Prepared for: FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE

PHASE 2 REPORT

Solid Waste Management Options Study Frederick County, Maryland

Prepared by:

10211 Wincopin Circle, 4th Floor Columbia, Maryland 21044

Project Number: ME1306-02

30 June 2017

FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... 1 ACKNOWLEDGEMENTS ...... 7 DISCLOSURE ...... 8 ABBREVIATIONS AND ACRONYMS...... 9 1. INTRODUCTION ...... 11 1.1 Terms of Reference ...... 11 1.2 Findings and Recommendations from Phase 1 ...... 11 1.2.1 Waste Diversion and Recycling Targets ...... 12 1.2.2 Recommended Options for Further Study in Phase 2 ...... 14 1.2.3 Public Comments on the Phase 1 Report Pertaining to Phase 2 ...... 15 1.3 Goals for Phase 2 of the Study ...... 19 2. SCREENING AND BENCHMARKING OF OPTIONS ...... 20 2.1 Overview of Approach ...... 20 2.2 Collection of Source Separated Organics ...... 21 2.2.1 Introduction ...... 21 2.2.2 Food Waste Collection from Restaurants ...... 22 2.2.3 Collection of Residential Source Separated Organics ...... 23 2.2.4 Estimated Quality and Quantity of Food Waste for Collection ...... 28 2.2.5 Main Challenges and Lessons Learned ...... 30 2.3 Expanded Recycling at Public Schools ...... 31 2.3.1 Food Waste Recycling Program ...... 31 2.3.2 Single-Stream Recycling Program ...... 32 2.4 Aerobic Composting ...... 34 2.4.1 Introduction ...... 34 2.4.2 Types and Costs of Composting Operations ...... 35 2.4.3 Existing Local Composting Capacity ...... 38 2.4.4 Main Challenges and Lessons Learned ...... 39 2.4.5 Permitting Considerations for New Facilities ...... 40 2.4.6 Incentive Programs for Composting ...... 41 2.5 Co-Digestion of Food Waste with Wastewater at Anaerobic Digestion Facility .. 44

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL i FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

TABLE OF CONTENTS (continued)

2.6 Resource Recovery Park ...... 46 2.7 Potential Financing and Contracting Mechanisms ...... 49 2.7.1 Overview ...... 49 2.7.2 Suitability of Different Contracting Mechanisms ...... 53 3. INCREMENTAL PHASE-IN OF SELECTED OPTIONS ...... 55 3.1 Overview ...... 55 3.2 Decentralized Collection and Composting of Source Separated Organics ...... 56 3.2.1 Limits on the Scale and Timing of Programs ...... 56 3.2.2 Recommended Implementation Schedule ...... 58 3.2.3 Siting Considerations for Composting Facilities ...... 60 3.3 Centralized Resource Recovery Park ...... 60 3.3.1 Initial Assumptions for Materials Flow ...... 60 3.3.2 Siting Considerations ...... 61 3.3.3 Potential Future Improvements ...... 62 4. DETAILED FINANCIAL MODELING AND ANALYSIS ...... 63 4.1 Overview of Approach ...... 63 4.2 Decentralized SSO Collection and Composting Programs ...... 64 4.2.1 SSO Collection from Public Schools ...... 64 4.2.2 Residential SSO Collection (Three-Bin Program) ...... 67 4.2.3 Food Waste Collection from Restaurants ...... 70 4.2.4 Collection Equipment and Hauling ...... 72 4.2.5 Composting Facility Development and Operation ...... 73 4.3 Centralized Resource Recovery Park ...... 77 4.3.1 Materials Recovery Facility ...... 77 4.3.2 Composting Facility...... 79 5. MODEL RESULTS AND SENSITIVITY ANALYSES ...... 82 5.1 Decentralized SSO Collection and Composting Programs ...... 82 5.1.1 Summary of Baseline Input Assumptions for SSO Collection Program .... 82 5.1.2 Summary of Baseline Input Assumptions for Composting Program ...... 84

Fred Co SWM Study_Phase 2 Report_FINAL ii FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

TABLE OF CONTENTS (continued)

5.1.3 Summary of Model Output under Baseline Assumptions ...... 87 5.1.4 Sensitivity of Model Output to Key Input Assumptions ...... 90 5.1.5 Sensitivity of Model Output to Program Implementation Schedule ...... 96 5.2 Centralized Resource Recovery Park ...... 100 5.2.1 Summary of Baseline Input Assumptions ...... 100 5.2.2 Summary of Model Output under Baseline Assumptions ...... 102 5.2.3 Sensitivity of Model Output to Key Assumptions ...... 103 6. SUMMARY AND RECOMMENDATIONS ...... 108 6.1 Summary of Phase 2 Review and Analysis of Options ...... 108 6.1.1 Qualitative Review and Final Selection of Options ...... 108 6.1.2 Options Eliminated from Detailed Analysis ...... 109 6.1.3 Options Selected for Detailed Analysis ...... 110 6.2 Quantitative Summary of Final Options ...... 112 6.2.1 Development of Pro-Forma Models ...... 112 6.2.2 Decentralized SSO Collection and Composting Model ...... 113 6.2.3 Centralized Resource Recovery Park Model ...... 114 6.3 Comparative Performance of Final Options ...... 117 6.4 Recommendations ...... 119

TABLES

Table 1-1: Waste Diversion and Recycling Targets for the Study Table 2-1: Suitability of Contracting Mechanisms for Recommended Options Table 3-1: Interdependency between Recommended Options Table 3-2: Suggested Phasing of SSO Collection and Composting Programs Table 5-1: Baseline Assumptions for SSO Generation and Capture Rates Table 5-2: Baseline Assumptions of Capital Expenditure on SSO Collection Table 5-3: Baseline Assumptions of Operating Costs for SSO Collection Table 5-4: Baseline Assumptions of Capital Expenditure on Composting Facilities

Fred Co SWM Study_Phase 2 Report_FINAL iii FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

TABLE OF CONTENTS (continued)

Table 5-5: Baseline Assumptions of Operating Costs for Composting Facilities Table 5-6: Predicted Recycling Rates from SSO Program (Baseline Assumptions) Table 5-7: Summary of Baseline Assumptions for RRP Development and Operation Table 5-8: Summary of Baseline Assumptions for RRP Performance and Revenues Table 5-9: Predicted Recycling Rates from RRP Model Output (Baseline Assumptions)

FIGURES

Figure 2-1: Existing Composting Operations within 100 miles of Frederick City Figure 3-1: Frederick County Population and Administrative Structure Figure 3-2: U.S. EPA Food Waste Recovery Hierarchy Figure 3-3: Waste Processing Flow Schematic for Resource Recovery Park Figure 4-1: Assumed Composting Mass Flow Diagram Figure 5-1: Quantity of SSO Collected and Number of Composting Facilities (Baseline Assumptions) Figure 5-2: MRA Recycling Rate and SSO Recycling Rate (Baseline Assumptions) Figure 5-3: Monthly Cost of SSO Collection Programs (Baseline Assumptions) Figure 5-4: Required Tipping Fee at Compost Facilities (Baseline Assumptions) Figure 5-5: Effects on Recycling Rates of Varying Organic Fraction of MRA Waste Figure 5-6: Effect on (A) Cost per Restaurant and (B) Cost per Household of Varying Organic Fraction of MRA waste Figure 5-7: Effect on (A) Cost per Restaurant and (B) Cost per Household of Varying Fuel Cost Figure 5-8: Number of Facilities Required as a Result of Varying the Fraction of Solid Residuals Generated from Composting Operations

Fred Co SWM Study_Phase 2 Report_FINAL iv FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

TABLE OF CONTENTS (continued)

Figure 5-9: Effect on Average Composting Tip Fees of Varying Compost Sales Figure 5-10: Effect on (A) Cost per Restaurant and (B) Cost per Household of Varying Compost Sales Figure 5-11: Effect on Recycling Rates of Varying the Program Implementation Schedule Figure 5-12: Effect on Recycling Rates of Voluntary vs. Mandatory Participation Figure 5-13: Effect on (A) Cost per Restaurant and (B) Cost per Household of Voluntary vs. Mandatory Participation Figure 5-14: Equivalent Cost per Household of RRP Development and Operation (Baseline Assumptions) Figure 5-15: Variation in Equivalent Cost per Household as a Result of (A) Varying the Efficiency of Recyclables Recovery at the RRP and (B) Varying the MPI Figure 6-1: Equivalent Monthly Cost vs. MRA Recycling Rate (Baseline Assumptions) Figure 6-2: Equivalent Monthly Cost vs. Organics Recycling Rate (Baseline Assumptions)

APPENDICES

Appendix A: Decentralized SSO Collection and Composting Model (Excel Spreadsheet) Appendix B: Centralized Resource Recovery Park Model (Excel Spreadsheet)

NOTE: BOTH APPENDICES ARE ATTACHED AS STANDALONE FILES TO THE PDF VERSION OF THIS DOCUMENT. TO OPEN, CLICK THE PAPER CLIP ICON AT THE TOP RIGHT HAND SIDE OF THE PDF VIEWER AND DOUBLE CLICK ON THE FILE(S) LISTED IN THE PANEL.

Fred Co SWM Study_Phase 2 Report_FINAL v FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

EXECUTIVE SUMMARY

This Phase 2 Report was prepared by Geosyntec Consultants for the Frederick County Solid Waste Steering Committee to describe findings from the Solid Waste Management Options Study. Initiated by Frederick County Executive Jan Gardner with support from the Division of Utilities and Solid Waste Management (DUSWM), the two-phase Study was conducted to develop a long-term solid waste management strategy that is informed by and inclusive of county residents. During Phase 1, five community workshops were held throughout the county between November 2015 and February 2016, collectively called the “What’s Next? Solid Waste Public Forum.” During these workshops, residents engaged in active dialogue and structured brainstorming exercises to identify options for achieving the County’s waste disposal and recycling goals and to define criteria for assessing those options. Phase 1 culminated in a final Phase 1 Report prepared by Geosyntec for the Steering Committee, dated 30 September 2016.

Phase 1 served to build community consensus on which viable waste management and recycling alternatives should be specifically studied and evaluated in more detail during Phase 2. As such, the Phase 1 Report was issued as a draft for public comment prior to it being finalized. Comments relevant to Phase 1 of the Study were addressed in the final Phase 1 Report. However, a number of pertinent comments were more appropriately directed at Phase 2 of the study. These comments and suggestions helped to define the goals for Phase 2 of the Study and to orient Geosyntec’s detailed evaluation of options as described in this Report.

Approach to Establishing Recycling Goals for the Study To guide the County’s future waste management strategy, the most practical framework around which to build the evaluation was the Maryland Recycling Act (MRA) and Maryland Zero Waste Plan (ZWP), both promulgated and enforced by the Maryland Department of the Environment (MDE). These documents provide objective statewide goals, definitions, and boundary conditions against which to measure performance of different options. To the extent possible, all definitions used in this Study are based on MRA terminology, which differentiates between “MRA waste,” mainly municipal solid waste (MSW) from residential and commercial sources, and “non-MRA waste,” which includes (but is not limited to) construction and demolition (C&D) debris, automobile components, sewage sludge, land clearing debris, and agricultural wastes. For this Study, the relative performance of different recycling options is evaluated against the ZWP, which targets incremental increases in recycling of overall MRA waste and various MRA waste categories over the period 2020 to 2040. However, it is important to make clear the distinction between recycling goals under the voluntary ZWP and the statutory MRA. The current goal for MRA waste recycling under the MRA is 35%, which is met each year by the County (as reported to and verified by MDE). As previously described in the Phase 1 Report, an underlying assumption for this Study is the County’s ongoing compliance with the MRA, which, therefore, is not the focus of interest for the Phase 2 Report.

In Phase 1 of the Study, food waste was identified as the category of waste that is currently unrecovered but could contribute significantly to increasing recycling rates in the future. The goal for food waste recycling, which is interpreted in this Study as source-separated organics (SSO) and is thus inclusive of compostable paper, is 90% by 2040. Incremental targets are established for 2020, 2025, 2030, and 2040.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 1 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

The analysis in Phase 1 focused on the costs and effects of implementing recycling options through 2025, since the size and distribution of the county population, waste stream, and available options are likely to evolve significantly over a longer time span. Overall MRA waste and food waste recycling goals for 2025 are 65% and 60%, respectively. Achieving goals for 2025 remains important in Phase 2; however, given the capital and other investments needed to implement a workable solution, the ability of final selected options to meet the 2040 goals are also considered.

Screening of Recommended Options from Phase 1 From a total of 20 options initially studied in Phase 1, seven options were recommended for potential analysis in Phase 2. These options comprise both programmatic elements (soft infrastructure) and processing systems (hard infrastructure) can be grouped into three categories as follows: 1. Expanded recycling and food waste/organics collection programs:

o Waste reduction program at County schools o Three-bin residential collection program o Food waste collection from restaurants o Co-digestion of food waste with biosolids at the Ballenger-McKinney Wastewater Treatment Plant 2. Development of composting facilities:

o Community-scale, decentralized composting program o Large-scale, centralized composting facility 3. Development of a large-scale, centralized resource recovery park (RRP) Screening of options in Phase 2 included verification of estimates from Phase 1 (e.g., material quantities, costs, and project scope) based on benchmarking data from case studies of similar programs/systems in other jurisdictions, characterizing the various waste streams and sources that may serve as feedstock of food waste and other organics to processing systems, review of markets and incentive programs for project development, and review of potential financing and contracting mechanisms.

Findings from screening and benchmarking efforts are detailed in Chapter 2 of this Report. As described therein, two options were eliminated from further consideration. Large-scale centralized composting would be of little value until the County’s ability to divert sufficient organics for processing has been demonstrated. As such, Geosyntec considers that implementing a large-scale composting facility to represent an undue capital risk. Co-digestion of food waste with wastewater at anaerobic digestion (AD) facilities is a relatively mature technology and may represent a cost-effective method of processing food waste collected from county business and residents. Details of the AD reactor design at the Ballenger- McKinney Plant would have to be professionally reviewed under a technical and financial feasibility study prior to deciding on implementing this strategy. While the exact timing and specifications of the AD system at the plant remain uncertain, however, more definitive evaluation of this option is unproductive at this stage.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 2 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

In Phase 1 of the Study it was assumed that public schools already had functioning single stream (blue bin) recycling programs in place under the County’s Public Schools Recycling Plan (PSRP) such that no meaningful additional quantities of clean recyclables could be recovered. However, with regard to expanded recycling at public schools, Geosyntec investigated both single-stream (blue bin) and SSO (green bin) recycling. Screening in Phase 2 indicated that Phase 1 assumptions generally hold true, such that Phase 2 should focus only on recovery of food waste from school kitchens and cafeterias as well as provision of additional organics collection bins in hallways. It is important to stress that expanding recycling at schools is an important goal for the County, but is not a further goal for analysis in Phase 2.

Selected Options for Detailed Analysis The options selected for detailed analysis and financial modeling are: 1. SSO collection from schools, restaurants, and households; 2. Decentralized composting of collected SSO; and 3. Development of a centralized RRP. Due to their significant overlap and similarity in scope, equipment, and potential roll-out schedule, the three SSO collection programs are collectively assessed as a single option. As noted throughout this Report, wholesale rollout of these SSO collection programs is not recommended. The County is advised to explore incremental rollout on a pilot scale with program expansion only after success can be demonstrated on a smaller scale and affected parties (not least DUSWM) gain some experience with the process. Based on this, a six-phase rollout program (Pilot plus Phases I-V) for gradually expanding SSO collection is recommended. Case studies suggest that capture rates under voluntary SSO collection programs are too low to meet Maryland ZWP recycling goals for food waste. Therefore, it is assumed that the program is voluntary only during the Pilot and Phase I, but becomes mandatory in Phase II. Phase II was chosen as the time at which to enforce food waste recycling as it is important to begin enforcement early in the program, when fewer entities are involved, to work out enforcement costs and mechanisms that can be applied as the program grows.

Several different types of aerobic composting operation have been developed. For analysis in Phase 2, however, it is assumed that covered aerated static piles (ASPs) will be used since these represent the predominant composting technology used at facilities that co-compost food waste without significant odor issues. To minimize permitting and operational complexity, proposed development of new composting facilities is limited to Tier 2-Small facilities (as defined by MDE) that will produce less than 10,000 CY of finished compost annually. Based on processing mass balance assumption, this limits organic feedstock to 12,000 tons/year, of which at least 50% by mass should be yard waste or other material suitable for use as a bulking agent (i.e., only 6,000 tons/year of SSO may be delivered to each facility). Therefore, a key component of the analysis is specifying the number of CFs needed to keep up with phased increases in SSO collection rates.

For the RRP, Geosyntec assumed that a materials recovery facility (MRF) with 250,000-ton throughput capacity would be required with separate lines for processing existing quantities of S-S materials and mixed waste, with onsite composting of recovered organics. The mixed waste line would also include

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 3 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

C&D processing and recycling. All unrecovered material not suitable for recycling or composting will be landfilled.

Modeling Performance and Costs of Selected Options The two decentralized options are directly dependent on each other while the RRP is somewhat independent. Therefore, in assessing the cost and expected performance of implementing each option, Geosyntec has constructed two models: one model to jointly analyze SSO collection and composting and one model to assess the RRP. Incremental development and phased-in expansion of recycling under different options is described in Chapter 3. Various mechanism for financing and project delivery were investigated; however, the baseline assumption is that the SSO collection and composting programs would be delivered under franchise agreements with private finance while the RRP would be developed as a County owned and operated facility or under a public-private partnership. In either case, the RRP would be financed via a bond issue.

The model architecture and baseline assumptions are described in Chapter 4. Both pro-forma models ultimately serve to estimate the cost per ton of waste recycled each year over a defined lifecycle of performance. Modeling and evaluation of the financial feasibility of each alternative varies considerably between these two very different approaches to increasing recycling in Frederick County. However, the models have several similarities in terms of the costs and revenues included. Costs accounted for include capital expenses (CAPEX), including design, permitting, RFP development, contracting, and construction; depreciation of assets and loan repayment and interest paid (cost of capital); operating expenses (OPEX), including labor, equipment and facility maintenance, property leases and facility charges, fuel, insurance, and other overheads; and education/outreach and enforcement. Potential revenues and cost offsets accounted for include secondary resource sales (compost and recyclables); service fees; and avoided costs (e.g., fees for landfill disposal).

Findings from Analysis of SSO Collection and Composting Program The model developed by Geosyntec for evaluation of SSO collection and composting allows for gradual introduction of SSO collection and composting in accordance with six phases (Pilot plus Phases I through V). A detailed summary of model output under baseline assumptions as well as sensitivity to key input variables is provided in Section 5.1 of this Report. In summary, the model shows that: • The overall MRA recycling and food waste recycling rates achieved would be 54% and 28% in 2025, respectively, growing to 64% and 90% by 2040, respectively. This means the County cannot meet overall Maryland ZWP recycling goals from the SSO collection and composting program alone, meaning that additional recycling programs (e.g., expansion of curbside collection of single-stream recyclables) will be necessary. Importantly, however, the model shows that that food waste recycling goals could be met after 2025. • The monthly cost of SSO collection at schools generally decreases with time, reaching a fairly stable value of $0.50 - $0.60 per student per month around the year 2025. The monthly cost per restaurant increases rapidly to between $500 and $600 by 2025, but then decreases slightly over time to below $500. After an initial steep increase, the monthly cost for households increases slowly with time, exceeding $6.00 per household by 2027 and $7.00 per household by 2031.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 4 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

• Assuming a discount rate of 2% net of inflation, the net present value (NPV) of the capital costs for developing the decentralized SSO collection and composting programs are expected to be $18.93 million and $30.23 million through 2040, respectively, or $49.16 million in total. Under the decentralized approach, costs are relatively evenly distributed through the life of the program. The model was found to be highly sensitive to changing assumptions on voluntary vs. mandatory participation. The model was also found to be sensitive to variability in the organic fraction of MRA waste and changes in the implementation schedule. Model output was relatively robust to other variables.

Findings from Analysis of Resource Recovery Park Development The model developed by Geosyntec allows for independent input assumptions for development and operation of the materials recovery facility (MRF) and compost facility (CF) that comprise the two main components of the RRP. A core assumption related to development of a centralized RRP is that the facility is sized to handle 100% of the available waste in the county from the date it commences operation (assumed to be 2018). Therefore, there is no escalation schedule for implantation of the facility as was the case with the decentralized composting program. A detailed summary of model output under baseline assumptions as well as sensitivity to key input variables is provided in Section 5.2 of this Report. In summary, the model shows that: • The overall MRA recycling and organics recycling rates achieved would be 73% and 65%, respectively. The RRP would enable the County to meet Maryland ZWP goals for overall MRA recycling and organics recycling only through 2025 and 2030, respectively. Thereafter, these recycling goals will not be achieved by the RRP alone. It is noted that the RRP is also expected to recycle about 12,500 tons of C&D waste each year, which generates some revenue to offset operating costs but does not contribute to the MRA recycling rate since C&D is a non-MRA material. • The input assumptions to the RRP model are not sufficiently granular to directly allocate the cost of waste processing and recycling at the RRP to individual sources of waste materials (e.g., by school, restaurant/business, or household) in the way that was possible for the decentralized SSO collection and recycling model. As a surrogate measure of unit costs, however, total costs of RRP operation are evenly spread among the total households in the county (89,800 based on 2016 data) to calculate an equivalent monthly cost per household, which declined over time from $8.13 in 2018 to $7.51 in 2025 and $6.09 in 2040. This decline is because more material is processed at the facility each year due to growth in the population served, yielding more recyclables and compost for sale at slightly higher operating costs but without further significant capital outlays. • The total nominal capital costs of the MRF and CF are assumed to be $44 million and $22 million, respectively, for a total of $66 million. Assuming a discount rate of 2% net of inflation, the combined NPV of these costs is $57.09 million. $33 million of these costs are assumed to be incurred in the first year of development. As such, development of a RRP requires a large upfront capital outlay. With the exception of the price earned for mixed recyclables recovered from the S-S processing line, the RRP model showed that costs are relatively robust to all variables. Given the significant variability in these prices, however, this represents an important sensitivity to a performance factor over which the

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 5 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

County has no control. The recycling rates achieved by the RRP were also highly sensitive to changing assumptions on the organic content of MRA waste and the recovery rate of organics and recyclables.

Comparative Performance of Selected Options To facilitate fair comparison between the decentralized SSO collection and composting programs and centralized RRP project under baseline assumptions, the total costs of the SSO programs were assumed to be evenly spread among county households in a similar manner as already performed for the RRP model. Household costs increase from less than $2 in 2020 to slightly over $10 in 2040 as the SSO program is expanded, while the costs for the RRP decrease from about $8 to $6 over the same period. Although the final unit cost of the RRP is lower, this illustrates that high costs are incurred immediately as a result of RRP development, with no ramp-up period to allow demonstration that the facility can perform as expected. By comparison, the phased approach of the SSO program means that a unit cost of $8/household is not incurred until after 2025, by which time a decade of experience has been gained. The overall recycling rate achieved by the RRP is static at about 73%, which meets the ZWP goal for each increment except 2040. The overall recycling rate achieved by the SSO program is dynamic, increasing from below 50% in 2020 (representing negligible contribution to the County’s recycling rate during the Pilot phase) to over 63% by 2040 (when the SSO program is fully developed). However, neither the SSO program or RRP meet the overall recycling goal under the Maryland ZWP through 2040, which means that the County would have to expand other recycling programs in order to boost the overall MRA recycling rate. This limitation in the SSO program was acknowledged in the Phase 1 Report and is fully expected: a program that targets organics can only be as successful as allowed by the total quantity of that material available. In this regard, although the SSO program is slower to achieve target rates of organics recycling than the RRP, it improves continually with time and can meet ZWP goals from 2025 through 2040. As such, it represents a fully successful program with respect to achieving its original performance targets from Phase 1. By comparison, the RRP has a static organics recycling rate of about 61%, which falls short of the ZWP target after 2025. Given that the RRP meets neither the overall MRA waste or organics recycling rate, it can only be considered a partial success with regard to meeting its original performance targets.

Recommendation Notwithstanding a number of important limitations and observations regarding the results of the analysis conducted and overall findings from the Study, Geosyntec’s recommendation is for the County to move forward with exploring a decentralized SSO collection and composting program. This is based on the comparative discussion of expected levels of performance and costs between the SSO program and the RRP project, and acknowledging the particular sensitivity of the financial performance of the RRP to the market price recovered mixed recyclables, which is highly volatile. In Geosyntec’s opinion, the County would be best advised not to incur the capital risk posed by developing the RRP under untested conditions. Contributing to this recommendation is recent industry experience with mixed waste processing, which has drawn the efficiency of these operations into question. Given the sensitivity of RRP performance to organics and recyclables recovery rates from incoming MSW, this uncertainty in performance is additional cause for concern.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 6 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

ACKNOWLEDGEMENTS

This Report was prepared for the Frederick County Solid Waste Steering Committee by Geosyntec Consultants of Columbia, Maryland to present findings from a Study performed by Geosyntec in collaboration with A. Goldsmith Resources, LLC of Atlanta, Georgia and the Nexight Group of Silver Spring, Maryland. Geosyntec would like to acknowledge the considerable support and input provided by several individuals during preparation of this Report, notably:

Solid Waste Management Steering Committee members John Daniels (Chair), Peter Blood (Vice-Chair), Ellis Burruss, Don Briggs, Patrice Gallagher, David Gray, Kai Hagen, Phil LeBlanc, Pat Miglio, Joe Richardson, and Chris Voell

The Office of the County Executive, including County Executive Jan Gardner and Communications Director Vivian Laxton

The Frederick County Department of Utilities and Solid Waste Management, in particular Kevin Demosky (Director) and Phil Harris (Superintendent, Department of Solid Waste Management)

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 7 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

DISCLOSURE

Geosyntec Consultants (www.geosyntec.com) is a specialized consulting and engineering firm that works with private and public sector clients to address new ventures and complex problems involving our environment, natural resources, and civil infrastructure. Waste management planning, engineering, and design are important practice areas for the firm, both in the US and abroad. Geosyntec is active in the design and permitting of several of the solid waste management and recycling systems evaluated in this Study, including landfills, composting facilities, anaerobic digestion plants, material recovery facilities (MRFs), and transfer stations. The firm’s design activities in Maryland have been limited primarily to landfills, MRFs, and transfer stations. Geosyntec does not build, own, or operate any commercial waste management facilities and has no direct or indirect interest in application of any particular waste management or recycling technology.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 8 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

ABBREVIATIONS AND ACRONYMS

AD Anaerobic digestion ASP Aerated static pile BOE Board of Education (Frederick County) CAPEX Capital expenditure C&D Construction and demolition CF Composting facility COMAR Code of Maryland Regulations CY Cubic yard DBO Design-build-operate DSWM Department of Solid Waste Management (Frederick County) DUSWM Division of Utilities and Solid Waste Management (Frederick County) FCC Frederick Community College FCPS Frederick County Public Schools FFR Fast food restaurant FSR Full service restaurant FOG Fats, oils, and grease LID Low impact development MBR Membrane bioreactor MDA Maryland Department of Agriculture MDE Maryland Department of the Environment MDOT Maryland Department of Transportation MES Maryland Environmental Service MFD Multi-family dwelling MPI Market price index MRF Materials recovery facility MGD Million gallons per day MRA Maryland Recycling Act MSW Municipal solid waste NMWDA Northeast Maryland Waste Disposal Authority

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 9 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

NWW Natural wood waste OPEX Operating expenditure PPP Public-private partnership PSRP Public Schools Recycling Plan RFP Request for proposal RRP Resource recovery park SFH Single family home SHA Maryland State Highways Administration S-S Single-stream SSO Source-separated organics TS Transfer station USDA United States Department of Agriculture U.S. EPA United States Environmental Protection Agency WWTP Wastewater treatment plant ZWP Maryland Zero Waste Plan

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 10 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

1. INTRODUCTION

1.1 Terms of Reference

This report was prepared for the Frederick County Solid Waste Steering Committee (Steering Committee) by Geosyntec Consultants (Geosyntec) of Columbia, Maryland to present findings from a Solid Waste Management Options Study (Study) completed by Geosyntec in collaboration with A. Goldsmith Resources, LLC of Atlanta, Georgia and the Nexight Group of Silver Spring, Maryland. The Geosyntec team was led by Mr. Jeremy Morris, Ph.D., P.E. and Mr. Thomas Ramsey, P.E., both Registered Professional Engineers in the State of Maryland.

Frederick County Government (the County) is led by an elected County Executive, who appoints Division Directors, as well as an elected County Council that is responsible for legislative matters. Solid waste administration is the responsibility of the County Executive and the Division of Utilities and Solid Waste Management (DUSWM). Within DUSWM, the Department of Solid Waste Management (DSWM) is responsible for implementing solid waste management and recycling programs.

In response to the need for a long-term municipal solid waste (MSW) management and recycling strategy, County Executive Jan Gardner established the Steering Committee to help develop identify and evaluate viable waste management and recycling alternates through a facilitated process of public discussion and input to the Study. The Steering Committee includes members of the County’s Solid Waste Advisory Committee, the Sustainability Commission, and other citizens who have a history of constructive and informed engagement in conversations about improving solid waste management and recycling in the county. Officials who currently manage the County’s solid waste programs also provide guidance.

The two-phase Study was performed for the Steering Committee by Geosyntec in accordance with Work Order No. 101-II-Y, effective 2 September 2015 under Contract #13-6(a) with the Northeast Maryland Waste Disposal Authority (NMWDA). The scope of work for the Study was described in Geosyntec’s proposal dated 27 May 2015. Notice to proceed from the Steering Committee was provided via a letter to Geosyntec from the Frederick County Department of Utilities and Solid Waste Management (DUSWM) dated 10 September 2015.

1.2 Findings and Recommendations from Phase 1

Phase I of the Study served to gather ideas and priorities from county residents for solid waste management and recycling options. Five community workshops were held throughout the county between November 2015 and February 2016, collectively called the “What’s Next? Solid

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 11 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Waste Public Forum.”1 During these workshops, residents engaged in active dialogue and structured brainstorming exercises to identify options for achieving the County’s waste disposal and recycling goals and to define criteria for assessing those options. Phase 1 culminated in a final Phase 1 Report prepared by Geosyntec for the Steering Committee, dated 30 September 2016.

Phase 1 of the Study served to build consensus as to which viable waste management and recycling alternatives should be specifically studied and evaluated in more detail in Phase 2. As such, the Steering Committee used the findings from the Phase 1 Report to make recommendations to the County Executive as to which options should be included in Phase 2.

