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MINUTES OF A
SPECIAL MEETING O DATE: April 2, 2002 TIME: 3:00 pm PLACE: Hamilton County
Department of Environmental Services PRESENT: Policy
Committee Members PRESENT: DOES Staff Jeffrey W. Aluotto, Solid Waste Manager Lisa Blair, Solid Waste Intern Sarah Brugger, Public Affairs Coordinator Cory Chadwick, Director Holly Christmann, Community Specialist Ken Edgell, Environmental Administrative Coordinator Christy Kellner, Business Specialist Ali Khodadad, Operations Coordinator Susan Schumacher, Secretary, Clerk Others In
Attendance ABSENT:
Policy Committee Members DOES Staff I. CALL TO ORDER Mr. Portune called the meeting to order at 3:05 p.m. Mr. Portune welcomed everyone to the meeting. II. CLERK'S REPORT A. Additions/Changes to the Agenda There were no additions to the agenda.
A. Omaha Paper Stock Market Development Grant Mr. Aluotto thanked the members of the Policy Committee and the members of the public for attending the meeting. Mr. Aluotto stated that in December, District Staff and the Ohio Department of Natural Resources (ODNR) were approached by Omaha Paper Stock Company (OPSC) inquiring about the possibility of submitting a pre-proposal for a Market Development Grant (MDG) through ODNR for a recycling project. As a result of that meeting, ODNR encouraged OPSC to submit a pre-proposal on that project. The pre-proposal stage is a formality ODNR uses to immediately "weed out" applications that clearly do not meet ODNR's guidelines. The pre-proposal submitted by OPSC outlined their desire to install small scale MRF processing equipment at their facility in Elmwood Place as a means of improving the efficiency of the material that was flowing through that facility. Mr. Aluotto stated that currently, OPSC, in addition to serving as a paper recycler, also accepts co-mingled curbside material which gets hauled to Dayton at a considerable expense to the operation. OPSC saw the MDG as a means of improving the operation from their existing facility as well as an opportunity to service some currently unserviced commercial markets in the Hamilton County area. ODNR accepted the pre-proposal and encouraged OPSC to submit a full grant application which was submitted on March 1, 2002. This was discussed at the January 10, 2002 Policy Committee Meeting. Since that time, the District has become aware that Rumpke has several concerns relating to this grant application which they have made known to ODNR. ODNR stated that they share some of the same concerns and forwarded the concerns to the Policy Committee. Mr. Aluotto stated the Policy Committee was being asked to address three specific questions: 1) Is this grant a duplication of services that are already provided in the Hamilton County area? 2) Will this grant significantly impact Rumpke's recycling operation from a financial standpoint? 3) What is the purpose behind the MDG in general? Mr. Aluotto gave specific examples for question #3. Mr. Aluotto stated that ODNR is asking the Policy Committee if this type of project is beneficial from a market development standpoint in Hamilton County.Mr. Aluotto stated that the understanding he had from ODNR is that consideration of this grant is on hold until these questions are addressed. If the questions are left unaddressed, this grant will not be considered. If the questions are addressed, ODNR will consider the grant in light of the answers provided by the Policy Committee. Mr. Portune asked if the three criteria outlined by ODNR are new policy requirements or was this part of the initial application? Mr. Aluotto stated that they were framed in the grant guidelines as guidelines i.e. application should not be a duplication of services, application should be of a significant financial determent to an existing business in the county. The controversy arises due to the opinions of how the guidelines are interpreted. Mr. Riddle stated that OPSC and Rumpke should answer the first two questions and the third question is more of a policy issue. Mike Murray from OPSC stated the following regarding "duplication of service": Commercial accounts have been contacting OPSC stating that they have mixed material that is currently going to the landfill. OPSC had been asked if they could accept this material. Without additional equipment to help in the sorting process, it is not cost effective to try and pull it out of the waste stream to recycle it. The bulk of the material is plastic mixed with corrugated boxes. Currently, nobody is recycling this material. Mr. Murray stated the following regarding "significantly impact Rumpke's recycling operation from a financial standpoint": OPSC is a very small company and the proposed equipment purchase is very minimal. Trying to compete with Rumpke with this sort of equipment is not feasible. OPSC is looking to have a way of better processing the material that is currently going to their facility and to go out and try and pull from the commercial waste stream. Mr. Portune asked Mr. Murray if he put the original grant application together. Mr. Murray stated no. Mr. Portune asked if Mr. Murray was familiar with the aspects of the grant application process. Mr. Murray stated that he knew it was very lengthy