1. Monroe County Solid Waste Management District June 10 th, 2010 Brian O’Neill & Patrick O’Neill Strategic Development Group Inc.

2. Introduction Over the past five weeks, Strategic Development Group (SDG) and Garmong Construction have conducted an assessment to provide estimates for the establishment of a Materials Recovery Facility (MRF) for the Monroe County Solid Waste Management District. Garmong Construction provided the analysis and preliminary cost estimates for retrofitting the Otis site. SDG conducted the following research activities: 20 hours of web-based research on MRF costs, revenues, and best practices Interviews with 10 MRFs operating in the region Site visits to 2 MRFs operating successful programs in the region Interviews with 3 manufacturers of balers and 3 manufacturers of sorters

3. Facility Concerns The Otis Elevator property is well-suited for use as a MRF for the District. The amount of space available should allow for future expansions of operations and also provides significant storage areas should the District choose a marketing strategy for which storage space is needed. The needed improvements to ventilation, weatherization, flooring, truck docks, etc. have been accounted for in the engineer’s report from Garmong Construction (appendix to SDG’s report) and those costs are included in the retrofitting item line of cost estimates.

4. Local Market 2008 MONROE CO. SWMD BLOOMINGTON CURBSIDE RANDOLPH CO. SWMD MARTIN CO. SWMD BARTHOLOMEW CO. SWMD VINCENNESSEYMOUR Recycling Tonnage 2,7003,100 8503,150 2,3004901,960 Net Recycling Income -$152,000-$118,000 $0$378,000 $210,000$48,000$231,000 Comingled? NO YES NO YES Baled? NO YES Net Income/Ton -$56-$38 $0$120 $92$98$119 Notes: As of 2010 Vincennes now has a deal with Hoosier Disposal mirroring Randolph Co. SWMD’s deal with a private vendor to take unprocessed recyclables for free (no baling), however Vincennes’ recyclables are comingled.

5. Recycling Revenue /TON

6. MCSWMD produces about 3,000t/yr in recyclables. Some others already expressed interest in collaboration:  The Indiana Memorial Union (IMU): about 100t/yr  IU Residential Programs and Services (IURPS): about 100t/yr  City of Bloomington’s Fiber Stream: about 2,000t/yr  City of Bloomington’s Comingle Stream: about 1,120t/yr Other opportunities for collaboration exist:  An unmeasured amount throughout IU (est. 2,000 t/yr).  Neighboring counties – especially those with weak recycling infrastructure, often partner with hub counties like Monroe. Current Program Analysis

7. = + [Processing of Recyclables] + [Transport of Recyclables] – [Sales of Recyclables] = + $121,000 + $123,000 - $29,000 = $215,000 There are two expenses in processing of recyclables: processing fees (per ton) and transportation (per pull). Some of the expense is recouped by the sale of recyclables. The total cost of processing of recyclables is $73/ton in 2009.

8. What will it cost us??? Part 1 – Capital Expenses

9. Baler Expenses Excel Balers (through Environment Link) $166,768.00 International Baler Corp. $260,000.00 American Baler $225,000.00-$240,000 CP Manufacturing $280,000.00

10. Use of Automation vs. Labor Automation requires capital expenses to invest in equipment but can lower annual operational expenses by minimizing the need for labor. Three types available: Ferrous Separation (Steel; ~$35,000) Non-Ferrous Separation (Aluminum; ~$75,000) Heavy-Light Separation (Glass/Plastic; ~$125,000)

11. Total Capital Costs (Purchasing) Retrofitting of Property (Appendix A)$251,272 Baling Equipment$166,768 Estimated Additional Installation Costs$16,000 Additional Equipment Estimated Costs$140,000 Total Estimated Cost: $574,500 Non-Ferrous Separator – Eddy Current Separator$75,000 Heavy Light Separator – Plastics/Glass Separation$125,000 Total Estimated Cost With Sorting Automation: $774,500

12. Leasing to Reduce Capital Costs Industrial equipment such as sorters and balers can be leased instead of purchased.

13. Taking a 5 year lease on the balers would reduce the capital expenses by $166,600 (from $574,500 to $407,900), and operational costs would have a net increase of $39,292.32 annually for the first 5 years and a 5 year total operational increase of $196,461.60. If a 5 year lease were taken on the balers and all additional equipment costs (roll-off truck, ferrous separator, conveyors) the capital expenses would be reduced by $306,600 (from $574,500 to $268,500) and operating expenses would have a net increase of $72,296.28 annually for the first 5 years and a 5 year total operational increase of $361,480.14.

14. What will it cost us??? Part 2 – Operating Expenses

15. Increase In Operating Expenses Operating a MRF would require an increase of $330,000 in annual operating expenses.

16. Revenue Generated by MRF The primary fiscal advantage of a MRF is the value of selling the processed commodities. Based on the range of values obtained by similar MRF operations MCSWMD can anticipate receiving between $90-$125/ton. The City will likely negotiate a deal with the District to manage covering the cost of sorting the city stream and profit sharing for recyclables value. The expense of managing city materials is already accounted for in all estimates throughout this report.

17. 3,120 Tons x$90-$125/ton $288,800-$390,000 Mid-Value = $340,000 2,930 Tons x$90-$125/ton $263,700-$366,250 Mid-Value = $315,000 Possible Revenue from City Material Possible Revenue from District Material

18. Savings Generated by MRF In addition to the possible revenue produced by the MRF, the City would experience a direct savings by avoiding the current cost (about $118,000 annually) of its contract to haul recyclables away. The District would avoid its current contracts costing about $215,000 annually.

19. Net Operating Cost/Income Summary = $643,000

20. Net Operating Cost/Income Summary = $571,000

21. National Market Adjusted Market Values (scaled to overlay for comparison) Reported by Waste and Recycling News (November 2009)

22. Net Operating Cost/Income Summary: Market Downturn = $366,000

23. Net Operating Cost/Income Summary: Market Downturn = $294,000

24. Additional Considerations More opportunities exist for collaboration Reduced carbon footprint Assurance of recycling Path to sustainability Creation of local jobs

25. Questions Patrick O’Neill Project Associate 812-331-1282 peoneill@sdg.us Brian O’Neill Senior Project Manager 812-331-1282 boneill@sdg.us