City Proposes Garbage Export Plan


With the Dec. 31, 2001, closure date of the Fresh Kills landfill approaching, the city is at a critical juncture in deciding how it will handle the 5.4 million tons of waste managed annually by the Department of Sanitation (DOS). In addition, waste export costs are driving significant growth in the DOS budget. IBO estimates that spending for DOS will grow 18 percent, from $841 million in 2000 to $996 million in 2001-nearly 75 percent above the 1997 budget of $578 million.

In May 2000, DOS released a proposed long-term waste export plan for disposing of the city's waste in the absence of the landfill and is seeking the City Council's approval of the plan. This long-term plan would have significant budgetary and policy implications; it would obligate the city financially and shape one of the city's most basic public services for the next two decades. This article summarizes and gives context to the waste export proposal.

Background.

Responsible for residential, city-agency, and institutional waste, DOS manages about 5.4 million tons of waste-3.6 million for disposal and 1.8 million for recycling. This represents nearly 40 percent of the city's total solid waste stream, with another 8.5 million tons of commercial waste handled by private vendors-3.1 million for disposal out of the city and 5.4 million for recycling.

Fresh Kills, located on Staten Island, has been operating for over 50 years and is the last remaining in-city waste disposal site. Beginning in July 1997, through the implementation of a five-phase interim export program (interim program), DOS has been diverting an increasing amount of trash from Fresh Kills. Sixty percent of this trash is now being handled under the interim program, which is made up of three-year contracts (plus two one-year extensions) with private vendors to export the waste out of the city, primarily by truck. By the end of 2001, all the waste would be exported under these contracts.

Draft solid waste management plan modification. New York State Environmental Conservation Law requires the city to prepare a solid waste management plan (SWMP) with a 10-year planning horizon. The city's SWMP was originally issued in 1992, covering the 1992-2002 period. It was modified in 1996 to expand the city's recycling program and review the environmental impacts of proposed incinerator projects. In May 2000, DOS released the draft of a second modification to the SWMP (plan modification), which included a proposed long-term waste export strategy (long-term plan).

The plan modification provides an overview of the long-term plan and a timeline for implementation. It also broadly describes DOS' current waste management programs, including waste prevention, recycling, composting, the interim program, and landfill closure.

Draft environmental impact statement. Accompanying the plan modification is a draft environmental impact statement (DEIS), which DOS is required by city and state law to prepare. The DEIS is a prerequisite for City Council adoption of the plan modification. It provides an environmental review of the in-city sites and facilities proposed in the long-term plan, as well as other alternative sites and facilities that were evaluated in the process of developing the plan. It also includes a fiscal analysis that is the basis for the cost projections in the long-term plan.

The Proposed Long-Term Export Plan.

The long-term plan is defined by six key parameters. The plan:

It should be noted that the long-term plan does not address the current system for handling commercial waste, which represents over 60 percent of the city's total waste stream and almost half of the waste destined for disposal. The nonrecycled commercial waste is exported by private vendors primarily by truck.

Means of export. The long-term plan proposes to shift to a barge and rail-based export system. Barge and rail transport is considered by DOS and others to be more environmentally and community-friendly than the trucking arrangements under the interim program.

Historically, to dispose of trash at Fresh Kills, the city used marine transfer stations to transfer uncompacted waste directly from collection trucks onto river barges that were then sent to Staten Island and unloaded at the landfill for ultimate disposal. Only trash from Staten Island was transported by city sanitation trucks directly to the landfill.

Now, under the interim program, trash is hauled by city sanitation trucks to an incinerator in New Jersey or to transfer stations in either the city (Brooklyn or the Bronx) or New Jersey to be reloaded onto large trailer trucks for export by private vendors to disposal sites mainly in Virginia, Ohio, and Pennsylvania. The only exception to the use of truck export occurs in the Bronx, where about half the trash is exported by rail.

