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14 AUGUST 2007 NOT EXEMPT LOWER POLMAISE - WASTE TRANSFER STATION REINVESTMENT OF FIRE DAMAGE INSURANCE SETTLEMENT

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STIRLING COUNCIL

TO ITEM

ON THE AGENDA

EXECUTIVE ENVIRONMENT SERVICES

14 AUGUST 2007 NOT EXEMPT

LOWER POLMAISE - WASTE TRANSFER STATION

REINVESTMENT OF FIRE DAMAGE INSURANCE SETTLEMENT

1 SUMMARY

1.1 The Waste Transfer Station at Lower Polmaise suffered fire damage in August 2005, following which essential repairs were undertaken to return the building to a fully operational state.

1.2 The surfaces of the wall and roof cladding and secondary steelwork were affected by acid residue from the smoke deposits. Professional testing of the affected components concluded that the Transfer Station building had a residual life of six years, which could be further extended by periodic maintenance.

1.3 The building, which is of a temporary nature and is expected to be operational until 2013, remains in a fully serviceable and weather resistance state. It is therefore not deemed necessary to undertake full replacement of the cladding or steel framework, which would cost £760k.

1.4 Following extensive negotiations with the Council’s insurance provider, a fire damage settlement payment totalling £580k has been agreed, of which £80k has been used to offset the cost of the initial repairs.

1.5 It is proposed that £200k of the remaining £500k settlement is ring-fenced for any future remedial related work required to the Transfer Station building during its remaining operational life.

1.6 It is also proposed that the other £300k is used to extend the area of the adjacent composting facility at Lower Polmaise, which due to the high volume of ‘green’ waste being collected by the Council, is now operating at above capacity and producing high quality compost material. This extended capacity will assist in the Council achieving its waste minimisation targets. Without this the Council will not be able to continue with the excellent progress made in relation to composting and diversion of waste from landfill.

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2 RECOMMENDATION

2.1 It is recommended that the Executive approve the allocation of the insurance settlement in relation to the fire damaged Waste Transfer Station, with £200k being ring-fenced against a Repairs and Renewal Fund for future inspection, repairs and related works to the Transfer Station building and £300k being used to extend the existing composting facility at Lower Polmaise.

3 CONSIDERATIONS

3.1 The Waste Transfer Station was constructed to handle Stirling Council’s residual waste following closure of the landfill site at Lower Polmaise in August 2004.

3.2 The Transfer Station building was designed as a temporary structure and constructed on made-up landfill with a lifespan of 10 years. The building currently has initial planning approval until 2008, with an application for an extension of this consent due to be submitted for consideration later this year. 3.3 The Transfer Station also accepts residual waste from Clackmannanshire

Council, and is operated on behalf of Stirling Council by Avondale Environmental, who transport the waste for disposal at their landfill site near Falkirk.

3.4 On 14/15 August 2005 an internal fire, caused by combustion of stockpiled waste material, damaged the Transfer Station.

3.5 Following the fire and subsequent assessments by the Council’s insurers, Zurich Municipal, and loss adjuster, essential repairs were carried out on the electrics, lighting, shutter doors, dust suppression equipment and push wall. Repairs were also made to the CCTV and fire alarm system.

3.6 An assessment was made of the effect of the smoke and soot deposits from the fire on the integrity of the structure. The Council’s Consulting Engineers, Atkins, advised that while there is a continuing risk to the lifespan of the cladding materials, fixings and secondary supporting steelwork, there are no significant defects to the main structural elements of the building. Tests concluded that in their present state the materials have a residual life of 5 to 6 years, which could be further increased if the interior of the building is cleaned. The exterior aesthetics of the building was unaffected by the fire, and it remains wind and water tight.

3.7 Atkins also recommended that if the cladding were not to be replaced, the roof and walls should be visually inspected regularly to check for signs of deterioration, and in two years time a further series of tests should be carried out to further determine the life expectancy of the building.

