These actions will allow the County to enter into a public-private partnership with Northern Recycling, LLC (Northern) for the construction of a state-of-the-art compost facility at the Yolo County Central Landfill (YCCL). Additionally, these actions will allow the County's existing Anaerobic Composter Operation to be operated by the same contractor as the proposed Covered Aerated Static Pile (CASP) compost facility, realizing efficiencies that result in lower costs and a more robust organics management system.
Background
California has a statewide goal to divert 75 percent of waste from the YCCL by 2020. In February 2007, the California Department of Resources Recycling and Recovery (CalRecycle) adopted Strategic Directive (SD) 6.1, which calls for a 50 percent reduction in the amount of organics being disposed in the landfills by 2020. Organic waste makes up approximately one third of the 35 million tons of waste that is currently landfilled in California. To aid in meeting the state-wide 75 percent goal, Assembly Bill 1826 was passed in September 2014 requiring businesses, including government agencies, that generate threshold amounts of organic waste per week to have organic waste recycling programs on or after April 1, 2016. To meet these goals, the Yolo County Division of Integrated Waste Management (DIWM) has implemented a three-part strategy: 1) having an organic waste transfer facility, 2) an anaerobic composter facility, and 3) an in-vessel digester (liquid digester). The DIWM has long had the goal of developing a compost facility at the YCCL to supplement and strengthen the County’s organics management program.
Covered Aerated Static Pile Compost Facility
On April 23, 2019, the Board authorized negotiations with Northern for the financing, construction, and operation of a regional compost facility and construction, demolition, and inert facility at the Yolo County Central Landfill (YCCL). Those negotiations have resulted in an agreement to finance, construct, and operate a covered aerated static pile compost facility (CF2) and a Construction Demolition and Inert (CDI) Facility, which are projected to be operational in July 2022.
Northern is financing the capital costs to construct the CASP compost facility and the CDI Facility and transferring the Yolo-Solano Air Quality Management District (YSAQMD) permit from Northern’s Zamora Compost Facility to the landfill, a significant cost savings valued at about $4 million. The Zamora Compost Facility will cease to function as a compost facility when the facility at the landfill becomes operational. The value of the investment in the CASP compost facility and the CDI facility is estimated at $34.5 million for the infrastructure and stationary equipment, increasing to $40.3 million with the addition of mobile equipment. The County will contribute the soil to be used as construction material for the facilities and 49 acres of land, valued at about $441,000. At the time of contract termination the County has the option to purchase the Facility. If the County exercises that option then the replacement value of the soil contribution will be deducted from the purchase price or the soil will be replaced. The agreement will result in an estimated $800,000 per year in revenue to the landfill.
This approach to construct and operate the facility is consistent with the recommendation of KNN, a public finance consulting firm, that recommended the County should enter into a public private partnership that would not require the County to borrow funds for such a large capital project. KNN recommended the County preserve the borrowing capacity for other mandated capital expenses, such as closure and construction of landfill cells. The envisioned public/private partnership results in each side providing resources and reaping benefits.
The agreement to finance, construct, and operate the CASP compost facility and the CDI facility is for an initial term of 25 years, with an annual renewal of one year after 20 years so that the remaining term will always be at least 5 years when a party elects to stop the auto-renewal, unless terminated sooner pursuant to the agreement.
Anaerobic Composter Operations
Northern is currently receiving and grinding organic waste at the landfill that is being placed in the anaerobic composter cells and ultimately excavated by another contractor. Based on actual costs to fill and excavate the anaerobic composter cells, the proposal from Northern Recycling is $5 per ton less than the current cost. With a design capacity of 52,000 tpy, this is an annual savings of $260,000.
The proposed CASP compost facility will operate in conjunction with the Anaerobic Composter facility. The proposed agreement for Anaerobic Composter Cells is for a term of 10 years, a length that allows for equipment costs to be amortized over a longer period, resulting in lower costs. Due to the symbiotic relationship between the two organic management facilities, a number of cost-reducing efficiencies are created by operating both facilities under the same contractor, such as:
- Coordination of operations between facilities, particularly hauling. Delivery of feedstock and return haul of excavated digestate can be better coordinated, reducing wait times and transportation costs. There are also opportunities to share equipment and personnel.
- Ability to coordinate feedstock delivery and cell filling to optimize equipment costs. There is the ability to direct the type of load to the facility where it is most efficiently managed. Some organic material sourced by Northern could be pre-ground and directed to CF1, saving money on hauling and upfront processing costs. The Yolo County cities don’t have the capacity to pre-process the material before arrival at the landfill.
- Better management of peak loads. With the same contractor, peak loads at CF1 could be better managed by increasing the amount sent to CF2 to maintain a relatively consistent inflow to CF1, allowing for better management of anaerobic composter cell retention time and capacity.
For these reasons, staff recommend that the existing contract with Northern be amended to cover the services related to the anaerobic composter cells.
Construction, Demolition and Inerts Facility
Construction and demolition (C&D) debris recycling has been an integral part of landfill operations since 2007. Each of the cities in the county, as well as Yolo County, incorporate C&D debris recycling requirements into their building permit programs utilizing the CALGreen Standard. Under this standard, applicable projects currently must recycle 65 percent of the C&D debris.
Since 2007, the county has contracted with several companies to operate a C&D recycling facility at the landfill. The agreement with the current contractor expires on July 31, 2021. The agreement with the current contractor is structured as a cost reimbursable agreement with the current recycling costs of C&D averaging approximately $82 per ton, which is more than the cost proposed by Northern. The agreement with the current contractor also relies on off-site sorting facilities to process most of the C&D material so there is vulnerability to year to year price changes. The negotiated agreement with Northern includes a tiered price structure based on the amount of material processed with the highest rate tier being less than the current average cost under the current agreement.
Based on historical inflow to the landfill, staff anticipates payments will be in the second rate tier ($70 per ton) which will represent a $12 per ton savings over current. Additionally, Northern’s planned operation includes a dedicated sorting facility on-site which will provide price stability.
To provide assurances that the Northern’s cost proposal is competitive, landfill staff engaged HF&H Consultants, experts in the solid waste industry. After a review of Northern's assumptions and cost factors, HF&H’s conclusion is that the cost proposal from Northern is competitive and better than could be expected from a bidding process. HF&H produced a report on Northern’s cost proposal that was reviewed by the Yolo County Purchasing Agent, who concurred with their conclusion. |