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INTRODUCTION & BACKGROUND *

The East Central Solid Waste Commission (Commission) is a joint powers board comprised of Chisago, Isanti, Kanabec, Mille Lacs, and Pine Counties (Counties). The Commission oversees implementation of an integrated solid waste management system in the Counties, and is about to implement a Landfill Gas-to-Energy (LGTE) project at its publicly-owned and operated landfill located in Arthur Township, Kanabec County, near Mora, Minnesota.

The Commission has a Designation Plan, dated February 1988, that was approved by the State of Minnesota on August 25, 1988 (see Appendix A). Because the original Designation Plan related to delivery of Mixed Municipal Solid Waste (MMSW) to a Materials Recovery Facility (MRF) near the landfill for processing the waste and separating out combustible material for delivery to the Western Lake Superior Sanitary District in Duluth, Minnesota, and the Commission’s new Designation Plan is related to delivery of waste to the Commission’s Landfill Facility for production of renewable energy, the Designation Plan has been updated and revised to reflect these new developments.

Pursuant to the Commission’s Joint Powers Agreement (see Appendix B), in 1991 each of the Commission Counties adopted Waste Designation Ordinances designating all Acceptable Waste generated within their county to be delivered to the former Materials Recovery Facility, or one of the Commission’s two transfer stations located in Hinkley and Cambridge. The designation ordinances were adopted pursuant to authority in the Minnesota Waste Management Act (Minn. Stat. Ch. 115A). The MRF eventually was expanded to include MMSW composting, but the MRF and composting facilities have since been deactivated.

After extensive Commerce Clause litigation involving other Minnesota counties as well as in locations around the nation -- ultimately concluding with the decision in C.A. Carbone, Inc. v. Clarkstown, 114 S.Ct. 1677 (1994), which held that flow control ordinances were per se in violation of the dormant Commerce Clause -- the Commission counties took different approaches regarding their designation ordinances.

Mille Lacs and Chisago Counties still have their 1991 Designation Ordinances in place (see Appendix C). However, Kanabec County rescinded its Designation Ordinance, and does not now have one in effect. In 2007, some of the Commission member counties considered a new Designation Ordinance that provided for designation, but only for waste destined for disposal within Minnesota. This type of designation ordinance is known as an "intrastate" designation ordinance, because it does not preclude the delivery of waste out-of-state (as would an "interstate" designation ordinance). Both Pine and Isanti Counties adopted the Intrastate Designation Ordinance (see Appendix D).

In order to implement the LGTE project, the Commission must assure continued delivery of at least 75,000 tons per year (TPY) of MMSW to the landfill. Currently, the Commission is receiving approximately 75,000 TPY, including approximately 3,000 TPY from Aitkin County, with the remainder coming from Commission counties.

The Commission is planning on waste designation as a method to ensure sufficient delivery of waste over the long term. The legal ability to do so is supported by the recent decision of the U.S. Supreme Court in United Haulers Assoc. Inc. v. Oneida-Herkimer Solid Waste Management Authority, 127 S.Ct. 1786 (2007), in which the Court ruled that waste designation (or "flow control") ordinances to publicly-owned and operated facilities are not per se in violation of the dormant Commerce Clause of the U.S. Constitution. The Court further ruled that such ordinances provide much greater public benefits than any negative impacts on interstate commerce under the dormant Commerce Clause balancing test established in Pike v. Bruce Church, Inc., 90 S.Ct. 844 (1970). Because the Commission’s landfill and two transfer stations are publicly-owned and operated, designation to these facilities is consistent with the holding in Oneida-Herkimer.

Because the original Designation Ordinances that are still in place in Mille Lacs and Chisago Counties designate to the former MRF and do not designate directly to the Commission’s landfill, the ordinances will need to be amended to do so. Kanabec County, which has no Designation Ordinance, will need to institute a new Designation Ordinance, and Pine and Isanti Counties will need to amend their Designation Ordinances to reflect the new developments.

Minn. Stat. §115A.86, subd. 5(b) provides that, prior to amending an ordinance to designate to a disposal facility, a county shall submit a revised Designation Plan to the Minnesota Pollution Control Agency ("MPCA") for approval, and shall follow the procedures in Minn. Stat. §115A.85, which require public notice, a public hearing, and a contract negotiation process with haulers. This process would apply to the four counties needing to amend their ordinances, and would be very similar for Kanabec County in establishing a new Designation Ordinance.

The Commission’s JPA specifically delegates to the Commission the responsibility for a joint Designation Plan. However, the JPA specifically reserves to the Counties the responsibility to enact Designation Ordinances. Pursuant to the JPA, each County has agreed to promulgate one or more ordinances "providing for necessary restrictions on the flow of solid waste, …, including, if recommended by the Commission, a designation ordinance….."

The basic requirements for this revised Designation Plan are set out by statute:

Subdivision 1. Requirement. Before commencing the designation procedure under section l15A.85, the district or county shall adopt a comprehensive solid waste management plan or, under chapter 473, a master plan. The county or district shall then submit a plan for designation to be approved under this section. A county’s or district’s designation plan must be consistent with its solid waste management plan or master plan and with statewide and regional waste management goals.

Subdivision. 2. Designation; plan contents.

(1) the benefits of the designation, including the public purposes achieved by the conservation and recovery of resources, the furtherance of local and any district or regional waste management plans and policies, and the furtherance of the state policies and purposes expressed in section 115A.02; and

(2) the estimated costs of the designation, including the direct capital, operating, and maintenance costs of the facility designated, the indirect costs, and the long-term effects of the designation.