1.2.1 Waste Diversion and Recycling Targets

To guide the County’s future waste management strategy, the most practical framework around which to build the evaluation was the Maryland Recycling Act (MRA) and Maryland Zero Waste Plan (ZWP)2. Promulgated and enforced by the Maryland Department of the Environment (MDE), these documents provide objective statewide goals, definitions, and boundary conditions against which to measure performance of different options. To the extent possible, all definitions used in this Study are based on terminology contained in the MRA and ZWP. The MRA differentiates between “MRA” and “non-MRA” waste for calculating recycling and diversion rates. MRA waste includes MSW from residential and commercial sources, some institutional sources (excluding medical waste), and industrial waste that is not disposed of in private industrial landfills. Non-MRA waste includes (but is not limited to) construction and demolition (C&D) debris, automobile components, sewage sludge, land clearing debris, agricultural waste, coal combustion by-products, and industrial waste disposed in private industrial waste landfills. Under the MRA, the diversion rate for a county is calculated by adding the recycling rate and a source reduction credit that is given for specified source reduction activities up to a maximum of 5%. The ZWP builds on MRA concepts and offers insight into the goals and priorities of Maryland’s policymakers and future legislation. In Phase 1 of the Study, therefore, it was assumed that the County will adopt the goals of the ZWP, which aims for overall recycling and waste diversion goals of 80% and 85%, respectively, across Maryland by 2040. Zero waste goals, including specific goals for recycling of food scraps and yard trimmings, should be achieved through incremental targets established for 2020, 2025, 2030, and 2040.

Based on the ZWP framework, targets and improvement goals for the Study were established based on review of current waste diversion and recycling rates in the county. Importantly, the Study focuses on the costs and effects of implementing different options over the next ten years, since the size and distribution of the county population, waste stream, and available options are

1 www.frederickcountymd.gov/WhatsNext 2 http://www.mde.state.md.us/programs/Marylander/Pages/ZeroWastePlan.aspx

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 12 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

likely to evolve significantly over a longer time span. This approach affords the Study a forward-looking outlook while enabling considerations of options to be grounded in programs and technologies that are commercially available and cost-effective under current assumptions and data. The improvements needed by the County to meet the intermediate goals of the ZWP for 2025 are summarized in Table 1-1 below.

Table 1-1: Waste Diversion and Recycling Targets for the Study

As illustrated in the table, relatively modest improvements of about 15% are needed in the overall recycling and waste diversion rates in order to achieve target levels. The current yard waste recycling rate is not directly measured by DSWM but confidently it is assumed to be very high based on DSWM’s observational data (i.e., lack of yard waste in waste loads received at the transfer station). This is not surprising given that mandates banning disposal of yard waste in landfills exist at both the State and County level3. It is assumed that little improvement in current yard waste recycling rates can be achieved; as such, additional recovery of yard waste is not targeted as part of this Study. Significant improvement is needed to achieve the 60% target for food waste recycling; again, the current recycling rate is not directly measured by DSWM but is confidently assumed to be low given the current lack of food waste recycling options in the county.

Using 2013 MRA data published by MDE and DSWM’s internal waste and recycling tonnage data for 2013 and 2014, the County would need to recover an additional 40,000 to 45,000 tons of material from the waste stream in order to boost overall recycling and waste diversion rates by 15%. This represents about 30% of the quantity of waste currently landfilled each year.

3 More prescriptively, in 2014 the Maryland Legislature exacted HB1081 to expand the state’s existing disposal ban on source separated yard waste by requiring all yard waste to be source separated for composting if a suitable composting facility exists within 30 miles. The bill also requires large-scale food waste generators (two tons per week and above) to source separate food residuals if a suitable composting facility exists within 30 miles. See: http://mgaleg.maryland.gov/2014RS/bills/hb/hb1081f.pdf

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 13 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Analysis presented in the Phase 1 Report suggested that food scraps comprise about 18% of the unrecovered waste stream in the county, representing about 25,000 tons annually. Recycling 60% of this would require recovery of about 15,000 tons.

1.2.2 Recommended Options for Further Study in Phase 2

Based on targeting the waste diversion and recycling improvements summarized above, of a total of 20 options initially studied in Phase 1, seven options comprising both programmatic elements (soft infrastructure) and processing systems (hard infrastructure) were recommended for more detailed analysis in Phase 2. These options can be grouped into three categories as follows: 1. Expanded recycling and food waste/organics collection programs:

o Waste reduction program at County schools o Three-bin residential collection program o Food waste collection from restaurants o Co-digestion of food waste with biosolids at the Ballenger-McKinney Wastewater Treatment Plant4 2. Development of composting facilities:

o Community-scale, decentralized composting program o Large-scale, centralized composting facility 3. Development of a large-scale, centralized resource recovery park (RRP)

Findings from Phase 1 suggested that implementing a three-bin collection and/or restaurant food waste recovery program would perform best in terms of overall and unit costs (per ton and per household/business) of waste recycling. Either of these programs could also achieve the specific target of 60% recycling of food waste by 2025. Of these two options, residential three-bin collection appears highly sensitive to changes. As such, wholescale rollout of a three-bin program to all eligible households was not recommended; the County would be better advised to explore incremental rollout on a pilot scale with program expansion only after success can be demonstrated on a smaller scale and affected parties (not least DSWM) gain some experience with the process. Similarly, smaller-scale rollout of a program for collection of food waste from restaurants on a voluntary basis first was recommended rather than a full countywide effort.

4 Although not directly evaluated in Phase 1, the County Executive requested that potential co-digestion of food waste with biosolids at the Ballenger-McKinney Wastewater Treatment Plant also be evaluated. A phased approach to providing additional capacity and upgrading the plant to achieve Enhanced Nutrient Removal (ENR) levels of treatment is in place, including installation of anaerobic digesters once flow at the facility approaches 10 million gallons per day. This option overlaps meaningfully with other options and may offer a pragmatic approach for beneficial reuse of food waste diverted from county restaurants and/or households as recommended. As such, it is included as a seventh option for Phase 2.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 14 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

The option for expanded recycling and recovery of food waste from public schools did not perform well in the quantitative analysis because the amount of material recovered is expected to be modest, no more than 1,250 tons/year. However, collection of food waste from schools offers qualitative benefits and educational advantages. Exposing students in grade and high schools to the idea of separating food waste by the time they establish their own households should make the transition to a universal three-bin collection system easier over the longer term.

Due to high rates of recycling and waste diversion achieved, a RRP appears to offer attractive unit costs (per ton and per household), although this technology exhibited a number of cost sensitivities. Both community-scale and large-scale composting performed well in the analysis with relatively limited sensitivity to input variability. Large-scale composting was the best overall performer; however, as noted previously, investing in a large-scale composting facility would be of little value until the County’s ability to divert sufficient organics for processing has been demonstrated. As such, implementing a large-scale facility represents a significant capital cost risk. The County would be better advised to explore incremental developing of composting capacity by developing one or two community-scale facilities as a pilot program, with expansion only after the success of both organics recovery programs (see above) and composting operations has been demonstrated. As such, evaluation of composting in Phase 2 is focused on methods and targets for incremental development of community-scale projects.

Phase 1 demonstrated that most options, however promising, are unlikely to be fully successful or cost-effective if implemented alone: for example, separate collection of food waste may be wasted effort if there are no facilities available at which to process compostables. Electing to transport organics to a private processing facility outside the County may achieve the goals of waste diversion but at increased cost. Conversely, building a compost facility is of little value if source separated organics are not available for processing. A complete solution, therefore, often requires synergistic development of one or more option. It is also important to recognize that the performance of stand-alone solutions (e.g., construction of a resource recovery park) will be enhanced by additional upstream waste separation efforts. For example, mixed waste processing is made significantly more efficient by removing food waste and other organics from the incoming waste stream.

1.2.3 Public Comments on the Phase 1 Report Pertaining to Phase 2

The Phase 1 Report was issued as a draft for public comment prior to it being finalized. Comments relevant to Phase 1 of the Study were addressed in the final Phase 1 Report. However, a number of pertinent comments were more appropriately directed at Phase 2 of the study. These included5:

5 Comments are edited for style and content rather than repeated verbatim so as to clarify their relevance to the scope of Phase 2.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 15 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

• With regard to recycling at schools, there may be low-hanging fruit and opportunities to leverage existing programs as suggested in the Phase 1 Report. Uneven application of recycling contracts from school to school is an issue. Experience suggests there is additional recyclable material to be recovered from schools, although the U.S. Composting Council has found that the amount of food recoverable from schools is often overestimated. • The scope of waste reduction programs at County schools should include all private and public schools (K-12) as well as child care centers and colleges such as Frederick Community College, Hood College, STEM University, and the like. This would include collecting food waste for composting, and increasing recycling efforts. • Restaurant trash and food stuffs are currently placed in single dumpster which is transferred to the County waste system. Hence, the waste process can be improved with trash reduction by requiring the facility to have specific dumpsters designated for trash and food stuffs. • The food waste collection program being recommended for restaurants should include collection of paper towels from restaurant rest rooms. Paper towels are not recyclable as the fibers are too short; hence, they can only be disposed as waste or composted. • At a minimum, paper should be separated from the rest of the single stream recycling materials. • The stated food waste collection scope should be expanded to explicitly include the following special events venues: (a) commercial special events venues such as Ceresville Mansion, Walkersville Overlook, Shade Trees and Evergreens, and the like; and (b) community special events venues such as Community Carnivals; the Great Frederick Fair; City of Frederick Baker Park, “On the Street,” and “On the Canal” events; and the like. • The Study should examine variations of creating a three-bin collection system. An assumption was made in the Study that all of the current systems in place would change. The Study should look at different options such as maintaining current trash and recycling systems but add pick up of organics with community scale (pilot) or large scale composting. It seems costs would be less for implementation of one change in the system. Other options should be considered, such as privatization for compost pick up and management (for example, Veterans composting offers full service pick up of organics and composting at their facility, which also offers consultation services). • Phase 1 assumed that recycling and composting would be “encouraged” but remain voluntary; however, at some point the County should consider making recycling and composting mandatory if a three-bin system is to be truly sustainable. Changes could

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 16 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

perhaps begin incentives before, after several years, appropriate consequences for noncompliance may be considered. • The Study acknowledges that Montgomery County requires businesses to recycle and that this generates about 50% of their total recyclables. However, the Study does not explore what could be gained with mandatory recycling for businesses in Frederick County. The Study questions how much control the County could exert, but it should be possible for the County to exert control and this should be examined. It is important to note that the Study indicates that the area with the most potential for recycling gains is paper and cardboard. • A preparation period of several years is realistic for establishing the level of organics recycling envisioned in the Study, which can include transitioning activities to ensure the success of either community composting or large scale composting endeavors. During this preparation period several things should occur:

o The County should undertake a serious regional markets study before choosing the level of compost production facility and should talk with both private sector and public sector programs involving food scraps about challenges in collection and ease of marketing the material. Relationships should be built with golf courses, landscapers, local forestry experts (erosion control/stormwater mitigation), and the Maryland Department of Transportation (MDOT) and State Highways Administration (SHA) to ascertain the specifications needed for compost to be accepted. These will be some of the major markets, and the program should be built and sized around their requirements.

o Studies of actual food scrap amounts and quality from restaurants should be made before relying on this sector for the tonnage recommended. Most communities begin with the more homogenous feedstocks that come from hospitals, detention centers, colleges/universities and large institutions with cafeterias, before embarking on the riskier, more diverse restaurant feedstocks.

o A rapid move into revising zoning code is necessary because current zoning does not adequately support community scale and farm composting.

o DSWM should expand its existing home composting education program (many grants are available for this) to reach thousands of citizens per year out in their communities to put a “composting mindset” in place that will help prepare citizens for the eventual siting of community scale or large scale composting facilities. These facilities have a history of being opposed rigorously when citizens are unaware of the ways of mitigating the common complaint of odor when they are run by properly trained operators. On this note, the Peninsula Compost Facility in Wilmington, Delaware that was mentioned in the Phase 1 Report actually closed

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 17 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

due to odor that resulted from a sudden and overwhelming inventory of food scrap feedstocks contracted for without proper planning for production or markets. The site was not the underlying reason for its failure – before its final ownership, the facility was not the subject of complaints until the new owner rapidly escalated quantities of food scraps before planning for production and marketing, which then caused odor issues. Poorly planned programs face this risk. • The County should operate the composting program and resource recovery facilities with as much private involvement as possible, as having the public sector running a program involving recycling commodities/markets often means that decisions made and resources devoted are not as bottom-line oriented and it is easier to simply give the compost away. This hurts compost markets in the long run by underselling others who are producing valuable compost and are dependent on operating profitability to remain in business. • The County should develop and implement a “modular prototype” resource recovery park (RRP) based on the baseline near-term waste streams. The RRP can be readily expanded in years to come via modular additions to accommodate waste stream increases. In support of Frederick-based waste-specific recycling businesses, said businesses should be given first option to accept separated material streams from the RRP. • Developing a construction and demolition (C&D) waste sorting facility should be included in Phase 2. Although C&D waste is not MRA waste, this shouldn’t impact this decision. C&D waste is a huge weight problem with potential local solutions. There should be some mention that C&D waste recycling would decrease hauling costs and save landfill airspace. • The resource recovery park should include a research center. • Before moving forward with a three-bin option, the County should first invest additional funds into an education program on the existing single stream program to increase amounts recovered under the existing contract. Having a municipal recycling liaison on county staff whose job would be to partner so as to leverage the recycling efforts by municipalities and homeowners associations would be a much smaller investment and pull greater (and higher quality) tonnage from these locations. This would add tonnage more quickly and less painfully than adding a new material – organics – until the markets are fully established for compost, which can often take 3-5 years to establish successfully after community composting or large scale composting facilities begin operation. • Phase 2 should include education and outreach as well as appropriate staffing levels and mechanisms for monitoring and enforcement within the County. What is the County’s specific role with regard to source reduction and how will the County promote waste

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 18 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

reduction efforts? There has to be proper education and outreach, with enough staff, to achieve goals. More money spent upfront may ultimately save a lot of money. • The Study notes “behavioral change” as being an important component of success for any proposed option or action, but the Study does not directly offer ways or expertise in same. Phase 2 should be required to include extensive recommendations in this area. These comments and suggestions helped to define the goals for Phase 2 of the Study (see Section 1.3 next) and to orient Geosyntec’s detailed evaluation of options as described in this report. However, it is noted that in Phase 1 Geosyntec gave broad consideration to the educational requirements and behavioral changes necessary for an option to be successful, as well as identification of an option’s sensitivity to these input factors with regard to its expected performance. After Phase 2, a decision to implement an option by the County will require detailed consideration of the education and public outreach programs necessary to ensure success. Further detailed consideration of education and outreach needs is beyond the scope of this Study and will be better addressed by DSWM staff working with a consultant specializing in the field.

1.3 Goals for Phase 2 of the Study

Phase 2 provides more detailed analysis of the actual viability and efficacy of each recommended option, both individually and in combination with other options. Specific considerations addressed include: 1. Technology screening and benchmarking of recommended collection programs and processing systems (Chapter 2); 2. Investigation of optimal approaches for incremental phase-in of collection programs and processing systems in order to minimize capital cost and other risks (Chapter 3); 3. Detailed financial modeling of shortlisted options or combinations of options (Chapter 4); 4. Discussion of model outputs and sensitivity to variation in key input assumptions (Chapter 5); and 5. Summary and recommendations (Chapter 6).

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 19 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

2. SCREENING AND BENCHMARKING OF OPTIONS

2.1 Overview of Approach

The first category of recommended options listed in Section 1.3.2 includes expansion or introduction of various collection programs to recover food waste and other organics from the residential and commercial mixed waste stream that is currently delivered to the County’s Reichs Ford Road transfer station (TS) facility. These separated organics will serve as feedstock to the composting systems; as such, the effectiveness of these collection programs (i.e., volumes/tonnage recovered and physical/chemical characteristics of the feedstock) will serve as a primary driver in determining the feasibility of composting. Similarly, although the RRP option can function as a standalone system and is not dependent on separation of organics, the various collection programs will increase feedstock quality and thus improve the overall performance of the RRP.

As the analyses conducted in Phase 1 have already have provided a high level of critical screening to select promising technologies for consideration in Phase 2, a key goal of this screening and benchmarking stage is to further reduce the total number of individual and combined options for detailed analysis. Geosyntec originally assumed that half of the recommended options would drop out after initial screening such that a maximum of three were shortlisted for detailed analysis. Seven options were recommended from Phase 1; however, the inclusion of both a RRP, which includes a large-scale centralized composting operation, and decentralized composting as options renders consideration of a standalone large-scale composting facility unnecessary. As such, large-scale composting as a standalone operation is eliminated from further consideration. For the remaining six options, the initial screening analysis includes: • Verification of estimates from Phase 1 (e.g., material quantities, costs, and project scope) based on benchmarking data from case studies of similar programs/systems in other jurisdictions; • Characterizing the various waste streams and sources that may serve as feedstock of food waste and other organics to processing systems; • Review of markets and incentive programs for project development; and • Review of potential financing and contracting mechanisms. Competition between different programs is an important consideration; for example, diversion of residential or retail food waste to anaerobic digestion at the Ballenger-McKinney Wastewater Treatment Plant eliminates this material’s availability for composting.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 20 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

2.2 Collection of Source Separated Organics

2.2.1 Introduction

Two recommended options represent collection programs for compostable waste materials such as food scraps, yard trimmings, unrecyclable paper, and other source separated organics (SSO). These programs include separate SSO collection from restaurants and residential properties (single family homes) currently served by the County’s curbside single stream recycling program. Benchmarking data and other information gathered at this stage of the Study serve to address the following questions: 1. How much food waste and other SSO could these collection programs yield, and how does that help to focus planning in terms of where and at what scale they should be implemented? 2. What are the expected cost of SSO collection programs and how would these costs be paid? 3. How should SSO collection contracts be set up, and should these contracts be tied directly to composting operations? 4. What are the responsibilities on the part of potential program participants (e.g., the County, municipalities, residents and homeowners associations, and restaurant owners) with regard to public outreach, education, and enforcement? Part of the answer to these questions come from the observation that, with the notable exception of Frederick City, the 12 municipalities in the county are relatively small and geographically spread out. This is addressed further in Chapter 3. For comparison to case studies in this section, however, it is assumed that: • Initially, a program for collection of food waste from restaurants will be focused on establishments in Frederick City only. Expanded countywide collection could be considered after success with a program in the city has been demonstrated. In the meantime, restaurants outside the city would be welcome (encouraged) to deliver food waste to composting facilities but would be required to establish individual contracts for food waste collection. • Residential food waste collection would be implemented under a “three-bin” program in which the existing curbside recycling program offered to single family homes (SFHs) would be extended to include a separate cart (green bin) for SSO in addition to the cart for recyclables (blue bin). Initially, the SSO collection program would be focused on SFHs in Frederick City. Other residents of the county would not be included in the collection program, but would be welcome to deliver food waste to a composting facility.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 21 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

• Trash (black bin) collection at county businesses and households would continue to be contracted under current arrangements outside of the County’s responsibility. Although it is assumed that green bin collection services will be provided by new private contractors, existing private or municipal trash collectors could propose to provide these services. The County’s existing contract(s) for blue bin collection would remain unchanged.

2.2.2 Food Waste Collection from Restaurants

Based on 2014 data from Business for Social Responsibility (BSR)6, about 33 lbs. of food waste is generated per $1,000 in restaurant revenue. Based on a 2016 report from the National Restaurant Association7, there are 11,100 restaurants in Maryland, generating approximately $11.7B in revenue. Assuming an equitable distribution of revenue, the average restaurant in Maryland earns roughly $1.05M per year, equating to 17.4 tons of food waste per year. This is significantly lower than the estimated 43 tons per location estimated in Phase 1, but compares favorably with reported collection rates from other jurisdictions. For example, the City of Portland, Oregon has implemented a voluntary commercial organics collection program. About 1,000 businesses and some multi-family dwelling (MFD) buildings participate, although the emphasis is on collection from restaurants and supermarkets. A total of 25,600 tons per year are collected8, which equates to about 25 tons per location. An older 2005 study conducted for the United States Department of Agriculture (USDA)9 reported wide disparity between fast food restaurants (FFRs) and full service restaurants (FSRs), with the former generating 418 lbs. per day, or about 76 tons per year, and the latter generating 138 lbs. per day, or about 25 tons per year. Data suggest that about 10-15% of the recovered food waste from SSO collection programs at restaurants is contamination (non-compostables such as plastic forks and drinking straws) that needs to be screened and removed prior to composting.

The reported density of as-collected food waste is difficult to ascertain but is necessary to convert mass-based quantity estimates to volume-based estimates, which is the measure used by collection service providers and haulers. For example, waste auditing data reported by the U.S.

6 BSR (2014) “Analysis of U.S. Food Waste among Food Manufacturers, Retailers, and Restaurants.” Prepared for the Food Waste Reduction Alliance, 2014. Data based on a survey with 27 respondents (14 companies with more than 10 locations each) representing about 15 % of total restaurant sales in the U.S. The value of 33 lbs. per $1000 revenue does not include food that is already diverted (e.g., donated). 7 National Restaurant Association (2016) “Maryland Restaurant Industry at a Glance.” 8 Mendry K. (2014) “City Residents Adapt to (and Like) Food Scraps Diversion,” BioCycle, August 2014, 55(7), p.33. 9 Jones T.W. (2005) “Using Contemporary Archaeology and Applied Anthropology to Understand Food Loss in the American Food System,” University of Arizona report to the United States Department of Agriculture, Economic Research Service.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 22 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Composting Council10 showed that a small coffeehouse/café with a stated goal of waste minimization generated only about one cubic yard (CY) of food residuals per week while a large 170-seat restaurant serving lunch and dinner generated about 20-25 CY per week of food residuals.

If the volume of food waste generated at a restaurant is large, a dumpster or compactor may be needed along with a waste collection vehicle run by a commercial hauler. If the restaurant is small, it may be possible to simply place bagged waste into 64-gallon or 96-gallon carts or “toters” and either use a small truck and hauler to remove the bags, or use a rear- or side-loading waste collection vehicle to mechanically empty them. Other factors affecting the size of container and type of collection service needed include space restrictions, price and competition between haulers, collection schedule (i.e., daily, biweekly, or weekly), and liquid content of the waste (liquidy waste streams require watertight containers).

2.2.3 Collection of Residential Source Separated Organics

A national survey in BioCycle11 based on data through 2012 identified 183 communities representing 2.55 million households in 18 different states offered some form of curbside SSO pickup program. Independent research by Geosyntec suggests this number grew to about 200 communities by 2015. Many of these programs were initially implemented as pilot programs, and a good number were terminated or retained only at limited scale once the initial pilot program was completed. Nevertheless, curbside residential food waste collection is considered to represent a mature service, although most experience gained has been in western states. The largest and best developed SSO collection programs are in Californian cities such as San Francisco. Several “green waste” collection programs exist on the east coast, especially in Florida, but are often limited to yard trimmings (no food); these nevertheless indicate the programmatic capacity for providing three bin collection services. Specific case studies of jurisdictions offering curbside SSO collection are summarized alphabetically below.

Alameda County, California Households are generally offered weekly collection of residential organics (yard trimmings, vegetative and animal-origin food scraps, and soiled paper) on a year-round basis, with voluntary participation. Collection programs are administered individually by the different municipalities and communities, and some jurisdictions offer seasonally modified collection schedules. Various types of lidded 2-gallon containers for kitchen food scraps have been distributed to participating households, with funding assistance often provided by the Alameda County Waste Management Authority (Authority). Compostable bags are allowed by some jurisdictions. The

10 U.S. Composting Council (2009) “Best Management Practices (BMPs) for Incorporating Food Residuals into Existing Yard Waste Composting Operations.” 11 Yepsen R. (2013) “Residential Food Waste Collection in the U.S.” BioCycle Nationwide Survey, 9pp.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 23 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Center for a Competitive Waste Industry (CCWI)12 reported that about 175,000 tons of residential organics were collected from 365,000 households by 2010, of which the Authority estimated that only about 5-10% was food waste. This suggests an upper-bound food waste collection rate of about 0.05 tons per household, or about 0.02 per person. However, the more recent survey by Yepsen (2013) for BioCycle reported that approximately 53,000 tons of food waste was collected annually from 1.45 million participants. The average weekly participation rate was estimated to be 17-23%, with considerable week-on-week variation. The average yield of food scraps per household is approximately 6-8 lbs. weekly (about 300-400 lbs. or 0.15-0.2 tons per year). Contamination levels typically range from 2-10% by weight, and the Authority estimates that a 35-40% of the 30 lbs. of trash set out weekly by SFHs is food waste and other compostables. The latter figures are expected to fall following a combination of outreach, recognition and awards programs, advertising, and local government policies.

Boulder, Colorado In 2012, the city passed a food collection law requiring private haulers to provide collection of compostables at no additional charge to SFH customers. In 2016, the law was expanded to require owners of MFD buildings and businesses to subscribe to adequate compost and recycling services. Participation rates between 2004 and 2014 were high at SFHs, with residents achieving 48-58% food waste diversion. Lower rates were achieved among MFD residents (14-20%) and businesses (25-28%) during the same period, although participation was still voluntary at that time. About 66% of the total 7,700 tons of organics collected from SFHs comprised food scraps, meaning average food waste collection from the 17,250 SFHs equated to about 0.3 tons per household annually13.

Denver, Colorado The city established a grant-funded pilot residential food waste collection program in 2008 for 3,000 households. In 2010, the program transitioned to a private services with monthly subscription costs of $9.75 per household; about 2,300 households have remained in the program according to Yepsen (2013). Reported contamination is very low at only 1%.

Howard County, Maryland Howard County implemented a voluntary pilot program for curbside collection of food scraps from SFHs in 2013, termed “Feed the Green Bin.” Food scraps are co-composted with yard trimmings at the County’s Alpha Ridge Landfill in Marriottsville. Compost product is sold for $19 per cubic yard. Currently, only about 10% of the 16,000 eligible households participate in

12 Center for a Competitive Waste Industry (2010) “Beyond Recycling: Composting Food Scraps and Soiled Paper,” Report to U.S. EPA Region 9, January 2010. 13 Eisenman N. (2016) “Organic Diversion Numbers – City of Boulder” (Pers. Comm.)

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 24 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

the program, which collects 700 tons of food waste annually. This equates to about 0.44 tons per household.

New Orleans, Louisiana Established in 2010 by local residents, the private firm Composting Network, LLC14 provides voluntary commercial composting and offers curbside collection of pre-consumer food scraps and other SSO materials from city residents, businesses, schools and universities, and restaurants. Commercial customers (including MFDs) must “sponsor” a 48-gallon compost can for $75, after which a collection schedule (one, three, or five days per week) can be negotiated for a monthly fee (undisclosed). Residential customers are required to pay an initial processing fee of $35 for which they receive a 32-gallon can. Collection is provided one day per week with monthly fees ranging from $35 for one can to $95 for four cans. Only official cans will be collected. In an innovative move, customers (“Compost Partners”) are provided access to an online real-time accountability measurement tracking system detailing how much pre-consumer waste was collected and processed.

Portland, Oregon Portland has implemented a voluntary residential and commercial organics collection program. Under the residential program, households are provided weekly curbside collection by private hauling companies. Participation is estimated at 90% (in that 90% of organics bins contained food scraps as well as yard trimmings; however, food scraps represent only about 10% of total organics). Approximately 7,640 tons of food scraps and 68,760 tons of yard trimmings were collected from 150,000 residential customers in 201415, which equates to 0.05 tons and 0.46 tons per person, respectively.

San Francisco, California Prior to 2009, the city’s household food waste collection program was voluntary and engaged only about a 35% participation rate, yielding about 400 lbs. (0.2 tons) per year of non-yard trimmings per participating household (CCWI, 2010). This equates to about 0.09 tons/person assuming 2.26 people per household per 2010 census data. Following promulgation of mandatory recycling rules in 2009, all residents and businesses were required to separate food waste for collection. Building owners that did not provide food waste bins to residents were fined and all buildings were required to provide educational posters to tenants, employees, janitors, and contractors advising on what wastes should go in what bin. The cost of implementing this equipment and educational material is not reported, but likely represents a considerable investment by all parties. By 2011, participation rates were at 90% and the city was

14 www.compostingnetwork.com 15 Mendry K. (2014) “City Residents Adapt to (and Like) Food Scraps Diversion,” BioCycle August 2014, 55(7), p.33.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 25 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

collecting upwards of 600 tons of food waste daily from residents and businesses (Yepsen, 2013). This equates to about 0.27 tons per person assuming a city population of 815,000 (per 2010 census data), which represents a three-fold increase over 2009 collection rates. This suggests that moving from voluntary to mandatory participation under a well-publicized and enforced food waste collection program may increase collection rates by a factor of three.

San Francisco provides weekly collection of food waste on a year-round basis. To separate compostables, the city has distributed two types of kitchen containers to households: a solid 2- gallon bucket with attached lid (no bag required) and a 1.5-gallon vented pail (bag required). Residents are required to use only biodegradable bags such as paper bags or compostable plastic bags, which are widely sold in grocery, hardware, and convenience stores. The city invested considerably in educational outreach efforts to promote easy access to and identification of appropriate bags by consumers.

Toronto, Ontario (Canada) Toronto’s mandatory “Green Bin Program” to separately collect food waste along with yard trimmings commenced in limited capacity in 2002 and was rolled out citywide by 2005. By 2010, all 510,000 SFHs were part of the city’s three stream collection program (organics, single stream recyclables, and trash) with weekly participation rates as high as 90% (CCWI, 2010). Households are provided with a kitchen “catcher” and a 16-gallon outdoor cart, in which they are permitted to use any plastic liner. Organics are collected weekly in a split-compacting collection vehicle, with the other compartment used on alternating weeks for single-stream recyclables and trash. For the most part, collection is provided through private franchise agreements. The average household sets out about 10 lbs. of organics (in addition to yard trimmings) each week, which suggests average food waste collection rates of about 0.12 tons per person annually. The city estimates that about 72% of “targeted organic discards” are captured and that adding expanded composting to existing recycling/yard trimmings collections increased overall waste diversion by 80%. The reported cost of organics collection and processing is $120-$155 per ton, which, although high, is about half the city’s reported cost of garbage disposal.

Washington, D.C. Metro Area A number of small-scale voluntary food waste collection programs exist in the metro area. For example: • Fat Worm (Washington’s Organic Recycling Mission) Compost16 collects food scraps, yard trimmings, and other organic materials from commercial locations (excluding office suites) and transports them to the Maryland Environmental Service (MES)/Prince George’s County composting facility in Upper Marlboro. Fat Worm will also schedule collection services for special events. They provide 35-gallon outdoor toters, although

16 www.fatwormcompost.com

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 26 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

clients are required to provide their own interior receptacles. Collection schedules are flexible depending on client needs. • Compost Crew17, a small independent private residential collection service, offers weekly collection for a pay-as-you-go subscription of $32 per month. Outdoor toters are included in the price. • Organix Recycling18, a larger national company, provides food waste collection to supermarkets and other organizations and attempts to follow the U.S. EPA’s hierarchy of recycling options and divert food recyclables to the highest recycling options available and only delivering to compost facilities where other options are not accessible. In some locations, they run their own composting operations; however, in the D.C. metro area they deliver food waste to Tubb Farm in Kearneysville, West Virginia. • The City of Takoma Park, Maryland provides curbside food waste collection as a public service to all SFHs as well as MFD buildings with 12 units or less19. The initial pilot program started in 2013. Participants receive a 5-gallon lidded bucket which is collected one day weekly (Tues-Fri) by the Department of Public Works (DPW). Collection is provided at no additional cost to households eligible for trash and recycling pickup. DPW appears to operate their own composting facility at the Public Works Yard and offers free compost to program participants in an effort to encourage organic lawn care.

