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County Administrator's Report 11. 22.
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| BCC Regular Meeting |
Budget & Finance Consent |
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| RECOMMENDATION: |
Recommendation Concerning the Contract Award for Perdido Landfill, Phase 2, Landfill Mining - Patrick T. Johnson, Waste Services Department Director, through Paul Nobles, Purchasing Manager, Office of Purchasing
That the Board take the following action:
A. Approve and authorize the County Administrator to sign the Agreement between Escambia County, Florida, and Thalle Construction Company, Inc., per the terms and conditions of PD 18-19.107, Perdido Landfill, Phase 2, Landfill Mining, in the amount of $7,612,711; and
B. Approve the remaining budget of $387,289, for contingency funding for similar and/or related tasks.
Florida Department of Environmental Protection (FDEP) requires an annual lifespan/cell capacity analysis be conducted (see Attachment A). This analysis is based on disposal rate, annual population growth rate, waste density and volume of active cell life remaining. The most recent analysis, conducted December 2019, indicated the end of life for existing Cell 1A to be January 2024. The future rate of increased waste generation will affect this timeline.
Design and construction of Cell 1B will take approximately 24 months. If the Agreement with Thalle Construction Company, Inc., (Thalle) for mining is approved, the design/construction timeline is extended by six months. Barring any unforeseen circumstances, the schedule to complete Cell 1B allows for a nine to 15-month contingency, to have Cell 1B in operation prior to the end of the estimated life span of Cell 1A. To ensure timely construction of Cell 1B, the design Contract is an item on this agenda for the Escambia County Board of County Commissioners (Board) consideration today.
A Request for Proposals for PD 18-19.107, Perdido Landfill, Phase 2, Landfill Mining was publicly noticed to 146 firms via Vendor Registry on November 19, 2019. The solicitation was viewed by 51 firms. Technical Proposals were received from three firms on January 2, 2020, and fee proposals on January 24, 2020. Thalle Construction Company, Inc., was deemed to be the most qualified and responsible firm with the lowest total cost.
| Vendor/Contractor |
Amount |
Contract Number |
Thalle Construction Company, Inc.
Fund 401, Solid Waste Fund; Cost Center 230315, Solid Waste Projects;
Object Code 56301, Improvements Other Than Buildings |
$7,612,711 |
PD 18-19.107 |
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| BACKGROUND: |
Comparison of Mining versus Non-Mining:
The table below below depicts a comparison of mining versus non-mining, to develop Cell 1B.
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Non- Mining |
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Mining |
| Cell 1B Construction |
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$10,000,000 |
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$10,000,000 |
| Construction Quality Assurance (CQA) |
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500,000 |
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500,000 |
| Cell 1B Engineering |
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972,222 |
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972,222 |
| Mining Cost |
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0 |
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7,612,711 |
| Mining CQA |
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230,000 |
| Tires Disposal Cost |
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0 |
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200,000 |
| TOTAL COST |
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$11,472,222 |
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$19,514,933 |
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| Airspace developed (cubic yards) |
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3,557,000 |
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4,000,000 |
| Value of Airspace |
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$143,000,000 |
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$160,700,000 |
| Site Life Extended (Years) |
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9 |
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10 |
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| Project Schedule (months) |
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24 |
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30 |
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| Aids in Environmental Remediation |
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No |
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Yes |
Note: Cell 1B Construction and CQA costs could vary based on receipt of formal quote at time of solicitation for these activities.
The amount of airspace developed and the value of this airspace is based on total site life build out of Cell 1B. The cost of mining is more expensive due to the mining itself, the additional cost of existing landfilled tires disposal (tires are now disposed of by transport to a regulated facility in Alabama) and mining CQA. The benefits of mining include additional airspace for future waste disposal, site life extension and additional revenue. Moreover, mining removes in-place waste which currently contributes to contaminated groundwater and gas migration. The Corrective Action Program approved by FDEP, identified mining, i.e. removal of this waste, as one of five corrective measures associated with site remediation for the County (See Atachment B).
Funding:
The cost for cell development is funded from the Waste Services Fund. Based on year-end figures from the 2019 CAFR and projected net income over the time-period for project completion, an approximate negative $8 million impact on the unrestricted net position is expected.
The table below illustrates the impact on the unrestricted net position from Cell 1B development including mining.
| Impact to Unrestricted Net Position With Mining |
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Unrestricted Net Position
9-30-2019 |
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$21,209,468 |
Projected Net Income
Generated During Project |
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$11,498,858 |
| Cost of Project |
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$19,514,933 |
Projected Balance of Unrestricted Net Position Upon
Project Completion |
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$13,193,302 |
| Estimated Impact to Unrestricted Net Position |
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($8,016,166) |
The calculations resulting in the figures above involve two analysis and are attached as Attachment C. The first analysis conservatively estimates the future expenses and revenue in the fund during the project timeline. The second analysis compares project costs to net income during the project timeline.
Landfill Mining:
As directed by the Board, staff researched other landfill mining projects where mining was considered and found that the decision to mine is site specific depending on several factors including economic and environmental. In speaking with six operators that chose to mine, the decision was predominantly based on environmental challenges with the economics of mining working in the positive. Out of these six operators, three stated mining would be considered for future expansion, one stated mining would not be considered for future expansion, and two are not at a point to consider future expansion options. Staff did speak with two operators which initially considered landfill mining and decided not to pursue it due to economics. A summary of staff research is found in Attachment D.
Waste Diversion
Extensive research across the waste industry has indicated the most dependable and reliable systems, apart from landfilling, are typically waste to energy operations such as mass burn, and refuse derived fuel (RDF) facilities (See Attachment E). RDF requires pre-processing of waste, whereby mass burn typically does not. Both types of facilities are typically designed and permitted for electrical generation. These facilities require a large capital investment along with a power purchase agreement with a local utility to buy the electricity produced.
Waste conversion technology projects have had very limited success. Technologies typically require large capital investments and have not demonstrated to be dependable and reliable. The Board has expressed interest in research and development of projects to divert waste from landfilling. In 2014 staff went through a procurement process to find alternative waste disposal options. This process resulted in six proposed waste diversion technologies. Negotiations with the highest ranked proposer, which proposed mixed waste processing, failed due to adverse risk regarding commodity pricing and organics processing.
Recently, staff has researched engineered fuel production and is still seeking answers to whether the economics work when the technology is built to a scalable size. The next step is to solicit for professional services to conduct a cost benefit analysis to include evaluating end markets for the engineered fuel and any other relevant technology for waste diversion. |
| BUDGETARY IMPACT: |
| Vendor/Contractor |
Amount |
Contract Number |
Thalle Construction Company, Inc.
Fund 401, Solid Waste Fund; Cost Center 230315,
Solid Waste Projects; Object Code 56301, Improvements Other Than Buildings |
$7,612,711 |
PD 18-19.107 |
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| LEGAL CONSIDERATIONS/SIGN-OFF: |
| Attorney Standard Form of Agreement, Form D: Paving/Drainage |
| PERSONNEL: |
| N/A |
| POLICY/REQUIREMENT FOR BOARD ACTION: |
| This Recommendation is in compliance with the Code of Ordinances of Escambia County, Florida 1999, Chapter 46, Finance, Article II, Purchases and Contracts. |
| IMPLEMENTATION/COORDINATION: |
| The Office of Purchasing will issue the Agreeement, as well as the Purchase Order. |
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