(1) whether the designation will result in the recovery of resources or energy from materials which would otherwise be wasted;

(2) whether the designation will lessen the demand for and use of indiscriminate land disposal;

(3) whether the designation is necessary for the financial support of the facility;

(4) whether less restrictive methods for ensuring an adequate solid waste supply are available;

(5) other feasible and prudent waste management alternatives for accomplishing the purposes of the proposed designation, the direct and indirect costs of the alternatives, including capital and operating costs, and the effects of the alternatives on the cost to generators; and

(6) whether the designation takes into account and promotes local, regional, and state waste management goals.

(1) whether the disposal facility is part of an integrated waste management system involving a processing facility and the designation is necessary for the financial support of the processing facility;

(2) whether the designation will better serve to protect public health and safety; (3) the impacts on other disposal facilities inside and outside the area;

(4) whether the designation is necessary to promote regional waste management programs and cooperation; and

(5) the extent to which the design and operation of the disposal facility protects the environment including whether it is permitted under current agency rules and whether any portion of the facility’s site is listed under section 115B.17, subdivision 13.

The statute also provides that when the Plan proposes designation to a disposal facility, MMSW that is subject to a contract between a hauler and a different facility that is in effect on the date the notice is given for the public hearing is not subject to the designation during the contract period, or for one year after the date notice is given, whichever period is shorter.

In an April 18, 2008 letter, the MPCA listed the issues to which the MPCA will give importance in its review of the Plan amendment as:

The revised Designation Plan is submitted to the MPCA for review and approval. The MPCA has 120 days to make a decision on the Plan, and the MPCA is required to approve the Plan if it satisfies all of the statutory requirements. In the case of designation to landfills, the MPCA must also find that the Plan has demonstrated that the designation is necessary and consistent with the waste management purposes and hierarchy outlined in Minn. Stat. §115A.02.

This revised Designation Plan contains the following information and analysis:

Chapter One provides the necessary background information regarding the Commission and the existing and planned integrated solid waste management system in the area.

Chapter Two describes the facilities to be served by designation, including the LGTE Project, a discussion of materials recovery, the institutional arrangements and the environmental impact of the Facility;

Chapter Three sets forth the key components of the Amended Designation Plan; and

Chapter Four contains the evaluation as prescribed by the Waste Management Act and demonstrates that the benefits of the proposed designation outweigh its costs and that the Plan is consistent with State landfill abatement policies.

The Commission was formed in September 1986 for the purpose of coordinating the solid waste planning and implementation efforts of Chisago, Isanti, Kanabec, Mille Lacs and Pine Counties. The Counties entered into the Joint Powers Agreement creating the Commission, pursuant to authority granted by Minn. Stat. § 471.59.

The first years of the Commission’s existence were devoted to evaluating the alternatives to land disposal of solid waste and to developing the original East Central Solid Waste Management Plan. The Solid Waste Management Plan was completed, adopted by each County and submitted to the Waste Management Board in fall 1987. The Board approved the Plan on December 17, 1987. Most recently, the member counties have cooperated on a regional 10-year integrated Solid Waste Management Plan (SWMP) that was approved by the State in 2005 (a copy of the SWMP is available on the Commission’s website at www.ecswc.cog.mn.us).

This Part summarizes the existing integrated solid waste management system to the extent relevant to the Designation Plan, and discusses waste generation, existing waste abatement programs, and disposal in the region.

The Counties work cooperatively to improve solid waste management and coordinate all activities related to the implementation of the SWMP through the Commission. The Commission maximizes efficiency of solid waste management through a combination of waste education, waste reduction, recycling, and disposal.

Waste Education. The Commission promotes waste reduction, recycling and environmental awareness through a coordinated waste education program.

Source Separation and Recycling. The Commission encourages and assists local source separation and recycling programs that are consistent with the SWMP. Single sort programs have been used since 2006.

Landfills. The Commission has permitted a demolition/construction waste landfill to conserve valuable sanitary landfill capacity. To meet regional goals and state policies, the Commission continues to own and operate a 300-TPD MMSW Landfill Facility. Energy recovery and reduction of Green House Gas (GHG) emissions will soon be accomplished through the LGTE project. It should be noted that no portion of the Commission’s Landfill Facility is listed on the State Superfund list under Minn. Stat. §115B17, subd. 13.

Regulation and Enforcement. The Commission works with the counties to develop ordinances that minimize inappropriate disposal of solid waste and assist in reaching MPCA’s target of no open burning of farm or household garbage after 2010. The current the Commission burn barrel program has been extended through 2012 providing for education and reduced cost of disposal of MMSW for turning in burn barrels.

The following table summarizes the projected waste volume in the Counties

The Commission continues to provide information to residents about the different recycling programs that the counties offer and also continues to offer recycling at the Commission facilities for cardboard, steel, electronics, appliances, mattresses and tires. The Commission provides the counties with information on recycling opportunities within each individual county.

The Commission continues to collect contact information from businesses that recycle. The Commission works closely with the County Solid Waste Officers to assist with preparation of SCORE Waste Reduction and Recycling Reports.

The Commission is exploring new opportunities for recycling plastic, aluminum, wood waste and paper at Commission-owned facilities and in cooperation with host Arthur Township. The purchase of additional containers for recycling was approved by the Commission. The Commission plans to work closely with Arthur Township to serve as a collection point for recyclables. Arthur Township plans to collect and bale the recyclables and send them to market from their facility.

The City of Mora requires all licensed haulers within the city limits to offer curbside recycling. It is not mandatory for Mora residents to recycle at the curb.

Pine County maintains 26 separate sheds in nine locations across the County. The sheds are serviced by a private contractor on a weekly schedule. Materials collected include several types of paper and cardboard, several types of food containers.

The Commission is going to collect wood waste using a roll-off container at each site. This waste will then be transported to Mora for storage until a quantity is reached for sale or chipping.

The Commission is exploring the idea of collecting latex paint, which is currently non-regulated. This latex paint would be offered to the public for re-use and the remainder would be sent off-site to be recycled.

