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Item J1BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: 1/20/16 Department: Public Works/Solid Waste Bulk Item: Yes No X Staff Contact /Phone #: Will Thomoon x4432 AGENDA ITEM WORDING: Discussion, direction, and possible approval of request by Waste Management of Florida, Inc. (WM) for a contract amendment to allow WM to dispose the County's waste at another Waste -to -Energy Plant in Palm Beach County since the WTE in Broward County will no longer accept waste for processing. ITEM BACKGROUND: The County received notice via a letter from Wheelabrator to WM indicating that WM had exceeded the annual delivery of Municipal Solid Waste (MSW) at the Wheelabrator South Broward (WSB) facility and that WSB must cease receipt of any additional MSW from WM at the WSB facility effective immediately. Waste Management has advised staff that they are currently taking the County's MSW to the WTE in Palm Beach County. PREVIOUS RELEVANT BOCC ACTION: 8/21/13: Discussion and direction on solid waste management program and related contracts. 10/16/13: Presentation and discussion of the current offers from the solid waste vendors. 30 day extension to negotiations authorized and more cost effective offers requested. 11/20113: Presentation and discussion of the semi-final offers from the solid waste vendors. 3 week extension to negotiations authorized and more cost effective offers requested. 12/11/13: Presentation and discussion of the final offers for solid waste and a potential incineration demonstration project. BOCC authorized moving forward with drafting of the solid waste contracts and also consideration of an incineration demonstration project in Ramrod. 02/19/14: Discussion on the incineration demonstration project and moving forward with a solicitation for processing of yard waste. No formal vote taken. 03/19/14: Discussion, recommendation and direction on the County's yard waste processing. Vote to proceed with RFP for yard waste processing. 5/21/14: The Board approved the Amended and Restated Haiti Out, Operation and Maintenance Agreement with Waste Management Inc. of Florida (WM) 03/18/15: the Board approved Antendntent 1 designating a yard Waste Processing area at the County's transfer stations. 04/15/15: The Board directed staff to bring back an agenda item to discuss the haul -out rate in the Amended and Restated Haut Out, Operation and Maintenance Agreement with Waste Management Inc. of Florida 05/20/15: The Board approved Amendment 2 clarifying the haul -out rates for municipal solid waste and yard waste and disposal methods for each. CONTRACT/AGREEMENT CHANGES: STAFF RECOMMENDATIONS: TOTAL COST: INDIRECT COST: BUDGETED: Yes No DIFFERENTIAL OF LOCAL PREFERENCE: COST TO COUNTY: SOURCE OF FUNDS: REVENUE PRODUCING: Yes _ No AMOUNT PER MONTH Year APPROVED BY: County Attorne f OMB/Purchasin Risk Managernen l-.,�-5- DOCUMENTATION: Included Not Required DISPOSITION: AGENDA ITEM # Revised 6/I5 County of Monroe The Florida Keys ift Memorandum DATE: 19 January 2016 TO: Commissioners CC: Gastesi, Hurley, Wilson, Shillinger, Limbert FROM: Will Thompson BOARD OF COUNTY COMMISSIONERS Mayor Heather Carruthers, District 3 Mayor Pro Tern George Neugent, District 2 Danny L. Kolhage, District 1 David Rice, District 4 Sylvia J. Murphy, District 5 SUBJECT: Waste Management MSW Haul -out & Disposal Contract Amendment This provides background context for the discussion and direction agenda item on the subject contact amendment requested by Waste Management, Inc. (WMI) at the January 20, 2016 BOCC meeting. Action Requested: Given that WMI is no long able to use the Broward WTE plant and given the uncertainty of long term use of the Palm Beach County WTE facility, Staff seeks BOCC guidance on how to respond to WMI's proposal not to include a term that requires a minimum recycle credit equal to what was received from the Broward WTE plant. Request by WMI: WMI is requesting a contract amendment to permit hauling of the County's MSW (garbage) to a waste to energy (WTE) plant in Palm Beach County. The change requested by WMI is shown immediately below with the changes highlighted: "3.01 Operation and Disposal Fee. The County, effective October 1, 2014, shall pay the Operator an operation and disposal fee of $87.15 per ton of waste'delivered to the Facility and such waste shall only be processed