business plan garbage, recycling & composting 19...business plan:. garbage, recycling &...

BUSINESS PLAN: Garbage, Recycling & Composting

How does this service contribute to the results identified in the City of London Strategic Plan? A strong economy A vibrant and diverse

community A green and growing

City A sustainable

infrastructure A caring community

We provide many services to about 167,000 households (single family and multi-family homes) and over 360,000 people in London. Some services (e.g., disposal) are extended to the business sector and to other municipalities in southwestern Ontario (e.g., processing recyclables). We contribute to the health of the environment and the citizens of London through appropriate collection and management of recyclables, yard materials, household special waste, yard materials and other selected/designated materials. This involves creating products of value from compostable/recyclable/reusable materials discarded by the citizens of London; promoting waste reduction and reuse opportunities; raising awareness of the benefits of recycling/composting to the environment; disposal of garbage in an environmentally responsible manner and monitoring closed landfills and other sites producing methane. City staff and our contractors are driven by our mission – At Your Service: A respected and inspired public service partner. Our programs, projects, people and partnerships are designed to make specific contributions to: A Strong Economy, A Green and Growing City, A Sustainable Infrastructure. A Strong Economy By owning our own Landfill Site, the City is able to provide London’s industries with local, secure and affordable disposal. Local jobs are created by managing our waste (garbage and recyclables) in London instead of exporting it to other municipalities. Additional jobs have been created from processing recyclables from several other municipalities at London’s Manning Drive Regional Material Recovery Facility. A Green and Growing City By creating products of value from compostable/recyclable/reuseable materials discarded by the citizens of London the City is reducing energy consumption, saving landfill space, reducing Greenhouse Gases and promoting a more sustainable lifestyle. A Sustainable Infrastructure Having local and municipality owned waste management facilities for disposal and diversion provides London with the infrastructure to management the City’s waste in the long term.

____________________________________________________________________________________________________________________ 2014 Draft Budget for the City of London - December 3, 2013

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Name the main activities done to provide this service:

Name The Activities Done To Provide This Service How Much Did We Do? (optional)

Is The City Mandated To Provide This

Service?

Can The Level Of Service Be

Changed?

1. Garbage collection for 167,000 households

• 42 pickups/year for curbside homes • 104 pickups/year for multi-residential and

downtown core • Litter box collection • Collect approximately 100,000 tonnes/year of

garbage and yard materials

Yes Yes

2. Yard Material Collection for 90,000 households

• 8 curbside pickups per year • 2 EnviroDepots (over 200,000 visits/year)

Yes Yes

3. Recycling collection, processing and transfer to end markets for 167,000 households

• 42 pickups/year for curbside homes • 52 pickups/year for multi-residential • Ship $3 to $4 million in recyclables to end

markets each year

Yes Yes

4. Landfill Operations

• Disposal of 210,000 tonnes of residential and business waste

Yes No

What is the current state of this service?

• Our goal is to contribute to the health of the environment and the citizens of London through appropriate collection and management of garbage, recyclables, yard materials, household special waste and other selected/designated materials.

• Solid Waste continues to make incremental improvements in waste diversion each year. In 2012 the City reached a milestone with more than 50% of waste from curbside residents being diverted. The overall diversion rate (includes waste from curbside and multi-residential units) increased from 42% in 2011 to 44% in 2012.

• Future improvements in waste diversion will be more difficult as most existing programs (e.g., Blue Box recycling, yard material composting, etc.) are performing at an average to high level and have little room to grow. Significant improvements in waste diversion in the future will require new programs/initiatives.

• The City’s Manning Drive Regional Material Recovery Facility (recycling centre) has attracted six area municipalities to the facility since spring 2012. St. Thomas is scheduled to start using the facility next year. The cost to process recyclables decreases as more municipalities use the facility due to economies of scale. ____________________________________________________________________________________________________________________ 2014 Draft Budget for the City of London - December 3, 2013

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What is the current state of this service? (cont’d)

• The City’s two EnviroDepot continue to be very popular (over 200,000 visits/year). Development of a third depot to service the north end of the City continues to make slow progress due siting difficulties.

• Collection of garbage and yard materials and the operation of the W12A landfill continue to provide excellent service to residents/customers. Delivery of

garbage from private haulers was reduced in 2013 and likely for a portion of 2014. This will impact the overall Garbage, Recycling and Composting Budget as tipping fee revenue is down.