With assistance from the MPCA, the Commission has researched and evaluated the feasibility of mattress recycling as an alternative to landfill disposal and is committed to implementing a mattress recycling program for its five member counties. In June 2005, the Commission was awarded $5,000 from the OEA to procure a used semi-trailer (and provide a match of one trailer) for the purpose of collecting and transporting mattresses from the East Central counties to Goodwill Industries in Duluth, Minnesota for recycling. By providing an alternate disposal option for mattresses, the Commission anticipates increasing the diversion of mattresses from landfill disposal and from illegal dumping.

The Commission in conjunction with its five member counties started the mattress recycling pilot program in 2005 and delivered 1,954 to Goodwill in 2007.

The Commission’s planned full-scale mattress recycling program includes the following steps:

Goodwill Industries has trained staff who deconstruct mattresses and prepare the by-products for recovered materials end markets.

The deconstruction of mattresses results in several marketable by-products including steel, cotton, foam, and wood. From the pilot study, WLSSD identified markets for these materials including:

Currently, Goodwill Industries charges $7.00 per mattress or box spring to cover their processing costs, materials marketing costs, and shipping costs to the end markets. Per the WLSSD pilot project, it was suggested that the term of the supply agreements between Goodwill and partnering counties be five years with two-year renewal options to ensure a steady supply of mattresses to Goodwill.

For mattresses brought to the landfill, they are collected in a covered roll-off container and then transferred to a building for storage until there are enough for a full load to be transported to Duluth.

The implementation of the mattress-recycling program will result in a net financial savings per mattress when factoring in the benefits of landfill airspace savings. In addition, the Commission has needed to adjust the $8 tip fee for mattresses in 2005 to $11 in 2008 because of increased costs of shipping the mattresses.

To fully implement a mattress-recycling program, the Commission initiated the following:

The Commission’s goal is to eliminate all electronics from being disposed of in landfills through electronics recycling. Electronics are a fast growing portion of America’s trash – more than 3 million tons of electronic waste is discarded in landfills annually. These electronics contain many toxic materials like lead, mercury, copper, chromium, cadmium, nickel and zinc. Recycling helps ensure these hazardous materials are kept out of landfills.

Nearly 250 million computers will become obsolete from 2005 to 2010. Mobile phones will be discarded at a rate of 130 million per year by 2005 resulting in 65,000 tons of waste containing lead and brominated flame-retardants. TVs and computers can contain an average of 4 pounds of lead as well as other toxins like chromium, cadmium, mercury, nickel, zinc and flame-retardants. Under state environmental laws, CRTs and monitors are banned from landfills beginning in July 2006. However, the Commission banned CRT’s in July 2005.

In 2008, the Commission reduced the cost of recycling electronics to its customers by 75% making it very affordable for customers to recycle electronics. Recycling is available at all three Commission facilities 6 days per week.

The Commission charges between $3 and $8 per electronic with electronic events being held annually at no charge to the customer. The cost of disposal recently went from .05 per pound to free disposal. There is no additional cost for transportation. The cost of maintaining recycling containers is very minimal.

Currently the Commission is finding beneficial uses for tire chips as part of landfill construction. The Commission will continue to examine new uses for waste tires.

The Commission charges $4 per auto tire, the cost of disposal is estimated to continue to be under $1.50. There is no additional cost for transportation.

Minnesota law established a $5.00 refundable surcharge when a motor vehicle battery is purchased. The law also requires motor vehicle battery retailers to accept up to five (5) motor vehicle batteries free of charge, whether or not the consumer is making a purchase. When a new battery is purchased, the customer may avoid the surcharge by turning in a used motor vehicle battery. The goal is to encourage proper disposal of motor vehicle batteries and household batteries and to ensure that citizens are educated about proper disposal of batteries. The Commission currently accepts batteries at the Mora locations. With increased value of batteries, residents are recycling their batteries elsewhere.

The goal of future initiatives of the five counties will be to continue to ensure through education and program development that adequate opportunities are available to meet the appliance disposal needs of resident within the five counties.

Minn. Stat. § 115A.9561 prohibits the disposal of appliances in MMSW, on land or in a solid waste processing facility. The law further requires that the Counties provide residents with an opportunity to recycle used appliances. Programs have been designed to support and insure compliance with State laws regarding major appliance disposal.

The Commission accepts major appliances at all three facilities. A vendor picks up the appliances for recycling. The goal is to be able to reduce the cost of recycling these appliances. The charge for dropping off appliances has been $16 since the early 1990s and into 2008. The Commission reduced that price starting August 1, 2008 to $8.00 per item. The cost to the Commission for recycling appliances was eliminated in July 2008.

Scrap metal is accepted at all three Commission locations for recycling at no charge. Customers are encouraged to remove scrap metal prior to weighing MMSW loads for disposal. In March 2008, the Commission started getting paid for all scrap metal that is recycled. Revenue from scrap metal recycling is to be used for purchasing and upkeep on recycling containers.

The Commission has contracted with Healthcare Waste Solutions for disposal. Medical sharps are accepted at no charge at all three Commission locations and the Commission also pays for disposal from the Chisago Household Hazardous Waste (HHW) facility. The Commission accepts medical sharps at all three facilities at no charge to customers.

The goal of the Regional HHW program is to provide environmentally sound and safe management options for household hazardous waste and to encourage, to the extent feasible, reuse, recycling, or safe home disposal of household hazardous waste. The five counties have chosen the Commission be the sponsoring organization to establish procedures for reporting and act as a liaison between the Counties and the State for HHW programs. Each of the Counties is responsible for determining their best alternative to handle HHW. Chisago County built a facility in 2000 to accept HHW through a State of Minnesota $110,000 grant. Isanti County, through a voucher system, has used the Chisago County Facility to dispose of their waste since 2003. The other counties have continued to hold HHW collection events at a location within their respective county.

