I. Approval of July 20, 2011 WRSWP Meeting Minutes

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1 NOT YET APPROVED WALLINGFORD REGIONAL SOLID WASTE PROJECT POLICY BOARD Minutes of a Meeting of the Policy Board held on October 19, 2011 at Wallingford Town Hall A Meeting of the Policy Board of the Wallingford Regional Solid Waste Project was held at the Wallingford Town Hall on October 19, Present at the meeting were William W. Dickinson, Jr., Mayor of Wallingford; Scott Jackson, Mayor of Hamden; Michael Freda, First Selectman of North Haven; Michael Milone, Town Manager of Cheshire; and Larry Kendzior, City Manager of Meriden. Others in attendance were: Cheryl Thibeault, Steve Diaz and Tim Cady of Covanta Energy; Doreen Zaback, Wallingford Project Coordinator; Susan Hemenway of BRRFOC; and Wallingford resident Bob Gross. The meeting was called to order at 9:07 a.m. by Chairman Jackson. I. Approval of July 20, 2011 WRSWP Meeting Minutes Mayor Jackson motioned to accept the minutes from the above-referenced meeting; Mr. Milone seconded the motion. The motion was unanimously approved. Mr. Milone commended Ms. Zaback for the accuracy of the minutes. II. Project Update A. Report on Waste Volumes and Plant Operations Cheryl Thibeault of Covanta distributed the Operational Report for the 3rd calendar year quarter (Attachment 1). Ms. Thibeault mentioned that as we know, Unit 2 is now up and running and she wanted to thank all the Policy Board members for their patience with this issue over the past year as Covanta went through the process with DEEP and the Attorney General s office. Ms. Thibeault went on to say the tonnage report now includes commercial waste; Covanta has been tracking this all along, but now has the software in place to include this information in the report. This information is collected on faith based reporting from haulers. Covanta expects to see some movement in commercial waste as the spot market fluctuates over the year. Ms. Thibeault said for all towns but one, there seems to be a 50/50 split in residential and commercial. Ms. Zaback mentioned that the data show Hamden s residential to be about 29% and asked Mayor Jackson if this was expected. Mayor Jackson said he is having Pam Roach, Hamden s Solid Waste Coordinator, look into these data.

2 Ms. Thibeault said overall the waste volumes are down about 5% from the previous year, which may be due to the economy and increased recycling. This seems to trend nationally. Ms. Thibeault added that there was a strange blip in waste delivered to the plant in July. Covanta did inspections at that time and found that some haulers were taking waste to the Mid-Conn facility. As Covanta runs this facility, they were aware that Mid-Conn was struggling for waste and units needed to be taken offline due to lack of waste. Mid-Conn also lowered the fee on spot waste to about $35/ton during this time, so haulers tried to take advantage of this situation. Covanta worked with CRRA to get this waste back and waste did start coming back in August. This will continue to be a risk especially since Covanta can t implement flow control. Ms. Thibeault added that during the 2008 contract negotiations, there was robust discussion on what could be committed and what could be controlled, especially when there is an attractive spot market out there. Mayor Jackson asked how Mid-Conn is doing now. Ms. Thibeault stated that they are full because they did have a black-plant outage and they did some tipping floor repair, so they stockpiled some waste. She added that waste has been steady in Wallingford, but they are starting to see winter trends set in and expect significant shortfalls to occur in Connecticut as they did last year. Scheduled outages at all plants will help alleviate some of the shortages in January. Mayor Dickinson asked about the waste volumes and plant operations; he had reports of high waste volumes on the tip floor and received several calls about odor coming from the plant. Ms. Thibeault responded that the volume is higher, but is within compliance with the allowed DEEP footprint. The waste is wet and will have a stronger odor; Covanta staff has been working to keep the doors closed during off-hours and checking the odor control equipment. She added that they are making progress to get through the waste, but they did have a scheduled outage on Unit 1 recently, which caused some backup. Mayor asked how long Unit 1 was down. Ms. Thibeault responded 8 days, and said they will continue to work through the waste and apologize for the calls the Mayor s Office is receiving. She said they are also starting to move some of the waste piles around, so that is contributing to some of the odor issue. Bob Gross, Wallingford resident, commented that the odor has been really bad on the weekends; and this Sunday was particularly strong. Mr. Gross said he didn t call this time, but he has gone over to the plant other times and staff is receptive to his concerns. Mr. Gross added that the problem is that this is an ongoing issue. Ms. Thibeault stated that on some occasions when there have been odor complaints, Covanta is not the source of the odor. B. Enforcement Activities 2

3 Ms. Thibeault distributed the Enforcement Report (Attachment 2) and stated that the report is shorter than previous months as haulers are now more familiar with recycling regulations of a recent Public Act and changes made to the permit condition for inspecting loads for recyclables. She added that the Covanta Waste Inspector, Mike Faniel, did a lot of education work with haulers on what they can bring in and we are now seeing the payoff; during the past quarter, Covanta only had to issue one fine. 3

