Contract No. 1992-43 Contract No. 92-43 Operation of Metals Program at LandfillITEM NO. 12.A.1.
F&I
Kodiak Island Borough
AGENDA STATEMENT
71c: llll.4 V1. UUMUCI 1, 1J
ITEM TITLE: Contract No. 92-43 Operation of Metals Program at Landfill,
SUMMARY STATEMENT Attached are cost summaries associated with the
processing of metals within the Kodiak Island Borough. Three options were
considered: Option 1: Processing of metals utilizing Kodiak Island Borough Staff and
Equipment at a cost of $159 per ton; Option 2: Award metal processing contract to
A -K Construction at a cost of $195 per ton and Option 3: stock pile metals at
Smokey's Metal yard for ultimate disposal in August, 1993, at a cost of $39 per ton.
In consideration of the cost effectiveness of all options available at this time, it is
recommended that all bids to process metals be rejected in favor of proceeding with
metal recycling Option 3.
FISCAL NOTES
[XI N/A Expenditure Amount
Required Budgeted
APPROVAL FOR AGENDA: 4� in �S
Mayor
RECOMMENDED ACTION: Move to reject all bids associated with the processing of
metals within the Kodiak Island Borough.
Kodiak Island Borough
..
Evaluation of Metals Processing Options
\- Engineering/Facilities Dept.
September 17, 1992
INTRODUCTION
A thorough evaluation of the costs associated with the processing of metals was
conducted by the Kodiak Island Borough Engineering/Facilities Dept. The
purpose of the study was to determine which metal recycling options would be:
most cost effective
most manpower efficient
most resource efficient
The study also examines the overall impact of metals processing activities on the
Borough's Baler/Landfill operation, and considers the option of stockpiling
metals for disposal in the Sring-Summer of 1993.
DATA
Table 1 is a summary of the anticipated costs which the Kodiak Island Borough
would incur if the metals processing operation were done by Baler/Landfill
Staff. One temporary or permanent full-time employee would need to be hired
if the Borough were to process metals. Table 2 presents an analysis of the
anticipated activities of a full-time temporary worker (75% time) devoted to the
processing of metals.
The KIB Engineering/Facilities Dept did solicit proposals from qualified firms
to process and ship scrap metals. Although there was much interest in the
project from the private sector, A -K Construction was the only firm to submit a
bid. Their bid was $195 per ton.
The cost estimate comparisons between A -K Construction and KIB used the
metals processing RFP as a foundation. Additional research by KIB staff was
conducted to determine the actual costs of accepting, processing and
transporting different metals.
The Kodiak Island Borough is also working earnestly to assemble and
implement plans to remove large amounts of scrap metal which reside within the
Kodiak Island Borough. This complex project will remove scrap metals from
Smokeys Metal Yard, the Coast Guard Base and any other entity which have
scrap metal they are wishing to dispose of.
TABLE 1.
FILE: MTLCOSTS.WK1 8/27/92
RET
(35,411)
(89)
(35,411)
(89)
5.
EQUIPMENT, REPAIR/MAINT
VARIABLE
(15)
UNIT
(15)
6.
EQUIPMENT, PURCHASE COST (6)
(11,000)
(28)
TOTAL TONS: (1)
400
PER
YEAR
2,400
6
8.
DUMP FEE:
30
PER
TON
(10)
9.
TRAINING/SAFETY
(1,000)
(3)
MARKET VALUE:
50
PER
TON
ANNUAL
REVENUES
ANNUAL
COSTS
ANNUAL TOTALS
SHIPPING: (2)
53
PER
TON
_________________
NOTES:
(1) ESTIMATED ANNUAL TONNAGE
NET
NET SALES
NET
COST
NET SALES NET PER
DESCRIPTION
SALES
PER TON
COST
PER TON
OR (COST) TON
1. VALUE OF SCRAP
METAL
(4) SEE NOTE (2) ABOVE
20,000
50
20,000 50
2. DUMP FEE REVENUE (3)
3. SEALAND FREIGHT (4)
12,000 30 12,000 30
(21,333) (53) (21,333) (53)
4.
LABOR (5)
(35,411)
(89)
(35,411)
(89)
5.
