Municipally- Owned Materials Recovery Facilities (MRFs) may be one answer to control recyclables processing costs

Municipally- Owned Materials Recovery Facilities (MRFs

By Barbara Warren, Consumers Union, 3/13/02

Municipally- Owned Materials Recovery Facilities (MRFs) may be one answer to control recyclables processing costs. Sean O’Rourke, Environmental Facilities Director

Here is a Case Study of how it works in Westchester County at their MRF.

This is a county- owned facility and operated by a private vendor.

Total Expenses last year -- $6 million-

$1 million of this amount is payment of debt service on the building and equipment ( the Facility cost $20 million)

$4 million is the payment to the private vendor.

$1 million.(approx.) -maintenance and electricity to operate facility are approximately

Total Revenues were- $4,817,624 with 80% going to county and 20% going to the vendor. The Westchester County share was $3, 854,099.

NET Operating expenses then would be $6 million - $3,854,099(revenues) = $2,145,901

Based on processing of a total of 73000 tons, the cost is $29.4/ ton.

Recycling education is not included in this figure. Westchester County spends approx. $1 million on this. There may be money expended by the various towns and villages on recycling education.

Important points to note here:

The county invested in their own facility. They oversee the operation. They use the facility to educate school children about recycling.
Renewals on this contract are done every five years and they already let one vendor go because they were not happy with performance.
There is a base fee of approx. $750,000 then $18.19/ton up to 4000 tons, then $16.63/ton from 4000-6000, then over 6000 is $14.10.
Their mix is about 2/3 paper and 1/3 MGP.
The vendor gets the benefit of the paper in the processing contract for MGP because the contract is for all materials.
The vendor gets a 20% share of the revenues.
The vendor is responsible for handling and disposing of residue, but they reserve the right to refuse loads. Residue is at 7% approx. They had a whole program of education about ensuring quality materials.
They do not have a problem with glass although prices are down. After they heard about what was happening in NYC, they looked at their numbers and found that MGP costs 2 ½ times the cost of processing paper.

To attempt to compare to the NYC situation, I calculated the cost of disposing of 40% of the MGP incoming material as residue. The end result is a cost of $36.5/ton average cost for all recyclables processed. This result was not intuitive for me because such a high residue I assumed would be very expensive. The reality is that in this situation the size of the paper recycling insulates the vendor from the effect of the MGP. Here I assumed the 1/3:2/3 split for MGP:Paper and added $55 per ton to processing costs for all residue.

However, one of the most important elements here is how can we deliver better quality materials to processors. In Brick Township, NJ because they are not compacting they have no problems with broken glass at the processor (it is only a small percentage) and they are collecting at about 5-6 tons per automated 42 cyd truck.

The City should invest in its own City-owned recycling infrastructure. On the drawing boards now is the SI transfer station at Fresh Kills. This could easily be converted to a MRF with only moderate investments in equipment for the facility.