This is an educational program providing information on the danger of burn barrels. Burn barrels may be turned in at the Commission facilities, including ashes, at no cost to the customers. Program costs are basically all put into printing of pamphlets and staff costs. Some commercial haulers have also offered reduced costs to customers that have agreed to turn in their burn barrel.

The Commission has partnered with Chisago County, some commercial haulers and the MPCA on this program. Cost is approximately $5,000 annually.

Most of the MMSW generated in the East Central area is landfilled. The land disposal facilities to which MMSW generated in the East Central counties is brought are:

This Chapter will discuss the Integrated Solid Waste Management (ISWM) system that will be served by the proposed designation, its proposed operations, the necessary institutional arrangements, and the Facility’s environmental impact.

The goal of the Commission is to improve the current waste management practices and continue to implement a regional waste management system consisting of a variety of waste abatement programs. The ISWM is centered around the network of two transfer stations that transport waste to the Commission’s landfill, in addition to all of the abatement programs discussed previously. Two transfer stations are sited to minimize overall transportation costs, and reduce GHG emissions. Drop-off centers have been established at each of the transfer stations for source separation/recycling. Materials will continue to be recovered at the transfer stations and landfill.

The Commission will continue to implement a public education/public information program on a regional scale to promote recycling, waste reduction, and waste abatement. The program is also intended to inform the public on the purpose, value, and use of the integrated waste management system.

Despite its aggressive recycling, reduction and recovery programs, there will continue to be a need to maintain and expand the Commission landfill to serve regional landfill needs.

The Commission will use the landfill to maximize the recovery of landfill gas. The landfill will utilize proven waste processing equipment and technology to place and compact the waste. The Facility is designed to accept 300 tons of waste in an 8-hour day. The landfill consists of a scalehouse, an access road, active area and inclement weather area.

The landfill will continue to be operated a minimum 8 hours per day, 5 days per week plus 4 hours on Saturday, 52 weeks per year. As the waste stream grows, or to meet seasonal peaks, the landfill may be required to operate additional hours and/or days.

The Commission owns and operates the landfill. Currently the Commission is in the process of expansion permitting of phases 6-10. Budgeting and construction of phase 6A is anticipated to be complete in 2009. Total financial support of the system is through tipping fees.

The Commission, along with Southern Minnesota Municipal Power Agency (SMMPA), a public agency comprising a variety of municipal utilities, is planning to implement the LGTE project. This project puts the facility higher on the state waste management hierarchy under Minn. Stat. § 115A.02(b) than a landfill that does not involve retrieval of methane gas as fuel for the production of energy. This production of renewable energy will assist SMMPA member municipal utilities in meeting their renewable energy requirements under Minnesota law, as well as help reduce methane GHG emissions that have been identified as a very important component in Minnesota’s strategy to reduce its overall GHG emissions in the coming decades.

The contractual arrangements for the project involve a series of agreements. The Commission and SMMPA have signed a contract for the sale of landfill gas to SMMPA (see Appendix E). SMMPA will accept 100% of the acceptable landfill gas generated in the landfill and delivered by the Commission. SMMPA will process the landfill gas. A lease agreement providing for a generating plant to be placed on Commission property has also been signed. SMMPA has a letter of intent from the City of Mora to purchase the electricity produced by SMMPA from the Commission’s landfill gas.

The environmental impact of the Facility will be evaluated and regulated by the MPCA. The Landfill Facility will require on-going permits from the MPCA. The Facility will require an Environmental Assessment Worksheet (EAW). The MPCA will be the responsible review agency.

To save valuable landfill space, the Commission has purchased equipment that allows for the greatest compaction of waste. Leachate recirculation provides greater waste densities within the landfill, thereby accelerating settlement with a resulting recovery of airspace, which delays construction of new airspace.

SMMPA has applied to the MPCA for an air permit for the LGTE turbine plant.

MMSW collection in the region is currently provided primarily by private collection companies (Haulers). The Commission anticipates these companies will continue to provide collection service in the future.

The Commission began a regional waste delivery marketing campaign in 2006. Private Haulers with Waste Delivery Agreements with the Commission had originally agreed to 5-year delivery contracts in 2002. These contracts began on January 1, 2003, with an established contract rate of $50.86/ton. Haulers that agreed to contract terms were paid a $4/ton cash rebate per ton of waste delivered. Thus, the effective out-of-pocket rate to contract haulers was $46.86/ton.

The contracts allowed for annual rate adjustments based on the Consumer Price Index (CPI), All Urban, Other. During the period from January 1, 2003 through the end of 2006, the fourth year of the contract, the Commission chose to voluntarily hold the rate without adjustment. In year five, as an incentive to contract Haulers, and to establish tipping fees comparable to regional markets, the Commission increased the hauler rebate by $5/ton. The then out-of-pocket cost to the hauler became $41.86/ton for the final year of the current contracts.

The offer of the additional rebate was an incentive for the contract haulers to sign new 5-year contracts, prior to December 31, 2006. The new contracts commenced on January 1, 2008 and run through December 31, 2012. In addition, the Commission agreed to increase the rebate by an additional $5/ton, effective January 1, 2008. The effective out-of-pocket tipping fee for contract haulers under the current contract is $36.86/ton, with a total rebate paid to contract haulers of $14/ton. The $36.86/ton tipping fee is comparable with most private, and some public, facilities in the market region.

The Commission has contracted for delivery of 71,500 TPY under the Waste Delivery Agreements (see Appendix F) with various Haulers operating within the Counties.

Current Contract Haulers Are:

The contracted tonnage, along with the Aitkin County deliveries of approximately 3,000 TPY, result in the current 75,000 TPY delivered.

