City of Lethbridge Materials Recovery Facility

Feasibility StudyPresentation to City Council

November 30, 2015

Identify & assess recyclable materials

for curbside collection & MRF

Establish design parameters, process flow, & conceptual

design

Assess ownership & operational scenarios

Assess financial feasibility

2

Scope of Work

Provide recommendation

regarding potential MRF

development in Lethbridge

• Curbside single stream recyclables:• Fiber: newspaper, cardboard, mixed

paper & paperboard• Containers: aluminum cans & foil, steel

cans, plastic containers, paper cartons & glass containers

3

Recyclable Materials Assessment

• Recycling station recyclables:

• Same list as curbside materials

• Other materials: plastic bags, shredded paper

4

Sample MRF Processing System

..\SchematicPFD.pdf

5

MRF Process Flow Diagram

• Design capacity:

• 15-year tonnage projection for facility sizing:

• City-only residential and portion of commercial recyclables: 5 tph increasing to 9 tph

• Including regional recyclables from communities within 150 km: 5 tph increasing to 12 tph

• Conclusion:

• Base MRF analysis on 10 tph design capacity

6

Lethbridge MRF Design Capacity

• Building Size 27,000–34,000 square feet• Minimum 25 ft height for processing system and truck

access

• Tipping floor with 2-day capacity

• Area for processing system (18K–24K s.f.)

• Bale storage area

• Office, employee facilities, public meeting space

• Site Size minimum 3 acres, preferably more• Truck scale and off-street queuing

• Shipping container staging area

• Employee & visitor parking

• Truck traffic

• Potential parking for recycling collection fleet

7

Lethbridge MRF Design Parameters

• Progressive & Paper Trail• Neither site provides sufficient area

• Both buildings would require extensive expansion & modification

• Both facilities are fully utilized for existing company activities which would need to be relocated if use for City MRF was possible

• Recommendation:• MRF should be developed on a new

site, potentially one already owned by the City

8

Assessment of Existing Facilities

9

Ownership & Operations Assessment

City Owned & Operated

Privately Owned & Operated

City Owned & Privately Operated

Control of Critical City Infrastructure

Yes No Yes

Competition / Contract Term

Not applicableInitially /

Long TermRecurring /Short Term

Capital Financing Cost Lower Higher Lower

Private Capital Risk Cost / Profit Margin

None Both Profit Margin

Prior Development Experience

No Yes No

Prior Operating Experience

No Yes Yes

Labor Cost Higher Lower Lower

Commodity Market Experience

No Yes Yes

• Recommendation:

• If City decides to pursue MRF development, utilize a public-private partnership based on City developing and owning the facility and a competitive selection of a private company to operate the MRF

10

Ownership & Operations

• Alternative:

• City partners with local non-profit work center to provide labor and City provide MRF management and other staffing

• New MRF development phases:

• Design, engineering, procurement, construction, equipment installation, performance testing, & commissioning

• 18 months required for new 10 tph MRF not including site acquisition, investigation & permitting

11

MRF Development Timeline

Q1 Q2 Q3 Q4 Q5 Q6

Site & Facility Design

Design-Build Procurement

Equipment Procurement

Site & Facility Development

Equipment Fabrication & Install

Commissioning

Relative Impact of Major Financial Variables

12

Financial Analysis

City Owned & Operated

Privately Owned & Operated

City Owned & Privately Operated

Land Acquisition Possibly No Possibly Yes Possibly No

Cost of Borrowing Lower Possibly Higher Lower

Labor & Benefits Higher Lower Lower

Other Direct Costs Similar Similar Similar

Revenue Similar Similar Similar

Profit Margin No Yes Yes

Total and Net Annual Cost per Tonne

13

Financial Analysis

City Owned & Operated

Privately Owned & Operated

City Owned & Privately Operated

Capital Cost

Facility Development & Rolling Cost

$11.4MM - $12.0MM $12.0MM - $12.6MM $11.4MM - $12.0MM

Net Annual Cost

Year 1

Total Annual Cost $152 - $160 $161 - $169 $146 - $154

Revenue ($97) - ($102) ($97) - ($102) ($97) - ($102)

Net Annual Cost (Revenue) $55 - $58 $64 - $66 $49 - $52

Year 15

Total Annual Cost $113 - $118 $115 - $120 $107 - $112

Revenue ($100) - ($105) ($100) - ($105) ($100) - ($105)

Net Annual Cost (Revenue) $13 - $13 $15 - $15 $7 - $7

Net Annual Cost

14

Financial Analysis

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

City O&O Private O&O City O & Private O

$51

$15

$57

$65

$7

$13

• A MRF to service a City curbside single stream recycling program is technically and financially feasible

• If the City chooses to move forward with implementation, KCI recommends a new MRF developed using a public-private partnership based on City development & ownership and private sector operation.

15

Summary

16

Questions & Discussion

Thank you for your time!