Ci ty of Ann Arbor Si ng l e S tream Re c y c li ng Upgrade Bu s i ne - PowerPoint PPT Presentation

WS-3 Ci ty of Ann Arbor Si ng l e S tream Re c y c li ng Upgrade Bu s i ne ss C a s e O c tober 12 , 2009 Overv i ew for C I TY C OUN C I L WOR KSESS ION www . re c y c l e . c om 1

WS-3 Si ng l e S tream Re c y c li ng S eparat i ng a ll re c y c l ab l e s f rom tra s h at the s our c e (home or bu s i ne ss ) i nto one “ s i ng l e s tream ” o f c omm i ng l ed re c y c l ab l e s (paper and c onta i ner s ) that are c o ll e c ted i n one tru c k c ompartment and pro c e ss ed at the M RF f or de li ver to re c y c li ng mar k et s www . re c y c l e . c om 2

WS-3 Si ng l e S tream Re c y c li ng S ummary • Overv i ew – S i ng l e S tream M RF Upgrade – S i ng l e S tream f or Bu s i ne ss e s and Re s i den c e s – Automated Re c y c li ng Co ll e c t i on – In c ent i ve S y s tem f or Re s i dent i a l Re c y c li ng – Dr i ven by Commer c i a l Re c y c li ng Ro ll -out • Key Var i ab l e s – C i ty ’ s Cap i ta l Inve s tment i n M RF/Cart s – F i nan c i a l Agreement s w i th RAA and FCR – M ar k et Cond i t i on s www . re c y c l e . c om 3

WS-3 Major Si ng l e S tream Re c y c li ng Benef i t s • Add i ng more mater i a l s to re c y c l e – M ore p l a s t i c s • Reward i ng hou s eho l d s f or re c y c li ng – Re c y c l eBan k reward s up to $540/yr/hou s eho l d • D i vert i ng more o f our wa s te s tream – Rea c h 70% by 2012 • Redu c i ng program c o s t s – S ave $500 , 000 to $750 , 000 per year www . re c y c l e . c om 4

WS-3 Up c om i ng C oun c il A c t i on s • November 5 , 2009 – FCR Contra c t Amendment ( M RF upgrade s ) – RR S I Con s u l t i ng Contra c t • De c ember 2009 – RAA Contra c t Amendment – Re c y c l eBan k Contra c t – Automated Re c y c l e Tru c k P ur c ha s e s – Re c y c l e Cart P ur c ha s e s

WS-3 Si ng l e S tream MR F Upgrade Pha s e I E qu i pment Upgrade www . re c y c l e . c om 6

WS-3 Si ng l e S tream MR F Upgrade Pha s e II Bu il d i ng E xpan s i on www . re c y c l e . c om 7

WS-3 Si ng l e S tream MR F Upgrade C ap i ta l C o s t s and Ro l e s • FCR ha s vendor propo s a l s f rom BH S and C P – Equ i pment pr i c i ng @ $3 . 2 to $3 . 3 m illi on – Bu il d i ng expan s i on pr i c i ng @ $500 , 000 to $600 , 000 – C i ty propo s ed to f und equ i pment (7/10) • $3 . 5 m illi on budgeted ( i n CI P ) • In c l ude s eng i neer i ng and c ont i ngen c y – 8 wee k downt i me f or c onver s i on (tran s f er requ i red) – FCR to f und bu il d i ng expan s i on l ater (by 12/11) • M ore ba l e s torage area and i mproved mater i a l f l ow • F l ex i b ili ty i n re c e i v i ng mater i a l s • A ll ow s FCR to hand l e more mer c hant ton s • Requ i re s 5 year c ontra c t exten s i on www . re c y c l e . c om 8