EQUIPMENT, REPAIR/MAINT
(6,000)
(15)
(6,000)
(15)
6.
EQUIPMENT, PURCHASE COST (6)
(11,000)
(28)
(11,000)
(28)
7.
PARTS REVENUE (7) 2,400 6
2,400
6
8.
UTILITES/TOOLS/DRUMS
(4,000)
(10)
(4,000)
(10)
9.
TRAINING/SAFETY
(1,000)
(3)
(1,000)
(3)
10.
IMPROVEMENTS (8)
---------
(18,875)
-------- ---------
(47)
(18,875)
--------
(47)
---------
--------
NET GAIN (LOSS) 34,400 86
(97,620)
(244)
(63,220)
(159)
NOTES:
(1) ESTIMATED ANNUAL TONNAGE
(2) BASED ON $800 PER FLAT(QOUTED RATE) AND 15 TONS
PER FLAT
(3) BASED ON FLAT RATE @ $30 PER TON x 400.
(4) SEE NOTE (2) ABOVE
(5) BASED ON ONE FULL-TIME TEMPORARY EMPLOYEE (758 TIME)
WITH 338
ADMIN
.FEE PLUS
ASSISTANCE
ASSISTANCE OF ONE WORKER @ ONE HOUR PER DAY
(6) PURCHASE OF EQUIPMENT @ $110,000, AMORTIZED OVER
10 YEARS
(7) BASED ON $2.50 PER RADIATOR, ALTERNATORS $4, STARTERS
$4, CAT
CONVERT $4,
DISTRIBUTERS $1, POWER STEER PUMPS $2, AC PUMPS
(ROTARY) $5
..
(8) METAL PROCESSING IMPROVEMENTS (STRUCTURAL SHELL)
Kodiak Island Borough
TABLE 2.
Analysis of Duties of Personnel
TASK
I. Processing vehicles
2. Packaging batteries
3. Processing other metals
4. Handling misc fluids (1)
5. Servicing Equipment
6. Administrative
7. Training
8. Contingency (3)
NOTES:
TOTAL
EST LABOR
TOTAL
HOURS
UNIT
PER UNIT
TONS
2.0
TONS
2.0
TONS
3.0
GALS
0.3
HOURS
0.8
HOURS
1.0
DAY
1.0
HOURS
--
TOTAL
TOTAL
TOTAL
EST QUAN
EST HRS
EST WEEKS
PER YR
PER YR
PER YR
300.0
----
600.0
--------
15.0
25.0
50.0
1.3
100.0
300.0
7.5
1,000.0
250.0
6.3
150.0
120.0
3.0
100.0
100.0
2.5
2.0
2.0
0.1
--
0.0
0.0
1,422.0
35.6
(1) 300 GALLONS CRANKCASE OIL, 100 GALLONS ATF, 600 GAL ANTIFREEZE
(2) ACTUAL AVAILABLE, HRS--> 1422 DAYS--> 177.75 WEEKS--> 35.6
(3) ESTIMATED TIME NOT OBLIGATED TO A SPECIFIC TASK
Kodiak IslandFarough
Evaluation of Metals Processing Options
Kodiak Island Borough Engineering/Facilities Dept.
Page 4
Based on information gathered to date, the following three options are presented
as follows:
OPTION 1
Process Metals Utilizing Kodiak Island Borough
Staff and Equipment.
a. this option requires hiring of one full-time temporary
employee (3/4 time) and the use of another existing staff
member for five hours per week.
b. option 1 requires the capital purchase of loader or
equivalent piece of equipment, estimated cost to be
$110,000.
C. this option does include building improvement costs
required to justify the hiring of additional staff. Building
improvement costs add a minimum of $47 per ton to the
cost figure.
the cost per ton figure does not include reasonable profit.
e. this option does not include any unforeseen costs
associated with the metals processing operation.
f. does not include the costs of KIB staff handling batteries
and fluids
ESTIMATED TOTAL ANNUAL COST: $63,220
ESTIMATED TONNAGE PROCESSED: 400
NET COST TO BOROUGH: $159 per ton
Evaluation of Metals Processing Options
Kodiak Island Borough Engineering/Facilities Dept.