and that OPSC was pre-approved to move forward. Mr. Portune asked Mr. Murray if OPSC had been using a processing facility in Montgomery County. Mr. Murray stated that currently, OPSC is trucking the material to Dayton, Ohio at a high cost. Dr. Evert asked if the new equipment would preclude the need to ship the materials to Dayton. Mr. Murray stated yes and they would be able to process it on-site. Dr. O'Reilly asked what percent of the material was commercial and what percent was residential. Mr. Murray stated that without the proposed equipment, it was not feasible to collect commercially. Close to 90% is residential. Dr. O'Reilly asked who picked up the recyclables. Mr. Murray stated that OPSC had a contract to process CSI's corrugated, office paper, and co-mingled recycling. Dr. O'Reilly asked Mr. Murray if the new equipment was for the existing operation or for the commercial stream. Mr. Murray stated it was for both. Dr. Evert asked Mr. Murray to comment on the extent of the trucking operation that would be eliminated by the new equipment. Mr. Murray stated that roughly 100 tons of recyclables would not need to be transported to Dayton by purchasing the new equipment. Mr. Riddle asked if CSI was the only vendor using of the facility. Mr. Murray stated that along with CSI, Waste Management, C & D Waste, and a few small operators also uses their facility. Mr. Aluotto asked Mr. Murray to elaborate on the possibility of furthering the recovery of fiber by using the processing equipment. Mr. Murray stated there is a lot of corrugated that is contaminated with plastic, metal, wood, etc. which currently can not be processed at their facility without going through additional equipment. This new equipment has the capability to process it. Mr. Murray stated that OPSC does receive a lot of calls for this type of material. Mr. Portune stated that the grant, rather than allowing for a new market, is just supporting competition to an existing market. There is nothing new or unique about this service that OPSC is desiring to provide because it already is being provided by another provider. Mr. Portune asked Mr. Murray to address his statements. Mr. Murray gave a few examples to show that OPSC grant application is a unique service (plastic bottles wrapped in plastic on pallets going to the landfill, not having the capability to offer curbside, etc.). The equipment will be used more for the commercial end of the recycling process as opposed to residential. Mr. DiPuccio asked if OPSC was using the recovered paper stock to feed its own operation. Mr. Murray stated yes. Mr. DiPuccio stated that a few years ago, Federated Department Stores consolidated their recycling efforts and a major paper company took the recyclables. Is this what OPSC will be doing? Mr. Murray stated it was exactly what OPSC proposes to do. OPSC is looking for additional ways to increase their volumes. One way is to look at material that is marginally contaminated that can not be recycled in the form it is in and run it through the new equipment. This will help the commercial industries reduce their waste. Steve Sargent stated that he was the general manager of the recycling division for Rumpke. On behalf of Rumpke, Mr. Sargent stated he was at the Policy Committee Meeting to officially contest and formally oppose the grant application. The parameters of the grant application clearly states that OPSC's operation is outside of the grant application parameters. Mr. Sargent stated it is not an issue of competition. Mr. Sargent stated that Rumpke does not want this issue to cloud the relationship with the District. Rumpke and the District have had a great relationship and look forward to continuing the relationship. The State has set a precedent by wanting the local determination done at the local level. If one reads the grant application, it says that the Division will make the determination and the State has asked the Policy Committee to make the determination. Mr. Sargent gave background information on where the MDG funding originates. Mr. Sargent stated there are eight parameters listed in the application i.e. allowable expenditures, allowable materials, etc. The first parameter listed is "duplication of existing services is not allowed". "Projects that replace or duplicate existing recycling market activity will not be funded". If a project is funded and it has the potential to damage or have an economic impact on another existing project in that county, then it will not be funded. Mr. Sargent asked if the OPSC grant passed the litmus test of duplicating existing services in Hamilton County. Mr. Sargent stated yes. Mr. Sargent gave several examples of why they feel that the OPSC grant is duplicating existing services in Hamilton County. Mr. Sargent asked if the OPSC grant strengthened the market for post-consumer recyclables. It is important to define what is residential and what is commercial. Mr. Sargent gave an example of a previous grant they obtained in Franklin County and stated that Rumpke had to go through the due dilligence process. Mr. Portune stated concerning the issue of duplicating services that are already being provided, is it Rumpke's statement that Rumpke was able to demonstrate that there was no