1. Session 9 Solid Waste Management Study 2018 and Beyond Southampton County Board of Supervisors Meeting December 15, 2008

2. Session 9 SCS Scope Task 1 - Review Existing Regional Solid Waste System Task 2 - Evaluate Future Technology and Facility Needs Task 3 - Evaluate Institutional Models for Solid Waste Management Task 4 - Facilitation with Chief Administrative Officers Task 5 - Prepare Report and Recommendations 2

3. Session 9 Fundamentals Study is forward thinking Takes a clean slate view – what is the best approach to take for the Region Not an audit, although current situation carefully considered Considers institutional, technological, economic, and political challenges and opportunitities 3

4. Session 9 Evaluation Factors Technology status and reliability Institutional status and reliability System reliability System flexibility Funding approach Ease of implementation Financial metrics 4

5. Session 9 Assumed 2018 Conditions Current system debt retired In Region disposal capacity Out-of-region disposal capacity Transfer station network Waste-to-energy C&DD disposal capacity Solid waste quantities Feasible technologies Recycling 5

6. Session 9 Solid Waste Authorities/Organizations Information gathered on other county/regional solid waste organizations: Central Virginia Waste Management Authority Connecticut Resource Recovery Authority Delaware Solid Waste Authority Environmental Cooperative of Main Fairfax County, Virginia Lancaster County Solid Waste Management Authority Sanitation Districts of Los Angeles County Northeast Maryland Waste Disposal Authority Solid Waste Authority of Palm Beach County Pinellas County, Florida Portland Metro Virginia Peninsulas Public Service Authority 6

7. Session 9 Solid Waste Authorities/Organizations Evaluate differences in: – Membership – Governance – Day-to-day administration – Operations – Debt management Applicability of other approaches to Region 7

8. Session 9 Pro Forma Evaluation Evaluated various cooperative scenarios Disposal – New regional landfill – Out-of-Region disposal WTE – Maintain existing RDF WTE Facility – Expand with mass burn WTE Facility – Abandon existing RDF WTE Facility 8

9. Session 9 Scenarios Descriptions Scenario A – All eight communities continue to cooperate for recycling and disposal services similar to existing cooperative model with SPSA – Assumed major debt retired by 2018. – Major variables New Regional Landfill Dispose at out-of-region Landfill WTE (with and without, expand and /or replace) 9

10. Session 9 Scenarios Descriptions Scenario B – All eight communities in the region cooperate on a consolidated solid waste management program for all municipally collected solid waste – Variables New Regional Landfill Dispose at out-of-region Landfill WTE (with and without, expand and /or replace) 10

11. Session 9 Scenarios Descriptions Scenario C – All eight communities go their separate ways and contract for disposal – Virginia Beach continues to operate its landfill through 2022, contracts for disposal after 2022 – Decommission RDF WTE Facility 11

12. Session 9 Scenarios Descriptions Scenario D – The City of Franklin, Isle of Wight County, and Southampton County align to provide recycling and disposal services – The Cities of Chesapeake, Norfolk, Portsmouth, Suffolk, and Virginia Beach align to provide same – Variables Smaller communities contract for disposal Same as Scenario A for larger communities 12

13. Session 9 Scenarios Descriptions Scenario E – The City of Virginia Beach independently provides for municipal recycling and municipally and commercially collected solid waste disposal services – Other communities align to provide recycling and municipally and commercially collected solid waste disposal services – Variables Similar to Scenario A 13

14. Session 9 Landfill Options considered: – Siting a new publically-owned and operated facility in Region – Contracting with out-of-region landfill for disposal. – Transfer via road haul (rail haul an option depending on final location of facility) 14

15. Session 9 Waste-to-Energy Options Expanding, adding an additional 2,000 tpd mass burn WTE Facility Replacing existing RDF WTE Facility with new 3,000 tpd mass burn WTE Facility Operating without WTE 15

16. Session 9 Host Fee Added host fees for – Landfill – WTE facility Amount can be easily varied in model 16

17. Session 9 Current Cost Structure SPSA costs used in pro forma analysis for: – Administration – Environmental – Transfer Station – Recycling – WTE City of Virginia Beach 17

18. Session 9 Financial Metrics 30-year Net Present Value Analysis 18

19. Session 9 Net Present Value 19 Present Value of a cash flow at a given discount interest rate Allows for comparison of complex alternatives

20. Session 9 Financial Metrics 30-year Net Present Value Analysis System Rate Analysis – $/Total Tons per year – NPV/Total Tons during planning period Total Tons = MSW + YW + Recyclables 20

21. Session 9 Sensitivity Analysis Transportation Rate Location of New Regional Landfill CPI and Fuel Escalation Factors Out of Area Tip Fee 21

22. Session 9 Pro Forma Analysis Expanding WTE capacity resulted in the highest NPV costs Cooperating appears to provide long- term value, although in the early years some savings could be realized by individual member communities Host fees could provide substantial benefit to community hosting landfill and WTE facility 22

23. Session 9 Pro Forma Analysis City of Virginia Beach has most flexibility with respect to disposal options and ability to control costs, at least in the short-term and possibly long-term depending on fate of permitting efforts at Landfill No. 2 23

