Q 20Q 20
The city of Portland Sanitation Department is responsible for the collection and disposal of all solid waste within the city limits. The city must collect and dispose of an average of 300 tons of garbage each day. The city is considering ways to improve the current solid-waste collection and disposal system:
The present collection and disposal system uses Dempster Dumpmaster front-end loaders for collection and disposal. Each collecting vehicle has a load capacity of 10 tons, or 24 cubic yards, and dumping is automatic. The incinerator in use was manufactured in 1962. It was designed to incinerate 150 tons every 24 hours. A natural gas afterburner has been added in an effort to reduce air pollution; however, the incinerator still does not meet state air-pollution requirements. Prison-farm labor is used for the operation of the incinerator. Because the capacity of the incinerator is relatively low, some trash is not incinerated but is taken to the city landfill instead. The trash landfill and the incinerator are located approximately 11 miles and 5 miles, respectively, from the center of the city. The mileage and costs in person-hours for delivery to the disposal sites are excessive; a high percentage of empty vehicle miles and person-hours are required because separate methods of disposal are used and the destination sites are remote from the collection areas. The operating cost for the present system is $905,400. This figure includes $624,635 to operate the prison-farm incinerator, $222,928 to operate the existing landfill, and $57,837 to maintain the current incinerator.
The proposed system calls for a number of portable incinerators, each with 100-ton-per-day capacity for the collection and disposal of refuse waste from three designated areas within the city. Collection vehicles will also be staged at these incineration disposal sites with the necessary plant and support facilities for incinerator operation and collection-vehicle fueling and washing, and with support building for stores as well as shower and locker rooms for collection and site personnel. The pickup and collection procedure remains essentially the same as in the existing system. The disposal-staging sites, however, are located strategically in the city according to the volume and location of wastes collected; thus, long hauls are eliminated and the number of miles the collection vehicles must travel from pickup to disposal site and back is reduced.
Four variations of the proposed system are being considered, containing one, two, three, and four incinerator-staging areas, respectively. The type of incinerator used in each variation is a modular prepackaged unit, which can be installed at several sites in the city. All of the four units meet state and federal standards on exhaust emissions. The city of Portland needs 24 units, each with a rated capacity of 8.5 tons of garbage per 24 hours. The price per unit is $137,600, which means a capital investment of about $3,302,000. The estimated plant facilities, such as housing and foundation, are estimated to cost $200,000 per facility. This figure is based on a plan incorporating four incinerator plants strategically located around the city. Each plant would house eight units and would be capable of handling 100 tons of garbage per day. Additional plant features, such as landscaping, are estimated to cost $60,000 per plant.
The annual operating cost of the proposed system would vary according to the type of system configuration. It takes about 1.5 to 1.7 MCF of fuel to incinerate 1 ton of garbage. The conservative 1.7 MCF figure was used for total cost, resulting in a fuel cost of $4.25 per ton of garbage at a cost of $2.50 per MCF. Electric requirements at each plant will be 230 kW per day. For a plant operating at full capacity, that requirement means a $0.48-per-ton cost for electricity. Two workers can easily operate one plant, but safety factors dictate that there will be three operators at a cost of $7.14 per hour per operator. This translates to a cost of $1.72 per ton. The maintenance cost of each plant is estimated to be $1.19 per ton. Since the proposal for three plants will require fewer transportation miles, it is necessary to consider the savings accruing from this operating advantage. For example, the configuration with three plant locations will save 6.14 miles per truck per day on average. At an estimated $0.30-per-mile cost, this would mean that an annual savings of $15,300 would be realized from minimum trips to the landfill. Labor savings are also realized because the shorter routes would permit more pickups per day. This plan thus offers an annual labor savings of $103,500 for three incinerators. The following table summarizes all costs, in thousands of dollars, associated with the present and proposed systems.
A bond will be issued to provide the necessary capital investment at an interest rate of 8% with a maturity date 20 years.
The proposed systems are expected to last 20 years with negligible salvage values. If the current system is to be retained, the annual O M costs would be expected to increase at an annual rate of 10%. The city will use the bond interest rate as the interest rate for any public-project evaluation.
(a) Determine the operating cost of the current system in terms of dollars per ton of solid waste.
(b) Determine the economics of each solid-waste disposal alternative in terms of dollars per ton of solid waste.
(c) Select the best alternative based on the benefit-cost ratio.