The Commission has examined whether the Counties should continue to subsidize the tipping fees at the transfer stations and Landfill Facility, in lieu of designation. The Commission’s successful contract negotiations with 21 haulers reflects their interest in and support for the Commission’s ISWM System. The determination was that designation is needed for the successful implementation of the Commission’s ISWM in the long term.

The Commission plans to work with each of the Counties to by ordinance designate all Acceptable Mixed Municipal Solid Waste generated within the Service Area described below to the Commission Landfill Facility or to transfer stations primarily serving the Facility.

The Commission plans for each of the Counties to designate all Acceptable Mixed Municipal Solid Waste generated in their jurisdiction to be delivered to the Commission’s Landfill Facility in Arthur Township, Kanabec County and/or to the two transfer stations serving the Facility, which are located in Cambridge and Hinkley. "Acceptable Mixed Municipal Solid Waste" is garbage, refuse and other municipal solid waste from residential, commercial, industrial and community activities that the generator of the waste aggregates for collection, but does not include hazardous waste, auto hulks, street sweepings, ash, construction debris, mining waste, sludges, tree and agricultural wastes, tires, lead acid batteries, motor and vehicle fluids and filters, and other materials collected, processed, and disposed of as separate waste streams. Acceptable MMSW also does not include:

The designation will not apply to or include:

The Commission plans that each member County will, pursuant to the JPA, implement a designation ordinance in compliance with this revised Designation Plan. This is necessary to maximize waste abatement, energy recovery, and GHG control in the region. The designation ordinances will serve the Commission’s ISWM system. The Commission will prepare a model Designation Ordinance for use by the Counties.

In planning the future and determining the scope of the designation, the Commission has taken into account all of the abatement activities and has determined that even though designation is necessary for efficient operation of the system, it will not jeopardize the abatement goals as set forth in the SWMP. The Commission anticipates that 35% of the waste in the area will be recycled

The Commission has determined that it is necessary to designate the entire five county region in order to have sufficient waste to supply the necessary landfill gas. Each of the five counties will be separate Service Areas subject to designation. Under each ordinance, the designated Service Area will be the entire county. The amounts of Acceptable MMSW to be subject to designation can be estimated as follows:

Thus, after counting 71,500 tons under Delivery Agreements, approximately 9,000 tons are delivered to landfills outside the Commission’s region.

In summary, the ISWM system and the scope of the designation are planned to handle the optimum capacity and to meet the seasonal variation. The goal, however, is to manage all the Acceptable MMSW generated in the five Counties that is not otherwise abated.

The Commission plans for the Counties to designate three points of delivery:

a. The Commission’s Landfill Facility located at 1756 180^th Avenue, Mora, MN (320-679-4930, ext. 14);

b. The Commission transfer station located near Hinckley (339198 County Highway 61, Hinckley, MN 320-384-6596); and

c. The Commission transfer station east of Cambridge (4194 Highway 95 East, Cambridge, MN 763-689-4056).

The Commission plans that the designation ordinances will be binding on all political subdivisions, landfill operators, solid waste generators, and solid waste collectors (Haulers) in the designated Service Areas, except for the exemptions cited above.

Haulers within the five Counties may choose which of the three designated facilities they wish to deliver. In accordance with the designation, however, they may not deliver Acceptable MMSW anywhere else. In the event that either of the transfer stations closes for a brief period, Haulers will be directed to take their waste directly to the Landfill Facility.

This Chapter will evaluate the revised Designation Plan pursuant to the factors discussed in the Introduction. These evaluation factors are required by Minn. Stat. § 115A and the MPCA. This evaluation demonstrates that the benefits of designation in the East Central area will outweigh the costs and that the revised Plan is consistent with state, regional and local policies and purposes.

The need for designation is critical for two reasons.

1. In 2005, the Commission constructed and installed an active gas extraction and destruct system at the landfill. The system is designed to capture landfill gas and to destroy the landfill gas in a flare. The results as such that the facility is better able to control odor (odor is destroyed in the flare) and negate the potential migration of landfill gas off-site. However, without assurance of delivery of the remaining MMSW after abatement programs, the Commission will not be able to harness the landfill gas for renewable energy production.

The Commission must have assurance that all MMSW generated in the Counties will be delivered to the system in order to appropriately convert landfill gas to energy. Without this assurance, the landfill gas would simply continue to be flared and the opportunity to generate renewable energy would be lost. The Commission has accepted the challenge to effectively reduce overall GHG emissions, and increase renewable energy potential.

It should also be noted that the Commission facility is not required under state or federal law to install an active landfill gas system. By voluntarily installing the landfill gas system, the Commission has qualified as a carbon offset member of the Chicago Climate Exchange (CCX). This status allows the Commission to utilize the CCX carbon credit trading platform for the sale of carbon credits. The revenue derived from these periodic sales will provide the capital necessary for future expansion of the landfill gas system.

2. The economic analysis of the ISWM system has shown that the cost per ton decreases significantly as the volume of waste delivered increases. In order to run the ISWM system efficiently, and at the lowest cost to waste generators, it is important that all Acceptable MMSW, after implementation of successful abatement programs, is delivered to the system.

The Counties joined together to change current solid waste management practices in the region to avoid the environmental problems associated with the indiscriminate disposal of waste. The Commission and the Counties have devoted significant resources to establish and publicize recycling, waste reduction and other abatement programs. In order to implement the ISWM system in an efficient, cost-effective manner and to meet the Commission’s waste abatement objectives, it is critical that all Acceptable MMSW that is not recycled or otherwise recovered, be delivered to the Landfill or to the transfer stations serving the Landfill. As this Plan demonstrates, designation represents the most cost-effective way for the Commission to ensure recovery of renewable energy at the Facility.

Generally, the primary benefit of the planned designation is that it will provide assurance that the solid waste management in the Commission’s jurisdiction will be improved and will assure that waste management policies and plans set by the State and the Commission will be met. This part will discuss the specific policies that the proposed designation furthers and promotes, and will explain how solid waste management will be improved.

