City Council votes to enter agreement with Concord Regional Waste Cooperative

LACONIA — The City Council this week unanimously endorsed the recommendation of City Manager Scott Myers to enter a new agreement with the Concord Regional Solid Waste Resource/Recovery Cooperative (Coop) for the disposal of municipal solid waste when the current contract expires at the end of 2014.
With the Coop, and Wheelabrator Concord Company, L.P. , operator of the trash-to-energy plant in Penacook, in agreement on a new contract, the 25 member municipalities — among them Laconia, Belmont, Gilford, Gilmanton and Tilton — are in the process of determining whether to extend their relationships with the Coop beyond 2014. The members must vote on the proposed agreement by June 30.
In a memorandum to the council, Myers explained that apart from the cost of recycling, there are three major components to solid waste expense — the cost of collecting trash at the curbside, the cost of hauling trash from the Transfer Station to a disposal site and the tipping fee to dispose of the trash.
Since the city contracts with Bestway Disposal Services, Inc. for curbside collection, only the haulage costs, which are a function of miles travelled and fuel costs, and tipping fees are currently in play. The city's haulage contract with Waste Management expires in 2027.
Currently the city pays $16.50 per ton to haul trash to Penacook and a tipping fee of $66.80 per ton to dispose of it for a total of $83.30. Both costs are indexed to the inflation rate annually and fuel costs twice a year.
Trucking trash to landfills in the North Country at Bethlehem or Berlin offered the principal alternative to the Coop. While the tipping fees would be less the haulage costs would be more because of the greater distance traveled. Myers said that the city received a preliminary proposal of a tipping fee of $41 and haulage cost of $34.50 for a total of $75.50 per ton in 2013 dollars.
Myers estimated that the tipping fee at the Coop would be $68.71 beginning in 2015. However, he noted that the city would receive a credit of $324,000, or $40,500 a year, over the life of the contract. Based on the current volume of solid waste of 6,700 tons, the credit represents a discount of $6 per ton, reducing the tipping fee to $62.71 in 2015. Myers said that shrinking the volume of trash by recycling would increase the discount, further reducing the tipping fee. "We're estimating conservatively, but there is a potential upside," he said.
With haulage costs of $16.50, the total cost of contracting with the Coop would be $79.21. However, Waste Management offered to trim the haulage cost to $15.15 per ton, which with the reduced tipping fee of $62.71, represents a total cost of $77.86 in 2015 dollars. Myers said that since the alternative to the Coop is expressed in 2013 dollars, with adjustments for inflation and fuel costs, by 2015 the differences between the two would be minimal.
"With everything factored into the equation," Myers wrote to the council, our recommendation is that we accept the Cooperative agreement with Wheelabrator along with the renegotiated hauling costs with Waste Management and lock in our solid waste hauling and disposal costs through 2022."
Meanwhile, the future of the Coop remains in question and in large measure hinges on the decision of Concord, its largest member. The agreement between the Coop and Wheelabrator provides that if Concord leaves the Coop, the remaining members must deliver 58.5-percent of the current 87,000 tons of trash — or about 51,000 tons — to the incinerator. Together Laconia and Gilford account for about a third of the required amount, leaving the smaller municipalities to provide the balance. Without the required tonnage, Wheelabrator could sever its ties with the Coop.
On the other hand, if an insufficient number of Coop members accept the proposed agreement, the Coop would dissolve, leaving each municipality to its own devices after 2014. Myers assured the council that he is taking steps to protect the city's interests whatever happens.