The Georgia Department of Community Affairs and Georgia Recycling Coalition has developed a Source-Separated Organics Recycling Toolkit (S2ORT)20 with funding support from the U.S. EPA. The toolkit consists of a guide for local governments and an Excel-based spreadsheet, and is intended to assist local governments with implementing residential SSO collection programs, including a model request for proposals (RFP), sample ordinance provisions, template reporting documentation, and information on best practices. A summary of residential SSO collection programs is also provided, with structuring of costs varying considerably. For example, Hennepin County, Minnesota charges a one-time fee of $25 for a 32-gallon cart and a monthly fee of $3.50-$5 per household for once per week collection. Cedar Rapids, Iowa charges $40 for a 96-gallon cart and also provides weekly collection, the cost of which is included in their solid waste management fee. Olympia, Washington charges $7.72 per month for SSO collection every other week.

17 www.compostcrew.com 18 www.organixrecycling.com 19 https://takomaparkmd.gov/government/public-works/curbside-collection-services/food-waste-collection/ 20 http://www.dca.state.ga.us/development/PlanningQualityGrowth/programs/SWMrecyclingAssistance.asp

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 27 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

The U.S. EPA released its online Managing and Transforming Waste Streams Tool21 in September 2015. This provides examples of 100 policies and programs that communities can implement to increase waste diversion, including food waste collection programs. Sample ordinances, service provider contract and franchise agreement language, and incentive programs are also provided.

2.2.4 Estimated Quality and Quantity of Food Waste for Collection

The composition of MSW in Frederick county is not directly measured by DSWM; however, rather than scoping a focused waste sorting and characterization study at this stage, Geosyntec reviewed national and statewide data to estimate the quantities and composition of food waste and other compostable organics potentially available from restaurants and households.

Pre-Recovery (Gross) Food Waste Generation A 2002 study for the USDA reported that U.S. households threw out 1.28 lbs. per day (467.2 lbs. per year) of food in their trash22. This does not include food loss that goes down the garbage disposal, into backyard compost piles, as food to family pets, or similar non-trash disposal pathways. This equates to about 0.25 tons/year per household, or about 0.1 ton per capita assuming about 2.5 persons per household. Although 15 years old, this data is interesting as it pre-dates significant curbside collection or other diversion of food waste and is thus a good representation of gross food waste generation. Based on this, total gross food waste generation from the approximately 90,000 homes in Frederick County would be 22,500 tons annually, which compares favorably to the Phase 1 estimate of 25,000 tons. In comparison, Montgomery County, Maryland reported total food waste in trash collected from both commercial and residential sectors of 141,700 tons in 2012, which equates to 0.14 tons per person (the county’s population was reported as 1.004 million in 2012).

Pre-Recovery (Gross) Waste Composition U.S. EPA data published in 201423 estimated that food waste, yard trimmings, and paper comprised about 14.6%, 13.5%, and 27% of total MSW generated in the U.S. A 2016 report by Rethink Food Waste through Economics and Data (ReFED)24 separated U.S. food waste into four segments: farms, food manufacturers, consumer-facing businesses (including distributors, retail grocers, restaurants, foodservice providers, and institutions) and homes. Consumer-facing

21 https://www.epa.gov/transforming-waste-tool 22 Jones T., Dahlen S., Cisco K., McKee B., Bockhorst A. (2002) Household Refuse Food Loss. Bureau of Applied Research in Anthropology, University of Arizona. Report to the United States Department of Agriculture, Economic Research Service 23 EPA-530-F-14-001, “Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Facts and Figures for 2012,” published February 2014. www.epa.gov/wastes 24 Rethink Food Waste Through Economics and Data. “The Roadmap to Reduce U.S. Food Waste by 20 Percent,” April 2016: http://www.waste360.com/food-waste/seven-key-takeaways-refed-s-roadmap-reduce-us-food-waste-report

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 28 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

business and homes made up 40% and 43%, respectively, of all food waste. Restaurants accounted for nearly 50% of food wasted by consumer-facing businesses. In the ReFED report, food waste across all sources was broadly estimated to comprise about 42% fruits and vegetables, 26% milk and dairy, 19% grain products, and 14% meat and fish/seafood. More granular data provided by the USDA’s Economic Research Service (ERS)25 puts combined food losses at the retail and consumer level at 31% annually (429 lbs. per capita), with fruit comprising 14% of losses, vegetables 19%, dairy products 19%, grain products 14%, eggs 2%, and meat, poultry, and fish/seafood a combined 11%. Losses at the consumer level were generally 2-4 times higher than at the retail level.

Post-Recovery Waste Composition The above-mentioned U.S. EPA data published in 2014 estimated that recovery of food waste, yard trimmings, and paper as a percent of total MSW generation was 5.0%, 60.2%, and 63.3%, respectively. This means that unrecovered food waste represents about 13.9% (i.e., 95% of 14.6%) of total MSW generated nationally, while unrecovered yard trimmings and non-recycled paper represent about 5.4% and 9.9%, respectively, of total MSW generated. Data from waste characterization surveys conducted between 2012 and 2014 in Montgomery, Anne Arundel, and Prince George’s Counties, which offer curbside recycling and can be assumed to have a residual solid waste stream with similar characteristics to Frederick County, were reported in the Phase 1 Report. Food waste comprised 16-20% (average 18%) of the unrecovered waste stream, while yard trimmings comprised 2-3% and non-recycled paper comprised 7-16% (average 11%). The closeness of these values suggest that it is fair to assume these data will be representative of average trash loads collected in Frederick County. Therefore, of the 137,000 tons of trash collected in the County in 2013, about 24,600 tons were food waste, a further 15,000 tons were non-recycled (compostable) paper, and 4,000 tons were yard trimmings.

Of note, the data above show that 95-98% of yard trimmings are not collected in MSW, likely due to the ban on yard waste going to landfill that is in effect in Maryland. DSWM’s MRA waste data for 2013 showed that a total of about 30,000 tons of yard waste and other organics were composted, including 14,000 tons by DSWM. Although feedstock recipes are process- specific and need to be properly designed as part of any proposal to develop a composting facility, a general “rule of thumb” is that the carbon to nitrogen ratio should be at least 20:1 but preferably in the range of 30:1 to 45:126. In this context of this Study, this means that the capacity for composting food waste may be limited by the availability of yard trimmings and other carbon-rich bulking agents. Significant tonnage of yard waste will need to be redirected if

25 Buzby J.C., Wells H.F., Hyman J. (2014) “The Estimated Amount, Value, and Calories of Postharvest Food Losses at the Retail and Consumer Levels in the United States,” EIB-121 Economic Research Service/USDA. February 2014 26 U.S. Composting Council (2009) “Best Management Practices (BMPs) for Incorporating Food Residuals into Existing Yard Waste Composting Operations.”

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 29 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

all food waste is to be composted as planned, as up to three tons of bulking agents may be required per ton of food waste27.

2.2.5 Main Challenges and Lessons Learned

The case studies reviewed in this section suggest that voluntary SSO collection programs work well if participation is free and good educational support and public outreach is included in their initial implementation and during any expansion (as exemplified by Boulder and Portland businesses). However, voluntary programs tend to result in low residential participation (as exemplified by Portland and Howard County). Starting at pilot scale with good dissemination of goals and performance is important to build interest and participation levels. Switching to mandatory programs is generally recommended only after sufficient momentum and awareness has built, as mandatory programs result in pushback when businesses and households have to pay for composting services. Including a food scrap fee in the trash collection fee is recommended so that everyone feels they should use the services to get their money’s worth28. According to Howard County, more, better quality food waste is available from producers (farmers) and the commercial sector (restaurants, supermarkets, etc.) than from residential sources and it is easier to collect food waste from non-residential sources since they are less spread out and there are fewer people to educate. In hindsight, Howard County would not have rolled out their pilot program to the residential sector before first developing other sectors.

The “yuck factor” is a significant obstacle to household recycling of food waste, particularly during warm summer months. Allowing compostable bags is important in this regard. In addition, given the negative reaction among most people to the term “waste”, many program operators report it is important to define “yard waste” as “yard trimmings” (or landscape trimmings) and “food waste” as “food scraps” or “discarded food.” These slight semantic differences change the public’s impression of what these natural resources are. Further, changing the definition of certain materials from being included in MSW to being source- separated resources can, in some circumstances, increase competition for collection by non- franchised haulers. CCWI (2010) reports that the City of Oakland, California took this course with respect to commercial recyclables and food scraps, with positive benefit for their landfill diversion rate and the quality and range of collection services that businesses can receive.

27 Food Waste Diversion and Utilization, Best Management Practices for Composting: http://compostfoundation.org/Portals/1/Documents/foodwaste_compostingtraining.pdf 28 Freeman J., Skumatz L.A. “Best Management Practices in Food Scraps Programs,” prepared for U.S. EPA Region 5: http://www.foodscrapsrecovery.com/EPA_FoodWasteReport_EI_Region5_v11_Final.pdf

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 30 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

2.3 Expanded Recycling at Public Schools

2.3.1 Food Waste Recycling Program

The USDA’s Food Waste Challenge29 provides resources for K-12 schools across the country to participate in reducing, recovering, and recycling food waste on school premises as well as educating students about recovering excess food for donation and reducing food waste to conserve natural resources. Given the relatively high unit cost of collecting food waste from schools estimated in Phase 1 of the Study ($145/ton), it is recommended that Frederick County Public Schools (FCPS) seriously consider participation in this or similar programs in order to minimize food losses higher up the resource management chain. Participation could be coordinated with support from DSWM and/or other County staff. The ideal (albeit unattainable) situation would be where no wasted food requires off-campus transportation for composting. The USDA stresses the importance of careful menu planning and production practices in school lunch and breakfast programs to reduce food waste and improve consumption of healthy foods. Innovative programs for dealing with excess food recommended under the Food Waste Challenge include: • Using Self-Assessment Scorecards30 to help reduce food waste; • Setting up a sharing table for students to place items they are not going to consume (e.g., milk and packaged or pre-portioned items); • Letting students self-serve and self-portion; • Ensuring students have ample time to eat and/or scheduling recess before lunch so that they are not anxious to get outside to play and have already worked up an appetite before eating; • Using wholesome excess foods for classroom cooking projects; • Collecting excess wholesome food after mealtimes to donate to food pantries31 or organizations such as Food Bus32, a public charity that designs, implements and maintains systems by which unused/unopened leftover food from elementary school lunches is saved and distributed to local food pantries; and • Composting food waste for school gardens or collaborating with local farmers on composting or food-scrap projects.

29 https://www.usda.gov/oce/foodwaste/resources/K12_schools.html 30 http://smarterlunchrooms.org/resource/lunchroom-self-assessment-score-card 31 A searchable list of food pantries and food banks in Maryland is maintained by: http://www.foodpantries.org/st/maryland 32 https://www.facebook.com/FoodBus

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 31 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

A number of states support outreach programs to reduce food wasted at schools and these should be reviewed by the County. For example, to aid compliance with Massachusetts’ 2014 food waste disposal ban, the State established The Green Team33, an interactive educational program that empowers students and teachers to improve waste reduction, recycling, composting, and energy conservation. Classroom kits for several activities are provided and participating classes receive certificates of recognition and are eligible to win awards. Connecticut has developed a manual for school composting34, which includes the steps and tools needed, as well as creative ideas like incorporating food recycling into the science curriculum and other teaching materials. At the local government level, in San Francisco, where composting of food waste is mandatory, the city runs a citywide schools composting program35 that makes composting a fun challenge for students.

Accurate data on waste generation at schools are hard to come by. The most comprehensive findings come from a school waste sort and composition study conducted by the Minnesota Pollution Control Agency in partnership with Hennepin County and the City of Minneapolis, which evaluated waste generated at six schools (two elementary, two middle, and two high schools in both urban and suburban settings) over a two-day period in April 201036. All six schools had pre-existing recycling and organics composting programs. The study was designed to evaluate all of the material schools discard, including materials collected as trash, recycling, and organics. Key findings were that average per capita total waste generation was 0.52 lbs. per day, over 78% of which could be diverted from trash with 50% managed via organics composting programs. The single most common material generated was food waste at 23.9% of the total waste generated. This suggests each student generates about 0.26 lbs. of compostable waste per day, lower than the estimate of about 0.4 lbs. from Phase 1 of the Study.

2.3.2 Single-Stream Recycling Program

Developing a Public Schools Recycling Program (PSRP) is required for all counties under Sections 9-1703(b) and (g) of the Environment Article, Annotated Code of Maryland, “Environment – Recycling – Public School Plans,” issued in 2010. Frederick County’s PSRP, which is described in the County’s 1998-2017 Solid Waste Management Plan dated June 2015, incorporates all FCPS, Frederick County Charter Schools, and Frederick Community College (FCC). Most aspects of the PSRP have already been adopted by the Board of Education (BOE) and individual schools. Main responsibility for recycling lies with the Energy and Recycling Coordinator for FCPS and the Executive Director of Facilities Planning for FCC, although

33 http://thegreenteam.org/recycling-facts/food-waste-reduction/ 34 http://www.ct.gov/deep/lib/deep/compost/compost_pdf/schmanual.pdf 35 http://sfenvironmentkids.org/teacher/food_flowers.htm 36 https://www.pca.state.mn.us/sites/default/files/p-p2s6-14.pdf

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 32 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

DSWM oversees and manages all recycling contracts and service agreements. Each school is responsible for the internal collection of recyclable materials, as well as determining the collection schedule directly with the collection contractor. The collection contractor is required to supply an agreed number of internal recycling containers of appropriate size to all schools to aid with collection. Single stream recyclables are brought to the County’s transfer station and consolidated with recyclables from the residential curbside single stream program for processing and marketing.

Staff at individual school, typically custodial staff, have primarily responsibility for monitoring of the PSRP, with assistance from DSWM when requested. Each school is responsible for educating staff and students. DSWM assists with outreach and education in several ways, including: • Providing education on their website and linking back to the FCPS recycling webpage; • Educating principals and administrative staff when requested by the BOE; • Attending outreach events when requested by the BOE; and • Assisting with promotional and educational materials when requested by the BOE. Given the above, in Phase 1 of the Study it was assumed that FCPS already had functioning single stream (blue bin) recycling programs in place such that no meaningful additional quantities of clean recyclables could be recovered. As such, the Study focused on recovery of food waste from school kitchens and cafeterias as well as provision of additional organics collection bins in hallways as previously described. This assumption generally holds true; however, given that separate collection of food waste and other SSO is contemplated and evaluated in Phase 2, it is recommended that the BOE work with DSWM and the County to reassess the PSRP and improve its efficiency. For example, contracts for collection of single stream recyclables could be jointly awarded to service providers for SSO collection. Responsibility for education and management of the PSRP could also be transferred to the collection contractor(s).

A number of resources are available to guide improvements to school recycling programs; for example, the Virginia Recycling Association provides a schools recycling guide and toolkit37. The Minnesota Pollution Control Agency also provides a toolkit and has published a cost-benefit case study of recycling programs at 150 K-12 schools38. The study concluded that many schools have an opportunity to reduce costs by seeking competitive bids from collection contractors on a more frequent or routine basis. High-performing recycling program generally reduce net waste management costs for schools since most jurisdictions have a lower unit cost for recyclables than

37 http://www.vrarecycles.org/SchoolRecyclingToolkit.aspx 38 https://www.pca.state.mn.us/school-recycling-toolkit

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 33 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

for trash (as is the case in Frederick County). However, organics recycling is typically more expensive per cubic yard than traditional recyclables. Integrating recycling best practices in schools will increase the effectiveness of recycling programs. In most cases, the improved performance will be cost neutral or save the school money.

2.4 Aerobic Composting

2.4.1 Introduction

As discussed in Section 2.1, evaluation of aerobic composting in Phase 2 is focused on decentralized (community scale) operations. Benchmarking data and other information gathered at this stage of the Study serve to address the following main questions: 1. Assuming collection of food waste and other SSO in tandem with the programs discussed in Section 2.2, what is the optimal approach for phased-in development of decentralized composting and how many facilities will be required at what scale? 2. Given that development of new compost facilities will take some time and is risky given their reliance on a new and untested feedstock, what existing food waste composting capacity exists in or near Frederick County that could serve as a pilot program? 3. What are the specifications for composting SSO (i.e., tolerances for variability in volumes, composition, and maximum contamination) and what blend of food waste to yard waste is realistic? 4. What is the expected cost of composting SSO using different composting methods, and what are the most common and reliable methods? 5. How should composting contracts be set up, and should these contracts be tied directly to collection programs? 6. What are the potential permitting and other constraints, land requirements, market conditions for compost product, and availability of grant monies and subsidies affecting development of a composting facility in Frederick County? A recent report published in BioCycle39 identified over 4,900 composting operations in the U.S., based on a national survey of state officials with 44 states reporting. Of these, about 71% compost yard trimmings exclusively and 5% compost biosolids (sewage sludge and manure). Only 7% compost food waste and SSO although a further 2% compost mixed organics or mixed waste. The inadequacy of dedicated collection programs and infrastructure is cited as a significant contributor to limiting the number of composting facilities accepting food waste, along with the fact that many composting operations are not staffed or equipped to comply with requirements for receiving this waste stream. State officials contacted were asked to tally the

39 Platt B, Goldstein N. (2014) “State of Composting in the U.S.” BioCycle, July 2014, 55(6), p.19.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 34 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

number of composting facilities in their state by processing capacity. A response was provided by 31 states that included nearly 3,300 facilities, which indicated that 72% of these facilities are composting less than 5,000 tons/year while a further 22% of facilities are operating in the 5,000 to 20,000 tons/year range. Very few large-scale facilities handling over 20,000 tons/year are in active operation, which supports the decision not to investigate development of a large centralized facility in Phase 2 of this Study.

2.4.2 Types and Costs of Composting Operations

Several different types of composting operation have been developed. Typical composting methods include passive piles, windrows, and static piles, which may be aerated or unaerated and covered or not covered. More specialized in-vessel composting techniques also exist (“vessels” in this context comprising bins, beds, silos, transportable containers, or rotating drums). Vermicomposting systems are also used, although typically at small scale and/or with relatively homogeneous feedstock. Passive piles are created by stacking materials in piles and allowing them to decompose over a long time with little management. This simple, inexpensive method has significant disadvantages (e.g., the pile can overheat and spontaneously combust, become anaerobic and release odors, requires large land area, and can look like a dump and thus attract the dumping of unwanted materials (fly tipping)40. For this reason, passive piles are not considered as a viable technology for food waste composting in this Study.

According to the Center for a Competitive Waste Industry (CCWI)41, the range of tipping fees for organics processing in 2010 varied from $15 to $90 per ton (average $44 per ton). This compares to the assumed cost of $75/ton for a 5,000 tons/year facility in Phase 1 of the Study, which was based on extrapolating 2014-2015 data from three facilities across two order of magnitude with respect to processing capacity, and $28 to $49 per ton for MSW composting reported by the U.S. EPA in 200042, which suggests that unit costs have increased by a factor of 1.5 to 2 over 15 years.

Windrows Windrow composting involves placing materials in long, narrow piles and turning or agitating them regularly. This is the most common method used for rapid composting of yard wastes and can accommodate SSO. Windrows are typically 3-12 feet high, 10-12 feet wide, and hundreds of feet long. Windrows are formed using a front-end loader and turned using this equipment or, more commonly, a specialized turning machine. This method is labor intensive with some activity performed almost daily. SSO to be composted are either premixed prior to being formed

40 Sherman R. “Large Scale Organic Materials Composting,” published by North Carolina State Univ. 41 Center for a Competitive Waste Industry (2010) “Beyond Recycling: Composting Food Scraps and Soiled Paper,” Report to U.S. EPA Region 9, January 2010. 42 EPA/R-99/XXXX, “Life Cycle Inventory and Cost Model for Mixed Municipal and Yard Waste Composting,” July 2000

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 35 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

into a windrow, or are layered (e.g., typically on a bed of ground yard trimmings, wood chips, or sawdust) and then mixed with the turner. To control release of odors when SSO are first added, some operators create a windrow and then wait for about a week before turning the pile. In other cases, windrows are covered with a layer of ground yard trimmings, which acts as a biofilter during this initial stage (CCC, 2004)43. An active composting period of up to nine months is required, depending on the type of materials and frequency of turning, followed by a 2-6 month (average 3-month) curing period44,45.

A comprehensive study by van Haaren, 2009)46 reported capital costs for a large windrow composting plant as $3.5 million for a facility processing about 45,000 tons annually, including site construction, equipment purchases, and repayment of the capital cost of the plant (annualized over 15 years at an assumed 6% interest rate). CCC (2004) estimates capital costs at about $45- $70 per throughput ton, assuming a minimum 55,000 ton/year capacity. Unit costs will be higher at smaller facilities. Annual operating costs (including site lease, labor, insurance and other overheads, and equipment and building maintenance) were estimated at about $13/ton by van Haaren (2009). The reported tipping fee for windrow composting of SSO in Cedar Rapids, Iowa in 2012 was $18/ton.

Aerated Static Piles Aerated static pile (ASP) composting comprises forcing (positive) or pulling (negative) air through a trapezoidal compost pile. Air is supplied through perforated pipes embedded in the piles. The open ends of the pipes allow air to be circulated through the piles after being mechanically blown in or passively drawn in through a chimney effect created by rising hot gases. An advantage of ASP composting is the ability to capture the process air for odor treatment (typically through a woodchip/compost treatment biofilter). Agitation only occurs when piles are combined or moved to a different area for curing. ASPs are primarily used to compost biosolids or feedstocks of similar consistency and homogeneity; thus SSO require grinding and pre-processing prior to blending with bulking agents such as wood chips. To better manage odors, piles may be covered with a layer of finished compost or wood chips, which then are incorporated when the piles are moved. Alternatively, it is increasingly common for ASPs to

43 Composting Council of Canada (2004) “Composting Processing Technologies,” www.compost.com 44 Vermont Department of Environmental Conservation (2015) Turned Windrow Composting: Sizing Your Composting Pad: www.recycle.vermont.gov 45 Ontario Ministry of Agriculture, Food, and Rural Affairs, “Agriculture Composting Basics.” http://www.omafra.gov.on.ca/english/engineer/facts/05023.htm 46 van Haaren R. (2009) Large scale aerobic composting of source-separated organic wastes: A comparative study of environmental impacts, costs, and contextual effects. M.S. Thesis: Columbia, Univ. New York, NY

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 36 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

be covered with a tarp, including specialized one-way breathable products such as the Gore Cover47. ASPs allow larger piles than windrows and compost materials in 3-6 weeks.

The study by van Haaren (2009) reported capital costs for an ASP with a Gore Cover as $7.35 million, again for a facility processing about 45,000 tons annually and including site construction, equipment purchases, and repayment of the capital cost of the plant (annualized over 15 years at an assumed 6% interest rate). The energy needed for the blowers and automated control/monitoring systems amounts to 0.75 kWh/ton. Unit costs will be higher at smaller facilities. Overall, a Gore Cover ASP facility appears about twice as capital intensive as a comparably-sized windrow composting facility. Annual operating costs (including site lease, labor, overhead, equipment and building maintenance, and cover replacement assuming two covers per year) were estimated at about $24/ton by van Haaren (2009). Again, this is about twice the cost for windrows.

The reported tipping fee for ASP composting of SSO in Hennepin County, Minnesota was $15/ton in 2012. However, Cedar Grove48, a long-standing private operator in the greater Seattle, Washington metro area that recycles 350,000 tons of residential and commercial yard and food waste annually at five locations operated as ASPs with Gore Covers charges $75/ton for commercial food waste, $68/ton for residential co-mingled yard waste and food scraps, and $17-$22 per cubic yard for residential yard waste. Cedar Grove’s tipping fee for food waste in 2008 was reported as $42/ton by van Haaren (2009), indicating that fees increased about 1.5-2 times over eight years.

In-Vessel Composting In-vessel composting refers to a diverse group of methods that confine the composting process within a container, building, tunnel, silo, bed, or rotary drum and use a combination of forced aeration and mechanical turning to speed up the composting. These systems are less labor intensive, require less land area, offer better odor control and faster composting (days as opposed to weeks), and produce consistently higher quality compost than windrows or ASPs. However, in-vessel systems have high capital, operating, and maintenance costs, ranging from $40 to $150 per wet ton of waste49. Because of the high costs, these systems are not usually used to compost yard waste or SSO, but more typically serve to compost sludges and other hard-to-manage materials.

The estimated capital cost of in-vessel composting is $300-$500 per throughput ton assuming a minimum throughput of 55,000 tons/year (CCC, 2004). Capital and operating costs were

47 See, for example, food waste composting solutions offered by Sustainable Generation: www.sustainable-generaiton.com 48 https://cedar-grove.com/residential/recycle-your-organic-waste 49 Sherman R. “Large Scale Organic Materials Composting,” published by North Carolina State Univ.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 37 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

estimated by van Haaren (2009) as $19/ton and $143/ton, respectively, for a 45,000 ton/year facility (under the same development assumptions as described previously).

2.4.3 Existing Local Composting Capacity

In order to ascertain what existing composting capacity exists in or near Frederick County and that currently accepts, or could potentially accept, food waste to serve as a pilot program for implementation of the recommendations from this Study, Geosyntec reviewed existing local facilities in Maryland, Pennsylvania, Virginia, and West Virginia. The searchable database maintained by BioCycle (www.findacomposter.com) was used in the primary search function, which returned 15 facilities within 100 miles of Frederick City. This database was supplemented with additional independent research to create the local picture of active composting operations depicted in Figure 2-1. Geosyntec also contacted individual facility operators to gain additional insight into their operations in terms of scale, type, and feedstock acceptance and restrictions.

It is important to note that Figure 2-1 is by no means exhaustive and will quickly become dated, as new facilities are routinely planned in Maryland. For example, during preparation of this report Geosyntec was aware of an RFP issued by Montgomery County, Maryland for a contract for a large-scale facility to accept up to 45,000 tons/year of SSO collected from the commercial and residential sectors in the county. MDE has also recently approved permits for a farm-based 13,000 ton/year in-vessel composting facility in Ridgley, Caroline County and a commercial 33,000 ton/year windrow composting facility in Woodsboro, Frederick County. The permit applications for both facilities indicate an intention to accept residential SSO feedstock, although SSO will not represent the primary feedstock for either facility.

Figure 2-1: Existing Composting Operations within 100 miles of Frederick City

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 38 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

As noted on the above map, a number of existing facilities already accept or would be willing to accept limited quantities of food waste as part of a pilot program developed by Frederick County. These include: • Tabb Farm, Kearneysville, West Virginia: This facility is located close to Brunswick and only about 30 miles from Frederick. This farm-based windrow facility mainly processes animal manure and sawdust waste from the site as well as surrounding farms, but has taken food waste in the past from the local Veterans Hospital and from some local grocery stores. The food waste from the grocery stores is delivered by Organix, a private company that businesses can hire to recycle food waste. The operator estimates that the facility could accept up to 1,300 tons of food waste per year, as long as it is pre- sorted and all plastic is removed. The tipping fee charged for food waste is $15/ton. The facility is permitted as a non-residential composting facility under WV 33CSR3; however, the ability to accept out-of-state waste needs to be confirmed. This regulation limits composting to 12,000 tons per year. • Veteran Compost, Aberdeen, Maryland: This commercial ASP composting facility accepts both food and yard waste (mixed) but predominantly takes food waste. Compost product is sold for $35 per cubic yard. The operation is expanding and currently has a second facility in Fairfax, Virginia. As such, the operator is willing to work with the County, either by taking food waste at the existing Aberdeen facility (about 80 miles from Frederick) or by helping to build and operate a new composting facility in or nearer to Frederick County. The operator indicated they can expand as necessary to meet feedstock demand. • MES/Prince George’s County Facility, Upper Marlboro, Maryland: This facility, which is located about 75 miles from Frederick, was started as a food waste pilot project at the Round Station Landfill in 2013 and expanded to accept 4,000 tons/year in 2014. The operator indicated that they currently have no extra capacity and do not generally accept out-of-county food waste; however, a further expansion to 8,000 tons/year is imminent. Initial construction was helped by a federal grant covering 8% of costs, although the operation is still only breaking even having sold about 5,800 tons of compost since the pilot began in 2013. Compost product is sold in bulk as garden compost for $12.50 per cubic yard.

2.4.4 Main Challenges and Lessons Learned

The U.S. Composting Council50 provides case studies of lessons learned and advice from facilities with experience handling food scraps. Odor management is high on every list, as is the

50 U.S. Composting Council (2009) “Best Management Practices (BMPs) for Incorporating Food Residuals into Existing Yard Waste Composting Operations.”

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 39 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

observation that the more food waste a facility agrees to manage the higher the level of effort and technology needed to prevent odor from becoming a problem. As one operator observed: “Several years of odor-free management makes it so people don’t realize the composting facility exists, whereas one week with odors means people will never forget you are there.” Keeping a site tidy is also important for public perception, as a messy site may imply that the compost operation is also poorly managed. In addition to improving aesthetics, keeping grass mowed also helps keep pests away from piles.

Providing feedback to generators and haulers is particularly useful with regard to managing contamination levels, which significantly impacts pre-processing effort and final quality of the compost product. Sharing photographs of poor feedstock loads helps explain what not to dispose of in the SSO container. Ultimately, facilities must be tough on only taking clean materials free from excessive contamination if they are to stay productive. Managing carbon to nitrogen ratios in piles is also important, which mostly manifests as ensuring that sufficient stockpiles of carbon-rich bulking materials are available on site.

2.4.5 Permitting Considerations for New Facilities

Composting facilities may be subject to several MDE and Maryland Department of Agriculture (MDA) regulations. In the context of this Study, authority for regulation and permitting of composting facilities is provided under Section 9-1725, Environment Article, Annotated Code of Maryland, and the Code of Maryland Regulations (COMAR) 26.04.11 and 15.18.04. MDE’s Composting Website51 provides guidance to prospective compost project developers in identifying applicable requirements across MDE and MDA regulations. MDA’s permitting requirements are for compost product registration (including testing, classification, labeling, and recordkeeping) and operator certification. MDE’s permitting requirements vary by facility and feedstock types, with some exemptions given (e.g., to very small facilities and farms that compost on-site feedstock and use the compost on-site). Feedstock types are divided into three types, grouped roughly by environmental risk, as follows: • Natural Wood Waste (NWW): Trees and other natural vegetative refuse; • Type 1: Yard waste; • Type 2: Food scraps, non-recyclable paper, approved animal manure and bedding, approved food processing materials, animal mortalities and roadkill, and other compostable products; and • Type 3: Sewage sludge (biosolids), used diapers, and mixed MSW.

