By Paul Gable
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 residuals above the 14.5% 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.
In October 2015, Horry County recyclables processed to the MRF amounted to 1,540 tons, according to HCSWA records. This equates to 223 tons of residuals, according to the historic 14.5%.
HCSWA records show a residual total of 1,157 tons from the processing of the combined Horry County and Charleston County amount of 4,387 tons delivered to the MRF.
Subtracting the 223 tons of residuals attributable to Horry County leaves 934 tons of residuals that should have established the residual amount to be shipped out of county.
According to HCSWA records, 300 tons of C&D were shipped out of the county in October. November had similar shipping of Charleston County trash to the HCSWA landfill.
It appears, at this point, that some Charleston County trash is going into the HCSWA landfill in violation of the instructions of Horry County Council.
There are still bugs to be worked out in the process that we are now five months into.
In the rush to get a contract in place with Charleston County by July 31, 2015, due diligence was not as extensive as it should have been.
All of the talk by HCSWA officials was how the contract would generate a profit for the authority. That is obviously not the case in the actual results to date.
I supported the contract when it was first announced based on the assumptions explained to me by HCSWA staff.
Obviously, I also should have done a better job of questioning those assumptions.