Here’s another one, still from Monday, but I am getting closer to getting them all done – I had technical difficulties and no time!
Overview
Chris Kelley, George Dreckman and another gentleman come to the table. Chris Kelly gives an overview. He says there is maintenance on all three facilitites, they want expansion of their equipment, a dump truck with plow, two tractors, a boom mower, and automated truck with dual arms. They want to finish the cold storage facility.They need a stump grubber and locator for Emerald Ash Borer. Landifll and BioDigester are for George Dreckman.
Landfill and Bio Digester
George Dreckmann says that he has to spend Friday Kyacking with his wife looking at Osprey to calm down after getting the call from the County that they were going to raise the tipping fees $10. It just underscores the fact that we don’t have control over the back end of our wastestream. He says they need to consider the digester project to deal with the $15 – $20 tons of material every year.
Mayor asks to explain what the increase from $2 to $10 means. Dreckman says they put $2 in because they thought that was likely to happen. Then they found out it would be $10. There are always questions about what that fee funds because if soemtimes funds things that are not landfill related. We will going to having the lowest rate available to the same rate as someone that shows up with a pick up truck at the gate. They are raising the gate rate and they are raising us $10 so it will be $50. Lots of questions. He says per ton. $50 per ton. Mike Verveer asks what the effect is on the operating budget. $300,000 to raise it the $8 says Chris Kelley. So its about $500,000 says Dreckmann, we landfill about 45,000 tons and it could go up as the economy improves. I have heard they may come down a little bit, but we can’t count on that. They do have to fund their expansion project. If they don’t do that the landfill will be full in 1.5 years at best, they are on track for that. They are meeting with staff tomorrow to go out to RFP to find alternative disposal options. To see what they can do with at least a portion of the waste stream. We are contractually obligated to send 25 tons each year to the Dane County Landfill. Assistant Attorney Viste is not here, but they are looking for a home for 15 – 20 tons of material. There is no guarantee they will find anything cheaper. They might want to operate like private material haulers so they are not beholden to any one provider. They have a transfer station that allows them to act differently, they have money in the budget to haul the materials a reasonable distance, but they might need more staff depending upon how far they have to haul. This prompts the need to look at the digester to provide us some independence. They are also looking at locating it at the Nakoosa Trail site and they could keep that off the grid. It would also be a good place to use it as compressed natural gas for fuel for the vehicles. That also has potential to enter into long term contracts with MG&E and gives us cost certainty on fuel costs.
Mayor asks them to tell them what they pay per kilowatt and what they would get for a cogen plant fueled by a biodigester? Dreckmann says if they sell it to MG&E we would get 4 cents per kilowatt, they pay about 15 cents per kilowatt. So, we would be providing as a substitute for retail power. We could produce, post digester, it would cost us about $1 per gallon to convert to diesel fuel. MG&E is interested in working on a fueling station and a compressor so we can lower some of our operating and capital costs but also get a favorable rate from them.
The mayor asks about the substream that comes out, will that have a value. Dreckmann says he doesn’t have it budgeted at a value but they could net about $200,000 but some of it depends on costs of converting it into a fully made compost. And there are some avenues they are exploring but they left it in as a 0 value material, until they find more solid markets.
Mayor says that when a farmer with a working staff instructs and starts operating a biodigester there are certain costs they don’t have, farm already exists so they have the land and there are not step increase to hire more staff, they just rework assignments. They fit it into the work schedule, part of it is redundant. For us, given the magnitude of the project, there is a significant cost, however, if we can replace 15 or 17 cent per kilowatt electricity as prices go up in future years with our ability to produce the electricity at lower costs it will hopefully offset the labor costs and investment in construction. This is a high priority for him, he did not enjoy pushing this back a year, in the next few weeks one of the things they will be looking at is the impact of the higher costs from the county in the tipping fees. He wants to remind them that this goes to a point which is the lack of ability to control the end stream of our flow of waste. That is creating difficulties and that should be kept in mind in all that we do. Although we might be able to recapture some savings, the levy limits are unforgiving. A $300,000 or $500,000 increase in tipping fees has to fit in the levy limits.