4 C. Environmental 1. Unit 2 Stack Test Update Tim Cady, plant manager, reported Unit 2 came back online on July 28, Unit 2 has been tested for dioxins twice since coming online, one test 7 days after startup and then a 30-day test. On the first test in August, dioxins averaged 3.27 ng/dscm (environmental limit is 30; DEEP has given Covanta a limit of 20), and in the second test in September, the average was 2.5 ng/dscm. Covanta will now have to test every 90 days for the next year, so the next testing will be during the last week of December, As far the annual stack test goes, dioxin for Unit 1 was 0.7 ng/dscm and for Unit 3 was 2.7 ng/dscm, so it looks like the engineering controls that were installed are doing their job. 2. Solid Waste Permit Mr. Cady said he talked with Covanta s environmental specialist and there is nothing new to report. Mayor Jackson asked how long the permit has been with DEEP. Ms. Thibeault said the initial submittal was placed over a year ago. Mayor Jackson asked if the lack of action on the part the State of Connecticut creates any operational difficulties on a day-to-day basis. Mr. Cady answered that it has not yet. Ms. Thibeault reported that with regard to the Transfer Act activity, Covanta paid one invoice to GZA for a reporting activity related to soil sampling (see Attachment 3). Ms. Thibeault also reviewed results of the September 2011 soil sampling which found all samples were below the CT Remediation Standards Regulation (RSRs) criteria; Ms. Thibeault said the full report will be generated soon and will get it to the group. At this point, GZA will move on to the next phase, which involves two years of groundwater monitoring. Everything is going as expected and there are no issues. Mayor Jackson asked Ms. Zaback to review the schedule of financing for these activities. Ms. Zaback stated that the Project had $500,000 in escrow for these activities, with the first $100,000 in costs for the subsurface investigation coming from the Project and the second $100,000 will come from Covanta. At this time, the first $100,000 has just about been exhausted, so the next activity will be at Covanta s expense. Ms. Thibeault said the issuing of the next report and groundwater monitoring will come out Covanta s $100,000. 4

5 III. Legislative Overview A. State 1. State Mandated Recyclables Expanded to Include: plastics #1 boxboards; magazines; white and colored office paper for residents; and CEDs. Ms. Zaback stated that as of October 1, 2011, the list of State of Connecticut mandated recyclables has been expanded to include the above-listed items. Ms. Zaback reminded each Policy Board member that they may want to look at their respective town recycling regulations to determine if they needed updating. 2. Legislative Issues for 2012 B. Federal Ms. Zaback reminded Policy Board members that if they had any issues they would like raised during the next legislative session to let her know. 1. H.R. Pharmaceutical Stewardship Act Ms. Zaback reported that this bill was proposed by a New York Congresswoman in September and will require drug manufacturers and distributors to establish a national collection program, or their own program, to collect and dispose of prescription drugs. This bill will not include controlled substances, but is believed to be the strongest product stewardship bill introduced to date. A few months ago, CVS did implement a take-back program which provides a mailer to prescription drug users at a cost of $3.99. Once collected, the drugs are to be incinerated, so there will be no changes in disposal method for the state of Connecticut. IV. Solid Waste Management Best Practices/Emerging Trends Ms. Thibeault reported that Covanta has implemented a Prescription for Safety Program, which provides safe disposal of medications at no charge and that Covanta is reaching out to the New York Congresswoman responsible for the bill proposal. In addition, Ms. Thibeault highlighted new project Covanta will be designing and operating in Ontario. This plant will start burning waste in 2020, which will have state-of-the-art air quality controls. Also, Ecovanta, the e-waste recycling facility in Philadelphia, has opened and can service municipalities within a 180-mile radius. If anyone would like a tour of the facility, Ms. 5

