August 28, 1998

To:Works and Utilities Committee

From:A. Bacopoulos

General Manager - Solid Waste Management Services

Subject:Keele Valley Landfill Site - Filling Options

Purpose:

The purpose of this report is to provide information on the financial implications of various filling options of the Keele Valley Landfill Site.

Funding Sources, Financial Implications and Impact Statement:

There is no immediate funding impact for 1998 resulting from the recommendation of this report. However, adoption of the recommendation of this report would require approval in the 1999 budget cycle for an increase in expenditure in the amount of $3,663,000.00. This initiative will extend the closure date of the Keele Valley Landfill by one year to late 2002.

Recommendations:

It is recommended that staff be authorized to increase the amount of waste being disposed at BFI's Arbor Hills Landfill to 450,000 tonnes per annum commencing on June 1 1999 and to immediately notify BFI in accordance with the terms and conditions of the contract with BFI.

Council Reference/Background History:

The Works and Utilities Committee on July 15, 1998, had before it a Report No. 3 in the supplementary agenda dated July 9, 1998. This report reviewed the potential utilization of the remaining approved capacity in the Keele Valley Landfill Site and discussed the impacts of three options for filling the site to its approved capacity; provided an update on the City's environmental assessment planning process for post-Keele Valley disposal capacity; and advised that it was staff's intention to discuss the content of the report with staff in the City of Vaughan and York Region. Staff further advised that a subsequent report would provide information related to their position on the closure issue, in addition to more specific detail related to financial matters.

The Committee deferred consideration of the aforementioned report until its next meeting scheduled to be held on September 9, 1998, to provide an opportunity for the Solid Waste Management Industry Consultation Committee (SWMICC) and any other interested parties to make a deputation.

Additionally, the Committee requested the Commissioner of Works and Emergency Services to submit a report to the meeting of the Works and Utilities Committee on September 9, 1998, providing more detailed information on the financial implications of the various options and outlining the timing of the proposal call for long-term disposal capacity, such report to include a breakdown of the origin of waste being disposed of at landfill.

The timing of the proposal call for long-term disposal capacity is the subject of another report before your committee on September 9, 1998.

Discussion and Justification:

Waste Origin

Table 1 outlines the breakdown of the origin of waste being disposed at the Keele Valley and BFI and Arbor Hills Landfills.

Table I

Waste Origin and Tonnages Anticipated for 1999

It is anticipated that in 1999 a total of 1,810,000 tonnes of waste will be managed from the City of Toronto, Region of York, and Region of Durham. Approximately 980,000 tonnes will originate from municipal sources including Agencies, Boards, and Commissions; 300,000 tonnes of private waste from industrial, commercial, and institutional (ICI) sources are expected to be delivered directly to the landfill; and 230,000 tonnes of ICI waste will be received at transfer stations. York Region and Durham Region will deliver 175,000 tonnes and 125,000 tonnes of municipal waste respectively directly to Keele Valley.

Effect of Site Closure Date on Site Capacity

As a result of biological decomposition of the waste deposited into the Keele Valley Landfill, the site undergoes continuous settlement equivalent to the volume which would be occupied by approximately 500,000 tonnes of waste per annum. Hence, the slower the site is filled the more waste can be placed within the same approved volumetric capacity.

The landfill has been surveyed and an engineering model has been developed which accurately estimates the closure date depending on the fill rate. For example, if the site were filled at a rate of 1,900,000 tonnes per year, its capacity will be reached in Spring 2001, at which time the site will contain a total of approximately 27,400,000 tonnes. If the site were filled at a rate of 1,200,000 tonnes per year, its capacity will be reached in the Fall of 2003, at which time the site will contain a total of approximately 28,600,000 tonnes.

Hence, the rate of filling of the site not only affects its closure date but its ultimate capacity.

In general terms, any additional tonnage which can be disposed into Keele Valley at the current approximate cost of $10.00 per tonne will offset future costs forecasted to be $50.00 to $70.00 per tonne.

Methods for Diversion

Clearly, as part of our waste management strategy, planning and implementation of infrastructure such as the mixed waste processing and material recycling facilities will strive for the goal of 50 per cent diversion by 2006. However, these initiatives will not likely impact in time to extend the life of the site appreciably.

Action is required immediately at moderate cost to achieve long term savings. Two such methods by which the City of Toronto can quickly control the rate at which the Keele Valley Landfill is filled is through the BFI contract to dispose of waste at Arbor Hills and through the setting of solid waste management (SWM) fees at its facilities.

BFI contract

Toronto began diverting waste from the Keele Valley Landfill in January, 1998 at an approximate annual rate of 260,000 tonnes. Purchase of this diversion initiative at a price of $53.60/tonne will have an annual gross budget impact of approximately $14 million. Toronto already has the option to divert up to 500,000 tonnes annually via the BFI contract. The contract expires at the end of 2002.

