guam solid waste system progress and proposed rates€¦ · guam solid waste system progress and...

Guam Public Utilities Commission 8/13/2010

www.guamsolidwastereceiver.org 1

Gershman, Brickner & Bratton, Inc.Gershman, Brickner & Bratton, Inc.

Guam Solid Waste System

Progress and Proposed Rates

Presentation to the Guam Public Utilities

Commission

Presented by

Gershman, Brickner & Bratton, Inc.

August 13, 2010

Gershman, Brickner & Bratton, Inc. 2222222

Table of Contents

1. Progress Under the Receivership

2. Status of Layon Landfill and Access Road

Construction

3. Interim Rates Approved by the District

Court

4. Guam’s Waste Stream

5. Rate Recommendations to the Public

Utilities Commission

6. Outstanding Issues

2




1. REVIEW OF RECEIVER’S FIRST

TWO YEARS

3


SWMD Collection Services

• Delivered regular, consistent

collection services

• Reduced collection routes

from 9 to 6

• Operated collection with a

single shift, down from 3

• Dramatically reduced

complaints

Old manual collection, trash cans

New semi-automated collection

with carts begins at 4 am




SWMD Collection Services (cont’d)

• Registered more than

19,000 customers for

new cart-based trash

collection

• Delivered 95-gallon

carts to customers

• Implemented new

account management

and billing system

Carts replace cages at the curb.

Registration events

Cart delivery


SWMD Operations/Administration

• Purchased new equipment

• Repaired old equipment

• Increased fleet to 10 working trucks vs. one working truck in 2008

• Achieved major savings with less leased equipment

6

Before: Old fleet of often

inoperable trucks

Now: New trucks,

with hydraulic

lifters for cart-

based service




SWMD Operations/Administration(cont’d)

Improved SWMD facilities

Before: Shower facilities

and kitchen

Now


SWMD Operations/Administration (cont’d)

• Streamlined and

consolidated

office operations

• Reduced SWMD staff

by 35%, with productivity

increases

Before

Now: Organized

customer service

offices




Operations: Ordot Dump and

Transfer Stations

• Implemented ban on

recyclable materials

• Added recycling at Ordot

Dump and transfer stations

• Pilot curbside recycling to

begin soon

After

Before


Operations: Ordot Dump and

Transfer Stations (cont’d)

• Improved operations at

Ordot Dump

• Implemented interim

filling plan, tracked

space volume use

• Installed new weigh

scale

• Began plans for closing

the Dump

New scale

SWMD employees improving storm

drainage




Layon Landfill

• Obtained approval of

the Solid Waste Facility

and the Air Pollution

Control permits

• Executed contracts for

landfill construction

• Completed earthwork

for Cells 1 and 2

• Construction of

landfill systems

and facilities is

underway

Then: 2004 Consent

Decree with 2007 landfill

completion date

Now: Landfill access road

and construction site


Receivership

• Achieved Court approval of est. capital funding needs

• Assisted in achieving full funding with sale of Section 30-backed bonds

• Participated in discussions re: USDA loan/grant

• Established Trustee accounts to manage capital funding, control funds, pay contractors

• Implemented new phased-in fees

• Negotiated LOI with Military re: their use of Layon Landfill

• Informed the public and the media through Receiver website




2. LAYON LANDFILL AND ACCESS

ROAD CONSTRUCTION

STATUS OF CONSENT DECREE PROJECTS


Layon Landfill

• Initial Earthwork and Operations Road Construction - Maeda Pacific Corporation

• Notice to Proceed -February 23, 2009

• Work completed in March 2010

• Cost - $10,045,245.40




Layon Landfill

• Construction of Cells 1 and 2 and landfill entrance facilities –Black Construction Corporation

• Notice to Proceed -December 29, 2009

• Contract Completion Date – May 14, 2011

• Cost – $22,428,485.04*

*Subject to change by additional change orders.


