Sec. 2. 38 MRSA §2201, first 11, as amended by PL 2011, c. 655, Pt, GG, §64 and affected by §70, is further amended to read: The Maine Solid Waste Management Fund, referred to in this section as the "fund," is established as a nonlapsing fund to support programs administered by the bureau and the Department of Environmental Protection. The fund must be segregated into -2 3 subsidiary accounts. The first subsidiary account, called operations, receives all fees established and received under article 1. The 2nd subsidiary account, called administration, receives all fees established under this article and under Title 36, chapter 719 and all fiords recovered by the department as reimbursement for departmental expenses incurred to abate imminent threats to public health, safety and welfare posed by the illegal disposal of solid waste. The 3rd subsidiary account, called solid waste stabilization, receives funds from the solid waste stabilization assessment under section 2204-A• disbursement of funds from the solid waste stabilization account must be in accordance with section 2201-B. 38 MRSA §2201-B is enacted to read: 1. Definitions. As used in this section unless the context otherwise indicates the following terms have the followint7 meanincs. A. "Licensed landfill" means a commercial, municipal, regional or state-owned landfill licensed in the State. B. "Tipping fee" means any fee, rate, toll or other charge that a licensed landfill or a waste processing facility certified under subsection 5 charges for disposal of solid waste from customers. 2. Funds. The department shall deposit solid waste stabilization assessment funds assessed and collected pursuant to section 2204-A in the Maine Solid Waste Management Fund solid waste stabilization account referred to in this section as "the account." 3. Funds disbursed. The department shall disburse the funds from the account through periodic payments to municipalities and recycling and compostingprograms qualified under subsection 4 and located in the State in accordance with this subsection. 14-063 JANUARY 13, 2014 A. The department shall calculate the amount of disbursements to be made to each 2 municipality and recycling and composting program qualified under subsection 4 by 3 determining, the difference in the weighted average of the tipping fees paid per ton of 4 solid waste to all licensed landfills in the State and the weighted average of the 5 tipping fees paid to all waste processing facilities certified under subsection 5 during 6 the preceding calendar year, as determined by the department pursuant to section 7 2204-A. multiplied by the number of tons of waste processed by each certified waste 8 processing- facility during, the same reporting period. Notwithstanding this paragraph 9 the amount of disbursement may not be less than `630 per ton. 10 B. At least annually, the department shall make disbursements to municipalities and 11 recycling and composting_ programs, or their designated agents, that qualify for 12 reimbursement under subsection 4. Any funds remaining after the annual 13 disbursement must be retained in the account and carried forward to the following 14 year. if the department determines there are sufficient excess funds carried forward 15 in the account, the department may make a downward adjustment in a future 16 assessment calculation. 17 4. Application for disbursement. In order to qualify for disbursement under this 18 section. a municipalit or r rec cling, or compostinpproeram, or its designated agent, must 19 apply LISillg, forms developed and provided by the depaiiment. The application must 20 include satisfactoi;y evidence of the amount oftipping f� ees paid by the municipality or 21 recycling or composting Program, or its designated agent, to a waste processing facility 22 certified under subsection 5 and the total number of tons of solid waste that were 23 transported to that certified waste processin 7 ft icility 611119 the applicable reporting 24ep riod. 25 5. Certification of waste processing facility. In order for a waste processing 26 facility to be certified under this section, the waste processing facility must: 27 A. Provide satisfactory evidence to the department that it does not have in 28 operational effect a long-term power purchase agreement with a large, investor - 29 owned transmission and distribution utility as defined in Title 35-A, section 3201, 30 subsection 12 obtained under the United States Public Utilities Regulatory Policies 31 Act of 1978, 16 United States Code, Section 2601 et seq. and that any funds 32 previously generated and held as a result of any such power purchase agreement have 33 been either disbursed to the appropriate municipalities and other interested parties to 34 the agreements or otherwise used or encumbered for future use by the waste 35 processing facility as a maintenance reserve or similar operational reserve, and 36 B. Provide satisfactory evidence to the department that it processes solid waste in a 37 manner that eenerates energy and reduces solid waste by an amount equal to at least 38 80% by volume and 65% by weight. 