SWM fees

Toronto can create a strong disincentive for the disposal of ICI waste at the Keele Valley Landfill by establishing a high SWM fee at the landfill. Some haulers of ICI material may choose to divert their loads to the transfer stations within the City if their waste is acceptable for receipt at the transfer stations. Historically, loads of construction and demolition (C&D) materials cannot necessarily be accepted at the transfer stations because during unloading, particulate concentrations in air may increase within the enclosed transfer station building. Additionally, loads containing material longer that four feet cannot be accepted due to the restrictions in the mechanical compaction equipment in the transfer stations Hence, if the fee at the landfill were to be increased significantly, haulers of C&D material may decide to avoid the KeeleValley Landfill and haul their loads to private facilities. These paid tonnages would be lost as a source of revenue.

Depending on the fee at the landfill, some ICI haulers may choose to avoid the landfill but to use the Toronto transfer station network. The City has the option to compact and haul the waste to the Keele Valley Landfill or to dispose of the waste via the BFI contract to Arbor Hills.

Filling Scenarios

Table 2 outlines five scenarios for filling the Keele Valley Landfill: status quo; one option whereby the site is filled rapidly; and three scenarios whereby the site is filled more slowly. Sensitivity analysis showed that the single rapid fill scenario is representative of a number of pricing and diversion initiatives which affects the site closure date by a matter of months. Three slow fill scenarios are discussed in this report to show the effect of extending the site closure date by as much as a year and a half.

Table 2

The Status Quo is assumed to be representative of costs and tonnages resulting from Solid Waste Management fees established in July, 1998 of $65.00/tonne at the Transfer Stations and $55.00/ tonne at the Keele Valley Landfill. It is assumed that approximately 530,000 tonnes would be received annually from the private sector of which 300,000 tonnes would be received directly at landfill; 230,000 tonnes would be received at the transfer stations. Approximately 260,000 tonnes annually would be disposed through the BFI contract to Arbor Hills Landfill. At the status quo filling rate of 1,550,000 tonnes disposed annually into the landfill, it will be full in December 2001 and will contain approximately 27,700,000 tonnes of waste.

1. Rapid FillLandfill fee $45/tonneTransfer Station fee $65.00/tonne

BFI hauls 260,000 tonnes per year

Rapid filling of the landfill is assumed to occur if, for example, the SWM fee were set at $45.00/tonne at the Keele Valley Landfill and $65.00/tonne at the Transfer Stations effective January 1999. It is estimated that approximately 860,000 tonnes would be received annually from the private sector of which 680,000 tonnes would be received directly at landfill due to the incentive of the lowered landfill fee of $45/tonne; 180,000 tonnes of ICI waste would be received at transfer stations. Roughly 260,000 tonnes would be disposed annually through the BFI contract to Arbor Hills Landfill. At this more rapid filling rate of 1,900,000 tonnes disposed annually into the landfill, the site will be full in Spring 2001 and will contain approximately 27,400,000 tonnes of waste.

1. Slow Fill Option a - Landfill fee $90.00/tonneTransfer Station fee $65.00/tonne

BFI hauls 360,000 tonnes per year

Slower filling of the landfill is assumed to occur if, for example, the SWM fee were set at $90.00/tonne at the Keele Valley Landfill and $65.00/tonne at the Transfer Stations. It is estimated that the higher fee at the landfill will be a disincentive to haulers resulting in a reduction of ICI tonnes to approximately 50,000 tonnes per year. As has been discussed previously, certain haulers will continue to haul directly to landfill; however, there will be an increased use of the transfer stations to an amount of 330,000 tonnes per year. An additional 100,000 tonnes would be handled via the BFI contract compared to the status quo such that a total of 360,000 tonnes would be landfilled at Arbor Hills in Michigan. The City is obligated to give BFI six months notice of its intent to increase tonnages in excess of 325,000 tonnes per year. Therefore it has been assumed for this analysis that BFI would begin hauling the higher tonnages in June 1999. The Keele Valley Landfill would be filled at an annual rate of 1,300,000 tonnes and would be full in early 2003. At closure the site will contain approximately 28,300,000 tonnes.

1. Slow Fill Option b - Landfill fee $55/tonneTransfer Station fee $65/tonne

BFI hauls 450,000 tonnes per year

Another method of slowing the filling rate into the landfill is by significantly increasing the diversion of waste to Arbor Hills via the BFI contract. If the SWM fees are not altered but 450,000 tonnes of waste is diverted to Arbor Hills via BFI, haulers will continue to use the landfill and transfer stations similar to the status quo rate, but Keele Valley will be filled at a rate of approximately 1,360,000 tonnes per year. The site will be full in late 2002 and will contain approximately 27,900,000 tonnes.

(5)Slow Fill Option c - Landfill fee $90/tonne Transfer Station fee $65/tonne

BFI hauls 450,000 tonnes per year

Another variation on the slow fill scenario involves increasing the SWM fees at the landfill to $90/tonne and maintaining high diversion through the BFI contract. This pricing alternative will cause a disincentive for ICI disposal at Keele Valley and will cause an increase in ICI disposal at transfer stations. Under this scenario Keele Valley will be filled at a rate of 1,210,000 tonnes per year and will contain 28,500,000 tonnes at closure in mid 2003.