51 www.mde.maryland.gov/composting

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 40 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Composting of NWW and Type 3 feedstocks is not covered under MDE’s Composting Facility (CF) Permit or composting facility regulations and is not of interest in this Study.

Facilities for composting Type 1 and Type 2 materials are divided into tiers based directly on permitted feedstock types (i.e., a Tier 1 facility may only compost Type 1 feedstock, but a Tier 2 facility may compost both Type 1 and 2 feedstocks). Tier 2 is further divided into Tier 2-Large and Tier 2-Small, based on the amount of finished compost produced per year. A Tier 2-Large facility produces in excess of 10,000 CY of compost per year. All Tier 1 and Tier 2 facilities require a CF Permit unless covered under one of the exemptions laid out in the composting facility regulations at COMAR 26.04.11.05 and .06. All facilities are required to conduct composting operations on an all-weather pad and manage stormwater in accordance with the Stormwater Associated with Industrial Activity General Discharge Permit as well as local stormwater and sediment and erosion control requirements, and may also require a Permit to Construct (PTC) for certain equipment such as aeration systems and grinders. However, Tier 2- Large facilities have stricter pad specifications and also require collection and treatment of all contact water, which represents a significant addition permitting, design, construction, and operating expense. For this reason, proposed development of new composting facilities as a recommendation from this Study is limited to Tier 2-Small facilities that will produce less than 10,000 CY of finished compost annually.

2.4.6 Incentive Programs for Composting

State of Maryland Development of green infrastructure (e.g., green roofs, bioswales, rain gardens, and green streets) using compost and/or compost-based products is promoted under the Maryland Stormwater Management Act of 2007. HB87852 and SB814 (2014) also established the use of compost as a best management practice (BMP) for erosion control and stormwater management in highway construction projects. Under this legislation, SHA is required to report the volumes and status of compost products used in state highway construction and provide recommendations to design engineers and contractors to maximize the use of compost. This legislation provides a mechanism for securing a market for compost production that meets SHA specifications53. As SHA and MDOT projects are likely to be the major markets for compost products, the composting program in Frederick County should be developed around their requirements.

A comprehensive listing of grant and funding resources that may be available for developing compost operations is provided by the Sustainable Maryland Grants Portal54. As an example of

52 http://mgaleg.maryland.gov/2014RS/bills/hb/hb0878f.pdf 53 See: https://www.roads.maryland.gov/OMT/p-compost.pdf. SHA also maintains a list of registered compost producers. 54 http://sustainablemaryland.com/grants-resources/grants-portal/

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 41 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

the kinds of resources available, MDA’s Animal Waste Technology Fund provides grants to companies that demonstrate new technologies on farms and provide alternative strategies for managing animal manure. These technologies may generate energy from animal manure, reduce on-farm waste streams, and repurpose manure by creating marketable fertilizer and other products and by-products. In October 2016, a grant of over $350,000 was jointly award to Veteran Compost and O2 Compost to develop an ASP demonstration project and public education/training facility in Anne Arundel County. The project will primarily manage equine manure for livestock farmers located throughout Maryland.

Finally, the Maryland Small Business Development Center Program, which is funded in part through the U.S. Small Business Administration, provides training, consulting advice, and technical support for small businesses, with emphasis on start-up operations. The program offers resources for developing business plans, understanding business law and contracting, applying for government grants and/or financial assistance, and selecting the best options for obtaining financing and venture capital55.

Local Governments Montgomery County, Maryland passed Bill No. 28-1656 in June 2016 requiring development of a Strategic Plan to Advance Composting, Compost Use and Food Waste Diversion by 1 July 2017, in most part to support the goal of recycling 70% of MSW in the county by 2020. The bill cites as motivation that “compost use is a valuable tool in stormwater management that can lower runoff volume due to improved water holding capacity, healthy vegetation/biomass, and increase infiltration.” Although use of out-of-county compost is not specifically covered, this nonetheless builds momentum for the use of compost amended soil in low impact development (LID) and landscaping projects, which is already required through the county’s RainScapes Rewards Rebate program. Similarly, Washington D.C.’s RiverSmart Homes incentive program for rain gardens and the requirement to use compost in LID applications, green roofs, and as bioretention filter media under the city’s new Stormwater Management Guidebook should have a generally positive effect on the local use of and demand for compost.

MDE’s composting guidance (see Section 2.4.5) notes that local governments have an opportunity to support the composting market in Maryland by using compost on county-managed lands and encouraging its use by others within the jurisdiction. This could help develop a “starter” market for compost in Frederick County during an initial pilot phase of food waste composting as recommended by the Study. A review of County ordinances and regulations, including zoning, solid waste, and building codes, is recommended to ensure they encourage

55 http://www.mdsbdc.umd.edu/finance_and_venture_capital_for_maryland_small_businesses_mdsbtdc.php 56 http://www.montgomerycountymd.gov/COUNCIL/Resources/Files/bill/2016/20161115_28-16A.pdf

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 42 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

rather than hinder collection and composting of organics57. The Source-Separated Organics Recycling Toolkit (S2ORT)58 developed in Georgia provides sample ordinance provisions for residential SSO collection.

Federal At the federal level, multiple agencies provide hundreds of millions of grants and loan guarantees for infrastructure development projects and programs. The programs have varied by region and availability. However, specific federal grant or loan programs for composting facilities are very limited. Some grant funding is available from the USDA’s Natural Resources Conservation Service for on-farm composting sites for equipment and infrastructure via its Environmental Quality Incentives Program (EQIP)59. The MES/Prince George’s County pilot- scale composting facility reportedly received federal grant monies covering 8% of initial construction costs in 2013, although the precise mechanism by which this grant was provided is not specified.

The U.S. Congress has passed legislation authorizing investment tax credits, enhanced tax credits, and enhanced depreciation to support investment. For example, in 2015 Congress enacted a tax package enhancing and expanding tax incentives for businesses by enabling them to deduct not just the cost but also half the potential profit from food donations.

Private Sector and Non-Profits Investment funds, corporations, and foundations are a final source of financial resources for consideration. Impact investors (those looking to make a social impact) provide low or no cost funding for environmental or social infrastructure. Corporations and their foundations, as well as non-profit entities, provide funds and program resources. For example, both PepsiCo and Coca Cola have recycling grant and program programs. Private foundations such as Greenworks provide grants and program support to expand education. A number of 501(c)3 non-profit community development finance organizations provide low interest loans and technical assistance. An impact fund, The Closed Loop Fund, formed in late 2014 has raised $100 million and provides zero interest loans to municipalities to invest in recycling projects. Green banks, such as the newly-formed Montgomery Green Bank, invest in projects that mitigate greenhouse gas emissions and other climate change impacts.

57 Ohio EPA has created guidance for local governments to ensure that zoning codes accommodate and encourage composting to the extent possible. See: http://epa.ohio.gov/portals/34/document/guidance/GD%201011_UrbanAgCompostingZoning.pdf 58 http://www.dca.state.ga.us/development/PlanningQualityGrowth/programs/SWMrecyclingAssistance.asp 59 https://www.nrcs.usda.gov/wps/portal/nrcs/main/maryland/programs/financial/eqip/

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 43 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

2.5 Co-Digestion of Food Waste with Wastewater at Anaerobic Digestion Facility

Anaerobic digestion (AD) of food waste generally outcompetes aerobic composting technologies when measured against three metrics – land resources required, pest/vector management and odor control, and potential for recoverable energy from methane generation – but otherwise scores lower than aerobic alternatives. Most significantly, even accounting for cost offsets from the sale of energy/methane and digestate byproducts, a stand-alone AD system is expensive to install and operate. Equivalent 10-year lifecycle costs were estimated at between $130 and $300 per ton in the Phase 1 analysis, depending on throughput capacity. Another reference estimates capital costs at about $450-$650 per throughput ton, based on assuming a minimum throughput of 55,000 tons per year60. A more recent feasibility study performed by the National Renewable Energy Laboratory (NREL)61 reviewed expected costs for a food waste digester with capacity in the range of 7,000 to 15,000 tons per year. Average installed and operating costs were estimated at $561/ton of throughput capacity and $48/ton of material processed, respectively. A 90,000 tons/year high solids AD facility in San Jose, California that began receiving organics from the commercial sector in December 2013 charges a tipping fee of $70-$95 per ton, depending on the level of contamination in feedstock loads.62

The high cost of stand-alone AD systems and the relative immaturity of this technology in SSO processing applications in the U.S. (financing novel technologies is generally more challenging) were the primary reasons given in the Phase 1 Report for not recommending this option for further evaluation in Phase 2. However, the County Executive requested that potential co- digestion of food waste with biosolids at the County’s wastewater treatment plant (WWTP) be evaluated in Phase 2. DUSWM owns and operates the existing 7 million gallons per day (MGD) Ballenger Wastewater Treatment Plant. Based on review of the Facility Plan prepared for DUSWM in March 2006 to identify and evaluate alternatives for the planning and phased design and construction of new wastewater treatment capacity, Geosyntec understands that sanitary wastewater flows are expected increase to over 13 MGD by 2020 and 24 MGD by 2040. A phased approach to providing additional capacity is planned under a $50-$70 million capital project aimed at developing the expanded Ballenger-McKinney Wastewater Treatment Plant (B- M plant). The expansion will include upgrading the treatment process to achieve Maryland’s Enhanced Nutrient Removal (ENR) levels of treatment based on advanced membrane bioreactor (MBR) technology once flow at the facility approached 10 MGD (expected in 2013 in the 2006 Facility Plan). The upgrade plan includes installation of anaerobic digesters.

60 Composting Council of Canada (2004) “Composting Processing Technologies,” www.compost.com 61 Moriarty K. (2013) “Feasibility Study of Anaerobic Digestion of Food Waste in St. Bernard, Louisiana,” prepared for the U.S. Environmental Protection Agency by the National Renewable Energy Laboratory (NREL) under Interagency Agreement IAG- 08-0719 and Task No WFD3.1001, January 2013 62 Goldstein N. (2014) “High solids digestion + composting in San Jose,” BioCycle March/April 2014, 55(3), p.42

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 44 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

There are two methods for introducing feedstock into anaerobic digesters: batch or continuous, which can be operated “wet” (>85% moisture content) or “dry” (<80% moisture content)63. The more common method is continuous feeding, which is used in low solids (wet) AD technologies used at WWTPs. Several different reactor designs exist, of which the continuous stirred tank reactor (CSTR) is the most common. In recent years, there has been a significant movement to start adding food waste to AD systems already in place at WWTPs. Food waste is highly biodegradable and has a much higher volatile solids destruction rate (86-90%) than biosolids, which means that even though additional material is added to the digesters, the volume of residual sludge generated will only increase by a small amount64. However, high solids SSO feedstock that arrives in collection vehicles must be pre-processed by diluting and shredding/grinding to a slurry prior to allow pumping with the influent wastewater stream to the digesters (this ignores food waste that may be ground in household kitchen garbage disposal units and conveyed directly to the WWTP in sewers). At the East Bay Municipal Utility District (EBMUD) facility in the San Francisco Bay area, for example, which has eleven digesters with combined capacity of 22 MGD, food waste is processed using a slurry tank, rock trap, grinder, and paddle finisher to achieve the “consistency of applesauce” before being blended at a 1:40 ratio with biosolids65. Another consideration to control for is that MSW organics may contain compounds that inhibit microbial activity; this concern is more prevalent in wet AD systems that rapidly diffuse throughout the reactor and may “shock” the microbial populations.

The cost-benefit analysis for co-digestion will vary significantly between locations and facilities, but is often reported to be net positive. For example, the aforementioned EBMUD facility invested heavily in the additional infrastructure needed to support acceptance of SSO, including $5 million to construct a food waste receiving station, $1.3 million in interconnection fees, and another $30 million for the new gas turbine. Additional operating costs are also incurred for maintaining the system, managing a greater volume of biosolids, and staffing the program with five full-time employees. Nevertheless, co-digestion has been a very beneficial investment: in 2012, for example, the facility generated $8 million in revenue through tipping fees with energy savings and sales yielding, on average, an additional $3 million a year. Tipping fees range from $0.03/gallon for liquid organic wastes to $30-$65 per ton for solid organics.

A 2015 review by the Environmental Research and Education Foundation (EREF)66 reported there were a total of 154 operational AD facilities processing some quantity of SSO in the U.S.

63 There is no specific standard for these cutoffs; however, these values are routinely targeted in the industry. 64 U.S. EPA, “The Benefits of Anaerobic Digestion of Food Waste At Wastewater Treatment Facilities,” available at: https://www.epa.gov/sites/production/files/documents/Why-Anaerobic-Digestion.pdf 65 EPA 600/R-14/240, “Food Waste to Energy: How Six Water Resource Recovery Facilities are Boosting Biogas Production and the Bottom Line,” September 2014 66 Environmental Research and Education Foundation, “Anaerobic digestion of municipal solid waste: Report on state of the practice,” August 2015

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 45 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

in 2013, including 54 at WWTPs (35%). Altogether, these WWTPs processed an average throughput of 237 tons of MSW organics per month, representing 29% of the total quantity of about 785,000 tons of MSW organics processed at AD facilities in that year. The majority of WWTP co-digestion facilities identified by EREF were in the Midwest (25) and Pacific (18), with only seven active facilities the Northeast and Mid-Atlantic regions, including: • New Jersey: Cumberland County Utilities Authority; • New York: Gloversville-Johnstown WWTP, Ithaca Area WWTP, Metropolitan Syracuse WWTP, and NCSD No. 2 – Bay Park STP; • Vermont: Essex Junction WWTP; and • Virginia: Opequon Water Reclamation Facility. It is worth noting, however, that New York City operates 14 WWTPs ranging in size from 30 to 310 MGD, all of which are equipped with AD. The city is currently undertaking a three-year demonstration project to add 50-500 tons/day of SSO to the digesters at the 240 MGD Newton Creek WWTP67 and may add food waste co-digestion capability at other facilities depending on the success of this demonstration. Geosyntec recommends that the Steering Committee consider visiting one or more of the above facilities if serious consideration is to be given to future co- digestion at the B-M Plant.

In conclusion based on the above, co-digesting food waste with wastewater at the expanded B-M Plant appears feasible and may represent a cost-effective method of processing food waste collected from county business and residents, although it is important to note that it would compete for SSO feedstock with composting facilities and thus would significantly impact the financial feasibility of that proposed program. In addition, some AD reactor designs are only suitable for treating liquid food waste and fats, oils, and grease (FOG) and are not suitable for processing high solids SSO, particularly non-food materials such as paper. The selected reactor design at the plant would have to be professionally reviewed under a technical and financial feasibility study prior to deciding on implementing this strategy. While the exact timing and specifications of the AD system at the plant remain uncertain, however, more definitive evaluation of this option is unlikely to be productive. Therefore, further analysis of this option is not recommended in Phase 2.

2.6 Resource Recovery Park

In the Phase 1 analysis, Geosyntec assumed that a large-scale resource recovery park (RRP) for centralized solid waste management and recycling with onsite composting of recovered organics would be developed. The County’s existing single stream (S-S) curbside recycling program and

67 Sharp R., Fiore A., Fok A., Mahoney K., Galst S., Lin T., Van Hore M. (2015) “Comprehensive evaluation of food waste co- digestion,” Clear Waters, Winter 2015, pp. 18-26.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 46 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

other recycling activities will remain in place; as such, the RRP must include a materials recovery facility (MRF) with separate lines for processing existing quantities of S-S materials and mixed waste. It should also include C&D recycling. All unrecovered material not suitable for recycling or composting will continue to go for landfill disposal.

The current throughput at DSWM’s transfer station (TS) will be assumed for sizing the initial RRP operation. Based on this, the mixed waste processing line at the MRF will initially be larger than the S-S materials processing line. However, although detailed evaluation of a RRP in Phase 2 was recommended in large part as a more centralized, automated, and non-participatory counterbalance to the highly decentralized options of separate food waste collection and small- scale composting that rely significantly on increased public participation for their success, it is nevertheless important to allow for increased S-S recycling and SSO collection over time, which would change the relative size of the S-S and mixed waste streams. The MRF design thus needs to be sufficiently flexible and scalable or modular to accommodate this and other potential long- term waste/recycling trends in Frederick County. It is also noted that a number of public contributors to the discussion on RRPs during the Phase 1 workshops envisioned a more sophisticated facility comprising the collocation of reuse, recycling, composting, manufacturing, and retail businesses. However, developing such a facility at the current time would be overly ambitious and the recommendation from Phase 1 was for significantly more modest facility, although the County could seek to expand the scope of operation in the future.

In terms of identifying case studies of similar RRPs from which to derive benchmarking data, Geosyntec could not identify any relevant east coast examples. However, a number of examples from western states exist: • Shoreway Environmental Center (SEC), San Carlos, California: This facility, which is owned by South Bayside Waste Management Authority and privately operated under a 10-year contract (2011-2021)68, is touted as California’s greenest recycling center that serves as “a national model for sustainable building practices and innovative recycling and material handling operations.” SEC functions as an integrated campus with a separate TS (which provides unloading and transfer of solid waste, C&D debris, and organics), highly-automated MRF (providing unloading, processing, and shipment to end markets for S-S recyclables), public recycling center (which offers buyback of recyclables and free drop off of hard-to-recycle items and household hazardous waste), and environmental education center. SEC’s “green building” features a white (cool) roof, natural lighting, and photovoltaic panels. The facility receives up to 3,000 tons/day and was built in 2008 at an estimated cost of $25.4 million for building and traffic improvements with $16.9 million for MRF processing equipment. SEC’s service area covers 93,000 homes and 10,000 businesses, with curbside three-bin collection provided

68 www.rethinkwaste.org

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 47 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

under a single franchise agreement with ReCology, a private hauler. Separated organics are transferred to the Grover Compost Facility in Tracy, a distance of about 65 miles. Finished compost is available at the SEC in limited quantities free of charge to residents and schools. Unrecovered trash is transferred to Ox Mountain Landfill in Half Moon Bay, less than 15 miles from SEC. • North Gateway Complex, Phoenix, Arizona: This 43-acre facility was constructed in 2006 for $40 million and includes 193,000 sq. ft. TS and MRF. The TS can handle 4,000 ton/day (with “significant” but unquantified recovery achieved) while the MRF is capable of handling 400 tons/day of S-S recyclables. No organics are separated for composting and unrecovered trash is transferred 60 miles for landfill disposal. Of interest, the TS/MRF building is LEED Gold Certified and features many sustainable design concepts to conserve electricity and water. These include steel framing with approximately 90% recycled content, fly ash content for all concrete, and interior finishes created from recyclable materials. Long roof overhangs shade interiors and reduce cooling needs while reflective and emissive roof paint minimizes heat radiation. • GreenWaste Materials Recovery Yard, Monterey, California: This private operation69 serves the Monterey Peninsula and portions of Santa Clara, San Mateo, and Santa Cruz Counties. It incorporates three distinct processing facilities that collectively can process over 100 tons of material per hour, while recovering over 80% of the materials received. Typical throughput is on the order of 2,000 tons/day. The three facilities are:

o Single-stream processing facility: Processes commingled recyclables and separates them into individual commodities for baling. The MRF can handle over 45 tons per hour and recovers over 95% of the material it processes.

o Mixed waste processing facility: Designed to remove organic material from MSW prior to sending residuals for landfill disposal. Two lines handle the vastly different waste streams received from SFHs and MFD complexes at 25 tons/hour and 37 tons/hour, respectively. Almost 70% of the material processed in the dirty MRF facility is removed for composting by a sister company (Z-Best Composting70), which processes up to 350 tons per day of this material into compost marketed to the local landscaping industry and a further 1,000 tons per day of yard trimmings that is sold to Salinas Valley farmers for use on crops.

o Yard waste processing facility: Processes the yard waste collected by GreenWaste’s San Jose collection fleet. Over 99% of the material processed in this facility is diverted from disposal. (GreenWaste and the parent company of Z-

69 www.greenwaste.com 70 http://www.zankerrecycling.com/compost/

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 48 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Best are partners in the 90,000 tons/year dry AD processing facility in San Jose reviewed in Section 2.5).

2.7 Potential Financing and Contracting Mechanisms

2.7.1 Overview

The SSO collection, decentralized composting, and/or centralized RRP projects recommended for detailed analysis in Phase 2 may be delivered as public services, privatized services, franchise agreements, or public-private partnerships. Financing mechanisms may take the form of grants, subsidies, loans, private equity, public debt (bonds), government loan guarantees, and/or tax incentives. Financing helps to spread the project costs over the asset’s lifecycle and is typically sought if the additional cost of financing can be justified. Access to funding has windows of opportunity dependent on the proposed contracting and project delivery mechanism and has to be carefully researched and pursued as part of the planning and design process for implementing a project option.

Public Sector Ownership and Operation The simplest contractual mechanism is for the County to deliver project option(s) themselves or in partnership with one or more municipalities. Depending on the scope of the project, the County could include the project under the existing portfolio of projects and services administered by DUSWM, or create a new division or public enterprise for project delivery and operation. Financing would likely take the form of a bond issue with capital cost repayments and operating expenses covered through fees levied for services. This option has the advantage that the County can directly monitor and enforce participation and maintain performance standards (i.e., levels of contamination in SSO loads), which may be valuable if participation is to be mandatory. However, maintaining standards and participation levels may be better achieved by building strong relationships through routine door-to-door contact with customers. For example, SSO collection by independent driver-owned businesses can promote careful materials segregation at source, because the driver is able to educate customers (residents) through regular, friendly reinforcement and who thereby become familiar with his/her needs.

A 100% public mechanism may work well for the centralized RRP project option and could be successful for phased development of decentralized composting facilities. However, in both cases private sector involvement has proved successful in developing similar projects in other jurisdictions. It is not recommended that SSO collection be provided under this mechanism since there is ample evidence to show that collection services are efficiently and cost-effectively provided under a franchise agreement such as is already in place for curbside single-stream recycling in the county.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 49 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Private Sector Ownership and Operation This mechanism, where the County would not have any direct involvement in project delivery and operation, has been used for replacement of some traditional public services in the U.S., including solid waste disposal. Private companies finance and develop projects most effectively when there is a market return on their investment to enable the company to grow and hire. As such, they are incentivized to find mechanisms to lower the cost of capital as well as capital and operating expenses. Under private sector ownership and operation, projects are normally funded through a combination of debt financing (loans provided by banks, credit unions, or savings institutions) and equity financing; private debt financing sources typically want to see 20-30% equity in the form of cash, stocks, bonds, inventory, real estate, or equipment (to the extent that these assets are available as collateral). Borrowers’ business plans and pro-forma must demonstrate their expectation to have adequate cash flow to cover the debt, generally at about 1.5 times the loan amount. Ideally, pro-forma cash flow projections for debt coverage should be based solely on tipping fee revenues (preferably backed up by contracts or letters of intent for delivery of organics) and should rely on product sales only for boosting profitability71.

The primary benefit of private sector ownership and operation is that it will not tie the County into public sector financing or operational risk and thus eliminates long-term liability for the County. In addition, there is the assumption that a qualified private sector operator will bring expertise and experience from other successful operations to bear on any facility or program developed in Frederick County. DUSWM is currently well-versed in utilizing the private sector for waste management services, with one example being the County’s current contract for waste transfer and disposal, where it pays a defined fee for services with no further liability or County involvement.

The primary drawback of private sector ownership and operation is the risk that issues outside the County’s control (i.e., financing, operations, etc.) can result in temporary or permanent disruptions in service. Private projects are fully subject to market forces (i.e., unprofitable projects are shut down under bankruptcy). It should be noted that this is not an insignificant risk, since during the past 10 years financial returns in the waste processing and recycling sector have been uncertain and a significant number of facilities have closed due to financial failure. Recent relevant examples include the Infinitus mixed waste processing facility in Alabama, the Peninsula Organics composting facility in Delaware, and the INEOS waste-to-biofuel facility in Florida.

Given that waste management services beyond traditional waste collection, processing of S-S recyclables, and MSW disposal are not currently available at a commercial scale in the county, there appear to be significant barriers to market entry for the private sector. At a minimum,

71 https://www.biocycle.net/2007/02/21/smart-financing/

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 50 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

choosing private sector ownership and operation will require the County to enter into a contract that would establish a unit rate service fee (e.g. $/ton) and minimum quantities of acceptably clean materials that would be delivered for processing (e.g. a “put-or-pay” contract, where a specified fee would be paid to the composting facility operator regardless of the quantity of SSO delivered). In addition, full private sector ownership and operation is more suited to small-scale composting facilities as opposed to a large scale centralized RRP because of the capital investment for each facility would be much smaller, thereby making it more likely to be able to secure commercial financing.

Public-Private Partnerships (Design-Build-Operate) A public-private partnership (PPP, 3P, or P3) is a cooperative arrangement for collaborative infrastructure development or service delivery between one or more public and private sectors, typically of a long-term nature. Common themes of PPPs are the sharing of risk and the use of private finance. A PPP typically involves a private entity financing, constructing, and managing a project over its projected lifespan or some other specified period in return for a promised steam of payments directly from the public entity or indirectly from users. Typically, these payments will include one or more of the following: • Contribution of some or all of capital development costs; • Public backing of debt issuance; and • Minimum guaranteed payments for services. While there are many PPP mechanisms used in a wide variety of programs and projects, this Study focuses specifically on the design-build-operate (DBO) model as being of most value to the County here. This model could be applied to all three of the project options recommended for detailed analysis in Phase 2, but is probably best suited to development of the capital intensive RRP option or bundling of SSO collection and/or compost facilities into a single contract.

Under the DBO approach, a private sector company would compete for an integrated single contract or concession, but title to the project assets would remain with the County (or would be transferred to the County after a set period). A simple DBO approach creates a single point of responsibility for design and construction and can speed project delivery by facilitating the overlap of the design and construction phases and the urgency of transitioning to the operating phase of the project (when the DBO contractor starts generating revenue from user fees and product sales). However, a DBO approach maintains the continuity of County involvement in the way that full privatization does not. When financing is added to a project, it is secured by either the public entity, in which case it becomes a DBO with public financing, or the private- sector company, when the arrangement then becomes a design-build-finance-operate (DBFO). No matter how the project is financed, the public entity retains ownership and ultimate control of

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 51 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

the land and any improvements made or equipment purchased as part of the project. The DBO contractor guarantees performance and assumes the responsibilities of operations and maintenance.

A potential benefit of DBOs is lower costs: when project planning, design, construction, and operation are handled together from the outset, there are more opportunities for efficiency. Research shows DBO projects are delivered at or below the owner’s budget almost twice as often as traditional project delivery methods72. DBOs also help lower risks, as control of the project remains in the hands of the owner while responsibility for performance and compliance are with the DBO partner. Both the owner and DBO partner can manage risk and liability through performance guarantees, insurance, the development of maximum total project cost guarantees early on, and the implementation of quality assurance and control processes. In the example of implementing SSO collection for delivery to decentralized composting facilities, the County (or municipalities) could guarantee some level of feedstock volumes (i.e., participation rates) while the private entity would be responsible for collection, processing, marketing, and sales of compost product. In this way, the County can stimulate private sector involvement in food waste composting while reducing some of the risk on the collection side (which the public sector is well placed to address through education/enforcement programs). This is important as commercial composting has more operational risk and less upside than other commercial waste and materials management activities.

A local example of a PPP of potential relevance to this Study is the Baltimore City Composting Facility (an in-vessel biosolids composting operation), which is operated through a partnership between the NMWDA, Baltimore City, and Veolia Water North America. Other examples include: • In 2015, Prince William County, Virginia entered into a PPP agreement with Freestate Farms, LLC, an agricultural services and production firm, to construct and operate an 80,000 tons/year ASP compost facility to process yard waste, food scraps, and wood waste on County land. The facility will be operational in the summer of 2017. Under the agreement, Freestate will process all organic material currently managed by the County at their landfill and composting facilities with no interruption in services. The term of the agreement is 20 years with the option to extend for two five-year periods73. • In another example, San Antonio River Authority selected Texas Disposal Systems to build, own, and operate a windrow composting and recycling facility by repurposing a former 52-acre biosolids land application site. Organics processed include yard trimmings, biosolids, food waste, and “other acceptable organics” as allowed by the

72 Williamson L. “Design-Build-Operate Project Delivery,” Design-Build Dateline, January 2006. 73 http://americancityandcounty.com/green/virginia-county-approves-new-organic-waste-processing-facility-related-video

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 52 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Texas Commission on Environmental Quality composting rules. The 30-year contract was executed in January 2014 and composting operations commenced in April 201574.

Franchise Agreements A franchise agreement is a legally binding contract granting exclusive access to customers for a specified time period assuming certain conditions are met. This is of significant interest for this Study with regard to contracts for SSO collection and compost facility operation, but is less relevant to development of a RRP. In the case of SSO collection contracts, a franchise agreement would provide exclusive access to businesses and residences in certain locations in the county. For operators of composting facilities, the agreement would provide exclusive rights to accept loads from specified SSO collectors and other sources.

Service provider contracts or franchise agreements can easily be drawn up in a way that incentivizes or sets targets for higher organics diversion and productive use (e.g., contract extensions, lower franchise fees, bonuses or liquidated damages, limited or no disposal payments). The U.S. EPA’s online Managing and Transforming Waste Streams Tool75 provides several examples of service provider contract and franchise agreement language as well as incentive and rewards programs that have been implemented to increase waste diversion. For example: • Cupertino, California negotiated its 5-year franchise agreement to engage its hauler in achieving 75% waste diversion citywide by a target date, making future contract extension contingent upon achieving the goal. • San Jose, California has developed several innovative contract mechanisms, including a tiered incentive payment based on levels of residential diversion achieved, an 80% minimum diversion standard of all material collected from commercial premises, and tipping fee incentives for cleaner commercial organics feedstock. • Boulder County, Colorado offers recycling rebates for licensed haulers in the form of shared revenues from the sale of materials delivered to their recycling center.

2.7.2 Suitability of Different Contracting Mechanisms

Based on the discussion above, Geosyntec’s qualitative assessment of the suitability of the four different contracting mechanisms for project delivery is provided in Table 2-1.

