Memo to SJ County on Orcas Recycling Services Proposal

To the San Juan County Council:

Thank you for devoting serious attention and time to the privatization plans for the Orcas transfer station.  We appreciate the responsibility you have undertaken, and share your sincere commitment to doing what’s in the best interest of our solid waste management system in both the short and long terms.

We understand that you have reservations about ORS’s ability to operate the Orcas Transfer Station. In this memo we would like to address those concerns:

1.      The County’s need to enter contracts quickly to avoid service disruptions.
Avoiding service disruptions has been the primary goal of County staff, and it is a very important goal.  Please understand that Orcas Recycling Services stands ready to launch the necessary transition operation immediately upon receipt of contract, whenever that may be. We would hope to have the County’ support in keeping the current onsite staff, as well as use of heavy equipment that is on site, under some type of lease agreement.

As to risk management in the awarding of contracts, we recommend you secure back-up contracts and out-clauses, in any case, to mitigate any perceived risks. We also support the idea that shorter term contracts may be deemed advisable, and the capital project investments may need to be delayed  to allow for these shorter contract terms.

2.     The respective vendor’s ability to negotiate a contract and begin services in a timely manner.

Orcas Recycling Services stands ready to launch the necessary transition operation immediately upon receipt of contract. The only significant concern we have is in regard to obtaining a transport/landfill contract on the mainland.

We are awaiting a bid for services from Idaho Waste Systems. We have it on good faith that they intend to offer us a deal for mainland transport and landfill service in the days ahead.

We believe that with the support of the County this segment of our solid waste chain would be easily obtained—perhaps even from Cimarron/Waste Management.

3.       The respective vendor’s solid waste experience.
ORS has cooperated with our neighboring transfer station for nearly thirty years.  Our plan is to retain current County staff at the site, for their expertise as developed over twenty years. We have also created an expert on-island management team. Please see attached ORS organizational chart.

Recently Orcas Recycling Services added solid waste management professional Dave Polis to our executive team.  Dave is known as an experienced and innovative solid waste manager. He has agreed to serve as Project Manager for at least the operational changeover year. See attached resume.

Several island professionals have recently joined the ORS team.  Each provides expertise to the operation in areas of concern:  financial management, legal services, permitting, solid waste management, and the efficient integration of recycling w/solid waste programs.

• David Polis – Solid Waste and Recycling professional with over 20 years of experience in the field.
• Jerry Noesen – Certified Public Accountant with substantial experience in the public and nonprofit sectors.
• Lawrence Delay – Local legal counsel.

4.       The respective vendor’s financial position.

It is our understanding in communications from Public works that a minimum of three months operating expenses in the bank is preferred.

You are familiar with our cash on hand (approximately $50,000), and the first $100,000 loan that has been made available to this project from Wendy Shinstine.  Recently we have secured another $50,000 low interest loan from islander Walt Corbin, bringing our available project funding to a minimum of $200,000 – and we expect more pledges in the days to come.

The 200k in cash and commitments is the equivalent more than six months of operating cash based on our projections. We are confident this will meet any needs we may have.

5.   Negotiations with the County to Design Two Economically Viable Contracts
ORS is actively engaged with County staff in negotiating for an economically viable contracts.  We believe that the best possible model where ORS manages the front-end, scales and tipping fees; and Cimarron manages trucking and disposal.

We believe this is the only viable two-party model. After looking at the staff-suggested model, in which ORS manages recycling and self-haul, we found the economics simply do not work. Dividing up the already limited revenue streams by allocating self haul garbage to ORS only creates two weaker systems and does not maximize the revenues present.

Garbage volume has gone down and will continue to go down. Using revenues, while they exist, to drive education and build better Recycle & Reuse systems will give us more options as a community down the road.

We welcome continuing dialog, and we are flexible and open to all other options (for splitting the revenues and services) which render ORS operations financially feasible.

Please see the most current numbers reflected in ORS-Self Haul & Z-Wall P&L Scenario_9232012.xls  attached.

Conclusion
There is general agreement that our proposed business model is the best long-term option, keeping jobs and in excess of $350k per year here in our community.  For that reason alone we will continue to ask for your support.

Sincerely,
Pete Moe, Board President
Orcas Recycling Services Board of Directors
Susan Malins, Errol Speed, Jared Lovejoy, Ian Harlow, Jeff Ludwig, Michael Greenberg

Cc:  Frank Mulcahey, Ed Hale, Russ Harvey, Randy Gaylord
We respectfully ask you to please have this letter read into the Council minutes.