Table 3 outlines the financial impacts of the five filling options.

Table 3

1. Rapid Fill

If the Keele Valley Landfill is filled rapidly due to the incentive of low SWM fees at the landfill, net costs in the years 1999 and 2000 will be reduced by an amount of $8.7 million each year compared to the status quo. Net annual costs will rise from $5 million in 2000 to $55 million in 2001 to $74 million in 2002. The total net disposal costs for the six-year period from 1999 to 2004 will be approximately $290 million compared to the status quo of $268 million.

1. Slow FillOption a

If the Keele Valley landfill is filled slowly as a result of the landfill SWM fee of $90/tonne and diversion of 360,000 tonnes via BFI, total net disposal costs for the six-year period from 1999 to 2004 will be $248 million representing a saving of $20 million compared to the status quo. There will be a reduction in the year 2002 cost impact of $47 million.

1. Slow fillOption b

If haulage via the BFI contract is increased in mid 1999 to 450,000 tonnes but the SWM fees remain unchanged, there will be a cost increase of $3.7 million resulting in net disposal costs of $16 million in 1999. There will be cost impacts of $7.3 million in each of the years 2000 and 2001 resulting in net annual costs of $21 million in 2000 and 2001. The total net disposal costs for the six-year period from 1999 to 2004 will be approximately $259 million representing a saving of $9 million compared to the status quo.

1. Slow fillOption c

If haulage via the BFI contract is increased in mid 1999 to 450,000 tonnes per year and the SWM fee at landfill is increased to $90/tonne, there will be cost impacts of $10 million and $14 million in 1999 and 2000. Option c results in the highest savings in costs of $27 million over the six-year period compared to the status quo.

Pros and Cons of the Options

1. Status Quo

Pros

The current ICI disposal fees are established; retaining these fees would result in the least resistance from this industry.

Cons

The annual disposal costs will dramatically increase to $73 million in 2002 from $14 million in 2001.

1. Rapid Fill

Pros

There is an annual net saving of $8.7 million in each of the years 1999 and 2000. Private generators would enjoy a 2-year benefit of low disposal costs at the landfill.

Cons

This option results in an overall increase of $22 million in net costs over the next 6 years (1999 to 2004). This option would result in the Keele Valley Landfill closing months before the status quo option and approximately 1.5 years before slow fill option (b), considerably reducing the time available to plan and implement a long term strategy for several viable options for diversion/recycling/disposal. The low SWM fee at the landfill may create an imbalance in pricing structures in the ICI sector. This option is the least effective in utilizing the total available capacity at Keele Valley.

1. Slow Fill

Pros

The three slow fill options considered in the report all extend the life of the Keele Valley Landfill site and all provide a savings ranging from $9 million to $27 million over the six-year period from 1999 to 2004. The recommended option identified as Slow Fill (b) although it results in the least saving of $9 million over the six-year period, provides the lowest costs of all the slow fill options leading up to the closure of the landfill. The recommended option (b) also retains the existing ICI fees, consequently causing the least impact to this sector and retaining these customers in the interim. The slow fill options better utilize the capacity available at the Keele Valley Landfill and allow the City more time with control of its own landfill, to develop 3R's alternatives to divert waste from landfill.

Cons

All slow fill options increase the annual net operating costs in the years 1999 to 2001 compared to the status quo.

None of the options meet the wishes of Vaughan residents to close the landfill as soon as possible. Under the rapid fill option, the residents may seek to negotiate an end to the class action lawsuit.

Conclusions:

If the status quo involving SWM fees of $55/tonne at the landfill and $65/tonne at the transfer stations is maintained, coupled with minimal diversion of waste via the BFI contract of 260,000 tonnes per year, Keele Valley will close in late 2001. Net annual disposal costs will rise from approximately $14 million in 2001 to approximately $73 million in 2002.

If slow filling of the Keele Valley Landfill were effected through increased SWM fees at the landfill and increased diversion via BFI haulage to Michigan, the site will close in early to mid 2003. Slow filling of Keele Valley will save the City from $9 million to $27 million for the six-year period from 1999 to 2004.

Slow filling of the landfill by increasing the BFI haulage to Michigan but not altering the landfill or transfer station SWM fees (Slow fill Option b) will not impact generators and haulers of ICI waste. The City will retain its private sector customer base. This option will extend the horizon for planning and implementing waste diversion and disposal infrastructure by one year. Moderate net cost impacts in the short term yield overall net savings in the amount of $9 million and will reduce by $28 million the status quo impact of $60 million forecasted for the year 2002.

Contact Name:

Ken Hogg, P.Eng.

Assistant Director

Solid Waste Management Services

Phone: (416) 392-4226

Fax: (905) 392-4754

E-mail: Ken_Hogg@metrodesk.metrotor.on.ca

A. Bacopoulos Barry H. Gutteridge

General ManagerCommissioner

Solid Waste Management ServicesWorks & Emergency Services

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