Item 8-i - Fiscal Year 2018-19 Budget Amendment #2

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10 exported recyclables. The National Sword is China's latest and strictest regulation on imports of solid waste as raw materials. In addition, Hurricane Florence caused significant infrastructure damage at two major North and South Carolina shipping ports, and paper mills located in Hartsfield, South Carolina owned by the recycling processor Orange County uses. Thus, mixed paper being processed now at the Raleigh facility cannot be sent to the flooded paper mills, nor can they be shipped from the ports. If the mills are not back online within a few weeks, processors may have to temporarily landfill mixed paper. Furthermore, damage caused by Hurricane Florence has necessitated that our recycling processor pay additional costs to have the recycling material processed. The material quality and value of all material throughout the Hurricane Florence affected region, is further degraded because of wet and muddy conditions, and there are fewer viable options as to where the material can go. This results in the processor having to slow down the sorting lines to discard wet material which further reduces productivity and efficiency, and increases costs. Fiscal Year 2018-2019 Impacts The original FY1819 budget requested $30,000 to cover recycling processing fees. Based on current markets, it is estimated, at minimum, $475,947 will be needed to cover the recycling processing costs for FY1819. Using the current projections, the account is estimated to be $445,947 over K budget. Table 2 below highlights cost incurred to date and monthly projections based upon historical tonnage. SWMD staff recommends using Solid Waste reserve funds to cover the unexpected expenditures. i Table 2:Fiscal Year 2018-2019 Expected Recycling Processing Fees Jul-18 1107 $ (31.29) 0 $ (35.00) $ (34,635) Aug-18 1055 $ (32.93) 120 $ (21.00) $ (37,261) Sep-18 732 $ (32.93) 0 $ - $ (24,105) Sep-18 132 $ (66.28) 132 $ (24.00) $ (11,930) Oct-18 543 $ (66.28) 543 $ (26.00) $ (50,066) Nov-18 548 $ (67.78) 548 $ (30.00) $ (53,571) Dec-18 478 $ (45.00) 578 $ (30.00) $ (38,879) T Jan-19 600 $ (45.00) 600 $ (30.00) $ (45,000) Feb-19 550 $ (40.00) 550 $ (30.00) $ (38,500) Mar- p; 19 550 $ (40.00) 550 $ (30.00) $ (38,500) Apr-19 1150 $ (30.00) 0 $ - $ (34,500) May- 19 1150 $ (30.00) 0 $ - $ (34,500) ' Jun-19 1150 $ (30.00) 0 $ - $ (34,500) Overall $ (475,947) Next Steps The uncertainty of this situation makes it difficult to make both short-term and long-term decisions. Solid Waste staff is developing a Request for Proposal which would insulate the County from the fluctuating commodity markets and provide some price stability, but would not address the impacts of Hurricane Florence and the costs associated with repairing and implementing new infrastructure. Orange County is also not in the strongest position, at the current time, to enter into contractual agreements, but there is a financial imperative to stabilize month to month costs.