6 Thibeault will make arrangements. This facility is environmentally safe and poses no threat to employees. 6

7 V. Reserves A. WRSWP Interlocal Reserve Update 1. Town Approvals Mayor Jackson said he sent out a draft of the Reserve Agreement yesterday, but didn t know if people had a chance to review the document. Mayor Jackson asked if there were comments or changes. Since there were none, he said he would distribute to each of the members a clean copy of the document at the end of the meeting (see Attachment 4). At this time, we need to develop payment schedules and start to develop a policy on investment as well. Since it will be held within the auspices of the Town of Wallingford, Mayor Jackson asked Mayor Dickinson if it was his plan to sit with the Wallingford Finance Director to come up with the appropriate strategy. Mayor Dickinson said he will do that. 2. Pay-in to Reserve Mayor Jackson stated that we should get instructions from the Town of Wallingford as to how to transfer the money and set a schedule for doing that. It was agreed that Mayor Dickinson and Ms. Zaback would do that and communicate back to the Policy Board members. Mayor Dickinson mentioned that each town needs to get the approval of the agreement from their legislative bodies, so subsequent to the approvals of the agreement then we should get into how we will implement the agreement. Ms. Zaback added that we do have a specific timeframe within which all approvals need to occur, so we should coordinate when each town will be approving. Mayor Jackson said he anticipates a special meeting in Hamden mid-november; Mr. Milone said Cheshire will be November 15; Mr. Freda said North Haven s could be November 3 through the Board of Selectman; Mayor Dickinson said Wallingford s would be by November 15; and Mr. Kendzior said, if he needed to go back to the City Council it would be after the 3 rd Monday in November. VI. Discussion on Draft Amendment to Municipal Solid Waste Disposal Agreement Regarding Add-On Charge to Tip Fee Mayor Jackson said some communities had approved the language and others have not. Mr. Milone said he will follow-up with his Town Attorney. 7

8 VII. Project Coordinator Report A. Discussion and Possible Action on 2012 Policy Board Regular Meeting Schedule Ms. Zaback referred to the draft meeting schedule that was included with the meeting packets (Attachment 5) and asked for any comments or changes. No comments were made. A motion to approve the 2012 Meeting Schedule was made by Mayor Jackson and seconded by Mr. Freda; the motion was unanimously approved. B. Update on Solid Waste Contract Negotiations in Connecticut Ms. Zaback reported that in November 2012, Mid-Conn project solid waste contracts with CRRA will end, so many of these towns are now looking at their contract renewal options. The seventy Mid-Conn towns have the option to renew directly with CRRA, contract with CRRA or Murphy Road Recycling (or a combination of the two vendors) through the Central Connecticut Solid Waste Authority (CCSWA), or go with some other vendor such as Covanta. To date, fourteen towns have signed contracts with CRRA, and a number of other towns have agreements with haulers, who in turn, have signed agreements with CRRA. Ms. Zaback added that according to the CRRA s website, CRRA will have about 712,000 tons of capacity at the facility in 2012, and to date they have secured about 426,000 tons. The tip fees within these options range from about $58.75/ton to $63.50/ton and may include recycling rebates from $10 to $22.50 per ton of recyclables. So, we should be aware of these contracts and starting next year our tip fee will be up around $67-$68 per ton and we may be one of the higher tip fees in the state. Mayor Jackson added that a few weeks ago, he, Mayor Dickinson and Ms. Zaback did have a conference call with Steve Diaz on this topic and he was not aware if there was a follow-up call with Meriden, North Haven and Cheshire pertaining to the additional waste that will be coming to the plant in Wallingford. Mayor Jackson asked Mr. Diaz if he would review the information at this time. Mr. Diaz provided an update. He indicated that he believed there were 21 towns that were members of the CCSWA as opposed to the 70 towns that are part of Mid-Conn. He said, as Ms. Zaback indicated, there were two vendors chosen to provide solid waste and recycling services to these 21 towns. Since that development, some of the 21 towns have decided to go out for independent RFPs. There are still about 50 other towns that are listening to a litany of things from many vendors including Covanta. He said right now, there are about 11 of these towns that make sense for Covanta to do business with, and that means some near Springfield, Preston and in the Wallingford area. What Covanta is looking to do, is up in the Springfield area to solidify some 8

9 long-term contracts with these towns as they have a fair amount of capacity that they need to fill there. Over in the Preston area, Covanta is looking at spot capacity. Mr. Diaz said Preston is experiencing the same thing that is happening in Wallingford, that when CRRA drops the market rate, some of these towns will sign for $59/ton, some will sign up for $63/ton, there a whole litany of different equations that are being discussed. What that means is the commercial folks in the Wallingford project will be lured out of the project and will go to Hartford when the spot rate is at $35. Mr. Diaz said as a result, Covanta is trying to fill those gaps with truly spot capacity with the intent to turn the spot capacity off if the capacity from the towns comes back, but Covanta can t run the risk at any facility with the fire sale that is going on in the state. Mr. Diaz summarized that Covanta is possibly looking to do a spot deal with the Town of Newington; it has not been executed, we are still discussing it with them, it will be a short-term deal and it would fill a need now. Mr. Diaz added that if the tonnage levels return to where they were, at 145,000 to 148,000 tons, then Covanta won t need any spot waste, but Covanta is seeing run rates in the neighborhood of 120,000 to 125,000 tons per year and we all lose of that happens. Mayor Jackson asked about the 120,000 to 125,000 tons, if that was pre-diversion of waste. Mr. Diaz indicated yes; Covanta took into consideration all the waste that came into the plant during the dioxin issue, as all those tons came over the scale and the host fee was paid on those tons. Mr. Diaz said the reduction in tonnage might be due to a great job recycling, but in reality, when the Mid-Conn facility needs waste CRRA needs to go out and market tons and they are marketing those tons well below the market in Connecticut and Massachusetts. He said that Covanta is hearing from elected officials in MA that they are going after tons up there. Mr. Freda said to Mr. Diaz that we need to understand that as Covanta goes out to market spot capacity, the rates perhaps will be less than what the project members are paying now. Mr. Diaz said perhaps, that Covanta is hoping to get the highest rate possible, but they are sitting across the table from a commercial guy that says he will drive the extra miles to Hartford when the rate is $35-$38. Mr. Freda said, that Covanta is saying they need the incentive to develop the spot market. Mr. Diaz said they need to maintain the capacity that they all thought they would have in this project when we signed the deal. Mr. Freda asked what the risk is for us if Covanta didn t have the incentives to fill the capacity; what is the risk to the project if Covanta can t fill the capacity. Mr. Diaz said the risk is that any energy revenue share that would be achieved would be lost and the host fee would be minimized. Mayor Jackson asked Mr. Diaz about the short-term contract that could be then be eliminated if the need for the waste was no longer there, what are the parameters 9

