Mark Spafford, General Manager Department of Solid Waste Services #DoSomething. October 18 and 19, 2018

Transcription

1 MUNICIPALITY OF ANCHORAGE ENTERPRISE AND UTILITY OVERSIGHT COMMITTEE AND ASSEMBLY WORK SESSION FOR INTEGRATED SOLID WASTE MASTER PLAN, PLAN OF FINANCE AND PROPERTY ACQUISITION Mark Spafford, General Manager Department of Solid Waste Services #DoSomething October 18 and 19, 2018

2 Everything that we do acak.statwindow.com/landfill 2

3 There are no other new landfill sites Current Location of Landfill Campbell Tract Point Campbell Sand Lake Pits 3

4 1985 Master Plan 2018 Master Plan MASTER PLAN Convert the Shredder Plant to a Transfer Station Build a regional landfill (ARL) Close out unlined landfills Optimize Landfill Operations and design to extend landfill life Improve Central Transfer Station facilities Implement new or expand diversion programs (Organics, Mattresses, Tires, etc. Waste/Landfill gas conversion to energy or other beneficial uses-energy Partnerships with Advisory Commission, other MOA Departments, Administration, Stakeholders, during development 4

5 2018 Master Plan and 01. The its recommendations AO No Plan of Finance 02. The AO No Wal Mart 03. The property acquisition WHY ARE WE HERE? AO No SWS Rate Analysis w w w. s u g a r a. c o m 5

6 AGENDA 2018 SWS Master Plan Tetra Tech Plan of Finance Alex Slivka Ross Risvold Rate Analysis Heidi Thomerson Mark Spafford 6

7 2018 SWS MASTER PLAN 7

8 Plan for the Future DEVELOP OPTIMIZE ASSESS 8

9 ANCHORAGE REGIONAL LANDFILL Conclusions & Recommendations Only major item identified for the landfill is it s finite life The Master Plan identified and recommended several alternative operating practices Grading plan revisions to add landfill life Plans for reducing leachate production Alternative technologies and/or Landfill expansion 9

10 CENTRAL TRANSFER STATION Conclusions & Recommendations Aging Assets (30+ to 40+ year old facilities) Safety Concerns Resource Management & Environmental Stewardship Traffic, Traffic, Traffic Limited Options for Future 10

11 Safety and Lack of Opportunities 11

12 Aging Infrastructure 12

13 Property Acquisition Concept 13

14 Wal-Mart Property Acquisition 14

15 15

16 PLAN OF FINANCE Alexander Slivka CFO Steve Kantor Hilltop Securities (Independent Registered Municipal Advisor To The Municipality of Anchorage) Ross Risvold Public Finance Manager Cynthia Weed K&L Gates LLP (Independent Bond Counsel To The Municipality of Anchorage) 17

17 Plan of Finance The Capital Improvement Project (the Project ) to be financed is the purchase of land adjacent to the existing transfer station, construction of a new transfer station on the land to be purchased and rehabilitation of the existing transfer station. An economical and efficient Best Practice Plan of Finance is a Short Term Borrowing Program (STBP) during the purchase and construction phase of SWS s CIP & Business Plan. Periodically, we will refinance that short term debt with long term revenue bonds. This is a Best Practice for debt management and is supported by our Municipal Advisor. A STBP for SWS would be much like what we currently have for the Port, ASU, AWU and ML&P. A STBP is an excellent, less expensive interim financing tool to use while we build and spend money on capital projects until we reach a level of debt where it makes sense to convert the STBP debt to long term revenue bonds. A STBP would require Assembly approval. Whenever we borrow money from investors, we will be required to have a comprehensive capital improvement plan, a plan for the use of the funds and a revenue stream that supports repayment with a coverage ratio of at least 125% (in the case of SWS). Basically, this means you need annual net operating revenue of 125% of annual debt service under the assumption that all of the debt is or will be converted to long term revenue bonds. 18