74 https://www.biocycle.net/2016/03/17/publicprivate-partnership-creates-composting-infrastructure/ 75 https://www.epa.gov/transforming-waste-tool

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 53 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Table 2-1: Suitability of Contracting Mechanisms for Recommended Options

Potential Contracting Mechanism Option County Owned Franchise Private DBO Contract and Operated Agreement SSO Collection Programs Suitable Suitable Unsuitable Preferable (Decentralized) Suitable Composting Facilities Suitable (individual Preferable Unsuitable (Decentralized) facilities only)

Resource Recovery Suitable Unsuitable Suitable Unsuitable Park (Centralized)

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 54 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

3. INCREMENTAL PHASE-IN OF SELECTED OPTIONS

3.1 Overview

Based on the screening evaluation described in Section 2, two of the original seven options for consideration have been eliminated from further analysis in this Study: large-scale composting and co-digestion of food waste with wastewater at the Ballenger-McKinney Wastewater Treatment Plant. The remaining five options selected for further analysis and detailed financial modeling are SSO collection from schools, restaurants, and households; decentralized composting of collected SSO; and/or a development of a centralized RRP. Due to their significant overlap and similarity in scope, equipment, and potential roll-out schedule, the three SSO collection programs are collectively assessed as a single option (“SSO collection”) moving forward. To varying degrees, the selected options are interdependent (Table 3-1) and their implementation will be more successful in combination with other options, including enhancement of recycling programs outside the direct scope of the Phase 2 study (e.g., increased single-stream recycling).

Table 3-1: Interdependency between Recommended Options Improvement Achieved in Potential as Standalone Option Combination with Other Option Option(s) High; Separate SSO collection Negligible; Separate SSO SSO Collection is a necessary precursor for collection is wasted effort if Programs development of decentralized there are no processing (Decentralized) composting, and will improve capacity available sorting efficiency of RRP

Low; performance would be Composting Facilities High; Separate SSO collection dependent on voluntary (Decentralized) is a necessary precursor separation and transfer of SSO High; processing efficiency is High; the facility will be significantly improved by Resource Recovery Park designed to process mixed increasing source-separation (Centralized) waste and source-separated of recyclables and removing materials food waste from mixed waste stream

From the table, the two decentralized options are directly dependent on each other while the RRP is somewhat independent. Therefore, in assessing the cost and expected performance of implementing each option, Geosyntec has constructed two models: one model to jointly analyze SSO collection and composting and one model to assess the RRP.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 55 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

3.2 Decentralized Collection and Composting of Source Separated Organics

3.2.1 Limits on the Scale and Timing of Programs

County Geography and Population With the notable exception of Frederick City, the 12 municipalities in Frederick County are relatively small (Figure 3-1). The population of the county is geographically spread out with more than half (59%) of the population residing in unincorporated communities, although these include southeastern communities with relatively large populations such as Ballenger Creek (approximate population 21,000), Urbana (12,000), and Linganore (10,000). Although single- stream recycling is provided countywide by the County, each of the municipalities and extra- municipal jurisdictions has established separate hauling contracts for trash collection (or leaves this to households or homeowner associations to negotiate separately). To be cost-effective, establishing a SSO collection program will require existing trash collection contracts to be renegotiated due to the reduction in trash volumes (and changed nature of the residual trash stream) that would be effected. As such, rather than assessing a full countywide SSO collection and composting program, a phased implementation program is proposed that initially takes advantage of the higher population density in Frederick City before being extended to other locations. This would limit initial contract negotiations to a single County-City agreement.

Permitting and Cost Considerations for Composting As discussed in Section 2.4.5, composting facilities developed for processing of SSO would require permitting as Tier 2 facilities, which are further separated into Tier 2-Large (>10,000 CY of finished compost product per year) and Tier 2-Small (<10,000 CY per year). Tier 2-Large facilities have stricter pad specifications and also require collection and treatment of all contact water, which represents a significant addition permitting, design, construction, and operating expense. For this reason, it is assumed that only Tier 2-Small facilities will be developed. This means that the timing of new facility development in the model developed by Geosyntec is fixed by the expansion of SSO collection programs having exceeded integer thresholds equivalent to 10,000 CY annual output per facility.

Other Factors A number of other factors may affect the expected performance of SSO collection programs, and hence the rate at which countywide composting of SSO from schools, businesses, and residences can be achieved. These include investments made in education and outreach programs, County ordinances and enforcement (e.g., mandatory rather than voluntary participation), overall cost of service, and markets for compost product. Consideration of these essentially qualitative factors was given in developing a schedule for phased-in introduction of SSO collection. Although initial assumptions are made, these are user-defined variables in the model.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 56 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 57 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

3.2.2 Recommended Implementation Schedule

The model developed by Geosyntec for evaluation of SSO collection and composting (see Section 4) allows for gradual introduction of SSO collection and composting in accordance with six phases (Pilot plus Phases I-V). The timing of phase introduction can be manipulated in accordance with user-defined input as described above; however, the pattern of phasing under baseline assumptions is indicated in Table 3-2.

Table 3-2: Suggested Phasing of SSO Collection and Composting Programs Frederick Other Institutions, Frederick Other Publics City County Other Phase City County Schools Residents Residents Businesses, Restaurants Restaurants (SFHs only) (SFHs only) and MFDs Pilot Pilot (10%) Pilot (20%) Phase I 100% 100% Pilot (20%) Phase II 50% Pilot (10%) Negotiate individually Phase III 100% 50% Pilot (10%) with Phase IV 100% 50% owner(s)* Phase V 100% * Not accounted for in model

Under the above assumptions, the pace of program implementation in schools is fastest as this has additional educational benefits. Having students familiar with the program and its goals should help facilitate enthusiastic participation by households in subsequent phases. The pilot programs for collection of SSO from restaurants and households will be focused on establishments in Frederick City only. Expanded countywide collection could be considered after success with these programs in the city has been demonstrated. In the meantime, restaurants and other businesses outside the city would be welcome and encouraged to deliver food waste to composting facilities but would be required to establish individual contracts for SSO collection. It is assumed that residential SSO collection would be extended only to SFHs that are eligible for participation in the County’s existing curbside recycling program. Other residents of the county would not be included in the SSO collection program, but would be welcome to deliver food waste to a composting facility, either directly or through individually negotiated hauling contracts.

Notwithstanding the estimates and recommendations for implementing SSO collection and composting described here, it is strongly recommended that studies of actual food waste amounts and quality from restaurants should be made before relying on these sectors for any tonnage as feedstock to composting facilities. Many jurisdictions with robust food waste collection and

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 58 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

composting programs reported starting with more homogenous feedstocks from hospitals, detention centers, colleges, universities and other large institutions with cafeterias before relying on the more diverse and riskier feedstock from restaurants and households. This should be encouraged in Frederick County also; however, it should be remembered that the reason that these SSO waste streams were targeted in Phase 1 were that they offered significantly large volumes to meet countywide recycling goals under the Maryland ZWP. It is also important to remember that processing food waste as compost ranks only one level above landfill disposal or incineration in the U.S. EPA’s food recovery hierarchy (Figure 3-2).

Figure 3-2: U.S. EPA Food Waste Recovery Hierarchy

Figure 3-2 suggests that competition for diverting food scraps to more beneficial uses will increase over time, and be welcomed/demanded by increasingly educated restaurant managers, staff, and customers76. As noted in the Phase 1 Study, DSWM should actively encourage backyard composting to reduce the total quantity of SSO collected from SFHs. This could include promotion of private enterprises and non-profit organizations such as The Hungry Redworm77 that provide home composting kits and training. Overall, this means that the availability of SSO for composting may decline over time. Although six phases for gradual implementation of SSO collection and composting are assumed in the model, these are user- defined input in which one or more phases may be eliminated to reflect such changes.

76 See, for example: http://www.fredericknewspost.com/news/environment/climate/how-one-company-eliminated-food-waste- the-landfill-can-no/article_5e0c2cb0-acad-5054-9579-6b5a7fe94ec6.html 77 https://www.facebook.com/thehungryredworm/

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 59 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

3.2.3 Siting Considerations for Composting Facilities

A property size of at least five acres will be required for siting a 10,000 CY/year composting facility. Although a number of suitably sized County-owned (and specifically DUSWM-owned) properties have been identified, the scope of Phase 2 stops short of individually vetting these properties with regard to their potential use in this way. More detailed analysis will be required should the County elect to move forward with this option. For this reason, in the model developed by Geosyntec, pre-development costs can be assessed either on the basis of leasing (preferably from the County at reduced terms) or purchasing the property.

Overall, the total number of composting facilities needed will vary depending on the extent of participation achieved and level of non-SSO feedstock to each facility. In terms of likely locations for composting facilities, review of Figure 3-1 suggests the following: • Frederick City (central area of the county including Ballinger Creek and Walkersville): The most density populated area with about 40% of the total population in the county, which will likely support three to five facilities; • North (northern area of the county around Thurmont and Emmitsburg): This area accounts for about 10-15% of the total population and will likely support a maximum of one facility; • East (area of the county east of Woodsboro and north of I-70 between New Market and Mount Airy): This area accounts for about 15-20% of the total population and will likely support one or two facilities; • South (area south of I-70 and east of Route 15): This area accounts for about 15-20% of the total population and will likely support one to three facilities; and • West (area west of Route 15 between Point of Rocks and Thurmont): This area accounts for about 15-20% of the total population and will likely support up to two facilities, one in the southern portion near Brunswick and one in the northern portion around Myersville).

3.3 Centralized Resource Recovery Park

3.3.1 Initial Assumptions for Materials Flow

The current throughput at DSWM’s transfer station (TS) was used to size the RRP operations (MRF with mixed waste, S-S materials, and C&D waste processing lines plus on-site composting facility), with allowances for long-term population and waste stream growth in accordance with County data. Based on this, the mixed waste processing line at the MRF will initially be significantly larger than the S-S materials processing line (Figure 3-3).

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 60 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Figure 3-3: Waste Processing Flow Schematic for Resource Recovery Park

3.3.2 Siting Considerations

A property size of at least 25 acres will be required for siting a RRP with the specifications required to serve as illustrated in Figure 3-3. Although suitably sized County-owned properties exist, the scope of Phase 2 stops short of individually vetting these properties with regard to their potential use for developing a RRP. More detailed analysis will be required should the County elect to move forward with this option. For this reason, in the model developed by Geosyntec, pre-development costs can be assessed either on the basis of leasing or purchasing the property. The decision will be largely dependent on the type of contract agreement entered into.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 61 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

The location of the RRP is not as dependent on local sources of feedstock as was the case for decentralized composting facilities; however, given the population concentration in the central and southern areas of the county and the existing solid waste infrastructure at the Reichs Ford Road facility, it is assumed that the RRP would be located in this vicinity.

3.3.3 Potential Future Improvements

Detailed evaluation of a RRP in Phase 2 was recommended in large part as a more centralized, automated, and non-participatory counterbalance to the highly decentralized options of separate food waste collection and small-scale composting that rely significantly on increased public participation for their success. A RRP is not scalable in the same way that decentralized facilities are, and the facility would be sized based on the maximum throughput expected during its service life. Nevertheless, the RRP design must allow for increased S-S recycling, C&D recovery, and SSO collection over time, which would change the relative size of the blue (curbside recyclables), orange (MSW), and gray (C&D) waste streams entering the facility as shown in Figure 3-3. It would also introduce a brown waste stream (food waste and organics) as a direct input to the compost facility in addition to this waste stream as an output from the mixed waste line (the relative size of these will depend on the extent of SSO collection achieved). Any change(s) in waste collection that decreases the size of the raw MSW (orange) input to the facility relative to the other colors will have a positive effect on the overall performance of the facility and the rate of recycling and waste diversion that can be achieved. The MRF design thus needs to be sufficiently flexible and scalable/modular to accommodate potential long-term changes in waste generation in Frederick County. The model developed by Geosyntec to evaluate the RRP is flexible in allowing user-defined modification to all input waste streams.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 62 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

4. DETAILED FINANCIAL MODELING AND ANALYSIS

4.1 Overview of Approach

Geosyntec has developed two independent financial pro-forma models: • Combined model for SSO collection and decentralized composting (Appendix A); and • Model for developing a centralized resource recovery park (Appendix B). Both models ultimately serve to estimate the cost per ton of waste recycled and diverted each year over a defined lifecycle of performance. Modeling and evaluation of the financial feasibility of each alternative varies considerably between these two very different approaches to increasing recycling in Frederick County. However, the models have several similarities in terms of the costs and revenues included: • Costs accounted for include:

o Capital expenses (CAPEX), including design, permitting, RFP development, contracting, and construction;

o Depreciation of assets and loan repayment and interest paid (cost of capital); o Operating expenses (OPEX), including labor, equipment and facility maintenance, property leases and facility charges, fuel, insurance, and other overheads; and

o Education/outreach and enforcement. • Potential revenues and cost offsets accounted for include:

o Secondary resource sales (compost and recyclables); o Service fees; and o Avoided costs (e.g., fees for landfill disposal). The models allow for a variety of parameters (e.g., implementation costs, anticipated revenues, timing, participation rates interest rates, discount rates, etc.) to be manipulated. In the remainder of Chapter 4, a brief introduction to the model’s functionality is provided, including sources for default input and output criteria, basis for assumptions, and boundary constraints. In Chapter 5, a summary of findings from the models is presented, including review of sensitivities to input criteria, as well as recommendations for moving forward with implementation.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 63 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

4.2 Decentralized SSO Collection and Composting Programs

4.2.1 SSO Collection from Public Schools

As part of the waste reduction program for public schools, a three-bin recycling program will be established. As previously discussed, many of the Frederick County schools should already have a two-bin recycling program in place. Therefore, the model focuses on collection of food waste and other organics such as non-recyclable paper.

Estimates of Waste Collection Mass A 2010 study conducted by the Minnesota Pollution Control Agency78 at six public schools reported that, on average, each student generates about 0.52 lbs. of waste per day. A waste sort revealed that about 50% of this waste is organic or compostable (including food waste, non- recyclable paper, milk cartons, compostable trays, and liquids). Using the current enrollment at Frederick County Public Schools of 41,378 students and a 180-day school year, this equates to a generation rate of 970 tons/year of organic waste. This represents an upper-bound estimate with the assumption that all the organic waste generated in schools is recycled. Realistically, only a fraction of this waste will be collected. Additionally, it is assumed that the capture rate of organics in schools will be a function of the quality and quantity of education and outreach provided to students, with higher rates of capture achieved with higher levels of outreach and with time. The function used to model the capture rate of waste generated at schools is shown below in Equation 1.

(Eq. 1)

Where: = capture rate as a function of time = minimum possible capture rate = maximum possible capture rate = education/outreach factor = time (years) = time corresponding to a capture rate halfway between and (years) The minimum and maximum possible capture rates were chosen based upon values from the Minnesota study, which reported an average organics capture rate of 28% in schools with organics collection programs (with a high of 58% and a low of 7.4%). The highest rates of

78 Minnesota Pollution Control Agency (2010) “Digging Deep Through School Trash: A Waste Composition Analysis of Trash, Recycling, and Organic Material Discarded at Public Schools in Minnesota.”

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 64 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

capture were observed in elementary and middle schools, with comparably lower capture rates in high schools. As most of the organics collection programs in the studied schools were implemented recently before the waste sort took place, it can be reasonably assumed that organic capture rates higher than 58% are achievable, particularly with high levels of outreach and education. Therefore, for this study, a minimum capture rate of 8% and a maximum potential capture rate of 90% were assumed.

The value of K can be adjusted to control the time it takes for capture rates to increase. Higher values of K correspond to slower growth of capture rates. For this study, a K-value of one year was chosen as it is expected that students, especially young students, will learn and adjust very quickly to the organics recycling program.

The education/outreach factor is an index value that varies between 0 and 1 and affects both the maximum obtainable capture rate and the time it takes to reach that maximum capture rate. In this study, it was assumed that the effects of education and outreach on the capture rate are time dependent, with outreach having greater effectiveness with time. Therefore, the education/outreach factor was defined according to Equation 2 below.

(Eq. 2)

Where: = education/outreach factor as a function of time = minimum possible education/outreach factor = maximum possible education/outreach factor = time (years) = time corresponding to halfway between and (years) To model the volume of organics collected from Frederick County schools with time, it was necessary to predict growth in student enrollment with time. For this, the Frederick County Education Facilities Master Plan Annual Update from September 2016 was consulted, from which an average enrollment growth rate of 0.4% was estimated for the period 2016 to 2040.

Estimates of Contamination (Non-Compostable Material) in Collected SSO To predict the amount of contamination expected in the organics waste stream from public schools with time, Equation 3 was used to model the fraction of contamination.

(Eq. 3) Where: = fraction of contamination in waste stream = worst case fraction of contamination in waste stream

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 65 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

= education/outreach factor as a function of time = quality index for waste from schools = best case fraction of contamination in waste stream

Based on two Californian case studies (San Francisco and San Jose), a qbad value of 30% contamination was chosen. The value of qgood was chosen as 0% since this is the best-case scenario from a contamination standpoint. QIschool is an index that describes the quality of the expected waste stream from public schools. This index can vary between zero and one, where a value of one represents high quality waste while a value of zero represents low quality waste. The 2010 study in Minnesota generally found low rates of contamination in SSO streams from schools, ranging from 6% in elementary schools to 14% in high schools. Therefore, a QI value of 1.0 was chosen for schools. Contamination from schools was considered in addition to the collected SSO (i.e. does not contribute to the mass of collected SSO). This method for estimating contamination rates was used to calculate total expected SSO collection (i.e. SSO plus contamination) from schools, as well as from SFHs (Section 4.2.2) and restaurants (Section 4.2.3).

CAPEX To implement an organics collection program in public schools, it was assumed that three different size bins would need to be provided. 64-gallon bins would be placed in the kitchens and cafeterias and emptied daily, 10-gallon bins would be placed in classrooms and emptied daily, and 2-CY dumpsters would be used to store organics for weekly collection. It was assumed that a typical classroom would hold 20 students, so one 10-gallon bin would be needed for every 20 students. For the 64-gallon bins, the mass of organic waste should be limited to 25 lbs. per day to easily transport and empty the bins. Based on the previously stated maximum organics generation rates (0.26 lbs./student), one 64-gallon bin is required for every 100 students.

The 2-CY dumpster will be emptied once a week. Assuming a density of organic waste of 700 lbs/CY79, this equates to 1,400 lbs. of waste, roughly equal to the mass of waste generated by 800 students in one week. In order to make sure that the bins do not overflow and cause litter and other issues, it was assumed that one 2-CY dumpster is required for every 500 students. 10- gallon, 64-gallon, and 2-CY containers were assumed to cost $20, $50, and $650 respectively80. The service life of all containers was assumed to be five years. It is assumed that all containers will be provided by the hauler and included in the cost of service.

79 U.S. EPA (2016) “Volume-to-Weight Conversion Factors.” U.S. Environmental Protection Agency, Office of Resource Conservation and Recovery, April, 2016 80 Based on: (1) Hyder (2012) “Food and Garden Organics Best Practice Collection Manual.” Prepared for the Department of Sustainability, Environment, Water, Population, and Communities, Commonwealth of Australia.; and (2) Bearicuda (2012) http://www.bearicuda.com/enclosures/Industrial-plastic-cubic-yard-waste-dumpsters-receptacle-trash-bins.php

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 66 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

The capital costs associated with waste pickup and hauling from schools are discussed in Section 4.2.4 as these costs are shared among the three organics collection programs (schools, SFHs, and restaurants).

OPEX Ignoring operating costs associated with waste pickup and hauling from schools, which are discussed in Section 4.2.4, the major operating costs associated with implementing an organics collection program at schools are the costs of education and outreach. It is assumed that approximately $20 per classroom per year will be spent on educational material and programs for organics collection in schools. This money will be used to cover costs of posters and signage for each classroom as well as outreach activities designed to get students involved in the organics collection program. It is also assumed that an additional $100 per year will be spent for every 2- CY bin provided to each school for additional school-wide signage and outreach activities (Hyder, 2012). All educational and outreach expenses will be borne by the County.

Additional minor OPEX includes purchasing compostable bin liners, which is assumed at $10 per bin per year for each of the 10-gallon and 64-gallon bins at schools (Hyder 2012).

4.2.2 Residential SSO Collection (Three-Bin Program)

Estimates of Waste Collection Mass To estimate the quantity of food waste that could be recovered from a residential three-bin SSO collection program, DSWM’s data on waste collection was used. As of 2014, approximately 292,000 tons of MRA waste was generated in Frederick County. MRA waste consists of MSW plus industrial waste not disposed of in private landfills. Data from multiple states (but not Maryland) indicates that, on average, MSW generation is split roughly 50/50 between the residential and commercial sectors81. Assuming this same split also applies to MRA waste, roughly 146,000 tons of residential waste was generated in Frederick County. In 2014, 20,100 tons of recyclables were collected from the curbside recycling program in Frederick County, while 14,000 tons of yard waste was composted by DSWM bringing the total amount of residual residential waste generated in the county to 111,900 tons. With approximately 89,800 households in Frederick County in 2014, this puts the waste generation rate at 1.25 tons per household per year. Data from Montgomery County, Prince George’s County, and Anne Arundel Counties puts the average proportion of compostable organics (food waste and non- recyclable paper) in residential household trash at about 31%. This indicates that approximately 0.39 tons/year of organic waste is generated per household in Frederick County, giving a maximum SSO collection potential of 35,000 tons per year in 2014. However, organic waste will only be collected from SFHs. It can be assumed that the current number of SFHs serviced

81 U.S. EPA (July, 2013). “MSW Residential/Commercial Percentage Allocation,” Office of Resource Conservation & Recovery

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 67 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

by the blue-bin recycling program (73,000 households, or 82% of total households) represents a good estimate of the total number of SFHs that could be serviced by the green-bin SSO collection program. This gives a maximum collection potential of 28,700 tons per year of residential SSO. This represents an upper-bound estimate with the assumption that all the organic waste generated in households is recycled. Realistically, only a fraction of this waste will be collected. As with county schools, it is estimated that the residential capture rate is a function of both the amount of outreach and education provided to homeowners and time.

In addition to household organic waste (food waste and non-recyclable paper), it is assumed that yard waste will also be collected from each household. According to U.S. EPA statistics82, the average person produces 205 lbs. of yard waste per year, giving an average of 0.28 tons per household per year. Since yard waste will be collected simultaneously with food waste, yard waste collection was modeled in an identical fashion to household organic waste.

The minimum and maximum possible capture rates of household organics and yard waste for SFHs were chosen based upon case studies from San Francisco, California and Boulder, Colorado. When the organics collection program was voluntary, San Francisco achieved a maximum capture rate of 40%. However, when the program was made mandatory, a 90% capture rate was achieved. Data from Boulder indicates that a capture rate between 48% and 58% was achieved from a voluntary program. For this Study, a maximum capture rate for a voluntary program was chosen as 50%, while the maximum was set at 90% for a mandatory program. A minimum capture rate of 10% was used.

Equation 1 presented in Section 4.2.1 of this report was used to model residential organic waste collection. The value of K in the equation can be adjusted to control the time it takes for capture rates to increase. Higher values of K correspond to slower growth of capture rates. For this study, a K-value of two years was chosen as it is expected that homeowners may be a bit slower to adjust to the organics collection program than students, where the default K-value was one year).

The education/outreach factor for SFHs was modeled exactly the same way as for organics collection from schools using Equation 2 in Section 4.2.1. It is assumed that this factor is less dependent on the collection area (i.e. schools, restaurants, or SFHs) and more dependent on the spending and effort dedicated by the County for educational purposes. Therefore, the same values were used to model the education/outreach factor with time for SFHs as for schools (i.e. maximum value of 0.75, minimum value of 0.25, and K-value of 2.5 years).

Contamination in the SSO waste stream from SFHs was modeled exactly the same way as for schools using Equation 3 in Section 4.2.1. The quality index from SFHs was chosen as 0.7, as

82 http://www.waste360.com/mag/waste_profiles_garbage_yard

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 68 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

SSO collected from SFHs is expected to be more contaminated than SSO from schools given the more varied household MSW waste stream. Contamination rates from households will be more difficult to control than in schools since enforcement is generally easier in a school setting.

Finally, to model the volume of organics collected from SFHs in Frederick County with time, it was necessary to predict growth in county population (and hence the number of households) over time. For this, the Frederick County population and employment projections83 were used. Based on these, an annual countywide population growth rate of 1.01% was chosen. Since collection programs were separated between Frederick City and the remainder of Frederick County, it was assumed that the population would grow at the same rate across all jurisdictions.

CAPEX To implement a residential SSO collection program, it was assumed that a 32-gallon green bin would need to be provided to each participating household. The cost per green bin was assumed to be $35. In addition to the 32-gallon bins for curbside collection, it was assumed that each participating household would acquire a kitchen caddy at an assumed cost of $8 each. It is assumed that the waste hauler would not provide kitchen caddies to participating households, but that this de minimis cost would be borne directly by residents if they choose to purchase one. The service life for the bins was assumed to be five years84.

The capital costs associated with waste pickup and hauling from schools are discussed in Section 4.2.4 as these costs are shared among the three organics collection programs.

OPEX

The major operating costs associated with implementing a residential SSO collection program are the costs of education and outreach. It is assumed that approximately $5 will be spent on educational materials per participating household per year, including distribution of informational pamphlets, collection calendars, and stickers for collection bins (Hyder 2012). An additional $5 per household per year would be spent on organizing community programs to promote the organics collection program. Finally, it was assumed that $15,000 per year would be spent on countywide promotions and campaigns to advertise and promote the organics collection and composting programs (Hyder, 2012). These costs would be borne by the County.

Waste collection and hauling costs are evaluated separately in Section 4.2.4; therefore, the only other operating cost associated with residential SSO collection is the cost associated with

83 https://frederickcountymd.gov/1480/Population-Employment-Projections 84 Costs and service life assumptions are based on Hyder (2012) “Food and Garden Organics Best Practice Collection Manual.” Prepared for the Department of Sustainability, Environment, Water, Population, and Communities, Commonwealth of Australia.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 69 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

purchasing compostable bin liners. It is assumed that $10 per year will be incurred by participating households on purchasing liners for their kitchen caddies (Hyder, 2012).

4.2.3 Food Waste Collection from Restaurants

Estimates of Waste Collection Mass Two studies were used to estimate the amount of food waste that could be collected from Frederick County restaurants. A 2014 study of 27 restaurants (14 of which had more than 10 locations each) by the Business for Social Responsibility (BSR)85 found that 33 lbs. of food waste is generated for every $1000 in restaurant revenue. Based on reports from the National Restaurant Association (2016), there are 11,100 restaurants in the state of Maryland, generating approximately $11.7B in revenue. Assuming an equitable distribution of revenue, the average restaurant in Maryland earns roughly $1.05M per year, equating to 17.4 tons of food waste per year. This value is supported by a case study from Montgomery County which found that an average of 18 tons of food scraps per year was collected from the Wellbeing Café in Rockville as part of a pilot restaurant food scrap collection program conducted between 2011 and 201486. A 2005 study for the USDA by the University of Arizona87 found that considerably more food waste is generated by fast food establishments than by full-service restaurants (76 tons/year versus 25 tons/year for full-service). For this Study, the BSR value for food waste generation (17.4 tons/year) was used for full-service restaurants (FSRs), while the USDA value (76 tons/year) was used for fast food restaurants (FFRs). A Google Maps search for restaurants in Frederick City found 66 FFRs and 90 FSRs, from which it is assumed that 35% of countywide restaurants are FFRs, while 65% are FSRs. This gives an average value of 38 tons/year of food waste for an average restaurant.

Using an average value of 0.19 restaurants per 100 people based on National Restaurant Association data for the State of Maryland88 and the Frederick County population as 249,054 in January 2017, there are approximately 475 restaurants in Frederick County, of which about 130 (i.e., 68,867/249,054 x 475) are in Frederick City. From this, the maximum amount of food waste that could be collected from all restaurants in the county is 18,050 tons per year, with city restaurants providing about 27% of the total. These represent upper-bound estimates with the assumption that all organic waste generated in restaurants is recycled. Realistically, only a fraction of this waste will be collected. As with county schools and SFHs, it is estimated that the

85 BSR (2014) “Analysis of U.S. Food Waste among Food Manufacturers, Retailers, and Restaurants,” prepared for the Food Waste Reduction Alliance. 86 Levchenko K. (2015) “Memorandum – T&E Committee #2 Discussion: Composting of Food Waste.” Transportation, Infrastructure, Energy & Environment Committee, Division of Solid Waste Services, Montgomery County, MD. 87 Jones T.W. (2005) “Using Contemporary Archaeology and Applied Anthropology to Understand Food Loss in the American Food System,” University of Arizona. 88 National Restaurant Association (2016) “Maryland Restaurant Industry at a Glance.”

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 70 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

capture rate from restaurants is a function of both the amount of outreach provided to county restaurants and time.

The minimum and maximum possible capture rates for restaurants were chosen to be 20% and 70% respectively for voluntary collection programs. For a mandatory collection program, the maximum capture rate was adjusted to 95%. These values were chosen based on the study by BSR (2014), which indicated that the largest barrier to food waste recycling in the restaurant industry is “insufficient recycling options,” indicating that restaurants would most likely have high participation rates if provided with a food waste recycling program.

Equation 1 from Section 4.2.1 was used to model food waste collection from restaurants. The value of K in the equation can be adjusted to control the time it takes for capture rates to increase. Higher values of K correspond to slower growth of capture rates. For this Study, a K- value of one year was chosen as it is expected that restaurant participation will be high and that restaurants will be quick to implement food collection programs if weekly collection and hauling is provided and/or mandated. The education/outreach factor for restaurants was modeled exactly the same way and using the same parameters as for organics collection from schools and SFHs in Equation 2 in Section 4.2.1. Similarly, contamination levels in SSO collected from restaurants was modeled exactly the same way as for schools using Equation 3 in Section 4.2.1. The quality index from restaurants was chosen as 0.85, as waste from restaurants is expected to have more contamination than that from schools, but less than that from SFHs.

Finally, to model the volume of organics collected from restaurants in Frederick County with time, it was necessary to predict growth in the number of restaurants over time. It was assumed that the number of restaurants will increase at the same rate as the county population, so an annual growth rate of 1.01% was used. Since collection programs are separated between Frederick City and the remainder of Frederick County, it was assumed that the number of restaurants will increase at the same rate both within and outside the city.

CAPEX To implement an organics collection program for restaurants, it was assumed that a large bin or dumpster would need to be provided to each participating establishment for weekly collection. The average size of container was calculated at 2 CY based on the average waste generation rate (38 tons/year) and assumed density of uncompacted organic waste (700 lbs./CY). The cost per dumpster was assumed to be $65089. In this analysis, it is assumed that the bins will be provided to each restaurant by the hauler with costs included in the service contract.

89 http://www.bearicuda.com/enclosures/Industrial-plastic-cubic-yard-waste-dumpsters-receptacle-trash-bins.php

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 71 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

The capital costs associated with SSO pickup and hauling from restaurants are discussed in Section 4.2.4 of this report as these costs are shared among the three organics collection programs (schools, SFHs, and restaurants).