Entrance Facilities Progress

16

April: Maintenance building




Entrance Facilities Progress

17

June: Maintenance building


Cell 1 and 2 Construction

Progress

April: Installation of subdrain and low perm soil

layer




Cell 1 and 2 Construction

Progress

June: Installation of primary liner and piping for

leachate collection layer


Construction Progress:Landfill and Entrance Facilities

0

7

12

18

24

31 37

0 26

14

21

31

40

0

20

40

60

80

100

Dec Jan Feb Mar Apr May Jun

Perc

en

t C

om

ple

ted

Liner Systems and Entrance Facilities Project Time vs Project Completion

% Project Time Expended % Project Completed




Access Road and Utilities

• Construction of Access Road, Sewer and other utilities – Core Tech Construction Corporation

• Notice to Proceed -December 11, 2009

• Contract Completion Date – April 27, 2011

• Cost – $26,971,285.00*



Access Road Progress

22

April: Access Road earthwork





23

June: Earthwork complete, utility work ongoing



24

June: Dandan Road improvements – gravity sewer





25

June: Sewer Line construction – Route 4


Construction ProgressAccess Road and Utilities

4

10

15

22

28

34

40

0 37

15

23

33

40

0.00

20.00

40.00

60.00

80.00

100.00

Dec Jan Feb Mar Apr May Jun

Perc

en

t C

om

ple

ted

Access Road and Utilities Project Time vs Project Completion

% Project Time Expended % Project Completed




Construction Management

Contractor

Winzler & Kelly

Contract Amount

$4,225,284*On-site lab for quality assurance testing



Liner Installation Carefully

Monitored by Independent Expert

•Third Party Independent Expert:

Vector Engineering (sub contractor to Winzler

& Kelly)

•Extensive expertise in landfill

liner systems

•On-site oversight assures:

•All liner materials meet

specifications

•All liner materials are

properly installed

•Conformance testing to

confirm high standards





3. INTERIM RATES APPROVED BY

THE DISTRICT COURT




Interim Fee StructureCommercial Tip Fees

3-Step Phase-in Now Completed


Interim Fee Structure Residential and Self-drop Fees

• Interim fees to be

implemented after

rollout of new cart

system is completed

• Fees to be phased in




Orders of the District Court Concerning

Interim Rate Increase

•Interim commercial fees approved by Order of

January 23, 2009

•Interim residential fees approved by Order of July

15, 2009

•Interim fees effective until permanent fees

approved by the Public Utilities Commission (PUC)

•GBB must submit a rate setting request to the PUC

by September 30, 2010

•PUC to set appropriate rate for treatment of

leachate


4. GUAM’S WASTE STREAM




Volume of Waste: Scale Data


Estimated Waste Stream Average

Annual 2012-2020




5. PRELIMINARY RATE

RECOMMENDATIONS


Preliminary Rate

Recommendations to PUC




Cost that Must Be Covered by

Rates

Operating Cost:•Operating cost for Layon Landfill

•Operating cost for Commercial Transfer Station

•Operating cost for Community Transfer Stations

•Residential Trash Collection

•Bulky and Metallic Waste collection

•Recycling

•Customer Service and Education

•Equipment Maintenance

•Household Hazardous Waste

•Administration


Cost that Must Be Covered by Rates

•Debt Service

•Section 30 backed Bonds

•Reserves

•Equipment Replacement

•New Cell Development

•Closure of Cells

•Post Closure Care

Note: The cost of closure of the Ordot Dump and post closure care

of the Ordot Dump are not covered by the proposed rates. These

costs will be financed by Section 30 backed bonds but the cost of

the debt service should be covered by general tax revenue.




Reserve for Equipment Replacement

Purpose: To assure that the solid waste system has

the financial resources needed to replace equipment

as the need arises.

Assumptions: •Average useful life of equipment is 7 years

•Inflation is assumed to be 3 percent

•Interest earnings are assumed to be 2 percent

•Reserve to be managed by trustee

•Funds must be spent for equipment

•Expenditures subject to PUC approval*

* During the period of Receivership, Court approval of expenditures is required.


Reserve for New Cell Development


the financial resources needed to properly construct

cells 3-11 in a timely manner.