18 Why Utilize A Short Term Borrowing Program? 01. Interest rate is lower for a STBP vs. selling long term revenue bonds 03. Immediate access to funds when needed 05. Avoid negative arbitrage for funds that are not needed right away 02. Maturities are flexible to meet the needs of the Municipality 04. Notes issued only when cash needs arise 06. Arbitrage rebate liability is eliminated since we borrow on a reimbursement basis 19

19 First 4 Year Financing Needs Estimated CTS and Wal-Mart Property Funding Timeline- Subject to change Date 12/1/2018 Land Purchase Use of funds 12/1/2019 Design and procurement 10/1/ % 40% 100% Disposal Costs Refuse Costs Estimate Cost Low Med High 9,600,000 6,400,000 16,000,000 16,000,000 16,000,000 16,000,000 1,200, ,000 2,000,000 2,000,000 2,000,000 2,000,000 Demolition and site work on purchased property 3,337,000 2,224,667 5,561,667 4,634,000 5,562,000 6,489,000 10/1/2021 CTS Construction 11/1/2021 Scale booth and Truck Scales 11/1/2021 Small Contractor cash booth 11/1/2021 Wheel Wash 12/1/2021 Operations Equip enclosure 3 Year Subtotal 13,562,200 9,041,467 22,603,667 18,836,000 22,604,000 26,371, , , , , , , ,200 66, , , , , , , , , , ,000 1,176, ,133 1,960,333 1,634,000 1,960,000 2,287,000 44,317,000 49,582,000 54,847,000 20

20 Subsequent 4 Year Financing Needs Date Use of funds 60% 40% 100% Disposal Refuse Estimate Costs Costs Cost Low Med High 6/1/2022 Demolition and site work(cts property) 4,359,000 2,906,000 7,265,000 6,054,000 7,265,000 8,476,000 8/1/2022 Residential drop off 2,873,400 1,915,600 4,789,000 3,991,000 4,789,000 5,587,000 9/1/2022 HHW, White Goods, E-Waste and Waste Tire bldg... 2,003,600 1,335,733 3,339,333 2,783,000 3,339,000 3,896,000 10/1/2022 Container Repair bldg./storage 1,003, ,067 1,672,667 1,394,000 1,673,000 1,951,000 11/1/2022 Roll-cart/Roll-off Container Storage Pavilions 1,085, ,333 1,808,333 1,507,000 1,808,000 2,110,000 12/1/2022 Refueling Area 148,600 99, , , , ,000 12/1/2022 Site work on new property for admin bldg.. 3,302,000 2,201,333 5,503,333 4,586,000 5,503,000 6,421,000 12/1/2023 Maintenance shop 3,007,000 2,004,667 5,011,667 4,176,000 5,012,000 5,847,000 12/1/2023 Warm Storage Building 3,419,200 2,279,467 5,698,667 4,749,000 5,699,000 6,648,000 12/1/2023 Refueling area 201, , , , , ,000 8/1/2024 Admin facility construction 4,569,200 3,046,133 7,615,333 6,346,000 7,615,000 8,885,000 1/1/2025 Refinance project to L.T. financing Low Med High Totals 55,720,805 37,147,204 92,868,008 80,388,008 92,868, ,348,009 * All dates and amounts are estimated and subject to change 21

21 Project Borrowing Needs & Timing The borrowing for this capital project extends over 8 calendar years December 2018 Approximately $17 M Approximately $38 M Approximately $51 M Overall Project Borrowing Approximately $106 M The difference between the CIP of $106 million and the Plan of Finance of $ million is the need to finance the costs of issuance and the funding of a debt service reserve fund required by investors. The debt service reserve fund belongs to SWS and if it is unutilized, would be used for debt service in the final years the debt is outstanding. 22

22 Timing of Financing Plan The Plan of Finance is expected to cost $ million Establish a STBP with a credit limit of $55 million with a 3 year term Refinance outstanding STBP debt with long term revenue bonds ($55 million plus costs of issuance and funding a debt service reserve fund) and for other immediate borrowing needs, if necessary Extend STBP for the remaining term of the construction project Refinance outstanding STBP debt with long term revenue bonds ($51 million plus costs of issuance and funding a debt service reserve fund) and for other immediate borrowing needs, if necessary Extend or Close STBP, as necessary 23