OPEX The major operating costs associated with implementing an organics collection program for restaurants are the costs of education and outreach. It is assumed that $100 will be spent per participating restaurant per year on educational materials, including distribution of information pamphlets, collection calendars, and community involvement programs (Hyder, 2012). These costs will be borne by the County.

4.2.4 Collection Equipment and Hauling

The community-scale SSO collection program envisioned for Frederick County assumes that a collection truck operated by a single driver/worker. In this way, each SSO collector will develop a personal relationship with the customers on his/her route, promoting higher rates of participation and lower rates of contamination in SSO loads. For this analysis, it was assumed that a new contract will be issued for each phase of the waste collection program (see Section 3.2.2). As such, costs and revenues were calculated separately for each phase of implementation.

CAPEX The major capital cost associated with SSO collection is the purchase of trucks. To keep the collection program small enough for personal relationships to develop between the collector and clients, it is assumed that relatively small 10-CY trucks will be used universally to service the program through all phases of implementation. This size of truck also avoids the need for operators to hold a Class A or B Commercial Driver’s License and should afford lower insurance premiums than for large trucks. It is estimated that each 10-CY truck would cost about $75,000 and would have a service life of 135,000 miles. For this analysis, it is assumed that each new truck will be purchased as the need arises (i.e. as the SSO collection program is expanded to include new customers and as more waste is generated through population growth, more trucks will be required to haul the quantity of SSO collected. Assuming that waste will be collected 260 days per year (i.e., 5 days a week for 52 weeks) and that each truck will be driven 80 miles per active day, the service life of each truck was calculated as 6.5 years.

The other major capital cost borne by the hauler is the cost of bins for schools (10-gallon and 64- gallon bins and 2-CY dumpsters), residents (32-gallon bins), and restaurants (2-CY dumpsters). These were calculated previously for each SSO collection program.

For this analysis, it is assumed that the first year costs associated with starting up a new collection program could be financed through a combination of debt, equity, and grants, while all

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 72 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

subsequent capital costs will be financed according to a simple depreciation schedule. Under default assumptions, an 80/20 debt to equity split is assumed with debt financed at two points above the prime rate and no grant funding available.

OPEX The operating costs associated with SSO collection and hauling include labor, fuel, truck maintenance and repair, and tipping fees at the compost facility. It is assumed that each truck operator would earn an hourly wage of $20 per hour, working eight hours a day, 260 days a year, leading to a per-worker cost of $41,600 per year. As the program is meant to be small and community oriented, it is assumed that only one worker per truck is required to collect, inspect and prescreen (i.e., remove obvious contamination), and deliver the organic waste to a compost facility. Based on manufacturer specifications, it is assumed that each truck will achieve a fuel efficiency of 9 miles/gallon and travel an average distance of 80 miles per day, 260 days per year. This results in fuel costs of $5,800 per year under default assumptions of $2.50/gallon. Maintenance costs are expected to be 60% of the total cost of the truck, distributed evenly over the service life of the vehicle, or nearly $7,000 per truck per year. For the pilot program, when SSO will be sent to existing composting facilities rather than a facility built specifically for this program, the tipping fee was calculated as $30/ton, based on the average fee charged by nearby facilities (Tabb Farm and MES/Prince George’s County). Tipping fees for subsequent phases are calculated based on the financial analysis for each composting facility, as described in detail in Section 4.2.5.

Collection Fees Collection fees for each SSO collection program will be charged to cover annual capital and operating costs. Revenues for each collection program were calculated by assuming a fixed profit margin (e.g. 12%). Collection fees were then calculated by multiplying total revenues by the number of trucks required for individual SSO collection programs (i.e. schools, restaurants, or SFHs), dividing by the total number of trucks required for the combined SSO collection program, and then dividing by the number of participants (i.e. number of students, number of restaurants, number of households). These collection fees represent the true cost of the program for different types of participants, but actual collection fees could be adjusted if necessary (e.g., collection rates for households could be raised slightly to subsidize the collection fee per restaurant) as long as the combined fees cover the total cost of service plus profit.

4.2.5 Composting Facility Development and Operation

To avoid more stringent permitting requirements (i.e. classification as a Tier 2-Large facility), composting facilities are limited to less than 10,000 CY per year of finished compost production. To calculate the amount of organic waste necessary to produce 10,000 CY of finished compost, assumptions regarding mass loss, residuals, and density of compost need to be made. Reported

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 73 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

values for compost density range from 800-1,200 lbs./CY90. For this analysis, the density of compost is conservatively assumed to be 800 lbs./CY. This means that the mass of finished compost that can be produced by a Tier 2-Small facility is 4,000 tons/year. Mass lost during aerobic degradation from composting, as well as residual masses were estimated based on the assumptions recommended in the Solid Waste Optimization Life-Cycle Framework (SWOLF), a lifecycle analysis program for solid waste management produced by researchers at North Carolina State University91.

Figure 4-1: Assumed Composting Mass Flow Diagram

90 Walters R. (2016) “Dirt Hog’s Companion; Technical Note 24: Composting Basics: Bulk Density, Moisture, and Porosity.” Department of Soil Science, North Carolina State University, Raleigh, NC 91 http://jwlevis.wixsite.com/swolf

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 74 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Estimate of Material Mass Balance As shown in Figure 4-1, for every 1,000 mass units of organic waste input to the composting system, 332 mass units of compost are produced, 181 mass units of water area added, 612 mass units off-gas during active composting and curing, and 237 mass units of residuals are produced. Based on these assumptions, roughly 12,000 tons of organic waste would need to be processed to produce 10,000 CY of finished compost. It is important to note that an approximate 50/50 mix (minimum) of food waste to a bulking agent such as yard waste is necessary to make high quality compost. As such, diversion of yard waste to the compost facility in approximately equal measure to the quantity of SSO is a requirement and not an option for effective operation. Therefore, it is assumed that only 6,000 tons of SSO can be handled at each composting facility.

CAPEX The major capital costs associated with building community-scale composting facilities are land acquisition and site preparation, the cost of the composting system, and the cost of all necessary supplemental equipment. It is assumed that five acres will be needed for each composting facility at a unit cost of $100,000 per acre. A land lease cap rate of 6% was used to calculate yearly lease payments on each five-acre parcel of $30,000 per year. Initial site engineering is assumed to cost $50,000 with a service life presumed to equal the life of the facility (assumed 38 years, based on the service life of utility interconnects), while site preparation (including construction of a working pad, fencing, scale house, etc.) is assumed to cost $345,000 with a service life of fifteen years. Utility interconnects are assumed to cost $75,000 and last for the life of the facility.

For this analysis, it is assumed that covered aerated static piles (ASPs) will be used for composting since these represent the predominant composting technology used at facilities that co-compost food waste without significant odor issues. The components of a covered ASP system include the compost covers (assumed to be Gore Covers), aerators, temperature probes, moisture probes, and a data collection system to monitor and record data for each compost pile. It is assumed that the covers will cost $75,000 each and all additional equipment will cost $65,000. Further, it is assumed that one system (cover plus additional equipment) will be required for every 2,000 tons of capacity. The service life of the composting system is expected to be 10 years.

Other equipment necessary for composting includes front-end loaders to move waste and compost around, screens to facilitate separation of contaminants, and grinders to break up large pieces of waste. For this analysis, it is assumed that one front-end loader, with an initial cost of $330,000 and a service life of seven years, is required for each facility. Other equipment is assumed to cost $65,000 with a service life of five years.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 75 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

For this analysis, it is assumed that first-year costs associated with starting up each new composting facility may be financed through a combination of debt, equity, and grants. Under default assumptions, an 80/20 debt to equity split is assumed with debt financed at two points above the prime rate and no grant funding available. All subsequent capital costs will be financed according to a simple depreciation schedule.

OPEX Operating costs associated with each composting facility include labor, equipment and facility repairs and maintenance, utilities, fuel, and the cost of disposal for compost residues. It is assumed that one supervisor will be required for each facility, regardless of throughput. Supervisor wages will be $20/hour, working five days/week for 52 weeks (260 days per year). The number of laborers required at each facility is dependent on the amount of waste processed. It is assumed that 0.1 laborers will be required for every ton of waste processed each day92. It is assumed that each laborer will be paid an hourly wage of $12/hour, working five days/week for 52 weeks (260 days per year).

Repairs and maintenance are expected for all equipment, the composting system, and the buildings and grounds. It is assumed that maintenance will amount to 60% of the total cost of each item, distributed evenly across the service life of that item.

Water and electricity costs are also considered in the analysis. It is expected that both water and electricity usage will increase as larger volumes of waste are composted. Electricity usage is estimated as 4 kWh per ton of waste accepted (Levis and Barlaz, 2013), while water usage is estimated according to the mass balance schematic shown in Figure 4-1 above (181 parts water added for every 1,000 parts waste composted). The cost of electricity and water are assumed as $0.08 per kWh and $0.01 per gallon, respectively.

Fuel usage is also expected to vary with the amount of waste accepted, as the equipment will need to be run more often if more waste is processed. It is expected that 0.5 gallons of fuel will be required for every ton of waste that is processed (Levis and Barlaz, 2013). The cost of fuel is assumed to be $2.50 per gallon.

Finally, it is assumed that all residuals (including unsaleable compost) will be sent to the landfill for disposal. A disposal cost of $55 per ton of material sent to the landfill is assumed, based on DSWM’s current rate for shipping waste from the Reichs Ford Road TS.

92 Levis J.W. and Barlaz M.A. (2013) “Composting Process Model Documentation.” North Carolina State University, November, 2013.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 76 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Revenues A profit margin of 12% on top of operating and capital expenses is assumed for the calculation of revenues for each individual composting facility operator. These revenues will be generated as a result of compost sales and tipping fees. It is assumed that 50% of the generated compost will be sold at a bulk rate of $20 per cubic yard, calculated based on rounding down from the average reported selling price of compost product at local facilities ($35/CY by Veterans, $19/CY by Howard County, and $12.50/CY by MES/Prince George’s County). The remaining compost (50%) will be sold at a lower price of $7.50/CY), based on DSWM’s reported bulk sale price of $15/ton for their Revive brand compost. Factoring in compost sales, the required tipping fee was calculated for each ton of waste accepted in order to guarantee a profit margin of 12%. This tipping fee is used as a retroactive input to the cost of SSO collection, since it needs to be included in the monthly service fee charged by haulers.

4.3 Centralized Resource Recovery Park

4.3.1 Materials Recovery Facility

As summarized previously, the County’s existing single stream (S-S) curbside recycling program and other recycling activities will remain in place; as such, the RRP includes a materials recovery facility (MRF) with separate lines for processing existing quantities of S-S materials and mixed waste (including C&D recycling). However, the MRF must be compatible with future expansion of S-S recycling to multi-family units and implementing a three-bin program for separate recovery of organics from schools, restaurants, and SFHs. Estimated Material Flow Balance and Throughput Capacity The material mass balance for RRP operation under assumptions for initial operation was illustrated on Figure 3-3. The basis for performance assumptions for material flows is as follows: • C&D Waste Processing: The assumed input to the mixed waste processing line is 25,000 tons/year, based on DSWM estimated tonnage for 2014. The baseline assumption for C&D recovery at a well-operated MRF is 50%, based on performance data reviewed during Phase 1. Recovered C&D materials will be sent to market without further processing at the RRP; residuals will be transported to landfill for disposal. • Mixed Waste Processing: The assumed input of MSW to the mixed waste processing line is 160,000 tons/year, based on DSWM estimated tonnage for 2014. The recovery rates for recyclables and organics from mixed waste were previously estimated at 30% during Phase 1; however, subsequent research in Phase 2 suggests these values may overestimate long-term sustainable performance levels, particularly for organics

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 77 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

recovery93. As such, the baseline assumption for organics recovery is reduced to 20%. The remaining 50% unrecovered material will be transported to landfill for disposal. • Single-Stream (S-S) Processing: The estimated 48,000 tons/year of recovered recyclables from the mixed waste processing line will be added to the 25,000 tons of S-S curbside materials recovered in the County annually. This comingled input of 73,000 tons will be processed with an assumed 85% recovery of clean recycles for transfer to market. Reported contamination levels in S-S materials vary widely between 5-30%; as such, an average value of 15% is assumed. These residuals will be transported to landfill for disposal. According to U.S. Census data94, the population growth rate in Frederick County between 2010 and 2015 was 1.01% annually. This rate was applied to growth in waste and materials flow through the MRF. Based on an estimated initial throughput of 210,000 tons/year (i.e., 160,000 tons of MSW plus 25,000 tons of S-S recyclables plus 25,000 tons of C&D waste), a MRF with throughput handling capacity of 270,000 tons/year should be sufficient over an assumed 25-year service life. Assuming 260 days per year of operation, this equates to about 800 tons/day (initial), growing to about 1,000 tons/day at maximum throughput.

CAPEX Estimated capital expenses for MRF development were researched in detail in Phase 1 and estimated at about $40 million based on data from four different sources. Reported CAPEX for the additional facilities reviewed in Section 2.6 were of similar magnitude. Given the dynamic and technology-specific design specifications for MRFs, coupled with the fact that many MRF developers consider their detailed line-item costs to be proprietary in nature, it is not considered useful to develop a more detailed breakdown of costs here. However, in the interests of conservatism the total CAPEX for MRF development was increased by 10% to $44 million.

It is assumed that 50% upfront capital will be required, with additional annual capital allocated in accordance with standard industry practice over the 25-year service life of the facility to cover the remaining 50%. An 80/20 debt to equity split was assumed, with debt financed at the prime rate (based on the assumption that the County would be able to issue bonds at or below this rate to cover the cost of the facility).

OPEX Operating expenses for the MRF were estimated at $45/ton in Phase 1; however, based on Geosyntec’s experience and the fact that WM Recycle America charges $73/ton at their Elkridge, Maryland facility, the cost of MRF operation was conservatively adjusted to $75/ton.

93 See, for example: http://www.waste360.com/mrfs/mixed-waste-processing-dead 94 http://www.census.gov/quickfacts/table/PST045215/24021

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 78 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

This includes all labor, equipment/machinery repairs and maintenance, and fuel but excludes disposal of rejects (currently $55/ton for all material sent to landfill), land purchase or lease payments (assumed $100,000 per acre at 6% land lease cap rate), depreciation, or interest payments. The latter costs are calculated individually in the pro-forma and added to the MRF operating costs to generate total OPEX.

Revenues Revenues from the MRF operation are generated in the form of tipping fees for materials accepted and sales of recovered recyclables. Assumed tipping fees charged (and sources of data/assumptions) are as follows: • Tipping fees:

o MSW: $69/ton, based on the current published fee at Reichs Ford Road o C&D Waste: $78/ton, based on the current published fee at Reichs Ford Road o S-S Recyclables: $25/ton, based on DSWM data • Material Sales:

o Recovered Mixed Recyclables: $82/ton, based on review of the Market Price Index (MPI) provided by DUSWM for December 2016, with historical range of $55-$150 per ton representing the bounds for sensitivity analysis.

o Recovered C&D Material: $30/ton, based on the average reported in Phase 1

4.3.2 Composting Facility

Estimated Material Flow Balance and Throughput Capacity The material mass balance for RRP operation based on the assumed composition of the overall waste stream in 2014 was illustrated on Figure 3-3. As shown, there are two separate inputs to the composting facility (CF): 32,000 tons/year of organics recovered from the mixed waste processing line plus an estimated 30,000 tons/year of yard waste that is currently composted elsewhere (including at DSWM’s Reichs Ford Road windrow composting operation) but that should be diverted to the new CF (bypassing the MRF) once the RRP is operational. This puts total initial input to the CF at 62,000 tons. According to mass balance assumptions for commercial composting operations described previously in Section 4.2.5, the CF would be expected to produce 20,700 tons of compost product annually, with 14,600 tons of rejects requiring landfill disposal. It should be noted that an approximate 50/50 mix (minimum) of yard waste to food waste is necessary to make high quality compost. As such, diversion of yard waste to the CF in approximately equal measure to the quantity of organics derived from the mixed waste processing line at the MRF is a requirement and not an option for CF operation.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 79 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Assuming annual growth of 1.01% based on previously described assumptions, a CF with throughput handling capacity of 80,000 tons/year should be sufficient over a 25-year service life. The CF is sized based on this assumption. However, if curbside separation of SSO were to be implemented under a three-bin program as encouraged throughout this Study, then the mixed waste processing line would no longer serve to separate organics prior to composting. As such, the total quantity of SSO delivered, and hence the size of the CF, would increase by about 50%95.

CAPEX Capital expenses for development of a CF as part of a RRP were researched extensively in Phase 1 and estimated at about $20 million based on data from several sources; however, in the interests of conservatism, the total CAPEX required for CF development was increased by 10% to $22 million. Consistent with the capital allocations for the MRF, it is assumed that 50% upfront capital will be required for the CF, with additional annual capital allocated in accordance with standard industry practice over the 25-year service life of the facility to cover the remaining 50%. An 80/20 debt to equity split was assumed, with debt financed at the prime rate (based on the assumption that the County would issue bonds at or below this rate to cover the cost of the CF as a component of the RRP).

OPEX Operating expenses for the CF were estimated at $33/ton in Phase 1 based on DSWM cost data for their Reichs Ford Road composting operation; however, this facility processes only yard waste and is an open windrow rather than covered aerated static pile (ASP) operation. Based on review of industry experience (see Section 2.4.2), the cost of CF operation was adjusted to $50/ton for Phase 2. This includes all labor, equipment/machinery, fuel, leachate and stormwater management, and monitoring but excludes disposal of rejects and unsaleable compost (currently $55/ton for all material sent to landfill), depreciation, or interest payments. The latter costs are all calculated separately in the pro-forma and added to the CF operating costs to generate total OPEX.

Revenues Revenues from the CF operation are generated in the form of tipping fees for organics accepted directly at the CF (i.e., not processed at the MRF) and sales of compost product. Assumptions are as follows:

95 Under these circumstances, rather than recovered organics representing 20% of input MSW, the organic waste stream would be closer to the actual SSO content in MSW of 31%. This would require 50% more yard waste, bringing the maximum potential throughput capacity to 120,000 tons over a 25-year service life. A larger property size and/or more sophisticated composting technology (e.g., in-vessel composting) would be required at greater cost than reported here.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 80 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

• The default tipping fee for SSO is $25/ton, assuming the same rate would be charged for delivery of this material as is currently charged at Reichs Ford Road for S-S recyclables. It is important to note that this is a hypothetical future revenue stream that is not utilized in the baseline analysis of RRP performance, as curbside collection of SSO is not currently offered. • Yard waste will be accepted at no fee, consistent with DSWM’s current practice. • The target sale price for compost product is $20/CY, rounded down based on the average reported local prices of $35/CY (Veterans), $19/CY (Howard County), and $12.50/CY (MES/Prince George’s County). However, under baseline assumptions it is assumed that only 50% of compost could be sold at this price. The other 50% of compost produced would only be saleable at a lower price of $7.50/CY, based on DSWM’s reported bulk sale price of $15/ton for their Revive brand compost.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 81 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

5. MODEL RESULTS AND SENSITIVITY ANALYSES

5.1 Decentralized SSO Collection and Composting Programs

5.1.1 Summary of Baseline Input Assumptions for SSO Collection Program

Phasing A six-phase implementation schedule (Pilot plus Phases I to V) was suggested for the SSO collection and composting program as shown in Table 3-2. Case studies suggest that capture rates under voluntary SSO collection programs are too low to meet Maryland ZWP recycling goals for food scraps. Therefore, for this analysis, it is assumed that the program is voluntary during the Pilot and Phase I, but becomes mandatory in Phase II. Phase II was chosen as the time at which to enforce food waste recycling as it is important to begin enforcement early in the program, when fewer entities are involved, to work out enforcement costs and mechanisms that can be applied as the program grows. Program Development and Operation A summary of the default input assumptions to the model for waste generation from schools, single family homes and restaurants can be found in Table 5-1 below.

Table 5-1: Baseline Assumptions for SSO Generation and Capture Rates Collection Variable Default Value Basis for Default Assumption Area 0.024 50% of 0.52 lbs./student per year based on Organics generation tons/student/year Minnesota study, see Section 4.2.1 Schools Min. capture rate 8% Section 4.2.1 Max. capture rate 90% 0.39 Organics generation Derived from DSWM data, see Section 4.2.2 tons/household/year Assumed based on case studies from Boulder, Min. capture rate 10% San Francisco, Portland (Section 4.2.2) SFHs Max. capture rate - Case study of Boulder organics collection 50% voluntary program (Section 4.2.2) Max. capture rate - Case study of San Francisco organics collection 90% mandatory program (Section 4.2.2) 38 Organics generation tons/restaurant/year Min. capture rate 20% Restaurants Max. capture rate - Restaurant industry estimates, see Section 4.2.3 70% voluntary Max. capture rate - 95% mandatory

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 82 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

CAPEX A summary of the default input assumptions to the model for capital expenditures for the SSO collection program can be found in Table 5-2 below.

Table 5-2: Baseline Assumptions of Capital Expenditure on SSO Collection Capital Variable Default Value Basis for Default Assumption Expense Cost $20.00 Online price search, see Section 4.2.1 10-gallon bin Required amount 0.05 bins/student Estimate based on 20 students per classroom Service life 5 years Estimate Cost $50.00 Online price search, see Section 4.2.1 64-gallon bin Required amount 0.01 bins/student Estimate based on waste generation rates Service life 5 years Estimate Cost $650.00 Online price search, see Sections 4.2.1-4.2.3 Required amount - 0.002 bins/student 2-CY schools Estimate based on waste generation rates dumpster Required amount - 1 bin/restaurant restaurants Service life 5 years Estimate Cost $35.00 Online price search, see Section 4.2.2 32-gallon bin Required amount 1 bin/household Estimate based on waste generation data Service life 5 years Estimate Cost $75,000 Assumed Ford F-650 trucks Capacity 10 CY Assumed to keep program small and personal Miles per pickup 80 miles Estimated Collection trucks Pickups per week 5 Assumed full time usage Service life 135,000 miles Estimated Based on internet search for used Ford F-650 Salvage value $5,000 trucks

Financing A discussion of the assumptions made for financing capital expenses for the SSO collection program is provided in Sections 4.2.4. All capital expenditures after year one are calculated on a simple depreciation schedule (i.e. yearly expense equals the number of items times their unit cost divided by their service life). For all new capital investments per phase, it is assumed that first- year costs associated with starting up each new composting facility may be financed through a combination of debt, equity, and grants. Under default assumptions, however, an 80/20 debt to

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 83 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

equity split is assumed with debt financed at two points above the prime rate and no grant funding provided.

OPEX A summary of the default input assumptions for the operating expenses for the SSO collection program can be found in Table 5-3 below.

Table 5-3: Baseline Assumptions of Operating Costs for SSO Collection

Operational Variable Default Value Basis for Default Assumption Expense Hourly Wage $20.00 Estimated Work days/year 260 days Labor Assumed Hours per day 8 hours Number of workers 1 worker/truck Assumed to keep program small and personal Cost $2.50 per gallon Upper-bound fuel price estimate, January 2017 Fuel Truck fuel efficiency 9 mpg Manufacturer specifications for Ford F-650 Truck 60% of purchase value divided by service life, see Cost $6,933/truck/year maintenance Section 4.2.4 Average of Tabb Farm ($15/ton) and Cost - Pilot $30.00/ton MES/Prince George’s County tip fee ($45/ton) Tipping fee Cost – Phase I and Back-calculated from financial analysis for Variable after composting facilities (Section 5.1.2) Promotions and $15,000/year Campaigns SFH educational $10.00/household material Education Restaurant Estimated from multiple sources, see discussion $100/restaurant and outreach educational material in Sections 4.2.1-4.2.3 $20.00/classroom School educational material $100/2-CY bin

Voluntary program Zero Enforcement Estimated, see discussion in Section 2.2 Mandatory program $5.00/ton

5.1.2 Summary of Baseline Input Assumptions for Composting Program

Phasing A six-phase implementation schedule (Pilot plus Phases I to V) was suggested for the SSO collection and composting program as shown in Table 3-2. All compost facilities are sized to

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 84 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

produce 10,000 CY of finished compost annually. Incremental development of additional facilities is driven by the SSO collection program reaching 6,000 tons/year milestones of additional SSO material as compost feedstock. CAPEX A summary of the default input assumptions for capital expenditures for the proposed composting facilities is shown in Table 5-4 below.

Table 5-4: Baseline Assumptions of Capital Expenditure on Composting Facilities Capital Variable Default Value Basis for Default Assumption Expense Parcel size 5 acres

Land Cost $100,000/acre Estimated acquisition Interest rate 6%

Lease payment $30,000/year Calculated

Site initial Cost $50,000 Estimated, see discussion in Sections 2.4 and engineering Service life 38 years 4.2.5 Site preparation Cost $345,000 Estimated, see discussion in Sections 2.4 and (concrete pad, 4.2.5 scale house, Service life 15 years etc.) Cost – Gore Covers $75,000 Cost – Additional equipment $65,000 Compost (aerators, sensors, Estimated based on industry data, see discussion system etc.) in Sections 2.4 and 4.2.5 Required number of 1/2,000 tons- facilities organics/year Service life 10 years Cost $330,000 Estimated for mid-size wheeled front-end loader Front-end Number 1 loader/facility loader Estimated based on industry data, see discussion Service life 7 years in Section 4.2.5 Other Cost $65,000 Estimated based on industry data, see discussion equipment and in Section 4.2.5 expenses Service life 5 years

Utility Cost $75,000 Estimated based on industry data, see discussion interconnects Service life 38 years in Section 4.2.5

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 85 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Financing The default input assumptions for financing the year one capital expenditures for each composting facility are 80% financed through debt and 20% financed through equity, with no grant funding provided (see Section 4.3.2). A prime rate of 3.72% plus 2.0% was assumed, with a loan period of seven years and annual payments. All capital expenditures after year one are calculated on a simple depreciation schedule (i.e. yearly expense equals the sum of individual items times their unit cost divided by their service life).

OPEX The default OPEX assumptions for composting facilities are shown in Table 5-5 below.

Table 5-5: Baseline Assumptions of Operating Costs for Composting Facilities Operational Variable Default Value Basis for Default Assumption Expense Work days/year 260 days Assumed Hours per day 8 hours Number of 1 person/facility supervisors Estimated Labor Hourly wage – $20.00 supervisor 0.1 people/ton- Estimated based on industry data, see discussion Number of laborers organics/day in Section 4.2.5 Hourly wage - $12.00 Estimated laborer Cost $2.50 per gallon Upper-bound fuel price estimate, January 2017 Fuel 0.5 gallons/ton- Estimated based on industry data, see discussion Usage organics/year in Section 4.2.5 Cost – equipment $36,100/facility/ year 60% of purchase value divided by service life, Cost – compost Maintenance $50,400/facility/ year based on industry standards (see discussion in system Section 4.2.5) Cost – buildings $14,600/facility/ year and grounds Estimated based on industry data, see discussion Electricity usage 4 kWh/ton in Section 4.2.5 Electricity cost $0.08/kWh Based on local price data Utilities 43 gallons/ton- Estimated based on industry data, see discussion Water usage organics/year in Section 4.2.5 Water cost $0.01/gallon Based on local price data

Disposal of Current cost of offsite disposal at Reichs Ford Cost $55.00/ton residuals Road transfer station

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 86 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Revenues Other assumptions made regarding composting facilities include the bulk sale price of compost product for $20 per CY (see Section 4.2.5). However, under default assumptions it is assumed that only 70% of compost product is saleable. The remaining unsold material will be put to beneficial reuse by the County at zero net cost.

5.1.3 Summary of Model Output under Baseline Assumptions

A summary of the model output using the default input values as recommended in Sections 5.1.1 and 5.1.2 is shown in Figures 5-1 through 5-4.

Figure 5-1: Quantity of SSO Collected and Number of Composting Facilities (Baseline Assumptions)

As shown in Figure 5-1, the total volume of collected organics (including yard waste) increases to roughly 1,800 tons in 2020, 17,000 tons in 2025, 51,800 tons in 2030, and 74,400 tons in 2040, at which point 14 composting facilities are needed to accommodate the volume of SSO collected through the program. As shown in Figure 5-2 below, this rate of SSO collection would lead to an “S-shaped” increase in the recycling rate of SSO material and the overall MRA recycling rate. SSO recycling rates were calculated by dividing the total estimated mass of collected material from the SSO collection program by the estimated total amount of organics in the waste stream (i.e. 31% of projected landfilled MRA waste). Landfilled MRA waste was assumed to grow at the same rate as the county population (i.e. 1.01% annually). Other recycling

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 87 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

streams (residential recycling, commercial recycling, and yard waste recycling) were also assumed to grow at this rate.

Figure 5-2: MRA Recycling Rate and SSO Recycling Rate (Baseline Assumptions)

A comparison of expected recycling rates over time with the statewide goals established in the Maryland Zero Waste Plan is shown in Table 5-6.

Table 5-6: Predicted Recycling Rates from SSO Program (Baseline Assumptions)

Recycling Goals and Expected Rates 2020 2025 2030 2040 Overall MRA Recycling Goal 60% 65% 70% 80% Predicted Total MRA Recycling Rate 50% 54% 61% 64%

MRA Recycling Goal for Food Waste 35% 60% 70% 90% Predicted SSO Recycling Rate 4% 28% 72% 90%

As shown in Table 5-6, under the baseline assumptions, the County will not meet overall MRA recycling goals from the SSO collection and composting programs alone, meaning that additional recycling programs (e.g., expansion of curbside collection of single-stream recyclables) will be necessary. This was acknowledged and discussed in the Phase 1 Report. Importantly, however, the table suggests that that MRA food waste recycling goals could be met by 2030.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 88 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Figure 5-3: Monthly Cost of SSO Collection Programs (Baseline Assumptions)

As shown in Figure 5-3, the monthly cost of SSO collection at schools generally decreases with time after the program is first implemented, but reaches a fairly stable value of $0.50 - $0.60 per student per month around the year 2025. The monthly cost per restaurant increases rapidly to a value between $500 and $600 by 2025, but then decreases slightly over time to below $500. After an initial steep increase, the monthly cost for households increases slowly with time, exceeding $6.00 per household by 2027 and $7.00 per household by 2031.

The reason that the per-student cost of SSO collection at schools starts high but then decreases is due to economies of scale. Very little waste is assumed to be collected from schools in the Pilot (only 7 tons per year in the first year and 24 tons per year in the second year), meaning that the capital costs associated with waste collection from schools are very high compared to the operating costs. This drives up the unit cost per student. When the remaining schools are added to the program in Phase I, the amount of waste collected also increases, lowering the ratio of capital costs to operating costs, and hence the unit cost of collection per student. The reason that both the per-restaurant and per-household costs initially increase steeply before becoming more stable has to do with the time dependence of SSO collection from these locations. Capture rates in homes and restaurants are initially low but then increase rapidly before stabilizing, particularly when the program is made mandatory in Phase II (when it is assumed that more waste is collected from each household and restaurant). This is rather counter-intuitive with regard to economies of scale, but has to do with the fact that initially more households are served by fewer collection vehicles and compost facilities (i.e., the per-ton cost is higher at the start of the program than after program maturity, but the cost per location served is lower).

