Regionalization

Planning for Growth

Part of effective, responsible municipal waste management involves preparing for long-term, future growth. As LCSWMA's waste-to-energy (WTE) facility in Lancaster reached capacity, we had two choices for increasing waste processing capability: 1) expand our facility by adding a fourth boiler, or 2) regionalize municipal waste management services with Dauphin County by acquiring the SRMC.

In 2011, LCSWMA made the decision to pursue regionalization. This option is more cost-effective and offers less risk, as the SRMC is already permitted, functioning well and offered the needed capacity for future growth. Plus, its close proximity (only 18 miles from the Lancaster WTE facility) is ideal. We can grow into the available capacity as the volume of Lancaster County's waste stream increases, while also bringing our proficiency in waste management to Dauphin County and positively impact the local community.

Line Devider

Making a Wise Decision

Our decision to acquire the SRMC was not without extensive deliberation, as we reflected on the best course of action to prepare for the future waste processing capacity needs of Lancaster County; while also considering how we could provide a brighter future for the residents of Dauphin County and City of Harrisburg. We recognized that the common need for both communities was stability. Among the many benefits, regionalization establishes stable tipping fees for Dauphin County and the City of Harrisburg, while continuing this legacy for Lancaster County well into the future.

LCSWMA assembled a team, including several highly regarded independent consultants, to fully vet this initiative, including conducting a thorough due diligence investigation of the financial viability, environmental condition and long-term operational efficiency of the SRMC. Our goal was to ensure the facility could serve the waste processing needs of both Dauphin County and Lancaster County for decades to come.

The due diligence reports submitted by our independent consultants affirmed our assumptions that the SRMC is operating well and in full compliance according to environmental permits. Additionally, the SRMC is a self-supporting asset, which boasts a strong fiscal plan and
financial forecast.

Compliance and Environmental Assessment
Among the consultants hired to assess the SRMC, LCSWMA retained the services of the ARM Group Inc.—an earth resource engineering and consulting firm, specializing in environmental consulting, waste management engineering, and related industries—to investigate the current compliance status and conduct an environmental assessment of the WTE facility, including the ash landfills.

Operational and Engineering Assessment
LCSWMA also retained the services of HDR Inc.—a global firm providing architecture, engineering, consulting and related services—to perform an Independent Engineer's assessment of the operational performance and condition of the SRMC. HDR concluded that the facility is operating well and in compliance with all environmental permits and approvals needed to successfully operate the facility. Additionally, HDR confirmed that the upgrades (retrofit) completed by Covanta in 2009 proved to be a reliable method of energy recovery and its reliability will continue in the future. Regarding the condition of the facility, HDR affirmed that Covanta has maintained the facility in accordance to industry standards and, with LCSWMA's planned capital upgrades to the facility, will continue operating well for at least the next 20 years.

We understand that the history and political sensitivity surrounding the SRMC raised some questions and concerns from Dauphin County and Lancaster County residents about the long-term stability of the acquisition. However, it's important for residents, businesses and public officials of both communities to understand that LCSMWA's acquisition of the SRMC benefits both Dauphin County and Lancaster County. Rest assured that LCSWMA's history of successfully managing a complex waste system, including the Lancaster WTE facility, provides a solid foundation of knowledge and expertise that ensures our success in this regionalization initiative. We are excited to work with the Dauphin County and Lancaster County communities to build a stable, positive and more sustainable future for the Susquehanna Valley.

Line Devider

Preparing for a Brighter Future

LCSWMA invested several months in preparation of acquiring the SRMC, as well as its incorporation into our Integrated System. We will continue to make several adjustments in the months and years ahead, including improvements to both the WTE Facility and the entire SRMC site. Look for great things to happen now and in the future!

Permit Reissuance
Part of our preparations included applying for permit reissuance from the Pennsylvania Department of Environmental Protection (PADEP), which designates LCSWMA as the new holder of the solid waste permits for the SRMC. On August 12th 2013, LCSWMA filed the following applications and supporting materials to the PADEP:

Acquisition Agreements
To establish service expectations, detail financial arrangements and assure the long-term success of this regionalization effort, LCSWMA negotiated several agreements pertaining to the acquisition of the SRMC with The Harrisburg Authority, Dauphin County, the City of Harrisburg, Columbia Borough in Lancaster County, the Commonwealth of Pennsylvania's Department of General Services and Covanta Energy.

On August 29th 2013, LCSWMA's Board of Directors approved a series of resolutions authorizing and approving the execution of seven agreements:

Asset Purchase Agreement:
LCSWMA assumes permanent ownership of the SRMC from The Harrisburg Authority, clear of all debt and liabilities.

Delegation and Assumption of Capacity Assurance Responsibilities Agreement:
LCSWMA acts as the implementing governmental entity for the assured disposal and processing of all municipal waste generated in Dauphin County.

Cooperation Agreement:
LCSWMA and Dauphin County are cooperating to enable LCSWMA to generate the necessary financial resources to acquire, finance and operate the SRMC.

Assignment, Amendment and Restatement of Municipal Waste Disposal Agreement:
LCSWMA assumes The Harrisburg Authority's obligations for the disposal and processing of all municipal waste generated in the City of Harrisburg.

Intermunicipal Agreement for Lease of the SRMC Electrical Plant and Steam Sale and Purchase:
LCSWMA sells steam generated at the SRMC through the combustion of waste to Columbia Borough. Columbia Borough will then generate electricity for sale to the Commonwealth of Pennsylvania's Department of General Services.

Intergovernmental Power Purchase and Sale Agreement:
Columbia Borough sells the electric generated by the SRMC to the Commonwealth of Pennsylvania's Department of General Services.

Escrow Agreement:
A deposit escrow account, established with Fulton Bank, manages the $500,000 deposit required by the Asset Purchase Agreement.

Management and Professional Services Agreement:
LCSWMA entered into an agreement for Covanta Harrisburg, LLC to operate and maintain the SRMC.

Host Municipality Benefit Fee Agreement:
This agreement establishes the host fee paid by LCSWMA to Swatara Township concerning ash Landfill Area B.

To view all of the documents relating to LCSWMA's acquisition of the SRMC, visit www.lcswma-srmc.org