National Solid Wastes Management Association 6210 Campbell Road, S-200, Dallas, TX 75248 214-368-0909 Phone

▪ 214-692-5959 Fax

August 31, 2011
Mayor Mike Rawlings City of Dallas 1500 Marilla Street Dallas, Texas 75201

Dear Mayor Rawlings:

Thank you for your interest in the Flow Control issue before City Council. As requested, enclosed is the detailed financial information concerning the cost of imposing flow control on the Dallas business community. The National Solid Wastes Management Association (NSWMA) members you met with on August 12, 2011, represent small Dallas based waste haulers as well as larger public companies. Together they collect and dispose of 77% of the commercial waste in Dallas and serve 16,800 Dallas commercial businesses, which generate annual revenue of more than $62 million. We believe the information provided will support the following conclusions:

Flow control will net only $6,594,000 per year in income to the city at a cost of $19,500,000 to area businesses. It will cost businesses almost $3 for each $1 the city receives from flow control. Flow control will have a negative financial impact on businesses throughout Dallas including businesses in Southern Dallas.

Costs for our Dallas customers will increase by 20% due to higher disposal fees, transportation, labor and capital costs. Flow control will reduce competition from smaller waste haulers who will not be 1 | Page

able to afford the high cost of adding additional trucks and other equipment needed because of the inefficiencies imposed by flow control. Dallas can move forward now, without flow control, on a wide variety of green initiatives at McCommas Bluff that will generate economic activity in Southern Dallas.

Why Flow Control Will Raise Costs to Dallas Businesses

Higher Disposal Costs North and South

The McCommas Bluff landfill is one of the most expensive landfills serving Dallas in terms of actual tipping fees charged to haulers. As staff pointed out in a footnote to its January 7, 2010 city council briefing, posted tipping fees are discounted by as much as 30% in the Dallas region. For this reason any presentation that compared posted Gate Rates at landfills is not an accurate reflection of what haulers actually pay to dispose of materials at these sites.

It has been suggested that the use of the Bachman Transfer station in northwest Dallas will help mitigate the longer travel time to McCommas Bluff in Southern Dallas. However, the city charges higher tipping fees at transfer stations to offset the high cost of processing waste into large trucks that then travel to the landfill. Under flow control disposal costs utilizing the Bachman Transfer station for North Dallas businesses would rise by more than 94% (from an average actual current disposal cost in the Dallas region of $18 per ton to staff’s projected rate of $35 per ton at Bachman).

Businesses in Southern Dallas are closer to the McCommas Bluff landfill but currently have access to less expensive alternatives. Disposal cost for wastes generated in Southern Dallas would increase by 29.4% under flow control (from an average actual current disposal cost of $17 per ton to staff’s projected rate of $22 per ton at McCommas landfill).

Disposal costs for wastes generated in North Dallas and taken directly to McCommas Bluff would increase by 22.2% (from an average actual current disposal cost of $18 per ton to staff’s projected rate of $22 per ton at McCommas landfill). 2 | Page

Higher Transportation Costs1

Dallas based Bluebonnet Waste Control has taken a typical route for our industry in Dallas and broken it down to demonstrate the additional costs that would be imposed by flow control. Waste is the largest independent, locally owned and operated, minority certified waste hauler in the Dallas area and its analysis could apply to any of our NSWMA members.

In a typical commercial route using McCommas Bluff, total mileage would increase travel each day to and from the landfill from 107 to 171 miles, an increase of 59%. Time to run the route would increase from 735 to 890 minutes, an increase of 21% at a cost of approximately $187 a day or more than $50,000 per year.

Part of that cost is the almost $16,425 per year in additional fuel costs due to the additional miles driven. Fuel consumption would increase 26.5 gallons to 42.14 gallons, an increase of 59% or almost 4,500 gallons of additional fuel used per year for each truck in operation.

Higher Labor and Equipment Costs

Because the average route would now take 15 hours vs. 12 hours without flow control it would have to be split. For Bluebonnet Waste Control alone, that would mean the addition of two front load and three industrial trucks for a total of $1,250,000 and additional drivers.