WS-3 Si ng l e S tream C onver s i on “ Nut s and Bo l t s ” Benef i t s • Enab l e s Add i t i on o f M ore Type s o f Re c y c l ab l e s • Enab l e s u s e o f Re c y c l eBan k Reward s S y s tem • In c rea s e s C i ty ’ s overa ll D i ver s i on Rate • L ower s Co s t s : – Re s i dent i a l Re c y c li ng Co ll e c t i on – Commer c i a l Re c y c li ng Co ll e c t i on – Expanded F l ex i b ili ty o f Dep l oyed Re c y c li ng Dump s ter s – Redu c e s Number o f M F and Commer c i a l Cart s – Enab l e s Re s i dent i a l Re f u s e Route Redu c t i on – L ower s Overa ll Annua l Operat i ng Co s t s • In c rea s e s L ong Term Enterpr i s e Fund Ba l an c e www . re c y c l e . c om 9

WS-3 New Mater i a l s for Re c y c li ng • A ll p l a s t i c bott l e s • Hou s eho l d p l a s t i c c onta i ner s #1 , #2 , and #4-7 , ex c l ud i ng S tyro f oam and #3 • Bu l k y HD P E s u c h a s bu c k et s , c rate s , toy s , tray s , and f urn i ture • P l a s t i c gro c ery and s hopp i ng bag s , s tu ff ed together ( P end i ng) www . re c y c l e . c om 10

WS-3 Re c y c l eBank Reward s • Re c y c li ng Reward program - i n c ent i ve f or hou s eho l d s to re c y c l e – RFID tag s i n c art s u s ed to mon i tor part i c i pat i on – Tru c k re c ord s c art li f t and route we i ght i n databa s e – Data tran s f erred to Re c y c l eban k .c om web s erver – Hou s eho l d s re c e i ve reward s f or s etout – M ax i mum reward va l ue i s $550 , average @ $250 – Can opt to tran s f er reward to non-pro f i t/ s c hoo l s – A mu l t i -m illi on $ e c onom i c s t i mu l u s f or Ann Arbor – P roven to dramat i c a ll y i n c rea s e re c y c li ng www . re c y c l e . c om 11

WS-3 Reward s Performan c e www . re c y c l e . c om 12

WS-3 C ommun i t i e s w i th C o ll ege s or Un i ver s i t i e s www . re c y c l e . c om 13

WS-3 Si ng l e S tream Re c y c li ng V o l ume Proje c t i on s E s t i mated Mater i a l from Si ng l e S tream Re s i dent i a l Program s (Adju s ted for Drop i n New s paper) L b/HH/Year 752 457 357 Ba s e li ne S i ng l e S tream S i ng l e S tream W i th Reward s P rogram www . re c y c l e . c om 14

WS-3 Si ng l e S tream Re c y c li ng V o l ume Proje c t i on s ( c ont) T ota l Si ng l e S tream T onnage Proje c t i on s 35000 30000 25000 20000 T on s / Y r 15000 10000 5000 0 2010 2011 2012 2013 2014 S i ng l e S tream w/In c ent i ve Ba s e li ne S i ng l e S tream www . re c y c l e . c om 15

WS-3 Si ng l e S tream Re c y c li ng RAA C ontra c t A ss umpt i on s • RAA c ompen s at i on s tru c ture mod i f i ed to a c h i eve targeted tota l c ompen s at i on – M oderat i on i n per ton i n c ent i ve s tru c ture – Adju s tment to month l y c harge per s erv i c e un i t • Tota l c ompen s at i on target s ex i s t i ng l eve l : – Re f l e c t s the i n c rea s ed e ff i c i en c y • Enab l e s route redu c t i on – Requ i re s at l ea s t 4 automated tru c ks i n Year 1 • Bu il t i nto ana l y s i s • F i ve year c ontra c t exten s i on to 2018 www . re c y c l e . c om 16