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 89 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Figure 5-4: Required Tipping Fee at Compost Facilities (Baseline Assumptions)

Figure 5-4 shows the required average tipping fee for the composting facilities constructed as part of this program. As shown in the figure, tipping fees begin very high (more than $250 per ton) in 2020 when the composting facility is assumed to be built in Phase I, but then rapidly decrease in the next few years of program expansion. This is due to economies of scale, as high startup costs and low waste volumes processed by an individual compost facility in the first few years of the program initially drive up unit costs. Tipping fees eventually trend downwards to more reasonable levels of about $100/ton in 2025, about $75/ton in 2030, and below $60/ton from about 2035.

5.1.4 Sensitivity of Model Output to Key Input Assumptions

In order to test the sensitivity of the model output under baseline assumptions to key input variables, a sensitivity analysis was performed. The main variables that will be assessed in this sensitivity analysis are as follows: • Organic fraction of MRA waste; • Fuel costs; • Residuals requiring disposal from composting process; and • Compost selling price and the fraction of compost product sold.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 90 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

The reason the variables listed above were chosen to represent sensitivity of the model to input assumptions was based on Geosyntec’s initial informal screening of all default inputs. Although the model was found to be robust to variability in many input assumptions, these four variables were found to have the potential to dramatically affect the performance of the SSO collection and composting programs, both financially and in terms of the recycling rate achieved. For instance, if more SSO is available from SFHs and restaurants than under default assumptions, the overall increase in the MRA recycling rate from implementation of the program would be higher. However, the cost of the program would also increase, as more trucks and compost facilities would be required to collect and process SSO, respectively, from the same number of SFHs and restaurants.

The sensitivity analysis was performed by holding all inputs steady except the variable or group of variables under investigation. For each of the variables assessed, an optimistic and pessimistic value above and below the expected baseline value were chosen to represent expected performance in terms of MRA recycling rate, SSO recycling rate, unit costs of SSO collection, average compost facility tip fee, and the total number of composting facilities needed.

Effect of Varying Organic Fraction of MRA Waste Only variability in residential MSW and as-collected SSO from restaurants was tested. The total quantity of SSO collected from schools make a small contribution to overall SSO collection and thus does not significantly impact the model output.

The compostable fraction of residential MRA waste was varied from 25% (pessimistic) to 40% (optimistic) relative to the default value of 31%. This range was chosen based on data from waste sorts reported for Montgomery, Anne Arundel, and Prince George’s Counties, for which the compostable fraction varied from 29% to 38% (average 31%). By varying the organic fraction in residential MSW, the per-household SSO generation rate varied from 0.31 tons/year (pessimistic) to 0.50 tons/year (optimistic) relative to the baseline assumption of 0.39 tons/year. The organics generation rate from restaurants was varied in proportion to the organic fraction in the waste stream from 31 tons/year (pessimistic) to 49 tons/year (optimistic) relative to the baseline assumption of 38 tons/ year collected from each establishment.

The effects of varying the compostable fraction of MRA waste on recycling rates are summarized in Figure 5-5. As shown, varying the organic fraction of MRA waste has negligible effect on the organics recycling rate. However, increasing the organic fraction does result in higher overall MRA recycling rates. In 2025, the overall MRA recycling rate is 55% and 53% under optimistic and pessimistic assumptions, respectively, relative to 54% under baseline assumptions. By 2040, these MRA recycling rates have increased to 68%, 64%, and 61% under optimistic, baseline, and pessimistic assumptions, respectively.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 91 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Figure 5-5: Effects on Recycling Rates of Varying Organic Fraction of MRA Waste

Figure 5-6 shows how varying the organic fraction of MSW impacts the monthly collection costs for restaurants (Figure 5-6A) and SFHs (Figure 5-6B).

A B

Figure 5-6: Effect on (A) Cost per Restaurant and (B) Cost per Household of Varying Organic Fraction of MRA waste

As shown in Figure 5-6A, under optimistic assumptions (in terms of quantity of SSO collected, not costs) the collection cost per restaurant ($627 in 2025, $640 in 2040) is considerably higher than under baseline assumptions ($584 in 2025, $490 in 2040) or pessimistic assumptions ($440

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 92 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

in 2025, $417 in 2040). This is because the volume of waste collected from restaurants under optimistic conditions is much higher than under baseline or pessimistic conditions, meaning that more collection trucks and more workers are required for each participating restaurant.

Figure 5-6B shows the effect of varying the organics fraction of MRA waste on household costs for SSO collection. Similar to the case for restaurants, the cost per household is higher under optimistic assumptions ($6.80 in 2025, $8.50 in 2040) than under baseline assumptions ($5.92 in 2025, $7.42 in 2040) or pessimistic assumptions ($5.58 in 2025, $6.45 in 2040). This is because more waste is generated per participating household under optimistic assumptions.

Although not shown in Figure 5-6, the expected number of composting facilities needed changes slightly between optimistic (four facilities in 2025, 17 facilities by 2040), baseline (four facilities in 2025, 14 facilities in 2040) and pessimistic (three facilities in 2025, 12 facilities in 2040) assumptions. However, the average tipping fee under optimistic and pessimistic assumptions remains indistinguishable from that under baseline assumptions.

Effect of Varying Fuel Cost Fuel costs were varied from $1.50 per gallon (optimistic) to $2.50 per gallon (baseline) to $5.00 per gallon (pessimistic). Only the fuel costs for SSO collection and transportation were varied in the analysis; internal fuel costs for compost operations were not tested. Results from the analysis showed that there is very little effect on any of the parameters of interest, indicating that the SSO collection and composting programs are not particularly sensitive to fuel costs. Recycling rates are not impacted by fuel costs, nor are the number of composting facilities required or the required tipping fee for composting. The effect of varying fuel cost on the unit costs of collection per restaurant and household are shown in Figure 5-7.

A B

Figure 5-7: Effect on (A) Cost per Restaurant and (B) Cost per Household of Varying Fuel Cost

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 93 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

As shown in Figure 5-7A, monthly collection costs per restaurant varied from $575 to $608 between optimistic and pessimistic assumptions in 2025, respectively, and between $480 and $515 in 2040. Figure 5-7B shows that monthly collection costs per household would only be expected to vary between $5.83 and $6.15 for optimistic and pessimistic assumptions, respectively, in 2025 and between $7.27 and $7.79 in 2040.

Effect of Varying Expected Compost Residuals (Efficiency of Compost Production) The mass fraction of SSO removed as solid residuals from composting facilities was varied from 15% (optimistic) to 24% (default), relative to the baseline assumption of 33%. This provides a measure of the efficiency of compost operations. It was assumed that any change in the fraction of solid residuals generated would cause a corresponding change in the fraction of organic waste that becomes saleable compost product. Therefore, a lower residual fraction results in a higher yield of compost and vice versa. The only parameter of interest that showed any appreciable impact from varying the expected compost residual was the total number of composting facilities that would be required (Figure 5-8). This is because efficient operations require fewer facilities while inefficient operations require more.

Figure 5-8: Number of Facilities Required as a Result of Varying the Fraction of Solid Residuals Generated from Composting Operations

As shown in Figure 5-8, the total number of composting facilities required by 2040 varies from 18 (optimistic) to 14 (baseline) to 10 (pessimistic). As such, the fraction of incoming waste that ends up as solid residuals makes a large impact on the number of composting facilities needed.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 94 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

This is because each facility can produce a maximum of 10,000 CY of finished compost if it is to remain as a Tier 2-Small facility for permitting reasons; therefore, more facilities are required when a smaller fraction of residuals are generated with less organic waste input, because a smaller fraction of this organic waste ends up as residual, and a higher percentage ends up as compost. This is important for understanding how much capital infrastructure and expenditure will be required to implement the SSO collection and composting programs.

Notwithstanding the above, varying the amount of solid residuals had very little impact on the average tipping fee charged at composting facilities. It seems that, although operating expenses are lower when less residuals are generated (i.e. there is less cost to dispose of residuals), this is offset by the increased capital costs associated with building more facilities. Similar to tipping fees, monthly costs of SSO collection for each of the three major collection programs also showed very little sensitivity to variations in compost residuals. Varying the amount of residuals generated from composting also does not affect recycling rates, because consistent with MRA methodologies, recycling rates are calculated as the mass of material collected in recycling programs and do not take into account residuals for disposal.

Effect of Varying Compost Sale Price and Fraction Sold The baseline assumption for the financial model was that 50% of compost could be sold at a price of $20/CY with the remaining 50% sold at a lower bulk price of $7.50/CY. Under pessimistic assumptions, it was assumed that 50% could be sold at $7.50/CY, while the remaining 50% would be given away or used by the county at zero net cost. Under optimistic assumptions, it was assumed that 50% of the generated compost could be sold at $35/CY (the price that Veteran’s currently charges) and that the other 50% could be sold at $20/CY. Effects on average tip fees and SSO collection costs are shown in Figures 5-9 and 5-10, respectively. Varying the compost sale price and fraction of compost sold has no effect on recycling rates (for reasons discussed previously) or the number of compost facilities that need to be built.

As shown in Figure 5-9, the average tipping fee is consistently lower under the optimistic assumptions ($89 in 2025, $46 in 2040) than under the baseline assumptions ($101 in 2025, $57 in 2040) or pessimistic assumptions ($109 in 2025, $66 in 2040). This effect is mirrored in the per-restaurant and per-household costs shown in Figure 5-10.

Although not shown on the figures, an effect on the monthly cost per student of SSO collection at schools is also evident, but to a lesser extent. These costs are $0.56, $0.59, $0.61 in 2025 and $0.62, $0.67, $0.70 in 2040 for optimistic, baseline, and pessimistic assumptions, respectively.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 95 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Figure 5-9: Effect on Average Composting Tip Fees of Varying Compost Sales

A B

Figure 5-10: Effect on (A) Cost per Restaurant and (B) Cost per Household of Varying Compost Sales

5.1.5 Sensitivity of Model Output to Program Implementation Schedule

The two variables that will be assessed in this sensitivity analysis are: • Implementation schedule (i.e. length of each phase); and • Voluntary versus mandatory participation.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 96 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Effect of Varying the Program Implementation Schedule

In this analysis, the baseline assumption that participation in the SSO collection programs would become mandatory in Phase II is held constant. The pace of program expansion (i.e., the time between moving to the next phase of implementation) was assumed to be two years under the baseline assumptions, based on Geosyntec’s initial iterative assessment of the schedule necessary to meet (or at least get close to) the MRA recycling goals of the Maryland ZWP. Relative to this baseline, an aggressive implementation schedule (one year between phases) and more relaxed schedule (three years between phases) were selected to represent optimistic and pessimistic assumptions. The effects of changing the implementation schedule on recycling rates are shown in Figure 5-11.

Figure 5-11: Effect on Recycling Rates of Varying the Program Implementation Schedule

As shown in Figure 5-11, MRA recycling rates in 2025 vary from 60% (optimistic) to 54% (baseline) to 52% (pessimistic). By 2040, MRA recycling rates have ceased to vary significantly as the baseline and pessimistic programs “catch up” with the optimistic program. Similarly, SSO recycling rates vary from 65% (optimistic) to 28% (baseline) to 15% (pessimistic) in 2025, but are much closer at between 86% and 92% by 2040. As would be expected, this confirms that short-term recycling rates are sensitive to the pace of program implementation. Only an optimistic phasing schedule in which each phase is implemented one year following the previous phase results would enable the County to meet the Maryland ZWP recycling goals for food scraps by 2025. Under the pessimistic scenario, the County would not meet food scrap recycling goals until sometime after 2040. Changes in phasing implementation never allow the County to

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 97 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

meet overall MRA recycling goals as there is insufficient SSO material available to allow this (as acknowledged and discussed in the Phase 1 Report).

Changing the implementation schedule for the project means that the program will become mandatory at the start of Phase II in 2020 under the optimistic assumptions, in 2022 under baseline assumptions, and in 2024 under pessimistic assumptions. This appears to have little impact on tipping fees or SSO collection costs. However, earlier mandatory participation requires that more money will be spent on program enforcement at an earlier time under optimistic conditions than under baseline or pessimistic conditions. Total enforcement costs from 2018 to 2040 would be roughly $5 million for optimistic conditions, relative to $4 million for baseline conditions and $3 million for pessimistic conditions. These costs are assumed to be borne by the County.

As would be expected, the phasing schedule directly impacts the rate of compost facility development and hence the rate of capital outlay. Under optimistic conditions, nine facilities will be required by 2025, while only four or two facilities will be required under baseline or pessimistic conditions, respectively. However, by 2040 a total of 14 facilities will be required under each scenario as the baseline and pessimistic conditions eventually catch up with optimistic performance.

Effect of a Mandatory versus Voluntary Participation To assess the impact of operating under voluntary or mandatory conditions, two scenarios were considered: the baseline scenario, which assumes the program is made mandatory at the start of Phase II, and a completely voluntary (pessimistic) program. An optimistic scenario was not assessed, since mandatory participation prior to Phase II would have no meaningful impact on overall performance of the SSO collection programs. In this analysis, the pace of program implementation (i.e., years between each phase) is held constant at every two years in line with baseline assumptions. Effects on recycling rates and SSO collection costs are shown in Figures 5-12 and 5-13, respectively.

As shown in Figure 5-12, if the program is completely voluntary (pessimistic scenario), overall MRA recycling rates and SSO recycling rates remain consistently below baseline performance levels. In fact, MRA recycling rates for the voluntary program are only 52% in 2025 and 57% in 2040, as compared to 54% in 2025 and 64% in 2040 for the baseline program. The difference in SSO recycling rates is even starker. The SSO recycling rate under a voluntary program rises to 18% in 2025 and 50% in 2040 as opposed to 28% in 2025 and 90% in 2040 for the baseline program. This analysis suggests that the County cannot expect to meet Maryland ZWP recycling goals under a strictly voluntary program.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 98 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Figure 5-12: Effect on Recycling Rates of Voluntary vs. Mandatory Participation

While the voluntary program would not allow the County to meet ZWP recycling goals, it would be cheaper. If the program is completely voluntary, there will be no cost of enforcement incurred by the County. This is a savings of $4M between 2018 and 2040 compared to the baseline scenario.

A B

Figure 5-13: Effect on (A) Cost per Restaurant and (B) Cost per Household of Voluntary vs. Mandatory Participation

The collection cost per restaurant and per household for the baseline and pessimistic (voluntary) program are also significantly impacted by participation mandates, as shown in Figures 5-13A

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 99 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

and 5-13B, respectively. Under a purely voluntary program it is expected that the SSO collection cost per restaurant would be $360 in 2025 and $384 in 2040, as opposed to $584 in 2025 and $490 for the baseline program (Figure 5-13A). Figure 5-13B below shows that considerably lower collection costs would be incurred by participating SFHs ($3.89 in 2025, $3.59 in 2040) under the voluntary program than under the baseline program ($4.16 in 2025, $7.42 in 2040). This makes sense, as less waste would be collected under a voluntary program than under a mandatory one, lowering total capital expenditure on collection trucks and compost facilities and reducing unit costs (in per-restaurant and per-household terms, but not per ton of material composted).

5.2 Centralized Resource Recovery Park

5.2.1 Summary of Baseline Input Assumptions

Facility Development and Operation Table 5-7 provides a summary of default input to the model under baseline assumptions on development and operation of the materials recovery facility (MRF) and compost facility (CF) that comprise the two main components of the proposed resource recovery park (RRP).

Table 5-7: Summary of Baseline Assumptions for RRP Development and Operation Default Item Variable Basis for Default Assumption Value Operating days/year 260 days Assumed

Service life 25 years Materials Estimated based on industry data, see discussion recovery in Sections 4.2.5 and 4.3.1 Total capital cost $44,000,000 facility (MRF) Maximum annual throughput Estimated based on 2014 tonnage data from 250,000 tons capacity DSWM with annual growth of 1.01% Operating expenses $75.00/ton Estimated, see discussion in Section 4.3.1

Operating days/year 260 days Assumed, consistent with MRF Service life 25 years Composting facility Total capital cost $22,000,000 (CF) Estimated based on industry data, see discussion Unit weight of compost 800 lbs./CY in Section 4.3.2 Operating expense $50.00/ton

Parcel size 25 acres Phase 1 Report Land Cost per acre $100,000 acquisition Estimated Land lease cap rate 6%

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 100 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Financing A discussion of the assumptions made for financing capital expenses for the RRP is provided in Sections 4.3. It is assumed that 50% upfront capital will be required, with additional annual capital allocated in accordance with standard industry practice over the 25-year service life of the facility to cover the remaining 50%. An 80/20 debt to equity split was assumed, with debt financed at the prime rate (assuming the County would issue bonds at or below this rate).

Facility Performance and Revenue Table 5-8 provides a summary of the default input to the model under baseline assumptions related to material flows at the RRP as well as expected revenues from tipping fees and sale of recovered materials and compost product.

Table 5-8: Summary of Baseline Assumptions for RRP Performance and Revenues Default Item Variable Basis for Default Assumption Value Estimated based on data from local waste sorting Organic fraction of MSW 31% studies, see Phase 1 Report Organics recovery from 20% mixed waste line Processing Recyclables recovery from 30% Estimated based on industry data for MRF mass mixed waste line processing, see discussion in Sections 4.3.1 and balance Recyclables recovery from 85% Phase 1 Report assumptions single-stream line (MRF and C&D recovery from mixed 50% CF) waste line Solid residuals from 24% composting Published data on composting process, see Mass reduction from Section 4.2.5 43% Composting Tipping fee - MSW $69.00

Tipping fee – C&D $78.00 DSWM current fee at Reichs Ford Road Tipping fee – single-stream Revenues $25.00 (MRF) recyclables Recycling commodity $82.00 Data from DUSWM for December 2016 materials price index (MPI)

Recycled C&D selling price $30.00 Reported industry average, see Phase 1 Report

Tipping fee – SSO $25.00/ton Assumed equal to current fee for S-S recyclables

Revenues Tipping fee – yard waste Zero Assumed (CF) Baseline compost sale price $20.00/CY Estimated based on data from comparable local Low compost sale price $7.50/CY facilities, see Section 4.3.2

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 101 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

5.2.2 Summary of Model Output under Baseline Assumptions

A core assumption related to development of a centralized RRP is that the facility is sized to handle 100% of the available waste in the county from the date it commences operation, which is assumed to be 2018 for the purposes of the analyses discussed here. Therefore, there is no escalation schedule for implantation of the facility as was the case with the decentralized composting program. Output from the model is, therefore, largely static, with relatively minor temporal variability exhibited only as a result of population growth (and hence increased waste generation and number of households in the county). This affords limited opportunities for graphical display of output data.

Output from the RRP model under baseline assumptions indicates that the total volume of organics (from the mixed waste processing line at the MRF) and yard waste processed at the CF would be roughly 64,500 tons in the first year of operation (2018), increasing in accordance with population growth assumptions to roughly 80,500 tons by 2040. This corresponds to an overall MRA recycling rate of 73% and an organics recycling rate of 65%. The latter is calculated based on the total mass of recovered organics from the MRF plus any other organics sent directly to the CF (excluding yard waste) divided by the estimated total amount of organics in the incoming waste stream (i.e. 31%, based on local waste sort data). The organics recycling value excludes yard waste because this is already banned from landfill disposal and thus is not an additional material diverted from landfilling by being composted. MRA waste generation was assumed to grow at the same rate as the county population (i.e. 1.01% annually). Other existing recycling streams (e.g., residential curbside recycling and commercial recycling) were also assumed to grow at 1.01% when computing overall MRA recycling rates. A comparison of these values with the statewide goals in the Maryland Zero Waste Plan is shown in Table 5-9 below.

Table 5-9: Predicted Recycling Rates from RRP Model Output (Baseline Assumptions)

Recycling Goals and Expected Rates 2020 2025 2030 2040 Overall MRA Recycling Goal 60% 65% 70% 80% Predicted Total MRA Recycling Rate 73% 73% 73% 73%

MRA Recycling Goal for Food Scraps 35% 60% 70% 90% Predicted Organics Recycling Rate 65% 65% 65% 65%

Under the baseline assumptions, by developing the RRP the County would meet goals for overall MRA waste recycling and organics recycling through 2025 and 2030, respectively. Thereafter, these recycling goals will not be achieved by the RRP alone. This indicates that additional recycling programs (e.g., expansion of residential curbside recycling) will be necessary to meet longer-term goals. The cost of such programs is not considered in this analysis.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 102 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

The input assumptions to the RRP model are not sufficiently granular to directly allocate the cost of waste processing and recycling at the RRP to individual sources of waste materials (e.g., by school, restaurant/business, or household) in the way that was possible for the decentralized SSO collection and recycling model. As a surrogate measure of unit costs, however, total costs of RRP operation are evenly spread among the total households in the county (89,800 based on 2016 data) to calculate an equivalent monthly cost per household (Figure 5-14). As shown in the figure, these costs decline steadily with time after RRP operation commences. From a starting value of $8.13 in 2018, household costs decline to $7.51 in 2025 and $6.09 in 2040. The reason for this gradual decline is that more material is processed at the facility, yielding more saleable materials (i.e., recyclables and compost) at slightly increased operating costs but without further significant capital outlays.

Figure 5-14: Equivalent Cost per Household of RRP Development and Operation (Baseline Assumptions)

5.2.3 Sensitivity of Model Output to Key Assumptions

In order to test the sensitivity of the RRP model output under baseline assumptions to key input variables, a sensitivity analysis was performed. The main variables that will be assessed in this sensitivity analysis are as follows: • Organics fraction of incoming MRA waste; • Organics recovery rate from the mixed waste processing line;

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 103 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

• Recyclables recovery rate from the mixed waste processing line; • Market price index (MPI) for mixed recyclables; • Residuals requiring disposal from composting process; and • Compost selling price and the fraction of compost product sold. The reason the variables listed above were chosen to represent sensitivity of the model to input assumptions was based on Geosyntec’s initial informal screening of all default inputs. Although the model was found to be robust to variability in many input assumptions, these six variables were found to have the potential to dramatically affect the performance of the RRP, both financially and in terms of recycling rates.

The sensitivity analysis was performed by holding all inputs steady except the variable under investigation. For each of the variables assessed, an optimistic and pessimistic value above and below the expected baseline value were chosen to represent expected RRP performance in terms of MRA recycling rate, organics recycling rate, and equivalent cost per household.

Effect of Varying Organics Fraction of MRA Waste Relative to the baseline value of 31%, the percentage of compostables present in the incoming MRA waste stream to the MRF was varied from 25% (pessimistic) to 40% (optimistic) to assess the sensitivity of key parameters to changing waste composition. The baseline value of 31% was chosen as the average of values reported for Montgomery, Anne Arundel, and Prince George’s Counties, which in turn varied from 29% to 38% (these values were used to guide selection of the pessimistic and optimistic limit values). The organics recovery rate at the mixed waste processing line is held constant at 20% of incoming waste, regardless of the organics fraction of that waste. As such, the overall MRA recycling rate is unaffected by varying the organic fraction of incoming MRA waste, but remains constant for all three scenarios at 73% through 2040. The equivalent cost per household is unaffected by this variable.

The modeled organics recycling rate is 50% under optimistic assumptions, 65% under baseline assumptions, and 80% under pessimistic assumptions. The organics recycling rate is affected by the organics fraction of incoming MRA waste in this way because the organics recovery rate at the mixed waste line is held constant at 20%. Therefore, if the organics content of the waste is higher (optimistic conditions), the corresponding organics recycling rate is lower and vice versa. Although the organics recycling rate is affected by the organics fraction of incoming MRA waste, it remains constant in each case over the service life of the RRP (assumed in this analysis to be through 2040, which corresponds with the final deadline for meeting Maryland ZWP recycling goals and also allows direct comparison with the decentralized SSO collection and composting programs). This is because there are no temporal changes in the relative composition of incoming MRA waste.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 104 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Effect of Varying Organics Recovery Rate from the Mixed Waste Processing Line In this analysis, the organics recovery rate from the mixed waste line was varied from 15% (pessimistic) to 25% (optimistic) relative to the baseline assumption of 20%. The total organic fraction of incoming MRA waste was held constant at 31%.

The overall MRA recycling rate changes slightly as a result of varying the organics recovery rate from the mixed waste line of the RRP, increasing to 75% under optimistic assumptions and decreasing to 70% under pessimistic assumptions relative to the baseline of 73%. Under optimistic conditions, the overall MRA recycling goals (see previous Table 5-9 for reference) are thus met beyond 2030 but fall short of the goal of 80% in 2040. Similarly, the organics recycling rate also increases with improved organics recovery from the mixed waste processing line. The expected rate is 81% under optimistic assumptions and 48% under pessimistic assumptions, relative to the baseline of 65%. This means that even under optimistic assumptions, the RRP cannot achieve the target organics recycling rate under the Maryland ZWP in 2040. There was very little effect on unit costs as a result of varying the organics recovery rate.

Effect of Varying the Recyclables Recovery Rate from the Mixed Waste Processing Line In this analysis, the recyclables recovery rate from the mixed waste processing line was varied from 20% (pessimistic) to 40% (optimistic) relative to the baseline assumption of 30%. As would be expected, increasing the recyclables recovery rate leads to significantly higher overall MRA recycling rates. The overall MRA recycling rate is 78% under optimistic assumptions and 67% under pessimistic assumptions, relative to 73% under baseline assumptions. As such, even under optimistic assumptions the RRP alone will not enable the County to meet MRA recycling goals for 2040. The organics recycling rate is unaffected by the performance of recyclables recovery from the mixed waste processing line.

The equivalent monthly cost per household for RRP operation is affected by the recovery rate of recyclables, since higher material sales are afforded. Figure 5-15A shows that the equivalent cost per household for the RRP is lower under optimistic assumptions ($5.76 in 2025, $4.34 in 2040) than under baseline ($7.51 in 2025, $6.09 in 2040) or pessimistic ($9.27 in 2025, $7.85 in 2040) assumptions.

Effect of Varying the MPI for Mixed Recyclables In this analysis, the MPI for recyclables was varied from $55/ton (pessimistic) to $150/ton (optimistic) relative to the value of $82/ton reported by DUSWM, which serves as the baseline. The optimistic and pessimistic values represent historic high and low values for the MPI, respectively. Varying MPI has no effect on either the overall recycling rate or the organics recycling rate, but significantly affects the equivalent cost per household. Figure 5-15B shows that the equivalent cost per household in 2025 is $3.54 under optimistic assumptions, $7.51 under baseline assumptions, and $9.09 under pessimistic assumptions. In 2040, the cost per

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 105 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

household drops to $2.21, $6.09, and $7.67 under optimistic, baseline, and pessimistic assumptions, respectively.

A B

Figure 5-15: Variation in Equivalent Cost per Household as a Result of (A) Varying the Efficiency of Recyclables Recovery at the RRP and (B) Varying the MPI

Effect of Varying Expected Compost Residuals (Efficiency of Compost Production) The mass fraction of input organics to the CF removed as solid residuals was varied from 15% (optimistic) to 24% (default), relative to the baseline assumption of 33%. This provides a measure of the efficiency of compost operations. It was assumed that any change in the fraction of solid residuals generated would cause a corresponding change in the fraction of organic waste that becomes saleable compost product. Therefore, a lower residual fraction results in a higher yield of compost and vice versa. The overall MRA recycling rate and organics recycling rate are unaffected by the efficiency of the composting operation, since under MRA methodologies all material diverted to the CF from the MRF is considered to be recycled. There is some effect on the equivalent cost per household as a result of varying the efficiency of composting operations, since more saleable compost is produced at higher efficiencies. However, overall variations were small: the cost under optimistic assumptions ($7.07 in 2025, $5.64 in 2040) is slightly lower than the cost under baseline ($7.51 in 2025, $6.09 in 2040) and pessimistic ($8.01 in 2025, $6.58 in 2040) assumptions.

Effect of Varying Compost Sale Price and Fraction Sold The baseline assumption for the financial model was that 50% of compost could be sold at a price of $20/CY with the remaining 50% sold at a lower bulk price of $7.50/CY. Under pessimistic assumptions, it was assumed that 50% could be sold at $7.50/CY, while the remaining 50% would be given away or used by the county at zero net cost. Under optimistic

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 106 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

assumptions, it was assumed that 50% of the generated compost could be sold at $35/CY (the price that Veteran’s currently charges) and that the other 50% could be sold at $20/CY.

Varying the price of compost and amount of compost sold in this way does not affect recycling rates. However, there is a moderate effect on the equivalent cost per household. The cost under optimistic assumptions ($6.84 in 2025, reducing to $5.42 in 2040) is slightly lower than the cost under baseline ($7.51 in 2025, $6.09 in 2040) and pessimistic ($8.00 in 2025, $6.58 in 2040) assumptions.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 107 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

6. SUMMARY AND RECOMMENDATIONS

6.1 Summary of Phase 2 Review and Analysis of Options

6.1.1 Qualitative Review and Final Selection of Options

Under the framework for the Study established in Phase 1, it is assumed that the County will adopt the goals of the Maryland Zero Waste Plan (ZWP), which specifies an overall MRA recycling rate of 80% by 2040. In Phase 1, food waste was identified as the category of waste that is currently unrecovered but could contribute significantly to increasing recycling rates in the future. The goal for food waste recycling, which is interpreted in this Study as source- separated organics (SSO) and is thus inclusive of compostable paper, is 90% by 2040. Incremental targets are established for 2020, 2025, 2030, and 2040. In Phase 1, the analysis focused on the costs and effects of implementing recycling options through 2025, since the size and distribution of the county population, waste stream, and available options are likely to evolve significantly over a longer time span. Overall MRA waste and food waste recycling goals for 2025 are 65% and 60%, respectively. Achieving goals for 2025 remains important in Phase 2; however, given the capital and other investments needed to implement a workable solution, the ability of final selected options to meet the 2040 goals are also considered.

Based on targeting the recycling improvements summarized above, seven options comprising both programmatic elements (soft infrastructure) and processing systems (hard infrastructure) were initially recommended in Phase 1 for more detailed analysis in Phase 2 of the Study. These options can be grouped into three categories as follows: 1. Expanded recycling and food waste/organics collection programs:

o Waste reduction program at County schools o Three-bin residential collection program o Food waste collection from restaurants o Co-digestion of food waste with biosolids at the Ballenger-McKinney Wastewater Treatment Plant 2. Development of composting facilities:

o Community-scale, decentralized composting program o Large-scale, centralized composting facility 3. Development of a large-scale, centralized resource recovery park (RRP)

Screening of options in Phase 2 included verification of estimates from Phase 1 (e.g., material quantities, costs, and project scope) based on benchmarking data from case studies of similar

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 108 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

programs/systems in other jurisdictions, characterizing the various waste streams and sources that may serve as feedstock of food waste and other organics to processing systems, review of markets and incentive programs for project development, and review of potential financing and contracting mechanisms. Findings are detailed in Chapter 2.