Recovery of energy from solid waste is a state, regional and local policy that will be clearly served by the proposed designation. Landfill gas is a cost-effective, reliable and local source of energy. Using the landfill gas to generate electricity will provide economic benefit for Mora and the entire region served by the Commission. Landfill gas is a safe and renewable energy source. Using landfill gas reduces the need to use more polluting forms of energy such as coal and oil. Using landfill gas reduces health and community risks, such as air pollution and odor associated with landfills. Landfills that use their landfill gas tend to better managed and make better neighbors.

Along with the recovery of landfill gas to be used to generate electricity, the Commission is also registered as a carbon offset provider with the Chicago Climate Exchange. The Commission plans to sell the first carbon credits fall of 2008. Carbon credits are important to the financial viability of the landfill gas recovery system’s infrastructure.

The waste management system proposed by the Commission is intended to maximize the diversion of materials currently disposed. The SWMP has a goal of 35% by 2015. The Commission is working hard to assist each County in reaching that goal by expanding recycling opportunities at the three Commission facility locations and by assisting each County with investigating additional recycling opportunities. The Commission’s ISWM system is designed to maximize the recovery of materials from the incoming waste stream. The waste haulers will remove high-density plastics, corrugated, newsprint, aluminum, glass and steel cans for recycling. In addition, containers will be strategically located to provide an opportunity to recycle wood waste, plastics, cardboard, metals, and glass.

A reduction in waste generated is a state, regional and local policy that will be indirectly furthered by the proposed designation. Requiring solid waste generators, over the long term, to pay the full costs of disposing of waste in an environmentally sound manner is the best way to make them aware of the solid waste problem. That awareness, as well as a desire to reduce the amount of costs, will provide an incentive to reduce the amount of waste generated. Additionally, the Commission will implement a public education program as a part of the ISWM system. The public education program will promote the reduction in waste generated.

The revised Designation Plan also fulfills the State policy promoting the orderly and deliberate development and financial security of solid waste facilities. The successful development and long-term stability of the Landfill and its LGTE project is dependent on the delivery of all MMSW generated in the Counties to the Facility. The Commission must have some assurance of waste deliveries in order to size the Facility, determine the capital costs and appropriately commit public funds, in an orderly and deliberate manner. Long-term financial security is dependent on waste deliveries, because tipping fees paid must cover capital costs, as well as the daily operating costs of the Facility. Designation is necessary to provide the certainty that waste will be delivered.

The reduction in the indiscriminate dependence on disposal of waste in landfills is one of the primary state, regional and local policies that will be significantly furthered by the revised Designation Plan. Currently, most of the waste in the area proposed to be subject to designation is landfilled without energy recovery. It is anticipated that the system will recycle about 35% of the total waste, and recover renewable energy from the rest.

The coordination of solid waste management among political subdivisions is a policy clearly promoted by the planned designation and ISWM system. The planning, development, construction and ownership and operation of the ISWM system among the five Counties, which comprise an area of greater than 2,000 square miles and are primarily rural, is clearly a regional approach favored by the Waste Management Act. The policy of political subdivision coordination is further enhanced by the LGTE project involving SMMPA, Mora Municipal Utilities, and the host township, Arthur.

The Commission has adopted solid waste policies that are similar to the State policies previously discussed. These policies include limiting indiscriminate disposal of solid waste, while promoting a regional system, waste reduction through public education, source separation, recycling, proper management of problem materials and HHW, and energy recovery. These policies are enhanced by the proposed designation as discussed above.

The direct capital, operating, and maintenance costs for the Commission’s ISWM system are shown in Table 1 below.

The cost of operating and maintaining the ISWM system has various components, including the Facility and the transfer stations, as shown in Table 1. A portion of these costs varies with the amount of waste delivered. Table 1 outlines both the variable and fixed costs and shows the variance on price/ton depending on waste volumes. It is estimated that it will take a minimum of 75,000 tons per year to maintain the ISWM system, including the LGTE project. Because only 71,500 is under contract, and such Agreements are threatened by competition from non-contract Haulers, designation is essential to the long-term viability of the ISWM system.

In addition to the direct costs, designation will result in a number of indirect costs for the Counties, waste generators and the Haulers.

The first indirect cost that may result from the implementation of designation is the cost of enforcing the Designation Ordinances. The potential cost depends on whether there is an economic incentive for Haulers and waste generators to avoid the designation and deliver waste directly to other landfills. For those Haulers with Agreements, the tipping fees at the transfer stations and at the Facility are likely to be competitive with area landfills, so there should not be any advantage for them to violate the designation ordinance. The key focus will be Haulers without Agreements (non-contract Haulers).

A second potential enforcement problem facing the Commission and the Counties results from the rural character of the area. Many rural residents have disposed of their waste on their own land or burned it in burning barrels and have not contracted for waste collection and disposal services. While this practice is changing, some residents in the rural areas still dispose of waste inappropriately. The enforcement issue arises because designation applies to waste generators as well as to haulers.

The costs of enforcing designation would include the following:

The Commission will minimize the costs of enforcing designation by public education programs designed to prevent violations by haulers and by waste generators. If the Commission makes citizens aware that the cost increases incurred by non-contract Hauler’s are not the Hauler’s responsibility, but are the result of the Commission’s decision to implement energy recovery, the Commission is less likely to find resistance to designation. Haulers are also more likely to comply if the Commission considers their interests.

The Commission’s public education program will also attempt to minimize violations by waste generators by discussing the environmental and health risks associated with inappropriate disposal practices. Generators are more likely to comply if they understand the value and benefits of cooperating. Through a carefully prepared, systematic public education program, the Commission should be able to reduce the number of violations.

