Marion County agrees to pay nearly double rates to Reworld incinerator in Brooks

Marion County has signed a six-month contract extension with Reworld Marion, which operates the municipal waste incinerator in Brooks, nearly doubling the amount per ton the county pays the company to take the county’s garbage.

The increase amounts to about $1.3 million over the term of the contract, which ends Dec. 31. The county plans to cover the additional cost out of its environmental services fund, rather than passing it on to garbage haulers and increasing customers’ rates.

The amendment extending the contract also eliminates any further guarantee that the incinerator will take the county’s waste, leaving residents’ future disposal rates up in the air.

New Jersey-based Reworld, formerly called Covanta, operates more than 40 incinerators in North America, Europe and the United Kingdom.

The company is struggling to continue operating in Marion County, Brian May, the county’s public works environmental services division manager, told county commissioners last month.

Reworld has not been able to process the amount of Marion County waste agreed to in its contract, May told commissioners. Last year, he said, it took only 96,000 of the 125,000 guaranteed tons.

In addition to municipal waste, Reworld holds private contracts to burn industrial and medical waste, at higher rates, at the Brooks facility.

Reworld also is struggling to comply with new state regulations that will better evaluate and possibly restrict the incinerator’s air pollution emissions, May said.

Those include former Gov. Kate Brown’s Cleaner Air Oregon initiative and 2023’s Senate Bill 488, which will require the company to continuously monitor the incinerator’s emissions for some toxins.

The new contract terms give the company some relief, May told commissioners.

“Most importantly for us, it allows Marion County and Reworld to address the future of incineration in Marion County,” he said.

Reworld officials declined the Statesman Journal’s interview request, saying the company does not talk about contracts.

Contract negotiations break down between Marion County, Reworld

The 38-year-old incinerator was built as a partnership between Marion County and Reworld.

Marion County issued $56 million in revenue bonds to build the burner, which is owned by Reworld. The county repaid those bonds with revenue from franchise fees, electricity sales and tipping fees, which garbage haulers pay to bring waste to the facility.

A state law passed before the burner opened in 1986 requires Marion County garbage collectors to take waste there.

In July 2021, Marion County left the partnership, signing a three-year contract that paid Reworld a flat fee to take a set amount of the county’s garbage.

The contract, which ran through June 30, had options for two five-year extensions, which would take it through June 30, 2034.

It’s unclear how or why the extension was scrapped.

The contract required the county to provide written notice of its intent to extend the contract at least 12 months prior to expiration, so by June 30, 2023. It required Reworld to then provide notice within 75 days of the county’s notice if it planned to end the contract.

County officials refused to tell the Statesman Journal whether either of those things had happened or provide other information about negotiations.

May told commissioners that negotiations over the extension broke down in late October 2023, when Reworld’s CEO came for a visit.

“(He) basically put it forward that they would not be able to continue with that amendment, that they had definitely some major financial restraints that were causing them issues and they would not be able to proceed,” May said. “That turned us back into new negotiations.”

Tipping fees Marion County pays Reworld nearly double

Under the new amendment, the amount per ton the county pays Reworld to take garbage will increase from $38.63 to $72.25.

For the next six months, Reworld will provide the county with 1,765.5 free tons of disposal per month, slightly reducing the total amount of the increase. County officials estimate the six month cost at $1,335,000.

That’s about the same amount as the $1.45 million penalty Reworld paid the county for not accepting the guaranteed amount of waste last year.

The contract, as well as the new amendment, requires Reworld to pay $49.95 for every ton of waste it does not process under the guaranteed minimum, which works out to about 10,416 tons per month. The penalty is paid monthly.

Haulers took the additional waste to the Marion Resource Recovery Facility, said Dennis Mansfield, the county’s deputy public works director. The county did not pay for its disposal but also did not collect the tipping fee on those tons of waste.

The facility, located a mile west of the incinerator, is owned and operated by the county's seven garbage haulers.

How Marion County says it will pay for the increase

All of the revenues and expenses connected with the incinerator go through the county’s environmental services fund, a special enterprise fund that doesn’t receive general fund or tax dollars.

The fund also pays to operate the environmental services department, which provides recycling and environmental education.

Since 2009, when the county paid off the bond to build the burner, the county has generally made more than it has spent on solid waste operations.

Instead of lowering tip fees, and by extension the rates residents pay for garbage service, county commissioners decided to sock the money away for future investments in the solid waste system.

The county also has used the fund for emergencies, including for repairs on the Courthouse Square building.

The environmental services reserve fund had $16.1 million as of June 30, 2023, according to the county’s most recent municipal audit. That’s up from $3.4 million five years earlier.

Marion County commissioners criticize state, lawmakers

At their meeting last month, county commissioners criticized the state Department of Environmental Quality and legislators for taking a hard line on air pollution from the incinerator.

They took particular issue with Sen. Deb Patterson, D-Salem, who introduced SB 488, which will require continuous monitoring of emissions for some toxins.

“Sen. Deb Patterson introduced legislation to require Covanta to monitor certain toxins with something that doesn’t even exist. There is no measuring system anywhere to allow them to do that,” Commissioner Danielle Bethell said.

“All she did was create harm and she did it in such a swift manner without real education behind kind of what that measuring could be,” Bethell said. “Now Marion County and our surrounding neighbors are going to be gravely impacted by this legislation.”

The bill was sponsored by nine senators and three representatives, including Rep. Tom Andersen, D-Salem. Following two public hearings and committee work sessions, it passed the Senate 17 to 8 and the House 34 to 21. Both Reworld and the Marion County Board of Commissioners testified against the bill, saying the facility's emissions already are subject to extensive testing.

“I know that almost everybody in Marion County thinks that the idea of turning garbage into electricity is really cool,” Commissioner Colm Willis said. “This does go to show that our legislators first need to do no harm. We need folks to be responsible over there. Otherwise, we get stuck with the mistakes.”

The facility is designed to burn about 187,000 tons of waste per year, generating up to 13 megawatts of energy, enough to power about 6,000 homes. Reworld sells the electricity to Portland General Electric.

“My hope is that Reworld can make some progress with DEQ and that cooler heads can prevail,” Willis said.

What happens if the incinerator closes or stops taking county waste?

Reworld has threatened to close the incinerator before.

In 2019, county and company officials said the incinerator could not continue operating unless the Oregon Legislature approved a bill providing the company millions of dollars in renewable energy credits.

House Bill 4049 would have allowed the incinerator to be certified under Oregon’s Renewable Portfolio Standard, which requires 50% of the electricity Oregonians use to come from renewable sources by 2040.

That renewable energy designation would have allowed Covanta to sell the electricity it produces at a higher rate.

The bill died in committee.

At that time, county officials said that if the incinerator closed, the county’s waste would go to Coffin Butte Landfill in Benton County.

Tracy Loew covers the environment at the Statesman Journal. Send comments, questions and tips:tloew@statesmanjournal.com or 503-399-6779. Follow her on Twitter at@Tracy_Loew