23 Flexibility of the proposed Plan of Finance The ordinance provides flexibility to the CFO to continuously re-evaluate the Plan of Finance with regard to timing of the anticipated STBPs and long term revenue bonds so that the Plan of Finance is executed in the best interest of SWS. 23

24 Rate Analysis 25

25 Disposal Rate History Rates to Consumer Price Index ( CPI ) Perspective Solid Waste Disposal Rate Per Ton 26

26 Financial Policies Moving Forward Revenues must cover operating expenses, and the utilities must adhere to the following basic financial policies: Operating Reserves Capital Reserves System Reinvestment Funding (i.e. Depreciation) Dividends Rate increases are unavoidable 27

27 Rate Analysis: How to Fund this Proposal Houston, we ve got a problem SWS Disposal Collections

28 Disposal $35,000,000 Disposal Revenue Requirement $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $ Expenditures No Action Annual Expenditures with CTS Revenue Under Existing Rates Revenue with Proposed Increase Rate Increase for Disposal

29 Rate Increase for Collections Collections

30 64-gal with Recycle 3CY, 2 times/wk Rate: Current - $26.56/month vs. Proposed - $27.62/month Rate: Current - $250.00/month vs. Proposed $263.00/month

31 Thank you. 32

32 SWS Integrated Solid Waste Master Plan Short Term Recommended Diversion Program Options Program Food Scraps Reduction, Prevention, Rescue, and Recovery Programs Impact on Disposal Capacity SWS Area Only Impact on Disposal Capacity All MOA 660 tons/yr 3,300 tons/yr Organics Diversion (Part 1) Backyard Composting 570 tons/yr 2,850 tons/yr Organics Diversion (Part 2) Residential Curbside Organics Collection Organics Diversion (Part 4) Increase Organics Processing Capacity and Facilities (Residential) Recycling (Public Sector Operations) 6,000 tons/yr 30,000 tons/yr N/A 200 yd 3 /yr (1,320 tons/yr) N/A 660 tons/yr Recycling and Organics (Residential & Commercial) Tool Kit N/A N/A Reuse and Recycle C&D Waste N/A N/A Increase Yard and Garden Waste Drop-Off 190 tons/yr 950 tons/yr Short Term Capacity Savings (tons/year) for Diversion Options 7,550 tons/yr (11% diversion for SWS) lbs/capita/day 37,760 tons/yr (11% diversion for MOA) lbs/capita/day Note: Organics Diversion (Part 4) option is not included in cumulative capacity savings as it is accounted for in Organics Diversion (Parts 2 and 3).

33 SWS Integrated Solid Waste Master Plan Medium Term Recommended Diversion Program Options Program Organics Diversion (Part 3) Commercial Organics Collection Organics Diversion (Part 4) Increase Organics Processing Capacity and Facilities (Commercial) Impact on Disposal Capacity SWS Area Only Impact on Disposal Capacity 8,000 tons/yr 40,000 tons/yr N/A N/A Reuse and Recycle C&D Waste N/A N/A Increase Tire Diversion 3,000 tons/yr 3,000 tons/yr Medium Term Capacity Savings (tons/year) for Diversion Options 11,000 tons/yr (17% diversion for SWS) lbs/capita/day 43,000 tons/yr (13% diversion) lbs/capita/day Note: Organics Diversion (Part 4) option is not included in cumulative capacity savings as it is accounted for in Organics Diversion (Parts 2 and 3).

34 SWS Integrated Solid Waste Master Plan Long-Term Recommended Diversion Program Options Program Impact on Disposal Capacity SWS Area Only Impact on Disposal Capacity Recycling (Residential & Commercial) Expand Material N/A N/A Categories Increase Bulky Item Diversion 120 tons/yr 600 tons/yr Long Term Capacity Savings (tons/year) for Diversion Options 120 tons/yr (less than 1% diversion) lbs/capita/day 600 tons/yr (less than 1% diversion) lbs/capita/day Highlighted programs are those that would utilize or benefit from an expanded Central Transfer Station facility.

35 No Expansion

36 Concept 1

37 Concept 2