at the Operator's owned or contracted Waste -to -Energy (WTE) Plant in Broward or Patin Beach County, Florida or such other Operator permitted or contracted facilities that produce recycling credits for the County or that otherwise meets the County's 75% recycling goal by 2020. Each October 1 thereafter, except as specified below, throughout the remaining term(s) of this Amended and Restated ..." Background: WMI asked staff in September whether the County would consider allowing WMI to dispose of the County's MSW at the Palm Beach WTE facility. WMI did not respond to staff's questions about why and what the costs would be. In mid -December 2015, WMI advised staff that it could no longer use the south Broward WTE plant and submitted a letter from that facility advising the WMI could no longer dispose of MSW at that facility, effective immediately. Staff asked WMI for the cost implications of that change and when no response was received, staff researched the matter and learned that the tip fee at the Palm Beach facility would be lower by as much as $25/ton. Staff recognized that the cost to haul to the further facility would increase for WMI and proposed a contract amendment that included the County sharing in a portion of the net savings with WMI. The draft amendment left definition of "significant savings" and the County's share percentage to WMI (these numbers were left as blanks in the draft submitted to WMI). WMI advised that such as provision was unacceptable. Staff subsequently proposed to WMI that the same section be changed to ensure that the recycle percentage of disposal at a WTE plant be preserved should the Palm Beach WTE plant not be a viable long term option for WMI disposal. The draft submitted to WMI is shown below: "3.01 Operation and Disposal Fee. The County, effective October 1, 2014, shall pay the Operator an operation and disposal fee of $87.15 per ton of waste delivered to the Facility and such waste shall only be processed at the Operator's owned or contracted Waste -to -Energy (WTE) Plant in Broward or Palm Beach County, Florida, that produce the sarrre or better recycling credits for the County as the WTE Plant in Broward County or such other Operator permitted facilities that otherwise produce recycling credits that meets the County's 75% recycling goal by 2020. The Operator shall 12rovide a rnontlaly report to the County which provides the disposalkacilities ittilized and the toms delivered to each facility. Each October I thereafter, except as specified below, throughout the remaining term(s) of this Amended and Restated...." WMI has advised staff that the phrases "the same or better " and "as the WTE Plant in Broward County" are not acceptable because WMI needs the flexibility to use their Broward County landfill (Monarch Hill) should the Palm Beach WTE plant reach capacity or become uneconomical. WMI is currently disposing the MSW at the Palm Beach facility even though it is not in accordance with the contract. They have explained that they wanted to ensure that the recycle credits were maintained. Staff recognizes that this is currently in the County's and WMI's best interests. In all cases, staff has included a proposed new Section 3.12 which ensures that WM and the County agree that use of other facilities will not include an extraordinary rate increase resulting from increased transportation costs due to a change in disposal location by WMI. Given that WMI is no longer able to use the Broward WTE plant and given the uncertainty of long term use of the Palm Beach County WTE facility, Staff seeks BOCC guidance on how to respond to WMI's proposal not to include a term that requires a minimum recycle credit equal to what was received from the Broward WTE plant or other mechanism to meet the goal of 75% recycle rate by 2020. Original BOCC Guidance: BOCC guidance during the initial contract negotiation was to establish an agreement that would make the cost of MSW disposal services to the taxpayers at a predictable rate (not over 10% over the 10 year contract term) and meet the State goal of 75% recycling by 2020. The contract amendment proposed by WMI provides flexibility to achieve the former at the possible risk of achieving the latter. The addition of a reporting requirement will, at least, provide early warning of changes in recycle rates, should the ultimate disposal be changed by WMI.