The Counties can minimize the cost of enforcement in a number of other ways. First, the Counties can reduce the costs of enforcement by using the existing solid waste officers in each County to run the enforcement program. These individuals know the haulers in the Counties and should be able to work out disputes and disagreements before enforcement action is necessary. Second, enforcement costs will be reduced if all five Counties have the same ordinances. This will reduce the confusion on the part of haulers and citizens and will make inadvertent violations less likely. Haulers are also less likely to violate designation if competitors in the same geographical area are paying the same fees, which is an incentive for all Haulers to have Agreements with the Commission.

A second potential indirect cost resulting from the implementation of designation is the rearrangement of some hauler’s routes to reach delivery points required by designation. Haulers with routes that cross county lines to outside the five Counties or haulers that deliver waste to landfills outside the Service Areas will have to adjust their routes so that waste generated in the proposed designated service area is delivered to the transfer stations or to the Facility. Currently, only a relatively small amount of waste is delivered to landfills outside the five Counties. A small number of haulers in northern Pine and Mille Lacs Counties deliver waste to landfills north of the County lines. A small number of haulers in Pine and Chisago Counties deliver waste to Wisconsin or Elk River. Most haulers, however, already deliver waste to the Commission.

Route rearrangement within the five Counties will also be insignificant, because the Commission will provide three possible delivery sites (two transfer stations and the Facility). These options should minimize the impact of designation. For the majority of haulers that will have to rearrange routes, transportation costs should not increase after the one-time administrative effort necessary to accomplish the rearrangement.

Haulers without Delivery Agreements would pay the full tipping fee without the $14 per ton rebate. Thus, the Commission will offer these Haulers the opportunity to enter into the same Agreement as the current Contract Haulers during the 90-day contract negotiation process required under Minn. Stat. Chap. 115A. If these Haulers sign Agreements, all Haulers would pay the same tipping fee, creating a level competitive playing field. Only Haulers choosing not to sign Agreements would pay a higher tipping fee because they would not receive the rebate.

Over the long-term, the effects of designation should be beneficial for Haulers because the Facility will provide a secure, long-term disposal site at the same price for all Haulers. Once the Haulers make the initial readjustment of routes, if any, they will not have to incur those costs again. A long-term disposal site provides a real benefit in terms of certainty. A long-term disposal site also results in stable transportation costs involving shorter haul distances. Moreover, the Facility and transfer station tipping floors will cause less wear and tear on Hauler’s trucks and may reduce maintenance costs over the long run and lower cost that are associated with long hauls.

The long-term effects on landfills resulting from the proposed new system will be insignificant. The Commission intends to operate the Landfill as a landfill gas producer, reduce green house gas and produce renewable energy. The amount of Acceptable Waste leaving the Counties for other landfills is approximately 9,000 tons per year. It is delivered to three facilities, none of which will be significantly impacted. Two of the three facilities recover renewable energy from their landfill gas, one does not. Once the LGTE project is operational, the Commission’s Landfill will be on par on the hierarchy with the two facilities and above the remaining one.

It is important to point out that the underlying reason for implementing designation is to improve the environmental quality of the Service Area; and the improved environment is perhaps the most consequential long-term effect of the revised Designation Plan. The Commission’s primary objective in reaching this goal of improved environmental quality is to improve the environment in a number of ways, including encouraging the reuse of materials, the recovery of energy and the reduction of waste generated, which means natural resources will not be used up as rapidly.

In sum, the proposed designation and the ISWM system it will serve will provide a means to help reduce the degradation of the environment that has been the result of past disposal practices such as hauling to distant landfills, and landfilling without energy recovery.

The Waste Management Act requires that this revised Plan evaluate the following additional issues:

1. Whether the designation will result in the recovery of resources or energy from materials that would otherwise be wasted. As discussed above, designation is required to assure that there is adequate gas produced for the LGTE project.

2. Whether the designation will lessen the demand for and use of land disposal. The Commission is planning to expand recycling to add collection of plastics, wood waste, and paper at all three facilities. Dependable waste assurance through Waste Delivery Agreements and designation will provide stability to accomplish this.

3. Whether the designation is necessary for the financial support of the facility. To support extended recycling and production of renewable energy, it is very important to have assured income that designation will accomplish. Costs over the last two years have increased significantly while the Commission was lowering tip fees and working hard to lower the costs of disposal of appliances and electronics.

4. Whether less restrictive measures for ensuring an adequate waste supply are available. The Commission did lower the tip fees to entice additional haulers that were currently serving the region to bring Acceptable MMSW to the Commission facilities. Haulers indicated the importance of the Commission providing for demolition disposal in order for signing of the Agreements. The Commission provided a demolition landfill in Mora and a very competitive fee was given of $6 per yard to those under contract. However, even with all of these incentives, not all MMSW generated in the Counties is delivered to Commission facilities.

5. Other feasible and prudent waste processing alternatives for accomplishing the purposes of the proposed designation, the direct and indirect costs of the alternative, including capital and operating costs and the effects of the alternatives on the cost to generators. The Commission looked at many alternatives such as waste to energy and attempted composting of MMSW twice. These alternatives were analyzed in the 2004 Strategic Business Plan (see Appendix G) and in the 2005 SWMP. The Commission has since determined the LGTE project as the most cost-effective and environmentally-sound supplement to the ISWM system.

In considering the adequacy of a waste assurance method, it is important to focus on the Commission’s objectives. First, the waste assurance method must be reliable enough to assure sufficient waste delivery to maximize landfill efficiency, to meet the Commission’s obligations to citizens, and to minimize the cost per ton to waste generators. Second, the waste assurance method should secure the supply of solid waste. Third, the Commission must be able to implement the waste assurance method in a timely manner, since the method must be effective immediately. These objectives must be kept in mind when examining the various types of waste assurance alternatives that the Commission might use.

