The Solid Waste Utility's operating budget for 2014 can be divided into two main parts: curbside collections and
components of the regional waste management system and are subject to regulatory requirements imposed by the Ministry of Environment and Metro Vancouver.
The curbside collections service is operated as a utility. The City sets annual user fees to recover the cost of providing the service. The costs of operating the VSTS and VLF are recovered through tipping fees charged to users of the facilities. Metro Vancouver sets the tipping fees for facilities across the regional system. At the end of the year, any operating surplus in the Solid Waste Utility is transferred to a dedicated reserve to fund landfill closure costs, post-closure costs, and environmental liabilities.
YEAR-OVER-YEAR BUDGET CHANGES
Explanation of Changes: Revenue
In 2013, the category "Other Revenues" included the recovery of costs for collection of recycling, garbage, and organics through the utility charges for those services, as well as the revenues received from the sale of recyclables. The change in service schedules that occurred mid-2013 has resulted in a decrease in the utility rate for garbage collection while the organics rate is increasing. Overall, the increase for garbage and organics combined is 2%, reflecting an increase in costs and increasing revenues by $0.8 million. These changes are consistent with the projections included in the Council report on the organics program.
In 2013, the Province's extended producer responsibility (EPR) program comes into effect, and beginning on May 19, 2014, the City will receive funding support for program operation from Multi-Material BC (MMBC).
Other Revenues will now also include these new revenues estimated at $5.2 million for the partial year from May 19 to December 31; this MMBC funding is to support existing program costs as well as additional costs associated with expanding the recycling program. As a result of MMBC funding support, recycling fees will be decreasing by 20% in 2014.
The proposed budget for the sale of recyclables has been reduced by $1.4 million in 2014. Approximately $1 million of that decrease is due to a drop in the commodity price for recyclables, the remaining $0.4 million is due to the City no longer collecting these revenues once the shift to MMBC collecting the revenue for these recyclables takes place.
In 2014, solid waste utility fees for single-family dwellings are estimated to be $256 (versus $255 in 2013). This represents an overall increase of 0.4% over 2013.
The Landfill and Transfer Station budget underwent a thorough review in 2013. Reductions in the overall amount of material delivered to the site are expected to be further reduced in 2014 due to increased success in diversion programs across Metro Vancouver. As a result, the revenue budget is being adjusted based on the expected tonnages, updated metro tipping fees and an increased cost per tonne recovered from Metro Vancouver. The regional tipping fee will increase from $107/tonne to $108/tonne for garbage, and from
$63/tonne to $65/tonne for compost in 2014.
Explanation of Changes: Expenses
The increase in the 2014 budgeted expenditures for the curbside collections service reflects the first full year of weekly green bin collection as projected in program approvals. Organics processing costs are expected to increase as participation in the green bin program continues to improve and the volume of materials collected increases. Costs are also expected to increase as a result of an extra two days of collection service added during the Christmas period. These extra days of service were added so that residents would not have a long gap in their garbage collection and green bin services over the holiday.
A new loan repayment to the Capital Financing Fund for installation of landfill gas collection infrastructure and an increase in Delta sewer fees have resulted in an increase in the 2014 budgeted expenditures for Transfer Station and Landfill Service.
Finally, there is uncertainty in some of the costs related to the shift in responsibility for recycling producers through the MMBC program; particularly due to potential changes in the travel distances to recycling processors and the need for additional communications to support changes in the materials to be collected. Staff have budgeted for additional transportation costs of $1.1 million to cover the costs of a longer drive to a processor and extra communications costs of $0.6 million associated with the changes in the recycling collection
program. The extent of the risk to transportation costs will not be clear until MMBC’s processing contracts are awarded in 2014.
The year-end Reserve Transfer reflects the expected tonnage and forecasted commercial revenues at the Transfer Station and Landfills the operating cost per tonne to handle refuse.
NOTABLE CAPITAL PROJECTS
The following table summarizes some of the noteworthy projects that the Waste Management and Resource Recovery Division is involved in or will commence in 2014. A complete list of all capital projects for 2014 is included in the appendices of the Council Report.
In 2012, closure of approximately 11 hectares of the Landfill's footprint with a state-of-the-industry
geomembrane system was completed, along with the commission of 144 new gas wells. In 2013, a further 13.7 hectares was closed with an additional 13 new gas wells. This work represents significant progress towards meeting the regulatory target of recovering 75% of the gas produced by solid waste in the Landfill by 2016.
Due to constraints and to allow a more strategic planning approach, two projects were deferred to 2014 or
improvements related to requirements for increased diversion under Metro Vancouver’s Integrated Solid Waste and Resource Management Plan.
BUDGET TREND TABLE
The following table summarizes the year-to-year budget figures from 2010 to 2013 and the 2014 proposed budget. The following paragraph discusses the year-to-year changes in more detail.
From 2010 to 2013, total budgeted revenues and total budgeted expenditures have generally shown a steady increase, with the exception of Transfer Station and Landfill operations. Budgeted expenditures for the Transfer Station and Landfill have remained relatively unchanged until 2014. Due in part to new loan
repayments to the Capital Financing Fund for construction of landfill gas collection infrastructure and increases in Delta sewer fees; expenditures for the Transfer Station and Landfill increase in 2014. The 2014 Budget has also been adjusted to more accurately reflect the expected tonnages and cost per tonne forecasted for 2014.
As the City moves forward with Zero Waste initiatives and a new expanded recycling program, the mix of materials being collected is rapidly changing. Both the revenue and expenditure budgets will be reviewed in detail and adjusted each year to reflect these significant changes.
EMPLOYEE TREND TABLES
From 2012 to 2013 total headcount and total hours worked increased to support the landfill closure, green bin program, and initiatives around garbage collection.
DEPARTMENT SERVICE METRICS
Garbage, Recyclables, and Organics Collection Service
A notable trend in solid waste collection is the decline in the tonnes of garbage collected and corresponding rapid increase in green bin materials—due to the 2013 implementation of food scraps diversion through weekly green bin and biweekly garbage collection. With respect to blue box recycling, there was a decline in tonnes collected from 2012 to 2013 due to fewer and lighter-weight newspapers in circulation.
Transfers and Landfill Service
Notable trends in metrics include changes in tonnes disposed at the two sites and in landfill gas collected. The quantity of waste disposed of at the Landfill is mainly influenced by the increase in tonnes received from Metro Vancouver’s transfer stations as well as demolition (wood) waste. The 2013 quantity will be less than previous years as a result of the new organics diversion program and reductions in waste from Metro Vancouver.
As expected, in 2013 an increase in 3-1-1 calls regarding missed collections was noted after the change in collection frequency while residents adapted to the change. The frequency of 3-1-1 calls rose slightly from an average of 2 calls to 3.3 calls per thousand customers served. Many of these calls were not actually missed collections but due to confusion about the change in collection frequency. The 3-1-1 call levels will gradually drop off and return to normal levels through 2014 as residents become more comfortable with the new frequency.
Tonnages at the Transfer Station have been relatively stable in past years. Landfill gas collection has increased due to the construction of closure and landfill gas works over the past three years. A correction has been made to the 2012 collection efficiency calculation (from 58% to 52%) due to an error found in the consultant’s report.
Collection rates also fluctuate during gas system construction due to transitional disruptions.