A decades-long partnership between Marion County and Covanta, the company that operates the county’s waste incinerator, is coming to an end.
The burner, at Brooks, will still take most of the county’s garbage. But it will now be as an independent company, specifies a draft contract between the entities.
This means that Covanta will have about a third of the capacity of the free incinerator to accept waste that does not come from the county.
The company already takes medical and industrial waste from the western United States and Canada, an investigation by the Statesman Journal detailed on Sunday.
Marion County commissioners plan to vote on the contract at their 9 a.m. public meeting on Wednesday.
County officials said they did not have time to answer questions about the proposed contract on Monday.
The new deal would completely change the way the county pays and makes money with the incinerator.
Currently, Marion County covers a large portion of the expenses associated with operating the incinerator, from property taxes and insurance to disposing of ash left over from burning waste.
Under the proposed new contract, Covanta will cover many of these expenses.
But the company will also keep most of the revenue it previously shared with the county, including revenue from electricity sales, metal recycling, and medical and industrial waste.
It’s unclear how this will affect the county’s bottom line or the waste rates paid by local residents and businesses – rates that are already among the highest in the state.
Marion County issued $ 56 million in tax bonds to build the incinerator, which is owned by Covanta. The county reimbursed these obligations with the revenue from franchise fees, electricity sales, and dumping fees (the fees paid by garbage haulers to bring the waste to the facility).
A state law passed before the burner opened in 1986 requires Marion County garbage collectors to bring garbage to Covanta.
Investigation:Paint, oil, plastic. What is Covanta burning in Brooks, Oregon?
In 2009, when the bonds were paid off, county officials said they would use the proceeds to invest in the solid waste management system, rather than lowering the dumping fee.
They used millions of dollars in waste revenue to solve serious construction problems with its downtown Courthouse Square complex, a 2020 Statesman Journal investigation found.
At the same time, the fall in energy prices reduced the burner’s income. Marion County’s share of electricity revenue increased from $ 5.5 million in 2014 to $ 1.2 million in 2019.
In 2019, county and company officials said the incinerator needed millions of dollars in maintenance. They asked the Oregon legislature to designate the incinerator’s electricity as renewable energy, allowing it to sell for a higher price.
Without the designation, they said, either the incinerator would shut down or local waste rates would double.
The bills proposed in 2019 and 2020 were not passed, and none of these results happened.
But uncertainty kept Marion County and Covanta from negotiating a new contract for nearly two years.
Their previous contract expired in 2019 and one-year extensions were approved twice.
“This current agreement is short-term in nature, offering many options for both the county and Covanta,” said company spokesman James Regan.
“Two years ago, we were discussing long-term agreements for the sale of energy and the disposal of waste,” he said. “The short-term contract allows for the ongoing operation and evaluation of the facility while providing vital and essential waste disposal services for both Marion County and other customers.”
Less expenses, less income
The proposed new contract comes into effect from July 1, 2021 to June 30, 2024. It has options for two five-year extensions, which would take it until June 30, 2034.
Here are the proposed changes:
Marion County previously paid Covanta a monthly service charge for waste disposal of about $ 700,000 per month, or about $ 8 million per year, to a maximum of 160,000 tonnes per year.
Under the new contract, Marion County will pay the company $ 37.50 per tonne and guarantee that it will deliver 125,000 tonnes per year, for a total of $ 4.7 million per year. Waste delivered in excess of this amount will also cost $ 37.50 per tonne.
Ash, leachate, wastewater
Burning garbage creates ashes. Removal and storage of ashes was previously the responsibility of the county. The county operates a small landfill near Woodburn where it stores the ashes, but it is nearly full.
Under the new contract, Covanta will pay the county to collect the ashes until the landfill is full and then pay to take them to the Coffin Butte landfill near Corvallis.
The company will also remove leachate, or acidic water, that seeps into the ash pit. This cost was previously the responsibility of the county.
And it will pay the county $ 3.06 per 1,000 gallons to use a pipe that carries cooling water from the facility to the Willamette River.
Medical and industrial waste
Under the new contract, the county will get $ 5 for every ton of medical and industrial waste from outside the county that Covanta accepts.
The county previously received half of the revenue from medical waste.
He received $ 100 per tonne for industrial waste, up to 7,000 tonnes per year, and $ 150 per tonne for amounts above that cap.
Last year the county made $ 559,623 in industrial waste. At the new rate, this would drop to $ 27,850.
Covanta has agreed to limit medical waste out of the county to 18,000 tonnes per year, up from 25,000 tonnes per year currently. There is no limit on industrial waste.
Sale of electricity and metal recycling
Under the proposed contract, Covanta will retain all income from electricity sales. The current split is 90% for Marion County and 10% for Covanta. Covanta will also retain all revenues from recycling metals in waste.
Covanta will be financially responsible for all state and local property taxes. Marion County had previously refunded taxes to the company.
The company will also take responsibility for civil liability and other insurance. In 2019, the county paid $ 444,345 for the facility’s liability insurance.
The county has already paid for most of the operating expenses of the plant. The new contract does not explicitly state whether Covanta will cover these expenses. They include:
- Annual chimney tests, environmental permit fees, water tests.
- The cost, increased by 10%, of operating the company’s continuous emissions monitoring system.
- Half of the monthly rental fee the company pays to Covanta Marion Land Corp., a subsidiary of Covanta, for the facility’s ground lease.
- Monthly bills for natural gas and telephone lines.
- Operational supplies including ammonia, dolomitic lime and coal.
- Medical examinations and medical examinations of employees.
Tracy Loew is a reporter for the Statesman Journal. She can be reached at [email protected], 503-399-6779 or on Twitter at @Tracy_Loew. Support local journalism by subscribing to the Statesman Journal.