Agenda - 02-18-1999 - Attachment 10

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THE "TIER 3 TONNAGE MRF" RECYCLED TONNAGE SOURCE CURRENT YEAR 5' YEAR 10" - Total Tier 2 Tonnage 14,985 29,195 31,766 - City of Burlington 1,211 1,513 1,891 - Duke University 768 960 1,200 - Other Users "' 5,000 6,250 7,813 TOTALS 21,964 37,918 42,670 Notes: 25% increase used for all year 5 programs except Tier 2 Tonnage ' 25% increase used for all year 5 programs except Tier 2 Tonnage Potential "Other Users' include private haulers, Town of Cary,or others. KEY ISSUES IN FACILITY SIZING A range of expected MRF throughput tonnage must be anticipated at this stage in the process. During early years as little as 10,000 to 20,000 tons per year may be all that is available as collection programs are reconfigured and ramped up to deliver materials to the MRF and as some communities make final decisions to participate in the project. Over the long term, however, the MRF need to be prepared to handle higher volumes cost effectively. Depending on the number of participating communities and private companies and the scope of their collection programs the MRF may need to handle tonnage during the next ten to twenty years that range from 32,000 tons per year to 42,000 tons per year. These demands need to be anticipated early in the MRF procurement process. It is important to assemble a "critical mass" of material for early years of operation that is in the range of 15,000 tons per year. This insures the viability of your project in the eyes of potential MRF developers. It is also important to be able to communicate the expected growth to potential bidders. Finally, its important to understand that some bidders may come to the table with their own tonnage in hand and be able to justify even larger facilities by combining your tonnage with theirs. The City of Burlington tonnage, for example, is currently serviced by FCR's Greensboro MRF. FCR could bid on your project and bring that tonnage with them under their own separate agreements with Burlington and their recycling contractor. Similarly, Durham and Durham County are currently serviced by Tidewater Fibers. Tidewater could bid on your project and bring those 12,000 to 15,000 tons, requiring an even larger facility. So there is a need for some flexibility as part of the RFP process, but also recognize that a'critical mass" of tonnage must be assembled for the MRF that you want developed for your own needs. These requirements for flexibility and the demands for "scaling up' to respond to increased tonnage mean that the MRF needs to have room to grow (sufficient building square footage) either as part of the original construction or permitted but added later. The MRF also needs to be equipped with processing systems that are cost effective in the early years and expandable as throughput tonnage increases over time. Preliminary technical and cost data has been evaluated for three phases of development of the MRF. The first being a small MRF that would be difficult to ever expand to the high volume scenarios. The second is sized for the Tier 2 volumes and represents a "partial" build out of a larger MRF. The third is sized for the large tonnage shown in the Tier 3 scenario. To measure these economy of scale issues, the MRF Operating Cost Chart on the following page shows costs per ton for small, medium and large MRFs designed to handle the Tier 1, Tier 2 and Tier 3 tonnage scenarios. The unit costs are net after market revenues are accounted for 2/5/99 Orange Regional MRF LOG Workshop Materials 4