Landfill Economics

1
Landfill Economics
2
Landfill Costs

• Each landfill is unique
• Costs are increasing
• Operation costs are 60-80 percent
• Engineering 5
• Equipment 18
• Think in unit terms
• tons, yards, days, the value of airspace

3
Preparing a Budget

• Valid part of well run site
• Look at where you want to go not where you have
  been
• Starts with Characterization
• Two types of costs
• Capital
• Operating

4
Capital Costs

• Amortized over time
• Includes
• Building
• Land
• Equipment
• Large up front costs
• Expressed as cost per ton

5
Operating Costs

• Refuse handling
• Labor and equipment
• Daily, intermediate and final cover
• Maintenance
• Litter control
• Training and safety
• Administration
• Leachate and landfill gas

6
Airspace Management

• How to Value Airspace
• Cost-based Method
• Revenue-based Method
• Market-based Method
• Measuring your sites Available Airspace
• Tracking Airspace Usage
• How to Contain Common Airspace Leaks

7
Valuing Landfill Airspace

• More Factors Affecting the Value of Landfill
  Airspace
• Competition
• Future Costs
• Remaining life
• Local Economy
• Ownership

8
AIRSPACE IS THE LIFE OF A LANDFILL

• Based on the tipping fee, how much is airspace
  worth here?

9
Revenue-Based Method

• How much revenue could you generate by selling a
  cubic yard of airspace?
• 43/ton
• / 2,000 lb/ton
• x 1,200 lb/cy
• 25.80/cy

10
Cost-Based Method

• Land Cost
• Permitting Cost
• Design Cost
• Construction Cost
• Liner
• LCRS
• Cap
• Gas Control

• Monitoring Cost
• Closure Cost
• Financial Assurance
• Post-Closure Cost
• Operating Cost
• ...all divided by total yards

11
Market-Based Method

• Tonnage is related to tipping fee.
• What will the market bear?
• Cost maps tell the story.

12
The Right Method

• Cost-Based Method
• Determines minimum charge to break even
• Used for bidding Budgeting
• Revenue-Based Method
• Shows Potential (max) Income based on Tipping Fee
• Very Applicable for Sites w/ limited capacity
• Market-Based Method
• To Predict Competitive Range of a Landfill

13
Cost Based Approach

• Based on cost
• Total all costs and add profit
• This is your tipping fee
• May need to be competitive
• Market may dictate actual tipping fee

14
Market Based Approach

• Fees must be competitive
• Charge what ever the market will bear
• Still must recover costs
• The more money you make opens the door for
  competition.
• Also think of yourself as your own competition.

15
Calculating the Value of Landfill Airspace

• Formula Tipping fee x density
• 2,000
• Where Tipping fee is in per ton
• Density is in pounds per cubic
  yard

16
Team Exercise

• Determine the value of air space for a landfill
  with
• Tipping fee 39.50/ton
• Density 1,200 pounds/cu yd
• Are there other considerations?

17
Answer

• Formula Tipping fee x density
• 2,000
• Where Tipping fee is in per ton
• Density is in pounds per cubic yard
• 39.50/ton x 1,200 pcy 23.70/yd3
• 2,000

18
How to Improve?

• Good isnt good enough anymore
• All landfills compete
• with other landfills for business
• with other community needs
• with themselves
• with customers
• Large landfills will probably end up with
  majority of garbage and revenue.

19
Re-Engineering Your Site for Increased Efficiency

• Site Plan Review
• Rerouting Utility Right-of-Way
• Raising Final Grades
• Lowering Base Grades

20
Re-Engineering Your Site for Increased Efficiency
(cont)

• Operations Reviews
• Water Truck Time Study
• Collector Time Study
• Dozer Time Study

21
EvaluateEvaluateEvaluate

• Adjust operating hours
• Determine optimum conditions
• Compaction
• Use good garbage
• Monitor soil placement
• Use soil budget
• Change perspective
• Be creative

22
Be Creative

• Can you increase density
• Recompaction
• Mining
• Surcharging
• Steeper perimeter slopes
• Consider sliver lifts
• Increase production

23
Understanding the politics

• Most Landfills have Political Consideration
• Marketing and Competition
• Marginal costs and Profit
• Political jurisdictions as customers

24
Crew Development

• Training Programs
• Staff Meetings
• Cross-Training
• Communication
• Teamwork becomes a priority only when you make it
  one

25
Do Some Marketing

• Political Video
• Used to educate political decision makers, the
  public and customers

26
Promoting Your Landfill to Your Community

• Its A Dump until you change the Image
• Provide tours
• Make for positive media exposure
• Respond quickly to public need
• Be your own biggest supporter

27
Dozer Productivity

• This graph shows the productivity of a D8 Dozer.
• Push short.