Assumptions: •Average cell size is 11.4 acres

•Average cost for new cells is $900,000 per acre

•Average cell capacity is 1,680,180 CYs

•Average annual cell consumption without Military is 329,217 CYs

•Average annual cell consumption with Military is 438,167 CYs




•Funds must be spent for new cells






Reserve for Cell Closure


the financial resources required by Guam and Federal

Law to properly close cells when they reach capacity.

Assumptions: •Average cell size is 11.7 acres

•Average cost for closure is $175,000 per acre

•Landfill gas management system cost is $24,000 per acre

•Funds must be available as each cell reaches capacity




•Funds must be spent for cell closure




Reserve for Post Closure Care


the financial resources required by Guam and Federal

Law to properly maintain the landfill for 30 years after

final closure of all cells.

Assumptions: •Expenditures begin during first year after final closure of Landfill

•Expenditures continue for 30 years

•Average cost of post closure care is $5,039 per acre

•Reserve must be fully funded when landfill is closed




•Funds must be spent for cell closure






Landfill

Residential

Support*

*These Components to be allocated to Landfill and Residential Rates.

Note: The base rate budget year is FY 2011 modified to Include first full year of debt

service in FY 2013. Financing is based on Section 30 Backed Bond Financing.


Customer Service &

Education

Components of Support Services

Total Budget $881,500

Allocation of Support Services is based on the percentage of total budget. Residential

Services receives an allocation of 31.7% and the Landfill receives an allocation of 68.3%.




* FY 2013 Debt Service on Section 30 Backed Bond Financing.


Post Closure

Annual Reserve ContributionsAssumes Military Not a Customer

Total Budget $7,184,900All reserves are 100 percent allocated to the landfill except equipment. 35.4 percent of

equipment is allocated to residential. Residential receives an indirect allocation of the

remaining reserves through its landfill fees.




Landfill Ops

Transfer Stations

Note: The base rate budget year is FY 2011 modified to Include first full year of debt

service in FY 2013. Financing is based on Section 30 Backed Bond Financing.


Trash Collection

White Goods &

Bulky Waste

Note: The base rate budget year is FY 2011 modified to Include first full year of debt service

in FY 2013. Financing is based on Section 30 Backed Bond Financing.




6. OUTSTANDING ISSUES


2010 Customers

60% increase in SWMD CustomersAs of June 30, 2010

Preliminary rates assume 16,000 residential customers.




Delinquent Customers• Over 80% of SWMD Customers pay on time and in full

• 14% (2,600) of SWMD customers currently delinquent

• An additional 4% (900) of customers are late with payments and close to delinquency

• Policy to address delinquencies– After 30 days a reminder call from Customer Service

– After 60 days notification that unless account is paid in full within 30 days, service ends and cart is recovered.

– To restore service customer must pay sum due, plus prepayment of one month and $50 for restoring service

– If delinquent account is turned over to a collection agency, to restore service, customer must pay all sums due, plus prepayment of one month, plus $100 fee

– Customers are responsible for cost of carts (damaged or unrecovered)


Military Participation

• Key to lower and stable long-term rates

• Higher volume of waste brings down rates by

spreading fixed cost over more waste

• Eliminates need for other landfills

• Potentially enhances recycling

• January 2010 - Receiver submitted draft

agreement to GovGuam and the Military for

review and comment.

• Establishing independent authority for Solid

Waste is key issue

• Final agreement remains uncertain




Other Outstanding Issues

Affecting Rates

– Final capital cost of Layon Landfill and related projects

– Award of contract to Layon Landfill operator

– Award of a contract for a Commercial Transfer Station

– Establishment of reasonable and accurate payment history under new system and interim rate structure


Other Outstanding Issues

Affecting Rates

– Better understanding of Military waste stream

– The cost (net of revenues from recyclables sold) of any recycling program implemented as a result of the pilot curbside recycling program

– Any additional cost for the proposed autonomous “Solid Waste Authority” to administer and manage the solid waste system

– Any “Free Service” mandated by law to be provided to Mayors or others on Guam




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