duplication of service in Franklin County. Mr. Sargent concurred. Mr. Portune stated that the difference between Franklin County and Hamilton County is that the target product as identified, whether it is being completely serviced or not, begs the question that if there is any service already provided toward that type of recyclable whether Rumpke is getting the whole market or not, constitutes a disqualification through ODNR's guidelines. Mr. Sargent stated that the focus must remain on the feedstock that feeds the system. If OPSC's conveying system takes the same feedstock and runs it through the process, then it duplicates Rumpke's service. Mr. Corman asked if the grant application took into consideration what percentage of the feedstock is being handled by any particular corporation. Mr. Sargent stated no. Mr. Corman asked if the grant offered any sort of incentive to be able to expand from one corporation to another. Mr. Sargent stated that ODNR will work very closely to try and partner the corporation with another. This happened with Rumpke in Franklin County. Mr. Portune asked if there was any parameters addressing negative impacts to an existing business. Is this how the guidelines are interpreted? If this is the case, can Mr. Sargent explain how a small incursion into an area that is already not being serviced would have an economic impact on Rumpke's operation. Mr. Sargent stated that the material is being serviced. Mr. Portune stated that he meant that the entire market isn't being serviced if Rumpke isn't taking all of the product. Mr. Sargent stated that the negative economic impact is when a public funded project comes on-line in your County and one begins to compete with public taxpayers money. Mr. Sargent reiterated his comment pertaining to the feedstock issue. Mr. Portune stated that Rumpke's position was that competition is fine but the purpose of the grant dollars is not to go into an area, in any fashion, and have the dollars be used in a competitive process. The dollars are there to deal with something totally unique and not being serviced. Mr. Portune stated that he understood that this would be Rumpke's policy position regardless but, Rumpke is stating that this is what the guidelines require. Its not just a policy position, this is what the grant requires. Mr. Portune stated that it was unfortunate that the Policy Committee did not have legal representation because the discussion is encroaching in areas where there are legal questions and asked if the District had received any Prosecutor's Opinion regarding this issue. Mr. Aluotto stated no. Mr. DiPuccio stated that there were eight parameters that ODNR uses in reviewing MDG's and the highest parameter is duplication of service; does the law state that this is an absolute obstacle that has to be overcome before they consider the grant? Mr. Sargent stated he could not refer to the law but it is listed on the front page of the second page of the application package. There is a list of adherences that one must stay within a certain parameter to be eligible to be funded. ODNR has put this to a local level to ask if this meets the parameters. Mr. Sargent stated that prior to the formation of solid waste districts, certified letters were sent to each private company that would possibly be in competition with the grant application entity and they were brought into a public hearing. This process was stopped because the State felt that this input was already involved in the process through districts. Dr. O'Reilly passed out copies of ORC 1502.01, 1502.03, and 1502.05 to the Policy Committee and explained the rules as they pertain to the ODNR MDG. Mr. Graham asked Mr. Sargent if it was fair to say that Rumpke does not pick up all recyclables and that some recyclables go to the landfill? Mr. Sargent stated yes. Mr. Graham asked how a duplication of service compares to expanding a market. If there are more recyclables and there is a company that has identified materials that are going to the landfill and this is going to help them divert that, it seems as though this is an expansion of the market. Mr. Sargent stated that Mr. Graham was correct but he was going beyond the issue. If OPSC wants to expand the market, they should use their own private dollars to do so. Mr. DiPuccio asked how many tons per day could Rumpke's MRF process. Mr. Sargent stated currently, they are at approximately 3,500 to 4,000 tons per month. Dr. Evert asked Mr. Sargent if Rumpke's MRF was not at processing capacity due to being underbid for the feedstock at this moment? Mr. Sargent stated yes that recently they have lost some contracts. Dr. O'Reilly stated that the grant money was not a tax dollar and that it was a fee dollar that we pay indirectly in our garbage. The grant money comes to ODNR as a fee dollar for the general revenues of the State. Dr. O'Reilly stated that his view that the general public is concerned that a lot of waste is going to the landfill that could otherwise be recycled and that the public wants recycling. Although the grant application is only for $100,000, it benefits the public in that it aids in competition. Mr. Riddle stated in using the guidance document that ODNR has put forward to qualify the grant is