28
Production Economics

• Landfills are under lots of pressure
• Financial
• Competition
• Regulatory
• Environmental
• Liability
• You must learn to do more with less

29
Establish Benchmarks

• Compactor tons/hr
• Dozer tons/hr
• Equipment maintenance
• Tons of waste vs. No. of operators
• Cost per ton
• Diversion vs. No. of workers

30
Develop thumbnail budget

• Equipment
• Labor
• Materials
• Use to track landfill financial performance on an
  on-going basis.

31
Operations Audit

• Audits People usually think of audits as
  something negative
• IRS
• OSHA
• Not all audits are negative. Like diamonds were
  to Marilyn Monroe audits can be a landfill
  managers best friend

32
These Tools Save Money

• Time Studies Unit Changing
• Using these tools, I've seen landfills save
  literally millions by making what are sometimes
  simple operational changes. In many cases, this
  type of evaluation can be performed by a
  landfill's on-site personnel for a minimal cost
• Here are some examples

33
Time Study

• A "time study" breaks simple, everyday tasks into
  their basic components, and then measures the
  time spent performing each one. To perform a
  time study, we'd watch a person or machine for a
  short period of time (i.e., a day or a week) and
  record the time they spend performing each task.
  The result is a table that lists the time spent
  on each task. Doing this often provides landfill
  managers with a new perspective in regard to the
  importance (or insignificance) of specific tasks.
  

34
Making Salad

• how much time cutting up carrots over 50-years?
• 3minutes x 7days x 52wk x 50yr
• 54,600 minutes
• 910 hours
• 38 days!
• ...maybe you should consider buying a food
  processor...!

35
Commuting to Work

• how many miles over 40-year career?
• 60miles (round trip) x 5days x 50wk x 40yr
• 600,000 miles...!
• _at_ 0.30/mile, this costs you 180,000
• _at_ an average 40 mph, it takes 1½ hours
• 15,000 hours
• 1.7 years...!

36
Watching Television

• how many hours watching?
• 3hrs x 365days x 60yrs
• 65,700 hours
• 2,737 days
• 7.5 years!

37
Working Hour Summary
38
Utilization Summary
39
Unit Changing

• UNIT CHANGING The unit change approach takes
  basic landfill tasks or cost items and looks at
  them using units which are different than those
  typically used. Again, this can provide landfill
  managers with a fresh perspective.

40
Cutting Edges

• I once knew a manager who spent LOTS of time
  looking for the best deal on cutting edges.
• He found it and saved 0.43 per day!!
• Focus on important things.

41
Gatehouse Attendant

• how much money does the gate attendant handle
  over a 20-yr career?
• 200tons x 260days x 35 years x 39.50/ton
• 71,890,000 ...yes, 72 million...!

42
Economics of Open Days

• Not all days are equal in terms of tonnage,
  revenue or cost
• In fact, some days simply dont pay
• Many landfills make money all week and lose money
  on the weekend

43
Subsidize to Haul Out

• Some landfills find that its more economical for
  them to close on certain days except for 1 or 2
  commercial loads that come in.
• As an alternative, consider closing and paying
  the trucks (a subsidy) to go elsewhere
• Is it best to pay 100 or lose 500?

44
Consider Boxes vs. Landfill

• Sometimes opening the Landfill costs more than
  closing itdozer, operator, soil, etc
• But, politically the site must be open.
• Consider setting up boxes near the gatehouse.
  Store the waste overnight and dump it at the
  landfill the next day.
• This can even work on weekdays

45
Staff Meetings (1)

• Implement regular staff meetings between
• Landfill staff
• Engineering
• Management

46
Staff Meetings (2)

• Staff meetings should address issues like
• site development
• soil management
• benchmarks
• budgets
• diversion
• new projects
• regulatory compliance

47
Conduct Operations Training

• Cross-training (Transfer Station - Landfill)
• Field trips to other facilities
• Training on specific topics
• Job-swapping (mgr - oper - engr)

48
Build on your Strengths

• Every landfill has some strengths and some
  weaknesses.
• Rally your strengths and work to improve what you
  can
• Chinese Table Tennis Team

49
Open Forum / Discussion

• What do you think about what weve been
  discussing?
• Can you apply this to your Landfill?
• What other questions do you have?