Potential Flow Control Income Much Less Than Projected In the past, the city has calculated potential income from flow control based on a calculation that 900,000 tons of commercial waste leaves Dallas for other landfills. Our calculations are that the amount of waste exported from Dallas is approximately 650,000 tons. We also believe the costs of implementing flow control will be higher than anticipated.

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Tonnage Revenue Operating Costs Net Profit

City Staff Projections 900,000 $18,807,000 $4,983.000 $13,817,000

Industry Projections 650,000 $13,577,000 $6,983,000 $6,594,000*

*After second year. First year produces only $354,000 in revenue due to startup costs.

Flow Control is Unnecessary for Green Initiatives

We are concerned about claims that flow control will put the city in a better position to negotiate contracts for green initiatives. There is no evidence that flow control will provide the city with a better bargaining position to obtain green energy projects for McCommas Bluff.

While Dallas has spoken with some vendors it has never put out a Request for Proposals to examine the various types of Green energy projects that could be used to develop jobs and economic activity in Southern Dallas. As industry experts with hundreds of green initiatives across the U.S. and around the world we are not aware of any green initiative that could process the 1.3 million tons of material already being disposed of at McCommas Bluff.

Landfills Are Not Bank Vaults

The McCommas Bluff landfill has been described as a vault holding valuable materials that can be mined for later use in waste to energy or recycling projects. Landfill mining involves any number of complex issues including costs, environmental impact and demand for recyclables. Flow control will immediately increase costs to Dallas businesses. Landfill mining, if it ever becomes economically feasible, is decades away from implementation.

Corporations do not place a value on the material disposed of in their landfills in their public filings or financial statements. It is unknown and highly speculative to suggest that there will be an economical way to mine landfills when other less expensive alternatives are likely to be available. Projections concerning the value of the waste stream itself are based on material collected at 4 | Page

businesses and homes, not on the value of material in landfills.


Our calculations show almost 700 trips per day to the landfill if all material goes directly to McCommas Bluff. This is based on 650,000 tons of material with an average load of 7 tons over 268 days per year. The city’s website indicates that flow control will generate an additional 350 truck trips per day to the McCommas Bluff landfill and increase in traffic of 25% for this Southern Dallas neighborhood.

Traffic patterns throughout Dallas should also be a concern. Flow control will direct traffic now leaving Dallas to the North – East and West onto I635 and I35 to reach the Bachman transfer station or on to US75, US45 through the downtown area to reach the McCommas Bluff landfill. Because of the limited window the landfill and transfer stations are open this will focus these additional trips during peak traffic hours.

The city has agreed to begin an air monitoring program after the U.S. Environmental Protection Agency, the NAACP, officials from Paul Quinn College and neighborhood residents expressed concerns about the impact of flow control on the area.

Creating a Win-Win Solution for Dallas

The NSWMA stands ready to work with the city to create a win-win situation that will create economic activity in Southern Dallas and keep Dallas an attractive and competitive environment in which to do business. These initiatives can start immediately and do not require flow control. We recommend the following:

Develop and issue a Request for Proposals for new green initiatives for the city.

Implement the best proposal using the 1.3 million tons of material already flowing into the landfill. Recapture the 44,000 tons of recycled Dallas residential recycling material now 5 | Page

leaving the city. Create a Community Development Corporation for District 8 funded by a small increase in the current McCommas Bluff tipping fee or a portion of the fee currently generated. • Evaluate potential cost savings by privatizing a portion of residential waste collection and operations of the landfill. Use some of those savings to fund economic development. Potential savings for residential collection alone have been estimated at $15 million. Closing the city’s inefficient transfer stations could additionally save millions of dollars that could be applied to economic development programs.


Mayor, we appreciate your spending time with us to better understand this important issue. We have also provided you with some additional information for potential green initiatives that could be implemented in the city. The NSWMA and its members stand ready to work with you to help the city remain competitive and meet its green objectives.


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