The underlying problem of uncertainty and unreliability of a sufficient waste supply arises because it would initially be more costly for non-contract Haulers to dispose of waste at the transfer stations and at the Facility than the other landfill, unless the Hauler signs a Delivery Agreement. The Commission must develop a waste assurance method that can overcome the economic forces that would allow non-contract Haulers to more cheaply dispose of Acceptable MMSW than Haulers with Agreements. The following sections will examine alternative methods of waste assurance to determine whether they will ensure a secure, reliable and timely supply of waste, while at the same time constitute a less restrictive method than designation. Specifically, this section will evaluate the following alternatives: contracts for waste supply, closure of landfills, organized collection, economic incentives to dispose of waste at the facility.

While contracting with either haulers or municipalities is clearly a less restrictive method than designation, without designation as a means to assure waste supply, not all Haulers will enter into contracts sufficient to meet the objectives and needs of the Commission. The Commission’s current Waste Delivery Agreements continue through December 31, 2012. The Hauler agrees to deliver all Acceptable Waste to Commission Facilities that is collected within the boundaries of the Commission. The reward is a reduced tip fee of $50.86 and a rebate of $14 paid back to the Hauler quarterly.

If the Hauler is found to be diverting waste from Commission Facilities in violation of the Agreement, the Hauler forfeits the rebate (including a rebate earned but not yet paid). In addition an assessment of up to Two Dollars ($2.00) per ton for each ton diverted as calculated by the Executive Director from historical solid waste volume records may be imposed. The tip fee may also be increased by up to one dollar ($1.00) for up to one year.

Enforcement of contracts primarily relies on legal action to force performance or secure some other remedy. Any legal action, however, takes a substantial amount of time and money. Therefore, if problems develop with any of the Hauler contracts, it could take a substantial amount of time to force the hauler to deliver or to contract with a new waste supplier. If the hauler under contract to supply waste went out of business or into bankruptcy, even legal action may well be ineffectual in providing a remedy.

Many of the haulers are small businesses that do not have the resources to make long-term commitments or pay substantial penalties for nonperformance. Therefore, no matter how well drafted or secure a contract appears to be, there is a substantial risk to the Commission insufficient waste is delivered, causing the cost/ton to increase, and creating the risk of insufficient revenue to cover the debt service on the Facility.

Thus, the Commission has determined that contracting with haulers without the support of available designation authority does not constitute an adequate assurance of a waste supply sufficient to meet the needs of the Commission.

While contracts with municipalities could offer greater security for the Counties, such contracts nonetheless fail to meet the Commission’s objective of providing a sufficient and timely supply of waste. For a contract with a municipality to be an effective waste assurance method, the municipality must have control over waste collection within the city so that it can direct by contract the final disposition of the waste. It is very unlikely that the municipalities in the five Counties would go through a process to organize collection, since there at this time is little incentive for them to do so and there is some risk that they may not succeed. Even if they were willing, it would take too much time for all the municipalities in the Service Areas to organize collection service and then negotiate waste delivery contracts with the Commission. Therefore, attempting to shift the burden of securing control of the waste supply from the Counties to municipalities through contracts does not appear to be a timely or feasible alternative.

There are no other landfills within the East Central region. Other landfills are in other counties or in Wisconsin.

Organized collection involves restructuring of the waste collection system so that specific haulers collect waste in defined territories under a contract with haulers through action of a municipality or county. Rather than the Counties taking over MMSW collection responsibilities, and potentially putting some Haulers out-of-business, designation is a fairer approach, as all Haulers have the opportunity to pay the same disposal price and compete based upon ability to provide efficient collection services.

In 2006, the Commission decided to enter into long-term contracts with the haulers that were servicing the Commission area. These Contracts, starting January 1, 2008, provided for an additional $10 rebate from the previous contracts that were to expire on December 31, 2007. As an additional incentive the Commission offered an additional $5 rebate one-year prior to the expiration of the previous contract if the 2008 contract was signed by December 31, 2006. The haulers that were supporting the system at that time all signed the Agreement. Beginning January 2007, the rebate was $4 plus the additional $5 bringing it to $9. In January 2008, the new contract brought the rebate to $14. Only one additional hauler was added to the Contract Hauler list, a licensed hauler servicing Mille Lacs County.

The Commission contacted all licensed Haulers within the area to learn more about their needs. The Haulers indicated the need for a demolition landfill, so the Commission did a survey of all the haulers and then went ahead and permitted a demolition area and provided to contracted and potential contract haulers a Construction and Demolition Contract to deliver demolition at a reduced rate of $6 per yard, if they were under contract to haul MMSW to the Commission facilities. This C&D Contract was non-exclusive and offered a rate to contract Haulers that would be more competitive than that for the occasional user. It was believed that this would attract more Haulers to sign Agreements, but the Commission was unsuccessful. In 2008, the tip fee charged to contract Haulers is the lowest in Commission history. Thus, the Commission continues to use economic incentives to assure waste, and may continue to do so under designation. However, without designation, the economic incentives combined with contracts does not assure long-term waste supply.

Only designation provides a reliable, timely, long-term assured waste supply adequate to meet the needs of the Commission’s ISWM system. A designation ordinance provides assurance that sufficient waste will be delivered to the transfer stations or the Landfill for the term necessary to ensure the success of the LGTE project. The Commission will negotiate contracts as required in the designation process and to the extent that contracts are secured, waste will be delivered pursuant to contract. If the contract is breached or terminated, the ordinance will be enforced.

Designation provides a means for a direct legal requirement that waste be delivered. Other waste assurance approaches involve reliance on numerous factors that are not always subject to Commission’s control or involve extended periods of time to remedy. Without the security and reliability that designation supplies, the Commission faces significant long term financial risk and will assume a significant risk that it will not meet its ISWM goals, and be able to recover energy from waste.

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