• The W12A landfill has between 10 and 12 years of capacity.

What is the future direction of this service?

• On June 6, 2013, Bill 91 was introduced into the provincial Legislature. The government is proposing to replace the existing Waste Diversion Act, 2002 with the proposed Waste Reduction Act, 2013 (WRA). The Province is also proposing a new Waste Reduction Strategy (WRS). If passed by the Legislature, the WRA and accompanying WRS will result in significant changes to how recyclables, organics and residential waste (garbage) are to be managed in Ontario (and London).

• The W12A Landfill Site is one of the most important assets owned by the City as it ensures that remaining garbage from residents and business of London can be managed within our boundaries at an affordable cost. As noted above the W12A Landfill has between 10 and 11 years of capacity remaining. Staff will be providing Council with a report in 2013 that outlines the major steps, financial needs and resource requirements required to complete an Environmental Assessment to provide the City with long term disposal plan (40 years). Coupled with this will be the need to examine additional resource recovery and waste conversion technologies as it has been noted that significant improvements in waste diversion in the future will require new programs/initiatives. Ministry of the Environment approval of a long term disposal plan will need to demonstrate reasonable efforts have been made to divert as much waste as practical.

• The current garbage/yard materials collection system is very cost effective however some residents would like a higher level of service (e.g., more frequent collection). The current system has been in place for over 15 years. Over this time period the types and quantities of material being handled have changed. A review of the collection system is being undertaken.

• Continued optimization of existing diversion, collection and disposal operations. This will include looking for additional revenue at the W12A landfill by

seeking new customers and exploring other revenue generating opportunities.


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What do you plan to do?

2014 • Begin Environmental Assessment for long term disposal capacity (40 years) • Continue examination of resource recovery and waste conversion technologies • Implement changes to garbage/yard material collection program (depending on recommendations of current review and if approval by Council) • Continue to optimize the Blue Box program by 1) pursuing other municipalities to use the Manning Drive Regional Material Recovery Facility, 2)

improving the quality of materials being collected (help residents understand what goes in the Blue Box) and look at what other materials can be added to the program

• Examine potential sources for additional revenue for the W12A landfill

2015 – 2018 • Complete Environmental Assessment and any other required approvals to implement long term disposal plan • Implement new resource recovery and waste conversion technologies (depending on recommendations of review and if approval by Council)

Key Performance Indicators Description of measure 2012 2013 2014 2015 2016 2017 2018

How Much? 1. Garbage Collected (tonnes) 90,000 90,000 91,000 92,000 93,000 94,000 95,000 2. Material Diverted (tonnes) 66,000 67,500 68,000 68,400 68,800 69,200 69,600 3. Recyclables Marketed (m3) 270,000 280,000 300,000 310,000 315,000 320,000 325,000 4. Waste Landfilled (tonnes) 230,000 210,000 220,000 240,000 240,000 240,000 240,000 5. Greenhouse Gases Destroyed (tonnes) 68,000 95,000 100,000 105,000 110,000 110,000 110,000

How Well? 6. Net Operating Cost ($/household) 74 74 74 74 74 74 74 7. Days garbage/recycling not fully collected 0 0 0 0 0 0 0 8. MOE Compliance (# of orders/year) 0 0 0 0 0 0 0 9. Diversion Rate (%) 44 45 45 45 45 45 45


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Service ExpenseNon Tax Revenue

Net Property Tax Supported Expense

Non Tax Revenue

Net Property Tax Supported Expense

Non Tax Revenue

Net Property Tax Supported

Prop. Tax Supported

(%)

Recycling & Composting 11,222 (6,818) 4,404 11,686 (7,575) 4,111 464 (757) (293) (6.7%)

Garbage Collection & Disposal 12,720 (4,468) 8,252 12,560 (3,680) 8,880 (161) 788 627 7.6%

Total to Maintain Existing Service Level 23,942 (11,286) 12,656 24,246 (11,255) 12,991 303 31 334 2.6%

(255) (255) (2.0%)

12,736 79 0.6%

Note: All figures are subject to rounding.

