2014 Annual Meeting Cross Insurance Center, Bangor.

2014 Annual Meeting

Cross Insurance Center, Bangor

2

WelcomeChip Reeves, MRC Board President

• MRC’s Mission– Affordable– Environmentally sound– Focused on the long-term

• Election Results– Ken Fletcher elected, Sophie Wilson and Josh

Reny re-elected, all to three-year terms.

2014 MRC Annual Meeting

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Treasurer’s ReportSophie Wilson, MRC Board Treasurer

FY 2014 Budget

FY 2014 Year-End Estimate

FY 2015 Proposed Budget

Municipal Dues Basis

2014 Tons 179,000 @ $1.25 $ 225,000.00 $ 224,000.00 $ 223,750.00

BHE Parity Deal Monitoring Agreement $ 57,000.00 $ 57,870.00 $ 58,000.00

Budget Stabilization Fund Transfer* $ 720,675.00 $ 748,197.00 $ 676,400.00

PERC Oversight Committee Reimbursement $ 10,000.00 $ 10,560.00 $ 10,000.00

TOTAL REVENUES $1,012,675.00 $ 1,040,627.00 $ 968,150.00

REVENUE


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EXPENSESFY 2014

BudgetFY 2014 Year-End

EstimateFY 2015 Proposed

Budget

Legislative Advocacy (PretiFlaherty) $ 55,000.00 $ 55,000.00 $ 65,000.00

Administrative Services (Ex. Director and Outside services) $ 209,495.00 $ 180,000.00 $ 180,000.00

Technical Consultant (CommonWealth) $ 122,180.00 $ 105,000.00 $ 125,400.00

Legal Services (Eaton Peabody-General) $ 15,000.00 $ 15,000.00 $ 15,000.00

Legal Services (Eaton Peabody-Specialized) $ 50,000.00 $ 52,000.00 $ 30,000.00

Audits (Loiselle, Goodwin & Hinds) $ 12,000.00 $ 11,500.00 $ 12,000.00

Insurance (general liability, D&O) $ 10,000.00 $ 8,900.00 $ 10,000.00

USAE Litigation $ 50,000.00 $ 60,000.00 $ 60,000.00

Contingency Fund $ 10,000.00 $ 4,200.00 $ 10,750.00

Subtotal Operations $ 533,675.00 $ 491,600.00 $ 508,150.00

Post 2018 Planning Activity

Legal & Property Acquisition Agent $ 143,000.00 $ 160,000.00 $ -

Fiberight Project Development & Engineering Services $ 134,000.00 $ 152,000.00 $ 300,000.00

Post 2018 Communications $ 69,000.00 $ 62,000.00 $ 60,000.00

Asset Option Purchase $ 63,000.00 $ 64,000.00 $ -

RFEI Process Evaluation $ 30,000.00 $ 52,000.00 $ -

UM Engineering Peer Review by Professors/Researchers $ 10,000.00 $ 20,000.00 $ -

DEP PBD processing costs $ 30,000.00 $ 39,027.00 $ -

Post 2018 Planning Contingency $ - $ - $ 100,000.00

Subtotal Post-2018 Planning $ 479,000.00 $ 549,027.00 $ 460,000.00

TOTAL EXPENSES $1,012,675.00 $ 1,040,627.00 $ 968,150.00


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Exciting NewsGreg Lounder, MRC Executive Director

• Location secured for a new processing facility.

• Agreement with Fiberight nearing completion.

• UMaine review of the technology.

• Working on solutions for facility residuals.


6

How Did We Get Here?Dan McKay, Eaton Peabody Attorney


2004• MRC permits joint exercise of MRC right of first refusal

allowing current PERC Partners to assume control and USAE to become general partner.

2007• MRC begins active monitoring of emerging MSW

technologies.

• Post-2018 planning continues with primary focus on PERC extension.

2008• Off-site meeting focuses on emerging alternative MSW

management technologies.

2009• MRC Board resolves that PERC extension is its preferred

post-2018 option.

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How Did We Get Here? (Cont.)


2010-2011

• MRC cooperates with USAE to effect PERC refinancing. Facilitates release of reserve funds to benefit PERC and USAE.

• USAE develops economic model for post-2018 operation. Brings economic feasibility of PERC extension into question with tipping fee projection of more than $110/ton.

• Other issues emerge (volume, GAT, out-of-state waste).

• MRC Board voices concern with pricing and other issues.

• MRC meets with Private Partners to discuss concerns with feasibility of post-2018 PERC extension.

• USAE informs MRC of PERC's intent to cease operations in 2018.

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2010-2011 (cont.)

• MRC Board begins to consider alternative post-2018 options while seeking to continue dialogue with USAE regarding PERC extension.

• USAE does not respond to requests for further dialogue.

2012

• MRC requests proposal from USAE to address pricing and other issues. USAE does not respond.

• MRC steps up evaluation of emerging technologies, requests joint evaluation. USAE does not respond.

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2013

• MRC continues to request USAE to participate in a joint evaluation of alternative technologies. USAE refuses, asserting without substantiation that there are no viable alternatives.

• MRC presents USAE with a comprehensive term sheet to address all outstanding partnership issues, including alternative technologies and potential extension of the PERC agreements beyond 2018. USAE does not respond.

• MRC invites PERC to participate in an RFEI process to solicit potential alternative technologies for the post-2018 period. USAE refuses.

• MRC issues RFEI. Receives numerous responses.

• Private Partners introduce L.D. 1483 in effort to gain government subsidies to support higher tipping fees.

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2013 (cont.)