WS-3 Si ng l e S tream Re c y c li ng FC R C ontra c t A ss umpt i on s • FCR c ompen s at i on - c hange s : – P er ton t i p f ee: i n f l ated by c o s t o f operat i on ($54) – Re c y c li ng revenue c hange s : C i ty Ton s • T i er 1 - 80% to C i ty when va l ue above $54 • T i er 2 - 90% to C i ty when va l ue above $70 • Current i s 70% above $42 – Re c y c li ng Revenue Change s : A ll Other Ton s • 30% to C i ty when va l ue above $54 – M er c hant ton s proje c ted to rea c h 32 , 000 tpy – Repre s ent s s ma ll per c entage o f what w ill be ava il ab l e i n mar k et area www . re c y c l e . c om 17

WS-3 Si ng l e S tream Re c y c li ng Fi nan c i a l A ss umpt i on s In f l at i on 3 . 0% per year Intere s t pa i d by C i ty 4 . 5% A P R Intere s t on C i ty i nve s tment s 3 . 5% A P Y * Interest rate used is same assumption as in commercial projections www . re c y c l e . c om 18

WS-3 Budget Impa c t: Wa s te C o ll e c t i on S av i ng s • Co s t S av i ng s on Tra s h Co ll e c t i on – H i gher re s i dent i a l re c y c li ng rate s c reate • l e ss tra s h on re f u s e route s • l ower tra s h s et-out rate s on re f u s e route s • greater e ff i c i en c i e s i n c o ll e c t i on – One wa s te c o ll e c t i on route c an be e li m i nated • Enab l ed by greater e ff i c i en c i e s • E s t i mated s av i ng s at $150 , 000 per year • P ha s ed i n dur i ng 2011 www . re c y c l e . c om 19

WS-3 Budget Impa c t: Avo i ded D i s po s a l C o s t s • Co s t s av i ng s f or tra s h due to i n c rea s ed re c y c li ng c ompared to ba s e li ne proje c t i on s • Ba s e li ne proje c t i on s i n c l ude expanded c ommer c i a l re c y c li ng program • Ba s ed on c urrent t i p f ee w i th i n f l at i on • P roje c ted annua l s av i ng s : • $49K in FY 10/11 - $206K at peak www . re c y c l e . c om 20

WS-3 Si ng l e S tream Re c y c li ng E nterpr i s e F und Budget • C i ty Dump s ter Re c y c li ng S erv i c e – Under s i ng l e s tream s y s tem , c ommer c i a l e s tab li s hment s w i th c i ty f ront l oad re c y c l e dump s ter s c an u s e one dump s ter f or a ll mater i a l s – E li m i nate s need f or c urb c art s erv i c e at the s e l o c at i on s – F i ve year net return to f und ba l an c e: $124 , 672 www . re c y c l e . c om 21

WS-3 Si ng l e S tream Re c y c li ng E nterpr i s e F und Budget • Curb Cart Commer c i a l Re c y c li ng S erv i c e – Commer c i a l c urb c art s erv i c e no l onger needed at s ome l o c at i on s , a s dump s ter s c onverted to s i ng l e s tream – Re s u l t s i n de l ay i n c art ro ll -out and f ewer c art s be i ng pur c ha s ed – F i ve year net return to f und ba l an c e: $325 , 387 www . re c y c l e . c om 22

WS-3 Si ng l e S tream Re c y c li ng E nterpr i s e F und Budget • Curb-Cart Re c y c li ng P rogram – S w i t c h to automated c o ll e c t i on – P ayment to RAA renegot i ated • F i ve year net return to f und ba l an c e: $1 , 461 , 041 www . re c y c l e . c om 23

WS-3 Si ng l e S tream Re c y c li ng E nterpr i s e F und Budget • Cap i ta l Budget – In c l ude s M RF upgrade and c art pur c ha s e • M RF upgrade @ $3 , 500 , 000 • Cart pur c ha s e s @ $1 , 281 , 600 • From c urrent $9 , 000 , 000 f und ba l an c e – In c rea s ed revenue f rom non-C i ty ton s • F i ve year net c o s t to f und ba l an c e: -$2 , 923 , 809 www . re c y c l e . c om 24