SPSA Budget Reduction Review

1
SPSA Budget Reduction Review

• January 24, 2007

2
Goal

• Provide reductions in operational and personnel
  expenses of 20

3
Process

• Reviewed organization and all operations and
  looked for opportunities to make changes
• Categorized services as contractual or
  non-contractual
• Identified opportunities to reduce cost without
  impacting core contractual services

4
Process

• Identified other reductions needed to meet 20
  goal with specific emphasis on non-contract
  services
• Identified policy issues for SPSA Board
  consideration

5
Process

• Identified other issues that have increased costs
• Services provided to communities beyond contract
  requirements
• Shifts in costs from communities to SPSA
• Services provided to enhance regions
  environmental stewardship

6
To Achieve 20 Expenditure and Personnel
Reductions

• Reduce operating expenses
• Sell Waste to Energy gt40
• Outsource Recycling Programs gt9
• Implement Managed Competition for other functions

7
Potential Budget Reductions

• Stop administering Solid Waste Management Plan
  including production of Regional Recycling Report
• Stop environmental management of non-SPSA closed
  landfills
• Stop public tours of SPSA facilities

8
Potential Budget Reductions Continued

• Eliminate service brochure updates and mailings
• Eliminate support of special cleanups by
  communities
• Reduce litter control in public areas outside of
  facilities
• Re-route trucks in Cradock to reduce operational
  costs

9
Potential Budget Reductions Continued

• Close transfer stations on July 4th and
  Thanksgiving Day
• Charge for keeping transfer stations open beyond
  normal closing times
• Stop ISO 14001 recertification
• Reduce staff where possible

10
Programs not Required by Contract

• Recycling
• Drop-off Collections
• Yard Waste Recycling
• Tire Disposal
• HHW
• Business Recycling
• White Goods Recycling
• Proprietary Waste
• Ferrous and Non-Ferrous Recycling
• Residential Used Oil Collection and Disposal

11
Sell Waste To Energy

• Benefits
• May provide cash to retire debt
• Eliminates new debt for Waste to Energy
• Eliminates administrative overhead related to
  Waste to Energy
• Eliminates staffing concerns
• Eliminates problems relating to maintenance and
  installation of needed upgrades

12
Sell Waste To Energy

• Issues
• Contract with Navy is complex
• Consider impact on outstanding debt
• Sale of the plant is very complex and will
  require outside assistance

13
Sell Waste To Energy

• Issues
• Availability of fuel
• Contracts beyond 2018
• Future value of electricity
• Unforeseen events
• changes in regulations
• catastrophic failures of equipment

14
Sell Waste To Energy

• Recommendations
• Conduct feasibility study
• Report findings to the Board

15
Outsource Recycling

• Benefits
• Eliminates non-core activity
• May provide cash to retire debt
• Eliminates new debt for equipment replacement
• Eliminates administrative overhead related to
  Recycling
• Eliminates staffing concerns

16
Outsource Recycling

• Issues
• SPSA does not currently have contracts for
  recycling services
• Having contract in place will improve market
  value
• SPSAs identity is closely linked to recycling
  services
• Recycling requirements imposed by law

17
Outsource Recycling

• Recommendation
• Develop contract between SPSA and member
  communities for recycling services
• Have SPSA enter into an agreement with a third
  party to purchase the recycling assets and
  provide recycling services that mirror the member
  contracts
• SPSA becomes the contract administrator for
  member recycling services

18
Managed Competition

• Select a committee to oversee the process
• Recommend the Intergovernmental Coordinating
  Committee
• Engage consultants as needed
• Identify services
• Transportation
• Transfer Station Operation
• Administrative functions
• Items on page 10
• Report recommendations to the Board
• Develop Requests for Proposals
• Evaluate Responses
• Recommendation to Board

19
Board Workshop Policy Issues

• Identify activities not to be outsourced
• Own versus sell components
• Contract compliance
• Craney Island Landfill
• Virginia Beach Landfill
• Free Citizen Disposal
• Profit margin on various services
• Future of Yard Waste Management
• Discuss services on pages 7 through 9

20
Summary of Recommendations

• Sell Waste to Energy
• Select consultant for feasibility review
• Identify Advisory Committee for Managed
  Competition
• Outsource Recycling
• Select other activities to evaluate
• Select consultant for assistance
• Set aside 2.00 per ton from recent increase for
  this work
• Plan Board workshop for February