2014 Budget Highlights: $ 000 %Maintaining Existing Service:

(293) (2.3%)

627 5.0%

Service Adjustments Required to Achieve Target(255) (2.0%)

Increase/ (Decrease) over prior year budget 79 0.6%

Garbage Collection & Disposal: Reduced revenue of $1,250,000 due to lower quantities of business garbage, partially offset by a reduction of $395,000 in associated costs, and a net increase of $500,000 anticipated in new revenue sources. In addition, increase in internal equipment rental based on actual experience and reduced user fee revenue.

Service Change Business Case - Reduction in Sanitary Landfill Reserve Fund Contributions

Garbage, Recycling & CompostingSummary of Submitted 2014 Budget

($000's)Increase / (Decrease) Over Previous

YearRevised Budget2013 2014

Draft Budget

Service Adjustments Submitted

2014 GARBAGE RECYCLING & COMPOSTING AS SUBMITTED

Recycling & Composting: Increase in revenue from the Extended Producer Responsibility Program due to change in funding formula and other net revenues partially offset by contractual obligations and personnel costs. An additional $75,000 was absorbed in purchased services to help offset reduced landfill revenue.


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2012 2013 2014

ObjectActual Revised

Budget

Maintain Existing Service

Service Adjustments

Requested Budget

Expenditures $ %Personnel Costs 489 730 68 799 68 9.3%Administrative Expenses 2 2 1 2 1 50.0%Financial Expenses 41 0 0 0 0 0.0%Purchased Services 9,968 9,984 216 10,200 216 2.2%Materials & Supplies 9 16 (1) 15 (1) (6.3%)Furniture & Equipment 36 45 (4) 41 (4) (9.0%)Transfer 190 441 184 625 184 41.7%Other Expenses 215 4 0 4 0 0.0%Recovered Expenses (47) 0 0 0 0 0.0%

Total Expenditures 10,903 11,222 464 0 11,686 464 4.1%

RevenueUser Fees (346) (473) (182) (655) (182) 38.5%Other Municipal Revenues (6,695) (6,345) (575) (6,920) (575) 9.1%

Sub-total - Non Property Tax Revenue (7,040) (6,818) (757) 0 (7,575) (757) 11.1%

Net Budget 3,862 4,404 (293) 0 4,111 (293) (6.7%)Additional Information / Commentary with respect to 2014 Draft Budget

Recycling & Composting

($000's)2014 Budget As Submitted

Explanation of AdjustmentsIncrease/ (Decrease) Over

2013

Net increase in revenues.

Maintaining Existing Service Levels (Flow through from prior years, inflation, contractual obligations, efficiencies) Increase in salary, wage and fringe benefits due to existing employment agreements including increase due to ensuring appropriate staff complement remains for regulated programs.

Decrease in contract services related to the green bin program.

Increase in purchased services, contract services, advertising costs and safety apparel based on actuals partially offset with a decrease in other purchased services to help absord reduction in landfill tipping fee revenue.

Increase in waste diversion costs based on inflation and contractual obligations.Decrease in internal rental equipment based on fleet rates.Increase in Extended Producer Responsibility due to change in funding formula .Decrease in recycling revenues based on current market (low).


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Budget Forecast

ObjectExpenditures 11,222 11,686 11,917 12,151 12,389 12,632 1,410Non-Property Tax Revenue (6,818) (7,575) (7,727) (7,881) (8,039) (8,199) (1,381)Property Tax Supported (Net Budget) 4,404 4,111 4,190 4,270 4,350 4,433 29Increase / (Decrease) Over Prior Year (293) 79 80 80 83 29Increase / (Decrease) Over Prior Year % (6.7%) 1.9% 1.9% 1.9% 1.9% 0.7%

Annual average increase: 0.2%

StaffingFull-Time Equivalents # 10.3 10.3 10.3 10.3 10.3 10.3Increase / (Decrease) Over Previous Year 0.0 0.0 0.0 0.0 0.0Full-Time Employees # 9 9 9 9 9 9Increase / (Decrease) Over Previous Year 0 0 0 0 0

Additional Information / Commentary:Annual increase of 1.9% applied to personnel expenses for existing employment agreements and a 2% inflationary increase applied to all non-personnel accounts and program adjustments.