Dreckman says that most of the costs of the biodigester is in collection, the operation is about $300,00 but we have the expense of adding 8 staff and additional vehicles for collection and the capital investments in the digester and trucks and carts is about $1.2 – 1.8M annual hit. They just about have that down, assuming we can build it for the $15M we thought we could.
Chris Schmidt asks about the differences of having it at Nakoosa instead of South Point? Dreckman sasy the biggest disadvantage is that we are squeezing it in, we won’t have room to expand if we have an opportunity. However at some of the other sites we wouldn’t be able to have the retail value, plus there is access advantages, plus the fact that the east side trucks drive by there every day. There is no additional cost for East Side trucks and the West Side trucks can unload at the Transfer station and then we can bring one or two trucks a day from the transfer station, so it is good as well from an operational standpoint. The biggest shortcoming is the footprint of the site and how it limits what we can do and the operation of the biodigester. It impacts the other uses of the site as well. That would be an ideal location.
Verveer asks about the landfill issue, you said the expansion is on schedule and he thought there was a negotiating team that Larry Nelson and Paul Riley are helping us out on, what are we negotiating? Dreckmann says the landfill expansion is a done deal, politics could always change that because all of the investments so far are in consultants and staff time. We haven’t put a shovel in the ground yet, the big money is yet to be spent, the assumption is that they will move forward as planned. They have requests for permits in with the DNR. A local negotiating team is required by state statute, he is on the committee with the Mr. Rushmore of former city bureaucrats. Verveer asks which one he is, he says Taft. Mayor asks them to review who is on it. Dreckmann says Larry Nelson the former city engineer, Paul Riley the former Comptroller, Jim Voss the former Assistant City Attorney who knows all about waste. They are negotiating with the communities affected by they site expansion. There are also representatives from the Town of Cottage Grove, the Town of Blooming Grove doesn’t care because they are not going to exist. The county is negotiating with the property owners that will be affected about compensation, they have essentially got it worked out. We are negotiating as the sellers of some of the property, we have an issue about highway AB and wanting to reserve adequate square footage in the right of way to expand that to 4 lanes when the time comes. The county does not purchase the expansion of land to expand county highways, the city does that. Then there is another issue of a third party agreement as a user of the facility and Dane County is the owner of the facility and that is the trickiest piece for the City of Madison. The county essentially put us in a bad position several years ago with the previous administration when they were less than forthcoming about the amount of time left in the landfill. Two years ago we thought that we might be hauling elsewhere today, but fortunately other things happens and hopefully the expansion will happen on time and be ready to take our material. Although you can see the extent of our faith in that because we put money in the budget to haul if we have to.
Stump Grubbing
Verveer asks about EAB stump grubbing. Says Marla Eddy will be at a neighborhood meeting tonight and he is wondering about how we are keeping pace with tree removals and is there a delay in removing stumps because streets has higher priorities. Kelley says that they priority stumps are done, the planting sutff is taken care of. There is a back log of 115 on each side of town for this years stumps, we have none from last year. So we have about 115 and we will stay out on stumps until leaves fall and as leaves fall they will cut back on stump program.
Verveer asks about the equipment needed, how does that impact the operating side of things? Are you able to keep pace? Is there an operating budget supplemental request? Kelley says that they will use the staff they have, they have equipment that goes down and then they can’t work and they have to rent equipment, both of the grubbers are getting older, if they are all up and running they will use staff.
Back to the Digester
Sue Ellingson asks if the digester is going to cost $21M and the federal government is going to pay $10.?. Dreckmann says no, the biodigester is about $15M, that includes trucks and carts. We don’t know, he was in Washington and met with just about anyone with an extra nickle and the hope is that on of the pieces of a budget deal that is cut involves money in the budget for renewable and sustainable energy, much of that is in the form of tax credits, which would probably not help this project as configured. However, we would not rule out a model that would allow for a private entity to take advantage of the tax credits and invest in the project, while we maintain control. We don’t know. He has met with most of the congressional delegation to plant the seed and earmarks have a bad name, but you never know. He says there is about a 10% chance. We have always thought of this as a project we would have to fund on our own. We may also find a company that wants its equipment up and running in Madison Wi and we may save $5M that way.