6.1.2 Options Eliminated from Detailed Analysis

Large-Scale, Centralized Composting Investing in a large-scale composting facility would be of little value until the County’s ability to divert sufficient organics for processing has been demonstrated. As such, Geosyntec considers that implementing a large-scale composting facility capable of processing 70,000 tons/year or more of organics to represent an undue capital risk as a standalone option. This is supported by a previously cited study in BioCycle which identified that very few of the over 4,900 active composting operations in the U.S. are large-scale facilities handling more than 20,000 tons/year. Evaluation of composting as a standalone option in Phase 2 thus focuses on phased development of community-scale projects. It is noted also that the RRP option includes a large-scale centralized composting operation.

Co-Digestion of Food Waste at the Ballenger-McKinney (B-M) Wastewater Treatment Plant Co-digestion of food waste with wastewater at anaerobic digestion (AD) facilities is a relatively mature technology. As such, adding food waste to wastewater AD at the expanded B-M Plant appears feasible and may represent a cost-effective method of processing food waste collected from county business and residents, although it is important to note that it would compete for SSO feedstock with composting facilities and thus would significantly impact the financial feasibility of that proposed program. Geosyntec identified seven active facilities the Northeast and Mid-Atlantic regions (see Section 2.5), and recommends that the Steering Committee consider visiting one or more of the above facilities if serious consideration is to be given to future co-digestion at the B-M Plant. Details of the AD reactor design at the B-M Plant would have to be professionally reviewed under a technical and financial feasibility study prior to deciding on implementing this strategy. While the exact timing and specifications of the AD system at the plant remain uncertain, however, more definitive evaluation of this option is unproductive. Therefore, further analysis of this option is not recommended in Phase 2.

Expanded Single-Stream Recycling at Public Schools (Non-SSO Collection) In Phase 1 of the Study it was assumed that public schools already had functioning single stream (blue bin) recycling programs in place under the County’s Public Schools Recycling Plan (PSRP) such that no meaningful additional quantities of clean recyclables could be recovered. Phase 1 thus focused on recovery of food waste from school kitchens and cafeterias as well as provision of additional organics collection bins in hallways. Further investigation in Phase 2 indicates that this assumption generally holds, such that Phase 2 focuses only on collection of

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 109 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

SSO from schools. It is recommended that the BOE work with DSWM and the County to reassess the PSRP and improve its efficiency. For example, contracts for collection of single stream recyclables could be jointly awarded to service providers for SSO collection. Responsibility for education and management of the PSRP could also be transferred to the SSO collection contractor. A number of resources are available to guide improvements to school recycling programs, as reviewed in Section 2.3.2. It is important to be clear that expanding recycling at schools is an important goal for the County, but is not a further goal for analysis in Phase 2 of this study.

6.1.3 Options Selected for Detailed Analysis

SSO Collection from Public Schools, Restaurants, and Single Family Homes As noted throughout this Report, wholesale rollout of SSO collection programs is not recommended. The County is advised to explore incremental rollout on a pilot scale with program expansion only after success can be demonstrated on a smaller scale and affected parties (not least DSWM) gain some experience with the process. Based on this, a six-phase rollout program (Pilot plus Phases I-V) for gradually expanding SSO collection is recommended (see Section 3.2). Case studies suggest that capture rates under voluntary SSO collection programs are too low to meet Maryland ZWP recycling goals for food waste. Therefore, it is assumed that the program is voluntary only during the Pilot and Phase I, but becomes mandatory in Phase II. Phase II was chosen as the time at which to enforce food waste recycling as it is important to begin enforcement early in the program, when fewer entities are involved, to work out enforcement costs and mechanisms that can be applied as the program grows.

Under the above assumptions, the pace of program implementation in schools is fastest as this has additional educational benefits. Having students familiar with the program and its goals should help facilitate enthusiastic participation by households in subsequent phases. The pilot programs for collection of SSO from restaurants and households will be focused on establishments in Frederick City only. Expanded countywide collection could be considered after success with these programs in the city has been demonstrated. In the meantime, restaurants and other businesses outside the city would be welcome and encouraged to deliver food waste to composting facilities but would be required to establish individual contracts for SSO collection. It is assumed that residential SSO collection would be extended only to SFHs that are eligible for participation in the County’s existing curbside recycling program. Other residents of the county would not be included in the SSO collection program, but would be welcome to deliver food waste to a composting facility, either directly or through individually negotiated hauling contracts. Trash collection at county businesses and households would continue to be contracted under current arrangements outside of the County’s responsibility. Although it is assumed that green bin collection services will be provided by new private

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 110 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

contractors, existing private or municipal trash collectors, or the County’s existing contractor(s) for blue bin collection, could propose to provide these services.

Decentralized Composting Program Several different types of aerobic composting operation have been developed. For analysis in Phase 2, however, it is assumed that covered aerated static piles (ASPs) will be used since these represent the predominant composting technology used at facilities that co-compost food waste without significant odor issues. Composting facilities (CFs) are regulated under Section 9-1725, Environment Article, Annotated Code of Maryland, and the Code of Maryland Regulations (COMAR) 26.04.11 and 15.18.04. Of particular importance to this Study, facilities for composting food waste and other SSO materials (termed “Type 2 feedstock”) are divided into Tier 2-Large and Tier 2-Small facilities based on the amount of finished compost produced per year. A Tier 2-Large facility produces in excess of 10,000 CY of compost per year, for which stricter design specifications apply as well as a requirement to collect and treat all contact water, which represents a significant addition permitting, design, construction, and operating expense. For this reason, proposed development of new composting facilities as a recommendation from this Study is limited to Tier 2-Small facilities that will produce less than 10,000 CY of finished compost annually. Based on processing mass balance assumption, this limits organic feedstock to 12,000 tons/year, of which at least 50% by mass should be yard waste or other material suitable for use as a bulking agent (i.e., only 6,000 tons/year of SSO may be delivered to each facility). Therefore, a key component of the analysis is specifying the number of CFs needed to keep up with phased increases in SSO collection rates.

Resource Recovery Park In the Phase 1 analysis, Geosyntec assumed that a large-scale RRP for centralized solid waste management and recycling with onsite composting of recovered organics would be developed. The County’s existing single stream (S-S) curbside recycling program and other recycling activities will remain in place; as such, the RRP must include a materials recovery facility (MRF) with separate lines for processing existing quantities of S-S materials and mixed waste. It should also include C&D processing and recycling. All unrecovered material not suitable for recycling or composting will continue to go for landfill disposal.

Detailed evaluation of a RRP in Phase 2 is recommended in large part as a more centralized, automated, and non-participatory counterbalance to the highly decentralized options of SSO collection and small-scale composting that rely significantly on increased public participation for their success. It is nevertheless important to allow for increased S-S recycling and SSO collection over time, which would change the relative size of the S-S and mixed waste streams. The MRF design thus needs to be sufficiently flexible and scalable or modular to accommodate this and other potential long-term waste/recycling trends in Frederick County.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 111 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Project Delivery and Financing Mechanisms It is assumed that the SSO collection, decentralized composting, and/or centralized RRP projects selected for detailed analysis in Phase 2 may be delivered as public services, privatized services, franchise agreements, or public-private partnerships. Financing mechanisms may take the form of grants, subsidies, loans, private equity, public debt (bonds), government loan guarantees, and/or tax incentives. Access to funding has windows of opportunity dependent on the proposed contracting and project delivery mechanism and has to be carefully researched and pursued as part of the planning and design process for implementing a project option. For example, self- funding and operation by the County may work well for the centralized RRP project option and could be successful for phased development of decentralized composting facilities. However, it is not recommended that SSO collection be provided under this mechanism since there is ample evidence to show that collection services are efficiently and cost-effectively provided under a franchise agreement such as is already in place for the County’s curbside single-stream recycling program. Additional discussion is provided in Section 2.7.

6.2 Quantitative Summary of Final Options

6.2.1 Development of Pro-Forma Models

The options selected for detailed analysis and financial modeling are SSO collection from schools, restaurants, and households; decentralized composting of collected SSO; and development of a centralized RRP. Due to their significant overlap and similarity in scope, equipment, and potential roll-out schedule, the three SSO collection programs are collectively assessed as a single option. To varying degrees, the selected options are interdependent and their implementation will be more successful in combination with other options, including enhancement of recycling programs outside the direct scope of the Phase 2 study (e.g., increased single-stream recycling). However, the two decentralized options are directly dependent on each other while the RRP is somewhat independent. Therefore, in assessing the cost and expected performance of implementing each option, Geosyntec has constructed two models: one model to jointly analyze SSO collection and composting and one model to assess the RRP. Incremental development and the approach for phased-in expansion of recycling is described in Chapter 3. The model architecture and baseline assumptions are described in Chapter 4.

Both pro-forma models ultimately serve to estimate the cost per ton of waste recycled each year over a defined lifecycle of performance. Modeling and evaluation of the financial feasibility of each alternative varies considerably between these two very different approaches to increasing recycling in Frederick County. However, the models have several similarities in terms of the costs and revenues included. Costs accounted for include capital expenses (CAPEX), including design, permitting, RFP development, contracting, and construction; depreciation of assets and loan repayment and interest paid (cost of capital); operating expenses (OPEX), including labor,

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 112 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

equipment and facility maintenance, property leases and facility charges, fuel, insurance, and other overheads; and education/outreach and enforcement. Potential revenues and cost offsets accounted for include secondary resource sales (compost and recyclables); service fees; and avoided costs (e.g., fees for landfill disposal). The models allow for a variety of parameters (e.g., implementation costs, anticipated revenues, timing, participation rates interest rates, discount rates, etc.) to be manipulated.

6.2.2 Decentralized SSO Collection and Composting Model

The model developed by Geosyntec for evaluation of SSO collection and composting allows for gradual introduction of SSO collection and composting in accordance with six phases (Pilot plus Phases I through V). A working copy of the model (Excel spreadsheet) is provided in Appendix A. A detailed summary of model output under baseline assumptions as well as sensitivity to key input variables was provided in Section 5.1 of this Report.

Baseline Performance Under baseline assumptions, the model shows that the overall MRA waste and food waste recycling rates achieved would be 54% and 28% in 2025, respectively, growing to 64% and 90% by 2040, respectively. This means the County cannot meet overall MRA recycling goals from the SSO collection and composting program alone, meaning that additional recycling programs (e.g., expansion of curbside collection of single-stream recyclables) will be necessary. This was acknowledged and discussed in the Phase 1 Report. Importantly, however, the model suggests that that MRA food waste recycling goals could be met after 2025.

Calculated tipping fees for compost facility operation are retroactively input as costs to the SSO collection programs. The monthly cost of SSO collection at schools generally decreases with time after the program is first implemented, but reaches a fairly stable value of $0.50 - $0.60 per student per month around the year 2025. The monthly cost per restaurant increases rapidly to a value between $500 and $600 by 2025, but then decreases slightly over time to below $500. After an initial steep increase, the monthly cost for households increases slowly with time, exceeding $6.00 per household by 2027 and $7.00 per household by 2031.

Financing Assumptions and Net Present Value The default input assumptions for financing the year one capital expenditures for each phase of the SSO collection program and each composting facility are 80% financed through debt and 20% financed through equity, with no grant funding available. A prime rate of 3.72% plus 2.0% was assumed, based on projects being privately funded without a bond issue by the County, with a loan period of seven years and annual payments. All capital expenditures after year one are calculated on a simple depreciation schedule (i.e. yearly expense equals the sum of individual items times their unit cost divided by their service life).

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 113 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Assuming a discount rate of 2% net of inflation, the net present value (NPV) of the capital costs for developing the decentralized SSO collection and composting programs are expected to be $18.93 million and $30.23 million through 2040, respectively. This brings the total NPV of the combined programs to $49.16 million. Under the decentralized approach, costs are relatively evenly distributed through the life of the program.

Sensitivity Analysis In order to test the sensitivity of the model output under baseline assumptions to key input variables, a sensitivity analysis was performed on the following six main variables: • Organic fraction of MRA waste; • Fuel costs; • Residuals requiring disposal from composting process; • Compost selling price and the fraction of compost product sold; • Implementation schedule (i.e. length of each phase); and • Voluntary versus mandatory participation. The sensitivity analysis was performed by holding all inputs steady except the variable or group of variables under investigation. For each of the variables assessed, an optimistic and pessimistic value above and below the expected baseline value was chosen to represent expected performance in terms of MRA recycling rate, SSO recycling rate, and unit costs of program development and delivery.

The model was found to be highly sensitive to changing assumptions on voluntary vs. mandatory participation, with overall recycling rates and costs significantly impacted by allowing participation to remain voluntary through the life of the program (pessimistic condition). The organics recycling rate does not exceed 50% under these circumstances while the overall MRS waste recycling rate remains low at 50% to 55%. The model was also found to be sensitive to variability in the organic fraction of MRA waste (higher organic content increases unit collection costs, since more SSO material is put out per location) and changes in the implementation schedule (short-term recycling rates are sensitive to the pace of program implementation, although baseline and pessimistic performance ultimately catch up with optimistic performance since the total quantity of material available for collection does not change). Model output was relatively robust to other variables.

6.2.3 Centralized Resource Recovery Park Model

The model developed by Geosyntec allows for independent input assumptions for development and operation of the materials recovery facility (MRF) and compost facility (CF) that comprise

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 114 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

the two main components of the RRP. The MRF includes separate lines for processing existing quantities of S-S materials and mixed waste, as well as C&D waste. A core assumption related to development of a centralized RRP is that the facility is sized to handle 100% of the available waste in the county from the date it commences operation (assumed to be 2018). Therefore, there is no escalation schedule for implantation of the facility as was the case with the decentralized composting program. A working copy of the model (Excel spreadsheet) is provided in Appendix B. A detailed summary of model output under baseline assumptions as well as sensitivity to key input variables was provided in Section 5.2.

Baseline Performance Output from the RRP model under baseline assumptions suggests an overall MRA recycling rate of 73% and an organics recycling rate of 65% would be achieved. The organics recycling value excludes yard waste because this is already banned from landfill disposal and thus is not an additional material diverted from landfilling by being composted. MRA waste generation was assumed to grow at the same rate as the county population (i.e. 1.01% annually). Other existing recycling streams (e.g., residential curbside recycling and commercial recycling) were also assumed to grow at 1.01% when computing overall MRA recycling rates. Under these assumptions, the County would meet goals for overall MRA waste recycling and organics recycling through 2025 and 2030, respectively. Thereafter, these recycling goals will not be achieved by the RRP alone. This indicates that additional recycling programs (e.g., expansion of residential curbside recycling) will be necessary to meet longer-term goals. It should be noted that the RRP is also expected to recycle about 12,500 tons of C&D waste each year, which generates some revenue to offset operating costs but does not contribute to the MRA recycling rate since C&D is a non-MRA material.

The input assumptions to the RRP model are not sufficiently granular to directly allocate the cost of waste processing and recycling at the RRP to individual sources of waste materials (e.g., by school, restaurant/business, or household) in the way that was possible for the decentralized SSO collection and recycling model. As a surrogate measure of unit costs, however, total costs of RRP operation are evenly spread among the total households in the county (89,800 based on 2016 data) to calculate an equivalent monthly cost per household. It is acknowledged that costs would not be allocated in this way, with fees for acceptance of different waste streams from different commercial, residential, and public-sector sources being assessed separately. Notwithstanding, the model shows that equivalent household costs would decline with time from $8.13 in 2018 to $7.51 in 2025 and $6.09 in 2040. The reason for this gradual decline is that more material is processed at the facility, yielding more saleable materials (i.e., recyclables and compost) at slightly increased operating costs but without further significant capital outlays.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 115 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Financing Assumptions and Net Present Value It is assumed that 50% upfront capital for RRP development will be required, with additional annual capital allocated in accordance with standard industry practice over the 25-year service life of the facility to cover the remaining 50%. An 80/20 debt to equity split was assumed, with debt financed at the prime rate, based on the assumption that the County would issue bonds at or below this rate to fund development of the facility.

The total nominal capital costs of the MRF and CF are assumed to be $44 million and $22 million, respectively, for a total of $66 million. Assuming a discount rate of 2% net of inflation, the combined NPV of these costs is $57.09 million. $33 million of these costs are assumed to be incurred in the first year of development. As such, development of a RRP requires a large upfront capital outlay.

Sensitivity Analysis In order to test the sensitivity of the RRP model output under baseline assumptions to key input variables, a sensitivity analysis was performed on the following six main variables: • Organics fraction of incoming MRA waste; • Organics recovery rate from the mixed waste processing line; • Recyclables recovery rate from the mixed waste processing line; • Market price index (MPI) for mixed recyclables; • Residuals requiring disposal from composting process; and • Compost selling price and the fraction of compost product sold. The sensitivity analysis was performed by holding all inputs steady except the variable under investigation. For each of the variables assessed, an optimistic and pessimistic value above and below the expected baseline value was chosen to represent expected RRP performance in terms of MRA recycling rate, organics recycling rate, and equivalent cost per household.

With the exception of the MPI for mixed recyclables recovered from the S-S processing line, the RRP model showed that costs are relatively robust to all variables. Given the significant variability in the MPI reported by DUSWM ($55 to $150, average $82 per ton), however, this represents an important sensitivity to a performance factor over which the County has no control. The analysis showed that the equivalent cost per household in 2025 would be $3.54 under optimistic assumptions, $7.51 under baseline assumptions, and $9.09 under pessimistic assumptions. The recycling rates achieved by the RRP were also highly sensitive to changing assumptions on the organic content of MRA waste and the recovery rate of organics and

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 116 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

recyclables from the mixed waste processing line. Even under optimistic assumptions, the RRP cannot meet either the overall MRA waste or food waste recycling goals for 2040.

6.3 Comparative Performance of Final Options

In order to facilitate fair comparison between the decentralized SSO collection and composting programs (hereafter, SSO program) and centralized RRP project under baseline assumptions, the total costs of the SSO program were evenly spread among the total households in the county (89,800 based on 2016 data) to calculate an equivalent monthly cost per household in a similar manner as was previously performed for the RRP model. Again, it is acknowledged that costs would not actually be allocated in this way, with fees for collection/acceptance of different waste streams from different commercial, residential, and public-sector sources being assessed separately. However, this allows direct comparison of unit costs between the two widely differing options. It is also provides a upper-bound limit on per-household costs for the SSO program, which is important given that the calculated per-restaurant cost of SSO collection is high (between $500 and $600 per month) and is likely to result in pushback if imposed on restaurants in full. Some subsidy of this cost from households would probably be necessary, which can be justified on the basis that all county residents ultimately benefit from improved recycling at restaurants. Similarly, the BOE and/or other responsible parties would likely welcome subsidy of the cost of SSO collection from public schools. Distribution of these costs among the various sources of SSO in the county will comprise an important component of structuring the SSO program in the event the County elects to pursue this option.

In Figure 6-1, the equivalent monthly household cost of the SSO program and the RRP is plotted against the overall MRA recycling rate expected to be achieved by each project. Since costs are dynamic in both cases, and the MRA overall recycling rate achieved by the SSO program is dynamic due to phasing assumptions, an indication of temporal performance is given by identifying the location on the plots that corresponds to the Maryland ZWP’s incremental recycling goals for 2020, 2025, and 2030, as well as the ultimate goal for 2040. The ZWP goal for each increment is shown in the call-out labels on each plot; green text signifies that the project meets the goal at that time, whereas red text signifies that the project does not meet the goal.

As shown on the figure, equivalent monthly household costs increase from less than $2 in 2020 to slightly over $10 in 2040 as the SSO program is expanded, while the costs for the RRP decrease from about $8 to $6 over the same period. Although the final unit cost of the RRP is lower, this illustrates that high costs are incurred immediately as a result of RRP development, with no ramp-up period to allow demonstration that the facility can perform as expected. By comparison, the phased approach of the SSO program means that a unit cost of $8/household is not incurred until between 2025 and 2030, by which time a decade of experience has been gained.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 117 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Figure 6-1: Equivalent Monthly Cost vs. MRA Recycling Rate (Baseline Assumptions)

Figure 6-1 also shows that the MRA recycling rate achieved by the RRP is static at about 73%, which meets the ZWP goal for each increment except 2040. The overall MRA recycling rate achieved by the SSO program increases from below 50% in 2020 (representing negligible contribution to the County’s recycling rate during the Pilot phase) to over 63% by 2040 (when the program is fully developed). However, the SSO program does not meet the MRA recycling goal at any stage of development, which means that the County would have to expand other recycling programs in order to boost overall MRA recycling by about 17% to meet the ZWP goal of 80%. This limitation was acknowledged in the Phase 1 Report and is fully expected: a program that targets organics can only be as successful as allowed by the total quantity of that material available.

It is important to note that the inability to fully meet the overall MRA goal is also true for the RRP, but only after 2030. By 2040, the County would have to find additional recycling opportunities to boost overall MRA recycling by about 7%. Although lower than for the SSO program, making up this percentage shortfall will be more difficult and expensive given that most MRA waste in the county will already be processed at the RRP at this time. The most realistic way to achieve 80% recycling might be to implement an SSO collection program to bypass the mixed waste processing line at the MRF, which would incur costs similar to those for the collection portion of the SSO program.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 118 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

In Figure 6-2, the equivalent monthly household cost of the SSO program and RRP is plotted against the organics recycling rate expected to be achieved by each project. Similar observations on the setup of the plots apply as for the previous figure.

Figure 6-2: Equivalent Monthly Cost vs. Organics Recycling Rate (Baseline Assumptions)

The figure shows that although the SSO program is slower to achieve target rates of organics recycling than the RRP, it improves continually with time and can meet ZWP goals by 2025. Importantly, the plot shows that the SSO program can meet the ultimate goal of 90% food waste recycling by 2040. As such, it represents a fully successful program with respect to achieving its original performance targets from Phase 1. By comparison, the RRP has a static organics recycling rate of about 61%, which falls short of the ZWP target after 2025. Given that the RRP meets neither the overall MRA waste or organics recycling rate, it can only be considered a partial success with regard to meeting its original performance targets from Phase 1. Again, it is emphasized that the RRP requires significant upfront capital deployment (represented by the high initial cost of $8/household) with no demonstration that the facility can perform as expected, while the SSO program assumes gradual increases in costs will be incurred only as the program matures and success is demonstrated.

6.4 Recommendations

Given the comparative discussion of expected levels of performance and costs between the SSO collection and composting program and the RRP project in Section 6.3, and acknowledging the

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 119 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

particular sensitivity of the financial performance of the RRP to the market price index (MPI) for recovered mixed recyclables (which is highly volatile) as discussed in Section 6.2.3, in Geosyntec’s opinion the County would be better advised to explore development of a SSO collection and composting program rather than incur the capital risk posed by developing the RRP under untested conditions. This is not an insignificant risk, since during the past 10 years a significant number of large-scale, capital intensive waste processing facilities have closed due to financial failure. Recent relevant examples include the Infinitus mixed waste processing facility in Alabama and the INEOS waste-to-biofuel facility in Florida. Although MRFs were considered mature technologies going into this Study, recent industry experience with mixed waste processing has drawn the efficiency of these operations into question. Given the sensitivity of RRP performance to organics and recyclables recovery rates from incoming MSW, this uncertainty in performance is additional cause for concern. In a notable recent interview with Waste 36096, for example, Shawn State (senior vice president with Pratt Industries, a recycling company that develops automated MRFs) opined when asked how mixed waste processing has changed over the years that: “I have not seen it work successfully so it hasn’t really changed…there’s just not a successful model that I am aware of that is pulling recyclables. The materials just aren’t as clean as they need to be for the end user. Currently the technology that is out there really hasn’t changed much in the last ten years, and there isn’t a technology I am aware of that is capable of cleaning the materials to the point where you can…sell the recyclables to the end markets.”

Notwithstanding the rather pessimistic discussion above on current RRP performance, there are some positive observations that can be made regarding future consideration of this option. First, processing of mixed waste is clearly the primary challenge, since single-stream facilities (“clean MRFs”) significantly outperform mixed waste processing facilities (“dirty MRFs”). As such, a successful green bin program with increased separation of wet, dirty organics from trash at the source, coupled with improved customer awareness of appropriate green/blue/black bin disposal protocols under the proposed SSO program, should have the beneficial side effect of rendering smaller volumes of a cleaner and drier residual waste stream. This may offer enhanced opportunities for efficient processing of mixed waste over the longer term. It is also likely to improve the quality of recyclables and thus the overall economics of recovery operations. Second, there is increasing evidence that the solid waste industry may be at the threshold of a revolution in automation due to ever-improving robotics technology and application of artificial intelligence. These factors may combine to offer opportunities for developing a more efficient, reliable, and cost-effective RRP in the future. As such, the recommendation to move forward with a green bin program for SSO collection and composting should have compounding benefits for the County’s recycling efforts.

96 http://www.waste360.com/mrfs/mixed-waste-processing-dead

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 120 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

Before moving forward with exploring a decentralized SSO collection and composting program, it is important to note the following limitations and observations regarding the analysis conducted and findings from the Study: • Several case studies reviewed for this Study suggest that voluntary SSO collection programs work well in early stages of deployment if participation is free and good educational support and public outreach is included. Starting at pilot scale with good dissemination of goals and performance is important to build interest and participation levels, and this is strongly recommended. However, voluntary programs tend to result in low residential participation. Switching to a mandatory program is often recommended only after sufficient momentum and awareness of the program has built up, as mandatory programs result in pushback when businesses and households have to pay for composting services. However, the baseline assumptions in the SSO program model for this Study indicate that the rate of SSO recycling will be too slow to make a meaningful impact on meeting the goals of the Maryland ZWP unless the County is committed to moving to a mandatary program relatively early in Phase II. This does not mean that everyone in the county is required to participate, rather that SSO sources selected for inclusion from Phase II onwards should be obliged to take part. Additional effort and expense will be incurred as a result of promotion and enforcement of participation. • The composition of MSW in Frederick County has not been directly measured by DSWM and was not directly investigated in this Study. Instead, data from waste characterization surveys conducted between 2012 and 2014 in Montgomery, Anne Arundel, and Prince George’s Counties, which offer curbside recycling and can be assumed to have a residual solid waste stream with similar characteristics to Frederick County, were substituted to represent residential waste composition. Case studies from the literature were used to represent expected SSO generation at schools and restaurants. At some stage, conducting a focused SSO characterization study will be helpful to better estimate the quantities and composition of food waste and other compostable organics potentially available from schools, restaurants, and households in Frederick County. This would be best implemented in conjunction with the proposed Pilot phase of SSO collection since this offers an opportunity to directly assess what materials households dispose of separately as “organics.” • Building on the above, many jurisdictions with robust food waste collection and composting programs reported starting with more homogenous feedstocks from hospitals, detention centers, colleges, universities and other large institutions with cafeterias before relying on the more diverse and riskier feedstock from restaurants and households. This should be encouraged in Frederick County also, and it is expected that operators of composting facilities will make concerted efforts to secure organics from such institutions. It is assumed this can be negotiated directly without need for organics collection from such institutions to be formalized within the more-complex programs for

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 121 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

SSO collection from households, restaurants, and schools. Additionally, although they potentially offer reliably homogenous feedstock, it should be remembered that the analysis in Phase 1 suggested that institutional sources would not offer significant SSO volumes in the context of meeting countywide recycling goals under the Maryland ZWP. • The mass balance assumptions for composting operations used in this Study are that for every 1,000 mass units of organic waste input to the composting system, 332 mass units of finished compost and 237 mass units of residuals are produced. Based on these and other assumptions on compost density, roughly 12,000 tons of organic waste would need to be processed to produce 10,000 CY of finished compost. Although feedstock recipes are process-specific and need to be properly designed as part of any proposal to develop a composting facility, an approximate 50/50 mix (minimum) of SSO to a bulking agent such as yard waste is assumed necessary to make high quality compost. Therefore, it is assumed that only 6,000 tons of SSO can be handled at each composting facility. More importantly, this means that diversion of yard waste to the compost facility in approximately equal measure to the quantity of SSO is a requirement and not an option for effective operation. This in turn means that the capacity for composting food waste may be limited by the availability of yard trimmings and other carbon-rich bulking agents. Significant tonnage of yard waste will need to be redirected to the composting facilities developed under this program if all SSO is to be composted as planned. • Geosyntec has assumed that sufficient market demand for compost product will exist, albeit at depressed or even net zero prices in some circumstances. This assumption is based on several factors, notably:

o Utilization of compost is promoted under the Maryland Stormwater Management Act of 2007 as well as HB878 and SB814 (2014), which established the use of compost as a best management practice for erosion control and stormwater management in highway construction projects. This legislation provides a mechanism for securing a market for compost production that meets SHA specifications. State highway projects are likely to be the major markets for compost products, the composting program in Frederick County should be developed around SHA and MDOT requirements.

o Local initiatives in Montgomery County and Washington D.C. incentivize programs for using compost, which should have a generally positive effect on the demand for compost for local government and private sector projects.

o MDE’s composting guidance notes that local governments have an opportunity to support the composting market in Maryland by using compost on county-managed lands and encouraging its use by others within their jurisdiction. This could help develop a “starter” market for compost in Frederick County during an initial pilot phase of food waste composting as recommended by the Study.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 122 FREDERICK COUNTY SOLID WASTE STEERING COMMITTEE Solid Waste Management Options Study: Phase 2 Report

• Notwithstanding the above optimism regarding SSO collection, compost production capabilities, and demand for finished compost, a review of County ordinances and regulations (including zoning, solid waste, and building codes) is recommended to ensure they encourage rather than hinder collection and composting of organics. Further, the County should undertake a regional market study of actual demand for compost from the public and private sectors and help the proposed operators of composting facilities developed under this program to build relationships with potential users such as golf courses, landscapers, local forestry experts, infrastructure developers, as well as MDOT and SHA, to ascertain their specifications and demand for compost. These represent major markets, and the program should be cognizant of their requirements. • A number of toolkits to support SSO collection programs have been developed as discussed in some detail in Sections 2.2.3 and 2.3.1 of this Report; these and other resources should be reviewed by the Steering Committee and County, as well as any consultants hired to help implement the SSO program. Information provided in these toolkits includes model request for proposals (RFP), sample ordinance provisions, service provider contract and franchise agreement language, ideas on incentive programs for participation, template reporting documentation, and information on best practices. A number of states support outreach programs for food waste minimization and collection at schools and these should be also reviewed by the County.

FRED CO SWM STUDY_PHASE 2 REPORT_FINAL 123