Mercer County Office of the Commissioners
Loss of landfill administrative fees threatened to end the Mercer
County Solid Waste Authority’s county-wide drop-off program. Faced
with long term debt, an obligation to reimburse the PADEP Recycling
Fund, and no revenue, the Authority turned to the County for help.
Although the County Commissioners were supportive of recycling, the
cost to sustain the program from the General Fund was prohibitive
without drastic reductions in operating expenses. The Commissioners
contacted Nestor Resources, Inc. to determine if enough savings
could be realized through operational efficiencies to justify
recycling as a long term budget expenditure.
Nestor Resources conducted an analysis of the
operating costs and methods utilized by the Authority. Routing, site
locations, capacity utilization, marketing, and overall
accountability and performance of the operations personnel were all
considered. Various alternatives for collection and processing were
provided to the County and Authority. These included options with
one or more of the following changes in each; site reductions,
equipment modifications; vehicle modifications; direct and indirect
marketing outlets; contract collection; a transition to total
curbside collection.
Change required compromises from the
Authority and a commitment from the County. The consultant helped
make short term adjustments to control the loss of money until the
feasibility of permanent improvements could be determined. The
Authority moved forward and implemented one of the options suggested
by Nestor Resources, Inc. Using an outside operator and equipment
modifications, the net collection costs for a three year contract
proved to be less than the Authority had been experiencing in one
year. These savings were sufficient to allow the County to enter
into an agreement with the Authority to provide ongoing financial
support to the collection program. Nestor Resources is currently
exploring with the County, the appropriate and most affordable
method of directly employing or designating the duties of a
Recycling Coordinator.
During this process, the consultant served as
the liaison to the PADEP to help negotiate not only a reduction in
the financial obligation from past grants but to secure the
necessary funds to provide for the transition in services.
Additionally, the consultant coordinated the physical equipment
transition; developed collection contract and equipment procurement
specifications; and has helped negotiate rates for processing of the
recyclable materials.
Elk County Department of Solid Waste and Recycling
Elk County faces challenges found in many rural counties when it
comes to providing solid waste and recycling services. Lack of
population density, distance to markets and sufficient volume of
materials all contribute to a higher cost of collection and
processing. In spite of these obstacles, Elk County has subsidized a
successful county-wide recycling drop-off program for years. In
addition, it hosts an ongoing monthly electronic waste and
fluorescent bulb collection program and sponsors numerous waste tire
and white goods collection events throughout the County. These
achievements are notable when one considers that the County operated
on a relatively small budget. The primary source of revenue for the
programs originated from landfill tipping fees for waste generated
in the County. Recent court rulings allowed landfills to discontinue
payment of these fees, thus significantly reducing the County’s
operating budget. Greentree Landfill, a 5,000 ton per day facility,
is located in the County. The host municipality benefits handsomely
from fees paid on the full daily volume disposed from all sources.
On the other hand, the County was able to negotiate host fees paid
only on waste received from neighboring Jefferson and Clearfield
counties. Similar to Elk County, these rural areas generate lesser
volumes of waste, thus producing minimal revenue for the programs.
The County
solicited support from Nestor Resources, Inc. to evaluate its
existing programs, prioritize core services, and identify services
with costs that could be shifted closer to the source of those
receiving the most benefit. Additionally, the project included a
complete revision to the Municipal Solid Waste Management Plan.
Recognizing that the County’s potential reduction in services might
have impact on the municipalities, the project also provided support
for that transition. This was particularly true for the City of St
Marys, the only Act 101 mandated community within Elk County.
Initial findings provided the County with immediate opportunities
for savings. Relocation of drop-off sites from municipalities with
curbside collection to underserved areas; a reduction in collection
frequency and/or capacity for under utilized sites; and a transition
in the types of material accepted for collection , provided the
County with nearly enough savings to make up for the loss of
revenue.
Crawford
County Solid Waste Authority
After struggling for
many years with grant funding and uncertain revenue, West Mead
Township approached Crawford County for help with its recycling
facility operation. In 2002, the Crawford County Solid Waste
Authority assumed responsibility for the operation and secured grant
funding to build a new material recovery facility with enhanced
sorting capabilities and the ability to handle a greater capacity of
material. In addition the facility enabled the Authority to expand
its services into surrounding counties. Unfortunately, the business
plan for the facility miscalculated the availability of material in
the region; its vulnerability in the face of fluctuating markets;
and the power of the private sector as a participant in the
marketplace. So, with consolidation of private haulers in the
industry; a redirection of material from municipal contracts; loss
of landfill fees; and a downturn in material sales, the Authority
quickly faced the same issues as its predecessor.
Nestor Resources
conducted a preliminary efficiency study of the overall program
operations. Recommendations included procedures to monitor and
establish cost cutting measures for operation of the facility and
the collection routes. These included time studies, material
handling, improved use of existing equipment and a restructuring of
operational and administrative personnel.
Based on findings in
the preliminary study, the Authority commissioned Nestor Resources
to do a full-cost analysis of the operation, which included
exploring options for potentially contracting for operation of the
facility, full privatization, or making internal modifications to
improve productivity and profitability. Recommendations from Nestor
Resources, Inc. resulted in a 65% reduction in net costs in spite of
a move to a third party processor. These savings enabled the
Authority to sustain its county-wide recycling drop-off program, HHW
and E-Waste collections and other special events in spite of the
loss of landfill administrative fees.
Over the years, the
PADEP had invested over 4 million dollars in the collection and
processing equipment as well as land development and the building.
Therefore, with potential demise of the program, the Authority faced
an enormous obligation for reimbursement to the Recycling Fund.
Further complicating the matter was the long term debt the Authority
encountered in completion of the facility construction. Nestor
Resources negotiated with PADEP to reduce the financial obligation
to the Fund based on liquidation of the facility. To facilitate the
transition of the program, the consultant acted as the hands-on
project manager. Nestor Resources acquired appraisals of the
property and equipment; coordinated the auction of the facility and
processing equipment; coordinated the physical transfer of
collection equipment to other counties and municipalities; prepared
a grant application that secured grant funds to acquire replacement
collection equipment; and developed contracts for the collection and
processing of recyclables.
Nestor Resources is now moving forward with
revisions to the County’s Municipal Solid Waste Management Plan.
The Plan will incorporate the recommendations made during analysis
of the recycling program , as well as address capacity contracts,
reporting and funding issues that have been affected by recent court
rulings and regulatory changes.
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