Ellingson says so the $10.78M is federal sources is for what. Dreckmann says they were hoping, there is no guarnatee. The numbers of $1.2 or 1.6 assumes no federal funding at all. That assumes we take on the entire cost of debt service on the digester and the trucks on our own. There may be money for C and G vehicles, but that might depend on the timing of the project.
Landfill contract
DeMarb asks about being obligated to the county to deliver so much garbage, what is the life of the contract. Dreckmann says it is for the life of the landfill. So right now it is 1.5 years, but the expansion is why we are negotiating with them. There are terms of the contract that have, the polite legal term is abrogated, by the county. We have lived up to our end of the contract but the county has pretty much turned its back on several key components of this agreement. He says that we also stipulated that we get the best rate and if they bump us to $50 we will not have the best rate, we think there is a private hauler that will get us $46 – 48. Again, we are arm wrestling about that.
Mayor says that this goes back to the mid 80s when we turned over the landfill to the county, right. Dreckmann says that we turned it over in 1976 or 1974. Kelley says we closed Greentree in the early 80s. Dreckmann says they county took over the disposal end of things and there is tremendous advantage to a publically owned landfill, but he doesn’t want to build one because the cost of the landfill would dwarf the digester. A minimum of $60 -80M and that doesn’t include the cost of the land. Kelley says it takes 10 years to put it together. Dreckman says we are, but we may have outs with the county as well, but there is no guarantee that we can haul waste to Janesville for $15/ton and disposal costs at $30, how would that compare to the 16 miles we haul now. They would have to update the numbers, they have done the research but they have to put that in 2014 dollars.
DeMarb asks about the expansion of the landfill and how many more years it will last. Dreckmann says 30 years, 2 15 year operating permits, they can only get a 15 year operating permit, they can only get a 15 year operating permit so that is what he can say with certainty.
Back to the biodigester
Ellingson asks how much waste would be diverted to the biodigester? Dreckmann says that 15 – 20,000 tons from the current wastestream. That depends upon how we do it, it depends upon how much organic material is in the trash and they are 13.8 pounds per week per household in the pilot project. So, it is 14 – 20K tons. Mayor says they may capture more because we have supermarkets, cafeterias etc that have private haulers that go to the landfill. Dreckmann says there is about 7,000 tons available of that material in the City of Madison from restaurants, cafeterias and large employers like American family. American Family is bringing us stuff in the pilot project now.
Ellingson asks what percent? Dreckmann says 30 – 40% of what we are currently landfilling.
Scott Resnick asks how long it would take and if it is shifting around other services during that time frame. Dreckmann says he hates to say it this way, but that is your job. Our original time frame was a year earlier than what we have, construciton 2015 and open 2016 and we put it back to meet the constraints we have to work under. He says it will take about a year in this climate, you have to open it when it is warmer and we have to phase it in to ramp it up to keep the bacteria happy. We have the material in the pilot project plus some of the private material and that would be the original stock and it would take several months to make sure it is working and then they would phase in collection across the city in the next 6 months. Once you get the bacteria going all you have to do is keep them warmand the digester does a good job of doing that. He says one of the advantages of doing this with other projects is that it takes advantage of the heat from the generators, that can also cool facilities. So you have another energy source. Since they only looked at Nakoosa recently he hasn’t looked at trying to capture that value. Resnick asks if there are other municipalities that might be interested in partnering with us. Dreckmann says that he doesn’t know, Fitchburg has a pilot going right now. He thinks what is more likely to happen, working with Pelliterri is that you might see a voluntary program where people interested would pay Pelliteri $5/mo to pick up their organics and they would bring that material in. If Pelliterri can get critical mass to justify a route they will do it, but he doesn’t hink a comunity would have a full scale project. Mayor says that things can go wrong with a biodigester, your bacteria can get sick, they can die, and suddenly you have a mess and restarting a biodigester is not pleasant. Dreckmann says that some systems make that easier than others. He says there are 10 and 15 year track records in Europe. Mayor says he can’t resist saying that bacteria are much like people, some woman off camera says “full of shit?”, giggle. Mayor says that if you feed them too much they may get sick and stop have sex and stop reproducing. And then they stop eating. Bacteria are our friends.