Recycling & Composting2014 - 2018 Budget Forecast & Staffing

($000's)

2013 Revised Budget

2014 to 2018 Projected Increase

2014 Requested

Budget

2015Forecast

2017Forecast

2018Forecast

2016Forecast


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2012 2013 2014

ObjectActual Revised

Budget

Maintain Existing Service

Service Adjustments

Requested Budget

Expenditures $ %Personnel Costs 6,357 6,408 (135) 6,273 (135) (2.1%)Administrative Expenses 67 76 3 79 3 3.9%Financial Expenses 647 256 (50) (255) (49) (305) (119.1%)Purchased Services 493 797 (5) 792 (5) (0.6%)Materials & Supplies 201 280 (83) 197 (83) (29.5%)Furniture & Equipment 4,582 4,509 98 4,607 98 2.2%Other Expenses 551 504 11 515 11 2.1%Recovered Expenses (354) (110) 0 (110) 0 0.0%

Total Expenditures 12,544 12,720 (161) (255) 12,305 (416) (3.3%)

RevenueUser Fees (4,070) (4,318) 808 (3,510) 808 (18.7%)Other Municipal Revenues (139) (150) (20) (170) (20) 13.3%

Sub-total - Non Property Tax Revenue (4,209) (4,468) 788 0 (3,680) 788 (17.6%)

Net Budget 8,334 8,252 627 (255) 8,625 372 4.5%Additional Information / Commentary with respect to 2014 Draft Budget

Service Change Business Case - Reduction in Land Acquisition for W12A as a result of reduced funding from less business garbage going to the landfill.

Maintaining Existing Service Levels (Flow through from prior years, inflation, contractual obligations, efficiencies)

Garbage Collection & Disposal2014 Budget As Submitted

($000's)Explanation of Adjustments

Increase/ (Decrease) Over 2013

Adjustment in salary, wage and fringe benefits due to existing employee agreements and actual requirements based on actual trends.

Decrease in materials and supplies based on actual trend and a reduction in business garbage.

Service Adjustments

Increase in health & safety based on actual trend.

Decrease in external vehicle rental due to a reduction in business garbage.Increase in internal rental equipment based on fleet rates. Increase in wastewater costs based on actual trend.

Decrease in user fee revenues based on actual experience.

Decrease in purchased services and the Mitigative Measures program due to a reduction in business garbage.

Decrease in tipping fees revenue due to reduction in business garbage from existing customers partially offset by $395,000 in associated cost reductions and an increase of $500,000 anticipated from new sources.

Increase in sewage recovery due to actual experience.


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Budget Forecast

ObjectExpenditures 12,720 12,305 12,858 13,095 13,335 13,583 863Non-Property Tax Revenue (4,468) (3,680) (3,754) (3,829) (3,905) (3,983) 485Property Tax Supported (Net Budget) 8,252 8,625 9,104 9,266 9,430 9,600 1,348Increase / (Decrease) Over Prior Year 372 479 162 164 170 1,348Increase / (Decrease) Over Prior Year % 4.5% 5.6% 1.8% 1.8% 1.8% 16.3%

Annual average increase: 3.1%

StaffingFull-Time Equivalents # 90.9 90.2 90.2 90.2 90.2 90.2Increase / (Decrease) Over Previous Year (0.7) 0.0 0.0 0.0 0.0Full-Time Employees # 75 75 75 75 75 75Increase / (Decrease) Over Previous Year 0 0 0 0 0

Additional Information / Commentary:

Annual increase of 1.9% applied to personnel expenses for existing employment agreements and a 2% inflationary increase applied to all non-personnel accounts and program adjustments.

Reduction in business garbage resulted in lower revenues. Expectation of one of three things to happen by 2015 that will make up the revenue shortfall from 2014. These are 1) landfill revenue bounces back, 2) new Blue Box funding as a result of the proposed Waste Reduction Act or 3) recycling revenues return to historical levels.

Garbage Collection & Disposal2014 - 2018 Budget Forecast & Staffing

($000's)

2013 Revised Budget

2014 Requested

Budget

2015Forecast

2016Forecast

2017Forecast

2018Forecast

2014 to 2018 Projected Increase

Decreased staffing in overtime due to reduction in business garbage.

Note: Above FTE counts do not include the impact of assessment growth cases.