24. Session 9 24 Scenario No.

25. Session 9 Pro Forma Results Siting a new Regional Landfill a significant factor to control costs – provided lowest NPV costs Regional landfill only scenario (without WTE) lowest cost NPV Transport and disposal in out-of-region landfill had highest NPV costs 25

26. Session 9 Pro Forma Results If contract out for disposal, operating the WTE facility reduces NPV costs compared to eliminating WTE Operating system with existing WTE facility generally 5 to 8 percent higher costs (assuming Regional Landfill), but allows for significant volume reduction and energy recovery 26

27. Session 9 Sensitivity Analysis The further a new regional landfill is located, the more competitive the WTE and contracting out alternatives become Significant discounts on tip fees and transportation needed to make contracting out disposal cost effective Reducing escalation factors favors WTE operations, but ranking remain similar 27

28. Session 9 Cooperation - Pros Various systems already in place More efficient development of facilities Current shortcomings are resolvable Some joint responsibilities after 2018 Cost efficiencies, especially relating to siting a new regional landfill Economies of scale Leveraged purchasing Solid waste planning Achievement of recycling goals 28

29. Session 9 Cooperation - Cons Loss of autonomy and control Reduced flexibility to respond to changes in market conditions Increased organizational and governance complexity Interplay of regional politics in implementation of Authority’s mission 29

30. Session 9 Institutional Recommendations Scope and function dependent on decision regarding ownership and operation of a regional landfill and the RDF WTE Facility and Mission of the organization Proportional representation Board membership qualifications Debt management System funding approach 30

31. Session 9 Remaining Disposal Capacity SPSA’s Current Regional Landfill – Should confirm expansion potential – Limited unless wetlands issue can be resolved City of Virginia Beach Landfill No. 2 – Expansion potential exists Out-of-Region Disposal Capacity – Capacity available through much of 30- year planning, but additional capacity would need to be permitted 31

32. Session 9 Landfill New Regional Landfill should be sited Siting approaches – Region performs siting studies, purchases land, permits, and develops site – RFP process for privates to site, permit, and then sell back to Region, with provision for life-of-site operations contract Schedule tight 32

33. Session 9 Waste-to-Energy RDF WTE Facility a valuable asset to the community – Volume reduction – Energy recovery – Hedge against increased transportation costs Can be maintained and upgraded to serve Region during planning period Facility extenstion study recommended 33

34. Session 9 Role of Privates Collection Recycling Transportation Municipal solid waste and construction, demolition and debris disposal 34

35. Session 9 Private Sector Contracting Advantages – Defined service levels and costs – Competitive bidding assures best pricing – Reduced number government employees, equipment, and overhead – Perceived more businesslike approach – Optimal location of facilities – Less political interference – More responsive to market changes 35

36. Session 9 Private Sector Contracting Disadvantages – Perceived loss of control by public – Some argue more costly because of profit and taxes included in contracts – Not as responsive to changes in community needs – Higher potential for litigation to resolve issues 36

37. Session 9 Other Factors Considered Conversion technologies Yard waste Recycling Rail haul Transfer station network Regional disposal asset ownership 37

38. Session 9 Solid Waste Conversion Technologies TechnologyProcessOutputOutput Uses Thermal Incineration (waste-to- energy WTE) SteamPower Thermal Gasification, Pyrolysis, Autoclave, etc. Syngas Power / Chemical feedstock Biological Anaerobic Digestion, Aerobic Digestion Compost, Biogas Soil amendment / Power Bio- Chemical HydrolysisEthanolBiofuel 38

39. Session 9 ConversionTechnologies Large scale implementation of most alternative conversion technologies not proven Region may wish to consider pilot programs for such things as organics diversion Of conversion technologies evaluated, mass burn incineration most demonstrated and feasible 39

40. Session 9 Yard Waste Should be managed separately from MSW and not disposed in landfill Process and recover for beneficial use 40

41. Session 9 Rail Haul Viable transportation option Should be evaluated in more detail once disposal option and location determined 41

42. Session 9 Transfer Station Network Critical to solid waste system Long-term viability, status, and capacity of each transfer station should be evaluated Optimization study recommended 42

43. Session 9 Recycling Provisions for municipal recycling critical Service could be administered collectively or independently (as is case now) Programs may vary depending on demographics and geography 43

44. Session 9 System Funding Several options evaluated Current tip fee model works at cross purposes with goal of resource conservation and recovery Consider a waste generation fee approach Further study needed to assess feasibility of implementing throughout Region 44

45. Session 9 Recommendations and Next Steps Review findings of study Present study to City and County Councils and Supervisors, respectively 45

46. Session 9 Recommendations and Next Steps Develop consensus on mission and goals for the Region Make decision on Regional cooperation and revise governance, policies, board member qualifications, and policies for debt management Evaluate alternative funding approach 46

47. Session 9 Recommendations and Next Steps Maintain key assets Proceed with siting a new Regional Landfill and study of expansion at current landfill Resolve sale of RDF WTE – If maintain ownership, conduct life extension study – If sell, revisit pro forma analysis, conclusions and recommendations 47

48. Session 9 HRPDC Staff & Committee Recommended Actions Accept the report Refer report to participating localities and SPSA for consideration Request comments by Jan. 20, 2009 Await finalization of SPSA negotiations on sale of RDF WTE Facility 48