• Hire lobbyists to promote. Assure MRC that lobbyists are being engaged by USAE and not at Partnership expense.

• USAE reneges. Bills Partnership for more than $750,000 in lobbying expenses incurred in 2013. MRC objects.

• USAE lobbyists begin organized effort to end run the MRC and lobby MRC Communities directly.

2014

• MRC files suit against USAE over lobbying fees.

• Lobbying efforts continue unabated at Partnership expense over MRC objections.

• PERC Holdings initiates effort to formulate plan to incorporate PERC into MRC's evolving post-2018 plan. MRC agrees to consider any reasonable proposal.

The Future of MSW Processing for the MRC

George Aronson, Commonwealth Resource Management

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MSW Management After 2018:Roles of Fiberight and the MRC

Fiberight Own, design, get permits for, finance, construct, start-up, operate and maintain, sell products, manage residuals

The MRC Own the site, lease land to Fiberight, agree to provide municipal MSW, help manage residuals, maintain oversight role

As landlord, the MRC has a clear basis for oversight


MSW Management After 2018:The Fiberight Facility

• Technology based on pilot plant in Virginia and equipment in MRFs and pulp mills

• Other plants will be in Iowa and Maryland

• Designed for 150,000 to 200,000 tons per year

• No out-of-state MSW accepted or needed

• Divert at least 80% of incoming MSW

• Send residuals to existing off-site landfills

2014 MRC Annual Meeting13

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MSW Management After 2018:Three Business Agreements

1. Site Lease: MRC leases site to Fiberight with site use restrictions and basis for oversight

2. Master MSW Supply Agreement: A contract between MRC and Fiberight that supports financing, insulates towns from liability, and simplifies management and compliance

3. Town Ratification Agreements: Agreements between the towns and the MRC on delivery of MSW to Fiberight


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MSW Management After 2018:Key Provisions

• Tip fees start under $70 per ton with rebates down to the $60s or even the $50s per ton

• Towns have delivery obligations, but the MRC has the only hard GAT (if needed)

• Towns can start waste reduction and enhanced recycling programs at will

• Towns can elect to send recyclables to Fiberight

• Initial term of 15 years from commercial operation date

• Full set of liability protections (milestones, defaults, etc.)


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How did we get here? Three Stages

2007 to 2013

Worked to extend the existing arrangement (with the private partners in PERC

2013 to 2014

Solicited and evaluated vendor proposals; chose to work with Fiberight

2015 to 2018

Complete development, construct and enter operation


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Stage 1: Extension of PERC

2007 Monitored emerging technologies

2008 Evaluated converting PERC to mass-burn and other retrofits

2009 MRC received first extension proposal concept. Board voted extension as preferred option after 2018

2010 Refined economic models. MRC issues of GATs, PERC scale-down, need for out-of-state MSW

2011 MRC received proposal at $110 per ton, with other issues: responded with 11-point letter


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Stage 1: Extension of PERC

2012

• MRC suspended efforts on extension until PERC private partners address the issues.

• MRC asked about joint evaluation of technologies.

• No response was received to either request.

• Partners indicated that PERC will likely close in 2018.


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Step 2: Solicit and Evaluate ProposalsJune 2013

• MRC issues Request for Expressions of Interest (RFEI); advertises for vendors and technologies

Aug. 2013

• MRC receives 13 responses, begins evaluation, visits five facilities

Dec.2013

• MRC identifies Fiberight as a leading candidate and detailed evaluation begins

2014

• MRC identifies nine potential sites

• MRC files PBD for two sites to host a landfill

• Maine DEP indicates PBD will not be approved


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Step 2: Solicit and Evaluate Proposals

2014

• MRC secures option on Hampden site

• MRC pursues other ways to manage residuals

• MRC retains University of Maine for peer review of the Fiberight technology

• MRC gives PERC private partners 90 days notice (to January 2015) to provide their proposal and address the issues identified in 2012


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Step 3: Overall Schedule

2015 • MRC will make exclusive commitment to preferred vendor and technology

• Apply for permits, develop infrastructure

• Negotiate agreements

2016 • Get municipal approvals

• Get permits, get financing, start construction

2017 • Construct facility and infrastructure

2018 • Start commercial operation


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Step 3: Events in 2015

Winter • MRC will make exclusive commitment to preferred vendor and technology

• Apply for permits, develop infrastructure

• Negotiate agreements

Spring • Fiberight applies for permits

Summer • Negotiate agreements

Fall • Finalize agreements to present at the 2015 MRC Annual Meeting in December


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Hampden Site IntroductionDenis St. Peter, PE

CES President & Senior Project Manager

• Centroid of MSW generated by MRC communities

• Town leadership support as host community

• Conforms with Town’s Comprehensive Plan & Zoning

• Enhances Town’s proposed development plans

• Significant distance from nearest residences

• Proximity to I-95 Exit

• Suitability of property - DEP siting requirements


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MRC Requests for the Towns1. Monitor MRC communications

2. Evaluate role in and needs for post-2018 system

3. Plan for Councils or Town Meeting to act on MRC proposals starting December 2015 (plan for warrant articles, etc.)

4. Give feedback on contents of agreements

5. Support MRC legislative positions


FOR MORE INFORMATION:

www.mrcmaine.org

Greg Lounder – MRC Executive Director207-664-1700 – [email protected]

2014 Annual Meeting Cross Insurance Center, Bangor.

Documents

mrc annual meeting

mrc board treasurer

budget fy

joint exercise of mrc

estimate fy

expenses fy

bangor slide

perc extension