the issue he is hearing; how is the grant being qualified? Is the guidance document being used? Its not the competition and its not if there are markets available; the issue is administration of the grant. Mr. Aluotto stated that earlier there was a reference made concerning due dilligence and he wants to assure the Policy Committee from a Staff perspective, the District takesdue dilligence very seriously and the District puts a substantial amount of time into investigating grants from the standpoint of whether or not they meet the guidelines. Staff feels that the majority of these issues are issues that should be decided at the State level by ODNR. The District takes the time to realize that there are issues involved in each and every grant and the time needs to be taken to evaluate them; specifically in regard to the duplication of services issue. Mr. Aluotto stated that when OPSC's grant was received, the District saw an opportunity for recycling program efficiency and to access a supply of material that was not currently being served by present providers. Although he can see and respects Rumpke's side, this is how the District interpreted the guidelines. Mr. Portune asked how ODNR has looked at the guidelines in the past and what the law requires in terms of how it is looked at. Both of these questions seem to be important. Mr. Aluotto stated he could not provide any input regarding Mr. Portune's legal question but in terms of the ODNR's guidelines, ODNR has submitted this back to the District for clarification. Mr. Aluotto stated that he took that to mean that ODNR does not have experience in addressing issues such as the ones before the Policy Committee. With past grant applications, ODNR has never asked the District to decipher grant guidelines. ODNR wants the District's interpretation of the guidelines and he assumes that ODNR is going to make the final decision. Mr. Portune asked Mr. Aluotto what ODNR's timetable was concerning this issue. Mr. Aluotto stated that ODNR needs some sort of response by next week and if they do not receive something from the District then the grant application will not be considered. Mr. Murray stated that after hearing the comments, the main point is duplication of services. Mr. Murray gave an example of how their grant application is not duplication of services. Mr. Sargent stated that the grant application is all State dollars and there is not any local dollars involved and asked Mr. Aluotto if this was correct. Mr. Aluotto concurred. Dr. O'Reilly motioned to support the OPSC grant application. Mr. Graham seconded. Mr. Portune stated that the Policy Committee was in an uncomfortable spot due to not having the factual or legal background/advice to make a truly informed decision. This is a deficiency in the record that is before the Board. With all due respect to OPSC and Rumpke the Policy Committee really needs the independent advice from the Prosecutor's Office on what the law requires. Mr. Portune stated that there are two providers of service that the Policy Committee wants to encourage and welcome. The Policy Committee would like to see both of them grow and develop in Hamilton County. It is very regrettable that there is conflict between two providers of a service that is needed and is necessary. The Policy Committee is all about the business of expanding those markets and improving greater recycling of products in Hamilton County. Mr. Portune stated that the Policy Committee does not have any time to hold this issue over until May to try and obtain a Prosecutor's Opinion on the legal questions but it seems that ODNR will be acting before an Opinion could be secured. The following are comments from the Policy Committee members pertaining to the reason for their vote: Mr. Portune stated that what the Committee has is questions regarding how legal requirements,with respect to policy, may be in conflict with the law. As the chair, he is troubled with that issue without a clear answer. It is apparent to Mr. Portune that regardless of how the Committee votes, this will be an issue that will be debated at the next level. Mr. Portune stated that despite the fact he would like to see the Policy Committee move forward in this direction and despite the fact that he would like to have seen Hamilton County's largest provider taken a softer stance with respect to this issue. Mr. Portune stated that while he feels there may be a technical negative economic impact, it is difficult to conclude that the impact would be harmful to the business of the company but notwithstanding that, he does not see in his reading of the law that there is a de minimus standard. Mr. Portune stated that his read of the law and interpretation of the arguments, despite the fact that he would like to see public money used to have greater recycling done whether it is in competition or not, the strictures of this grant suggest that this particular type of grant and public money can not be used in that fashion. Mr. Portune stated that he could not support the motion. Mr. Aluotto stated that so the Policy Committee would know that there was an effort made, ODNR was invited to the Policy Committee Meeting to provide some clarification on some of the issues. Mr. Graham