10 of that. Mr. Diaz said they are looking at either a 1-, 2-, or 3-year deal; Covanta wants to have flexibility and wants the project to have flexibility. He said the problem didn t come to fruition due to anybody in the room, this was driven by an attempt to fill a capacity at a project that is losing tonnage; regardless of Covanta pursuing those 11 towns, the commercial haulers will strip waste out of the marketplace with some of these 70 towns. So as a result, there will be an attempt by CRRA to utilize whatever means possible to run the Mid-Conn facility at capacity. Mayor Dickinson asked for clarification of the 70 vs. 20 towns. Mr. Diaz said there are 21 towns that comprise the CCSWA group; this group attempted to form a mini authority in the spring with Dick Barlow of Canton as the Chair. Mr. Diaz said CCSWA went through a procurement and picked CRRA and USA Recycling as vendors of choice. He said the way you had to bid the procurement, you had to bid on all 21 towns. Covanta did this, but it didn t make sense for Covanta and they were not chosen. Mayor Dickinson said, but Mid-Conn has another 50 towns. Mr. Diaz said yes. Mayor Dickinson asked if the belief now is that given the economy and recycling that all of the mass burn plants currently operating, that they will not be able to continue under their current capacities because of the reduction in volume of waste state-wide; what is the view of the total picture and do we now have more capacity than we have waste for. Ms. Thibeault said that is tough to answer, that even the state struggles to get their hands around this; there have been reports to show that about 250,000 tons were leaving the state that were not processed in state facilities, so on a global scale, there is probably enough waste to fill the facilities depending on the markets. She added if commercial haulers can get better out-of-state landfill prices coupled with transportation, they will do that. Mayor Dickinson added that the State of Connecticut could face a flow control issue. Mr. Diaz said it appears that there is economic flow control. Mr. Milone asked about the length of the Newington contract and when did Covanta hope to complete those negotiations. Mr. Diaz said he hopes it is complete by the end of the month. Mr. Milone asked if the tip fee is still around the $58.75 range. Mr. Diaz said yes. Mayor Dickinson asked if there is an expectation that this could become a legislative issue. Mr. Diaz said according to his government relations people, it could be. He said Covanta is hearing all kinds of concerns about this. C. DEEP Evaluation of Permitted Used Electronic Disassembling Facilities Ms. Zaback reported that at the last DEEP SWAC meeting, there was a presentation on violations committed by five permitted disassemblers. DEEP stressed that these 10

11 disassemblers are not the six approved certified electronics recyclers (CER) that are part of the state e-waste recycling program, but one disassemble is a downstream partner of a CER. The observed violations ranged from poor recordkeeping to accepting unpermitted materials. Ms. Zaback told Policy Board members that the one downstream partner is under escalated enforcement and if any towns are using this disassembler, they may want to be prepared to make arrangements with another vendor in the future. Mayor Jackson said members of the Hamden Recycling and Solid Waste commission did visit the downstream vendor and found it to be nightmarish. They also visited another facility that was very well managed. Ms. Zaback said that Wallingford had a bad experience with a downstream partner and did have to sever that agreement and work directly with the CER. VII. Discussion and Possible Action on Amendment to Municipal Solid Waste Disposal Agreement Regarding Date of CPI Determination Covanta presented a draft of the amendment to the Municipal Solid Waste Disposal Agreement, which changes the date of CPI determination from June 30 to March 31. Policy Board members agreed to take the document to their town attorneys for review and proper handling. It was agreed that all Policy Board members would have all information needed to adopt at the January 2012 meeting. VIII. ADJOURNMENT A motion to adjourn was made by Mayor Dickinson and seconded by Mr. Milone. The meeting was adjourned at 10:05 a.m. Doreen Zaback October 25,