To implement the long-term plan, refuse must first be compacted into special shipping containers before it can be loaded onto railcars or barges for export. The city has two options for "containerization":

Under the long-term plan, roughly half of the nonrecycled waste managed by DOS would be handled under the first option, sending uncompacted refuse by barge via existing marine transfer stations to a privately operated EBUF in Linden, N.J., and then exported by rail. The rest of the waste would be handled under the second option through five truck-to-container-to-barge or rail waste transfer facilities located within the city.

Costs. DOS projects that once fully implemented the long-term plan would cost $662 million annually. This is nearly equal to the $671 million DOS projects as the cost for the interim program when fully phased in. In comparison to the interim program, DOS projects the long-term plan's export costs would be higher, but its collection costs will be lower because city sanitation trucks will travel shorter distances to waste transfer stations. IBO is currently developing independent estimates of the cost to the city of the interim program and the long-term plan.

Timing. The long-term plan is intended to be fully implemented by 2004, by which time all facilities would be constructed, permitted, and operational and 20-year contracts would be signed with the vendors. However, contracts under the interim program will begin expiring in 2003, and the plan does not discuss this gap (for example, the Bronx interim contract expires in July 2002, while the Bronx facility is not scheduled to be operational until 2004). Moreover, concerns have been raised that there could be delays in implementing the long-term plan; operations of the EBUF in Linden, for example, may not commence in 2004 if there are delays in permitting and construction due to public opposition or other difficulties. If delays in the long-term plan occur, the interim program would presumably remain in effect.

Quantity. The estimate of the quantity of waste to be exported is critical to determining the design capacity of waste transfer facilities and would be the basis for the 20-year contracts with vendors. DOS uses its projection for 2002 as the amount that it will manage from 2004-2024. It also assumes that the residential recycling diversion rate will increase from the current level of 20 percent to 25 percent and does not factor in waste prevention. The plan modification states that this recycling increase will be achieved with current programs; no new recycling and waste prevention initiatives are planned.

The plan modification identifies forthcoming DOS-sponsored research on waste prevention and recycled products. While this research may shed light on appropriate city policy for waste management, it is not clear whether this information will be available before the Council is expected to act on the long-term plan.

Contracting. The 20-year contracts are a linchpin in the plan for providing the city with secure long-term disposal arrangements. They will be an important factor in determining costs as well as how DOS manages waste in the future.

The contracts would guarantee a minimum payment, partly related to design capacity and perhaps to tonnage delivered. Determining the correct quantity of waste to be exported, which drives design capacity, is important to costs and management flexibility. If the tonnage is underestimated, the city could pay an inflated cost because greater economies of scale would not be guaranteed to the vendors. If the tonnage is overestimated, the city would have to pay for more capacity than it needs and perhaps for more tonnage that it delivers. Overestimating could also provide a disincentive for the city to expand recycling and waste prevention if these efforts would reduce tonnage below expectations. This could happen if the city were to increase residential recycling beyond 25 percent or increase waste prevention, perhaps by moving toward compliance with the city's recycling law and the state's waste reduction goal of 40 percent recycling and 10 percent waste prevention.

In any municipal contracting activity, a market composed of many firms competing for the city's business can assist in reducing cost and providing flexibility if vendors prove unsatisfactory. These issues may be particularly significant in this case, where the contracts would be for 20 years, and there may only be two firms-Waste Management and BFI/Allied Waste-to compete for this work.

Approval Process
The long-term plan can be implemented only after the plan modification is approved by the NYS Department of Environmental Conservation (DEC), which has authority to grant or deny the necessary siting permits for the proposed in-city waste transfer facilities. Before it can be sent to the DEC, the plan modification must be approved by the City Council.

Since the long-term plan's release, there have been three hearings before the City Council on the plan modification and the DEIS, one in which DOS testified and two in which the public could testify. In addition, a public hearing on just the DEIS was held before DOS and other city agencies. DOS also accepted written comments and questions on the DEIS through June 16 and is required to respond in the final environmental impact statement.

For more information, please contact Sherry Login, Senior Budget and Policy Analyst, at 212-442-0615.