Agenda - 08-30-2000 - 7 - Laserfiche WebLink

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4 BFI, Inc. built and operated a 30,000 square foot MRF in Burlington that opened in July, 1992. The facility was constructed to handle the recyclable solid waste generated at 12 public drop off centers (on 7-year contract with Burlington, Graham, Mebane, and Haw River). BFI held the collection contract. Curbside collection programs were operated under contract to BFI in 4 municipalities (on 5-year contract with Burlington, Graham, Mebane, and Haw River). BFI had ashort-term goal of 1,200 tons/month and along-term of 1,800 tons/month. Peak operation in 1996 was 1,600 tons/month. In 1996 material prices plunged. In 1997 the contract with the municipalities was not renewed. Also, in 1997, contamination problems led to the closing of some drop-off centers. Based on our conversations we have determined that the primary reasons for the closing of the facility in August, 1999 were: • Market fluctuations' effect on operating budget Based on staffs' experience, great care must be taken in formulating revenue estimates when volatile commodities are involved. • Corporate Restructuring Major solid waste companies such as BFI were going through a period of consolidation and vertical integration, which resulted in a generally reduced commitment to recycling and the closing of several facilities nationwide in the past 3-4 years. • Higher than expected costs Significant reductions in quantities of materials caused processing costs to increase. Additionally, having to process highly contaminated materials increases costs. We understand the drop-off sites were not staffed, which led to contamination problems.. Staff believes contamination problems can also be improved by a concentrated effort of public education and outreach. • Loss of high quality, source separated materials from the municipal curbside collection programs When materials collection is not structurally or legally connected to the processing function, there is an opportunity for failure. Successful examples of exceptions to this notion do exist, however, in certain metropolitan areas where quantities of materials are high, processing costs reduced due to reasonable fees based on economies of scale, and either preferential collection contracts or dominance of a single recyclables collector exist. Without a steady and predictable supply of materials, a MRF cannot economically function. It appears that Alamance County could have signed contracts with the collection contractor that required the transport of materials to a specific facility.