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Business Case #3

Service Garbage Collection and Disposal Initiative Reduced contribution to Sanitary Landfill Reserve Fund Financial Implications ($ 000’s)

Change to Gross

Expenditure

Change to Non Property Tax Supported Revenue

Net Change to Property Tax

Levy 2014 Tax Levy

Impact % Future Year Impact $ (if applicable) 2015 2016 2017 2018

Capital Budget Impact (255) (255) (255) (255) (255) Operating Budget Impact (255) (255) (0.05%) Background

A portion of the tipping fee revenue received from business waste going to the W12A landfill is contributed to the Sanitary Landfill Reserve Fund. These funds are used to cover the increased capital costs caused by the additional waste.

There has been a reduction in the amount of business waste coming to the landfill and therefore there will also be a corresponding reduction in the amount of tipping fee revenue being contributed to the reserve fund. The proposed reduction in expenditures for site property acquisition offsets the reduction in funding coming from business waste tipping fees.

It should be noted the W12A Landfill Community Enhancement and Mitigative Measures Program is part of the City’s overall efforts to reduce and address the negative effects of the W12A Landfill on neighbouring properties. It provides for property acquisition or property value protection to a number of properties around the landfill. This policy was approved by Council in 2009 after extensive consultation and input from area residents.

In addition to addressing concerns about property values from area residents, acquisition of properties around the W12A landfill is required to:

• complete acquisition of lands identified as part of a special policy area (Waste and Resource Management area) in the City’s Official Plan,

• act as a buffer to existing landfill operations, • protect against short and long-term encroachment around the landfill site, • reduce opposition and provide buffering for future potential landfill and resource recovery development options, and • eliminate on-going “right of first refusal” payments to property owners.


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Business Case #3

Service Garbage Collection and Disposal Initiative Reduced contribution to Sanitary Landfill Reserve Fund

Property value protection is provided to nearby properties that are not purchased to ensure those properties don’t decline in value due to the proximity of the property to the W12A Landfill. Property value protection involves paying the difference between the fair market value of the property and what a willing purchaser would pay for the land knowing it is near a landfill. Under the W12A Landfill Community Enhancement and Mitigative Measures program, the City is required to provide property value protection if it does not purchase the property.

This proposal reduces the projected amount available to purchase property and provide property value protection from $13.4 million over ten years to $10.85 million. In addition, a second (separate) proposed 2014 service change would involve a further $2 million cut in funding to $8.85 million for the next 10 years. This amount is below the expectations of the community who provided input in the development of the Community Enhancement and Mitigative Measures Program. It must be recognized that a combined 34% reduction in property acquisition/property value protection funding will be viewed by the community as stepping away from a “community negotiated” deal and may result in opposition from the local community to the existing landfill operations and any proposed future facilities.

As noted above, acquisition of nearby properties will reduce opposition and provide buffering for future potential landfill and resource recovery development options. Failure to secure an expansion of the W12A landfill would increase waste management operating costs of between $6,000,000 and $10,000,000 per year. Development of the City’s long term disposal plan is expected to begin within the next year and any expansion of the W12A landfill will require approval by the Ministry of the Environment.

It should also be noted that any lands acquired can be sold in the future if it was deemed they were not required for buffering or as part of any future potential landfill expansion or resource recovery facility and the City will be able to recoup any money spent.

Performance Measures Impact This service change does not directly affect any of the services’ key performance measures in the short term. It may impact performance measures in future years should the community demand other actions from the City that have not been budgeted.

Impacts

a) Community

This service change will have a direct impact on the local community. It will be viewed as Council altering a deal with the local community for a function (waste disposal) that benefits the entire City. Also, there could be an indirect financial impact as this service change makes it more likely the City will have to pay higher waste disposal costs ($6,000,000 to $10,000,000 more per year) in the future.


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Business Case #3

Service Garbage Collection and Disposal Initiative Reduced contribution to Sanitary Landfill Reserve Fund

b) Community Engagement

The community will learn about this service change through the tabling of the 2014 Property Tax Budget in December 2013. The W12A Neighbourhood Liaison Committee will also be advised of this proposed change as this is the local resident’s group established by Council resolution.

c) Other City of London services

N/A

Risks Reducing the funds available for property acquisitions over the next ten years will: • affect the City’s ability to purchase property on a timely basis and therefore, will likely result in the need to purchase land at higher prices

in the future • reduce the ability to obtain local support for additional waste diversion and resource recovery facilities • impact the comprehensive nature of the Community Enhancement and Mitigative Measures Program thus reducing the positioning City

staff have with the Ministry of the Environment


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business plan garbage, recycling & composting 19...business plan:. garbage, recycling &...

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