Sylvan Lake Town Council made a unanimous decision Monday night to enter negotiations with Fogdog Energy, who says they can eliminate the Town’s need for landfills.
Though negotiations are set to begin, this does not mean a contract is for sure. There are many conditions Fogdog will have to meet for a contract to be made.
“We won’t be doing anything until such a time as Fogdog can prove themselves to us,” said Coun. Megan Chernoff Hanson.
Fogdog does not have an established history in Canada, as it is a new venture. This is a concern for the staff and Council as there is no way to check references.
However, the company has given the Town a very detailed business plan.
Another concern is the system is only used in a small hospital north of Toronto. Town administration have no way of viewing and reviewing the system in use in a municipality within Canada.
“Staff desires the chance to see how it works in person and the talk to the municipalities that use the converter,” said John Watts, acting public works director.
To see the converter in use and to speak to the municipalities that use the technology would mean a trip likely to Europe, as it is used most heavily there.
The ability to see the converter in use would allow staff to understand how it can handle the intake of a municipalities solid waste (MSW), as well as what options are available should something go wrong.
The technology is also used on ships and with the military, Mayor Sean McIntyre pointed out.
A large concern for Sylvan Lake is what would happen if the machine was to break down, or should the company fold. The Town does not want to see solid waste collected and left sitting around.
“The ability of the Town to redirect the MSW from the Fogdog Energy facility to a landfill to receive the MSW from Sylvan Lake should the need arise [is a major concern],” said Watts. “A letter has been sent to the municipality operating the regional landfill requesting this option for the Town, but to date a reply has not been received.”
Another concern Town staff has raised is the “built-in redundancy” of the machinery, should a failure occur. However, the company has emphatically stated staff are trained for emergency repairs and spare parts will be available at the site.
There are benefits to have the system operating in Sylvan Lake. There is a long term savings for the town, Fogdog says it will create jobs, there would be no need to sort waste, and 98 per cent or more of MSW would be recycled.
“There is also the benefit that we would be creating an industry leading business model and demonstration facility for the management of solid waste in Sylvan Lake,” said Watts.
“We would be leading not only the province but the country.”
Staff estimated there would be a one-time cost to the Town, at approximately $730,000. This would include costs to repair 30 Street, develop the land, extend the Green Box program until the facility is up and running as well as legal review and other incidentals.
Based on an estimated saving of about $355,000 a year, the incidental cost would be repaid in roughly four years.
“We would be borrowing against ourselves to cover the one-time payment,” explained Economic Development Officer Vicki Kurz.
If the contract is approved, funding for the project would be provided from the capital reserve fund, or by “borrowing against the Town” from a qualifying reserve. This will be paid back once a positive financial return is achieved.
The facility will be located at the the Waste Transfer Site, if the contract is approved. It could be as small as half and acre or as large as two acres, depending on the needs of the company.
The contract will include as a base:
- Fogdog Energy provides the process plant and operates the facility
- Fogdog Energy pays the Town a lease for the and at market value
- The Town develops the site for use, at the Town expense
- The Town and Fogdog Energy negotiates a tipple rate that is not to exceed $100 per tonne
- The Town commits to provide Fogdog Energy with all suitable waste within its control, but with no minimum waste volumes required to be provided by the Town
- That the refinery for converting fluff is not located at the Waste Transfer Site
- That the contract term is of 10 years with a termination clause and a mutually agreed upon option to renew
- Fogdog Energy will carry the appropriate insurance coverage
- Fogdog Energy will arrange for a site visit by Town administration if desired, at the Town’s expense, of a similar facility using the same technology as that proposed wherever that may be. The site visit is to include contact with pertinent government officials and operations management
- Fogdog Energy will comply with all regulatory requirements, including federal, provincial and municipal acts, regulations and bylaws.
“We expect the contract negotiations will go pretty quickly. We will know within the next couple months if this is something we would like to go along with,” said Watts.
If the contract is approved, Fogdog Energy says they can be up and running six months after approval, which would put the facility open as early as the end of December or the beginning of January, 2019.