Page 5
OPTION 2
Award Contract to A -K Construction to Process Metals.
a. option 2 includes overhead and profit.
this option does not include the indirect costs associated
with borough administration of the contract. This cost is
estimated to be $3.00 per ton.
C. no additional improvement costs are required to begin
processing metals
does not include any unforeseen costs associated with the
metals processing operation.
e. does not include KIB staff handling batteries and fluids.
ESTIMATED TOTAL ANNUAL COST: $80,800
ESTIMATED TONNAGE PROCESSED: 400
NET COST TO BOROUGH: $195 per ton
Evaluation of Metals Processing Options
Kodiak Island Borough Engineering/Facilities Dept.
Page 6
OPTION 3
Stockpile metals at Smokeys Metal Yard for
ultimate disposal by August, 1993.
a. all metals which have accumulated at Smokeys Metal
Yazd, the U.S. Coast Guard Base and any other location
would be shipped to recycling site for processing.
b. no capital outlays for equipment or building improvements
are necessary.
C. this option utilizes Smokeys Metal Yard to temporarily
store metals until cleanup in late Spring.
d. due to economies of scale, removal of metals will be
considerably less costly. This plan allows for the
excepting of metals from the entire community for the
least cost.
NET PROJECT COST TO BOROUGH: $135,000
ESTIMATED TONNAGE PROCESSED: 3,500-4,500
NET COST PER TON: $30 to $39
Evaluation of Metals Processing Options
Kodiak Island Borough Engineering/Facilities Dept.
Page 7
DISCUSSION
Option 1:
Should the Borough decide to process metals full time in-house, the following is
required:
hire one full-time temporary employee
purchase one piece of equipment
build/improve a structure to allow for processing during
inclement weather
Option 2
Should the Kodiak Island Borough award the metal processing to A -K
Construction, no special accommodations are required. Based on available
information and the consideration of risk involved with the project, the bid
submitted by A -K Construction appears fair and reasonable. The contract
duration would be for one year from the commencement of the contract.
Option 3
There is no question this option is the most cost effective alternative for the
disposing of metals. For an additional $60,000 (estimate), ten times the metal
can be processed and shipped if funds earmarked for Options 1 or 2 were
appropriated to a mass metal removal project.
In order to maintain public safety, accommodate code enforcement orders and
generally provide an alternative for the removal of junk nuisances, metals would
be stock piled at Smokeys Metal Yard. For the next 6 months, the public and
private sectors would be informed and invited to participate in the metals
disposal project slated for Spring, 1993.
Since the winter months are approaching, the quantities of metal requiring
disposal is anticipated to be slow. In addition, State and Federal OSHA
standards and the manpower inefficiencies associated with the processing of
automobiles during inclement weather does not fully justify the hiring of an
employee. Accumulation of metals would not be expected to increase
significantly until Spring when much of the community begins to dispose of
junk and other waste materials.
Evaluation of Metals Processing Options
Kodiak Island Borough Engineering/Facilities Dept.
Page 8
SUMMARY/RECOMMENDATIONS
The following is recommended:
Construct the security fence at Smokeys Metal Yard to prevent
unauthorized access to the facility. Installation costs, $70,000.
2. Begin diverting all ferrous scrap metal to Smokeys Metal Yard.
Advance notice must be given to the Kodiak Island Borough prior
to disposal of metals. All metals which accumulate at this yard
through the winter months will ultimately be shipped off Island
by August, 1993. .
3. Use KIB equipment and staff currently available in-house to
process ferrous and non-ferrous metals which currently reside at
the baler/landfill facility. Track actual costs associated with
metals processing.
4. Continue to receive only non-ferrous metals at the baler/landfill.
Utilize existing KIB equipment and staff to process and ship non-
ferrous metals to appropriate markets. Establish a long-term non-
ferrous metal recycling program at the baler facility.
KIB continues to accept and process lead -acid batteries at the
baler facility.
6. Evaluate long term ferrous metal processing capabilities, options
and costs based on experience received over the next 8 months.
7. RFP for scrap metals processing in June 1993.
Fiscally plan for anticipated expenditures associated with metals
processing (budget year 1993-1994).