stated that he did not think the Policy Committee was making a decision regarding the award of the grant. The Policy Committee was not asked to do that nor is the Policy Committee a party to making a decision about the award of the grant. ODNR makes a decision about awarding the grant and happened to ask the Policy Committee's opinion. ODNR did not ask the Policy Committee to act in their stead, as their agent, rather they asked for an opinion. Mr. Graham stated that he concurs with the motion. Mr. Riddle stated that ODNR asks solid waste districts across the state to administer their guidance document which clearly asked the Policy Committee to look at the duplication of efforts, competition, and other issues. that ODNR is not aware of like the District would be. ODNR understands many of the issues but they do not understand the complexities that were explained during the meeting from both sides. Whether or not it is a legal issue or a Policy determination issue, it seems the question before the Board becomes "is the application administratively correct according to the guidance document ODNR asked Staff to look at?" Mr. Riddle stated that Staff did a great job at looking over the issue although may not have understood the implications of issuing the grant to markets already available. Mr. Riddle stated that he would agree that it becomes a legal issue or a administrative/legal issue on how the guidance document is administered. Whether or not the Policy Committee want to push the recycling efforts in Hamilton County, is it a technically proficient application? Listening to the arguments, the application, according to those guidelines, is not technically efficient or proficient. Dr. O'Reilly commended Staff on evaluating the grant and stated that the Policy Committee may be binding themselves to a guideline rather than a statute. Dr. O'Reilly stated that as the public representative, the thing that is right for the residents of Hamilton County is to have more competition and the grant would aid in that. Mr. Corman stated that the one thing that needs to be focused on is that the major intention of the Board is to encourage the recycling process and to expand on it in Hamilton County. Consideration should be taken regarding the issue of economic competitiveness. OPSC claims that this is strictly as a result of an attempt, on their part, since they do not have the facility locally, to be able to increase recycling to their existing clientele. To look at the argument that Rumpke made, and reversing that, the Policy Committee would be encouraging a company, or working toward, a situation where a company does not comply with what the Policy Committee/District wants. If the Policy Committee votes to not support the grant, the Policy Committee will be putting the message out saying that they do not agree with a company that would like to recycle what they are taking in. This would be going against the whole message that recycling is good. Mr. Corman stated as far as negative economic impact is concerned, are the requirements set by ODNR based on application or theory. Could it be a negative economic impact on a competitor-or is it going to be? Is there any proof? Mr. Corman does not believe that a one time grant would be an economic set back on any competition versus being an annual grant. Dr. Evert asked if the Policy Committee votes to support the OPSC grant, does OPSC and Rumpke have an opportunity to argue their case at the state level? Mr. Aluotto stated that he did not think there was a formal process that is set up but he is sure that ODNR's offices are open for private arguments, letters of support or objections could be registered at that level. Mr. DiPuccio stated that ODNR has asked the Policy Committee to interpret what duplication of services means; a criteria the Committee had no part in setting up and he does not think the Committee should have any part in judging it. This is ODNR's criteria/parameter. Rumpke has made some good arguments regarding the definition of duplication of services that they have an existing facility, they have been servicing this area, and likely take the materials that OPSC is continuing to take. OPSC's argument is a persuasive argument because they have an existing client base they are serving, they are materials that are not going go to Rumpke's facility and have not been going there, OPSC is talking about serving a niche market. Mr. DiPuccio stated that overlaying all of that is that Hamilton
County has seen an overall decrease in recycling rates. From that
perspective, Mr. DiPuccio stated that he was inclined to support OPSC's
grant application. Mr.
Portune Nay Mr. Corman
Aye Mr. Graham Aye Mr.
Ingram Absent It was decided that Staff would write a letter stating the Policy Committee's support of the grant, signed at the direction of the Policy Committee, with the minutes of the meeting attached.
VII. POLICY COMMITTEE MEMBERS' COMMENTS VIII. PUBLIC COMMENTS IX. UPCOMING DISTRICT MEETINGS The next Policy Committee meeting is scheduled for 2:00 pm on Thursday, May 9, 2002 at Hamilton County Department of Environmental Services located at 250 William Howard Taft Road. X. ADJOURNMENT The meeting was adjourned by acclamation at 4:27 pm. |
