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Wednesday, 29 September 2010 19:46

Landfill for sale? Profit motive may prompt Haywood to sell landfill space

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Haywood County commissioners are deciding whether to sell off space in the county’s landfill, allowing trucks from elsewhere to dump their garbage here for a fee.

There’s only 30 to 40 years of life left in the landfill. Selling space will obviously shorten the life. Commissioners have to decide whether the money to be made is worth it.

“This is a very serious decision,” said Commissioner Skeeter Curtis. “We need to make absolutely certain what we are doing here because it is very, very important.”

The landfill was bought and built on the taxpayers’ dime, and filling it up with other people’s trash could cost the county later.

But the thought of making a couple of million a year selling landfill space — enough to offset the county’s own landfill costs — is too tempting to ignore.

“I think right now we have an asset, and we would be wise to explore every possibility of maximizing it,” said Commissioner Mark Swanger.

Commissioners have pledged to look before they leap, however.

“If we fill up our landfill too quickly, then what? Where does the future lie?” asked Commissioner Bill Upton. “We have a great resource because so many other places don’t have a landfill.”

Stephen King, the county’s solid waste director, isn’t overly concerned about the day Haywood’s landfill runs out of space, however. By then there will be other ways to deal with trash, he said.

“I foresee that burying trash in the ground is not going to be the only option 10 or 15 years down the line,” King said.

See also: A simpler solution

Taxpayers fork over $1.3 million a year to run the landfill, plus another $1.1 million annually for five years to pay for building a new pit (see “Trash budget breakdown”).

Swanger is optimistic the landfill costs could not only be wiped from the county’s budget, but the county could actually make money.

Selling space in the landfill is part of a larger discussion about turning over landfill operations to a private firm. Companies interested in running the landfill have until the end of the week to submit their proposals.

Any agreement would take the form of a long-term contract, perhaps as long as the life of the landfill itself.

“They would almost be like the owner in a way,” Commissioner Kevin Ensley said.

For-profit landfill ventures are nothing new. Several large trash companies operate chains of private landfills across a multi-state area, and that’s who will likely be interested in taking over Haywood’s landfill.  

A few months ago, the county outsourced to a private firm the operation of its 10 trash drop-off points known as convenience centers. The county saved $145,000 a year by turning convenience centers over to a private company rather than operate them in-house.

See also: Haywood’s quest for trash savings dumps costs on towns

Upton said there is no harm in seeing what the private trash companies offer.

“I would like to see if someone could operate a facility more efficiently than we do,” Upton said. But, “We need to move slowly and continue to look at both sides. I worry about what I don’t know might bite me.”

The county could be offered a sweet deal now to give up control of its landfill. But once the county is out of the trash business, it could be held hostage by changing terms and rising rates.

Swanger said a contract would be written meticulously to protect the county, which has already engaged a special attorney who’s an expert at landfills.

“To truly know the benefit we have to wait for the (proposals) and not just speculate,” Swanger said. “The (proposals) may lead us to say ‘This isn’t going to work.’”

 

Doing the math

Haywood is wading into a dilemma many others have faced: run your own landfill or ship your trash elsewhere. The choice pits big upfront costs against long-term savings.

Jackson and Swain counties and the Eastern Band of Cherokee Indians opt to ship their trash to mega landfills in South Carolina and Georgia.

“Short term it is cheaper because you don’t have the cost of building that landfill,” said Chad Parker, solid waste director in Jackson County. “It’s really hard to site a landfill in mountainous terrain. We don’t have any available land without spending quite a bit of money.”

Haywood and Macon counties — which already have landfills — find it cheaper to run their own since they already have the land.

Swanger thinks the days of building new landfills are over in the mountains. The county had a hard time 20 years ago finding somewhere to build the current landfill in White Oak — a tract that was large enough, removed from any neighbors and free of environmental constraints.

But the greater hurdle is a state moratorium on permitting new landfills. To some, the moratorium sounds like all the more reason for Haywood to guard what space it has left in its own landfill.

Swanger says it is just the opposite.

“The people with the state know there is trash being generated every day. You can’t continue to take it to neighboring states,” Swanger said. “What that tells you is there must be other plans in the works.”

That other plan is likely a trash incinerator — a giant one that would serve the whole region.

If the state halts the use of landfills and imposes a shift to regional trash incinerators, any space left in Haywood’s landfill could be left on the table. So one theory is that the county might as well make hay on its landfill while it can.

 

Can Haywood compete?

Private landfills in Georgia and South Carolina — where large tracts of flat land are plentiful — are dirt cheap compared to the per ton fee charged by landfills in mountain counties. Dump fees in the $30 a ton range are common, compared to twice that in the mountains.

Jackson County pays just $20 a ton to dump trash at a private landfill run by Waste Management in Homer, Ga.

The landfill takes in 2,000 tons a day — a volume that dwarfs the 150 tons a day seen at Haywood’s landfill.

The landfill is a total of 470 acres. It has 20 years of life left, but the company has already bought another 484 acres right next door, said Charlie Claws, district manager for Waste Management in northeast Georgia.

Claws’ landfills are cheaper for a couple of reasons: the economy of scale that goes with such a mega operation and slacker environmental regulations.

Claws said the cost of equipment would be hard for a small landfill to amortize. A compactor with big wheels and spikes to compress the trash costs $800,000 and only lasts five years. A basic dozer costs $650,000.

The same principle applies to labor. Claws has a staff of 10 at the landfill: five equipment operators, two mechanics, two in the scale house and one supervisor. Haywood has 9 workers — even though it does one-tenth the volume of trash.

“Can cities and counties do it? Yeah they can, but it is like anything else: you have more manpower and equipment than you need,” Claws said.

Claws also balked at how much Haywood is paying to construct a new section of the landfill. It costs him $250,000 an acre. Haywood is paying $500,000 an acre for a new pit under construction. King said it costs more to build landfills in North Carolina because of more stringent regulations.

“They are not regulated the way we are regulated,” he said of Georgia.

Haywood’s new lined pit will cost nearly $5 million and will last eight to nine years at the current rate of trash disposal.

The life of the cell might only be eight years, but it is laying a foundation for the future. Down the road, when the lateral footprint of the landfill can’t grow anymore, there will still be room to go up. But the base has to be built first, King explained.

But the questions remains whether Haywood can compete with the low per ton rates of landfills out of state.

Right now, Haywood would have to charge more than $44 a ton to break even. At $44 a ton, the county couldn’t compete. Besides, Haywood doesn’t want to merely break even on the trash. It defeats the purpose of selling space in the landfill in the first place. The whole point is to make enough profit to offset the cost of its own trash operations.

But the per ton cost of handling trash will get cheaper if the volume increases.

“Landfills are volume driven. The more volume they get, the cheaper it is to operate,” King said.

Plus, a private company may be able to run the landfill for less.

Claws estimated that Haywood will need to take in 600 tons a day to realize economies of scale. At that rate, however, the landfill’s life would be drastically shortened to as little as 10 more years.

Commissioners will soon have to weigh the pros and cons of cost savings versus the life of the landfill. The question is how much space is the county willing to give up in order to reap the financial returns.

“I think that threshold exists, but I don’t know exactly what it is,” Swanger said.

 

Haywood’s trash budget breakdown

Total budget    $4.7 million

Convenience centers    $680,000

Transfer station    $800,000

Material recovery center    $200,000

Landfill    $1.3 million

Recycling    $450,000

Loan payment on landfill expansion

$1.16 million

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