39 6. Expenses. The department may retain and use an annual amount equal to 2% of 40 the funds it collects and deposits in the account to ay for operational and administrative 41 expenses incurred in administering the account. t'age 2 - 1261,121172(01)-1 14-063 JANUARY 13, 2014 7. Rules. The department shall adopt rules to implement this section. Rules adopted 2 pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, 3 subchapter2-A. 4 See. 4. 38 MRSA §2204-A is enacted to read: 5 42204-A. Solid waste stabilization assessment 6 .1. Definitions. As used in this section unless the context otherwise indicates the 7 following terms have the following meanings. 8 A. "Certified waste processing facility" means a waste processing facility in the State 9 certified under section 2201-Q, subsection 5. 10 Q. "Licensed landfill" means a commercial, municipal, regional or state-owned 11 landfill licensed in the State. 12 C. "Tipping fee" means any fee, rate, toll or other charge that a licensed landfill or a 13 certified waste processing facility charges for disposal of solid waste from customers. 14 2. Assessment established. The department shall impose on each licensed landfill a 15 solid waste stabilization assessment on all solid waste, Including, but not limited to 16 household and commercially sourced solid waste and all other material deposited at the 17 licensed landfill. 18 3. Credit. When determining the amount of an assessment under this section, the 19 department shall give a credit for solid waste that is deposited in a licensed landfill and 20 that is removed within 18 months from that landfill and processed at a certified waste 21 processing facilites 22 4. Exemption. Solid waste that originates from a source that has an agreement with 23 the State for the disposal of solid waste is exempt from the assessment required under this 24 section. 25 5. Amount of assessment. The amount of the assessment under this section is 26 determined in accordance with this subsection. 27 A The department shall determine the total weighted average of the tipping fees paid 28 to each licensed landfill and the total weighted average of the tippingfees ees paid to 29 each ceilified waste processing facility. 30 B. The assessment is calculated by multiplying the difference between the total 31 weighted averages of the tipping fees determined pursuant to paragraph A by the total 32 annual capacity of all the certified waste processing facilities and dividing that result 33 by the total number of tons of solid waste deposited in all licensed landfills during 34 that same time period, except that, until 2017, the assessment may not be less than 35 $10 per ton and beginning in 2017 the assessment may not be less than $14 per ton 36 6. Waste management account. The assessment collected by the department 37 pursuant to this section must be deposited in the solid waste stabilization account of the 38 Maine Solid Waste Management Fund established Under section 2201. Page 3 - 1261,111172(f) I) -I 14-063 JANUARY 13, 2014 7. Rules. The department shall adopt rules to implement this section. Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375 subchapter 2-A. 4 See. 5. Develop process. 'file Department of Environmental Protection shall 5 develop a process to maximize the use of existing incineration facilities in the State and 6 increase the amount of Maine -sourced solid waste that is processed at those facilities 7 annually. The department shall report its recommendations, together with any necessary 8 implementing legislation, to the .joint Standing Committee on Energy, Utilities and 9 Technology by January 1, 2014. 10 SUMMARY 11 The purpose of this bill is to assist in the stabilization of the statutorily established 12 solid waste management hierarchy, to promote and strengthen the waste management 13 system in the State and to enhance the continued operation of the existing waste 14 processing incineration facilities located in the State. This bill directs the .Department of 15 Environmental Protection to: 16 1. Impose on each licensed landfill a solid waste stabilization assessment on all solid 17 waste, including, but not limited to, household and commercially sourced solid waste and 18 all other material deposited at the licensed landfill; 19 2. Deposit solid waste stabilization assessment funds in a solid waste stabilization 20 account within the Maine Solid Waste Management Fund; 21 3. Disburse the funds from the solid waste stabilization account through periodic 22 payments to qualified municipalities and recycling and composting programs located in 23 the State; and 24 4. Develop a process to maximize the use of' existing incineration facilities in the 25 State and increase the amount of Maine -sourced solid waste that is processed at those 26 facilities annually and report its recommendations to the Joint Standing Committee on 27 Energy, Utilities and Technology by January 1, 2014. Page 4-1261AR1172(01)-1