3.8 Full replacement of the damaged cladding and steelwork would cost £758k, of which the insurer would be prepared to pay up to a maximum of £677k, leaving a potential shortfall of £80k, as not all costs would be covered by the

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3.9 Given that the Transfer Station is a temporary building, with a projected operational life-span of a further 6 years, and that the assessment of the smoke damage indicates that the building will remain serviceable during that period, subject to routine inspection and maintenance; the Council and the Insurers agreed to consider a proportionate cash settlement in respect of the loss and damage caused by the fire, and in lieu of full replacement of the cladding.

3.10 Following extensive negotiations, a full cash settlement of £580,379 was agreed in respect of the Council’s losses.

3.11 This settlement includes the amount of the initial repairs amounting to £80,379, leaving a further payment of £500k to follow.

3.12 Of this further payment, it is proposed that £200k is ring-fenced to fund the cost of future inspections, testing, routine maintenance and related works to the Transfer Station building, including any subsequent repairs to the cladding or steelwork, during the remaining six years life of the Transfer Station.

3.13 It is also proposed that the remaining £300k is used to fund a much-needed extension to the existing composting facility at Lower Polmaise, which is now operating at full capacity.

3.14 Stirling Council has achieved one of the highest waste recycling rates in Scotland at 40%. This success has in part been due to the increase in cardboard and ‘green’ waste, collected through the brown bin system, which is deposited on the composting plinth, and processed to form compost material which has recently attained the PAS100 quality standard. Stirling Council is the first unitary authority in the UK to achieve this accreditation.

3.15 In order to meet increasing demand, and to enable the Council’s waste recycling rate to increase to the national target of 55% by 2020 and achieve our diversion from landfill requirements, the existing composting plinth requires to be extended to accommodate the projected quantities of cardboard and ‘green’ waste. It is proposed to undertake the design / construction during 2007/8, with the extended composting facility available from April 2008.

4 POLICY/RESOURCE IMPLICATIONS AND CONSULTATIONS Policy Implications:

Diversity (age, disability, gender, race, religion, sexual orientation) No Sustainability (community, economic, environmental) Yes

Corporate/Service Plan Yes

Existing Policy or Strategy Yes

Risk Yes

Resource Implications:

Financial Yes

People Yes

Land and Property or IT Systems No

Consultations:

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Policy Implications

4.1 The Council’s waste recycling and disposal is undertaken within the context of the Council’s Corporate and Service Plans, in an efficient, sustainable and environmentally friendly manner, which provides Best Value to the Council and its communities.

4.2 The Council is required by legislation to achieve waste recycling and diversion from landfill targets, and any failure to do so represents financial and reputational risk.

Resource Implications

4.3 There will be on-going costs in undertaking increased levels of routine maintenance to ensure that the Waste Transfer Station remains serviceable for the remaining period of its intended use. Accordingly it is proposed to set up a Repairs and Renewal Fund to ring-fence £200k of the insurance settlement payment to ensure funding availability for future maintenance costs.

Consultations

4.4 Head of Resource Management (Finance and Insurance) 4.5 Head of Planning, Regulation & Countryside (Planning) 4.6 Stirling Council Management Team on 11 June 2007.

5 BACKGROUND PAPERS

5.1 Lower Polmaise – Waste Transfer Station: Reinvestment of Fire Damage Insurance Settlement – Paper to Stirling Council Management Team dated 11 June 2007.

5.2 Waste Services Infrastructure Projects – Progress Report – Paper to Executive dated 13 February 2007.

5.3 Update on Waste Services Infrastructure Projects – Paper to Environment Committee dated 11 May 2006.

5.4 Lower Polmaise Landfill Site – Closure Options: Paper to Stirling Council dated 11 December 2003.

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Author(s):

Name Designation Tel No/Extension

Kevin Robertson Head of Performance, Resources & Waste

Ext: 2683

Approved by:

Name Designation Signature

Brian Devlin Director of Environment Services

References

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