Tag: residuals

HCSWA Moves to Cut Charleston Losses

The Finance Committee of the Horry County Solid Waste Authority board heard Thursday of moves to cut the losses the authority has sustained from its deal to process Charleston County recyclables.

According to HCSWA staff, Charleston County will pay the cost of transportation of its recyclables to Horry County for November, December and January in an attempt to allow the HCSWA to recoup its current losses.

In addition, any amount above 14.5% of residuals will be shipped back to Charleston for disposal.

But, even if the excess of 14.5% is shipped back to Charleston, that won’t solve the other key assumption in the contract that must be met if the HCSWA is ever going to turn a profit from the deal.

Every ton of recyclables above the 14.5% residual threshold means lost revenue that is needed for a profit to be realized.

The estimated profit of $1 million per year is based on a residual rate of not more than 14.5% and the ability to realize an average of $135 per ton revenue from the remaining 85.5% of recyclables processed.

One other problem is the amount of recyclable waste going to the HCSWA landfill.

Horry County Council made it specifically clear that it did not want any Charleston recyclables going into the HCSWA landfill. That space must be saved for Horry County trash and extended as much as possible.

The HCSWA told council it had an arrangement to send C&D waste out of the county in an amount equal to the excess recyclable residual amount realized. This was an airspace neutral arrangement.

The HCSWA claims a historic 14.5% residual rate for recyclables from Horry County.

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HCSWA Charleston Recycling Review

The HCSWA recycling processing of Charleston County trash is now three months old and the results are not what were projected, at least yet.

Through the process to get Horry County Council approval of a contract between the Horry County Solid Waste Authority and Charleston County to allow the HCSWA to process Charleston County recyclables, a projected profit from the contract of $1 million per year for the HCSWA was often repeated.

According to numbers presented by HCSWA officials to the Horry County Infrastructure and Regulation Committee, through the first three months that the authority has processed Charleston County recyclables, the HCSWA material recovery facility (MRF) operations have lost approximately $133,000.

It’s been 50 years since I took Calculus I, but a $133,000 loss in the first quarter of operations did not then, and does not now, project out to a $1 million profit at the end of the year.

HCSWA executive director Danny Knight spoke of the necessity to replace three belts and 30 rollers in the recycling equipment. Knight said the maintenance replacement of this equipment was overdue and now became necessary because of the increased load of recyclables being processed at the MRF.

The HCSWA also obtained a new, larger front end loader for the MRF because of the increased material.

Those costs appear to be amortized over the life of the equipment so no large, upfront cost is included in the above numbers.

The excess cost problem appears to be in the amount of residuals being experienced.

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