Cost & Benefit of a new Nanaimo Recycling Exchange

The following information was provided by the Nanaimo Recycling Exchange to share with the community.

This is a summary of key parts of the NRE business plan that will be presented to city council on June 11th. The full business plan will be posted on this website and the Nanaimo Recycling Exchange website once it has been received by city council.

Facility Vision:

Here are some of the highlights you can expect from the new Nanaimo Recycling Exchange facility and operation:

  • A convenient one-stop drop location where you can bring all your recycling, including hard-to-recycle items that other depots do not accept.
  • A recycling facility that is designed to meet the growing and changing recycling needs of Nanaimo, ensuring that the items you bring stay out of the landfill and reach their intended recycling end-points regardless of the cost.
  • A community hub for sustainability promoting Zero Waste through public outreach programs, education, advocacy and research.
  • A place to bring your re-usable and repairable items to be re-sold in the community for the purpose of funding further Zero Waste recycling and community non-profit initiatives.
  • A place designed for a safe, clean and pleasant experience that provides first class service for your residential and small business needs.
  • A facility designed to meet the highest safety standards in the collection of hazardous and toxic household materials, so that you can be certain they are dealt with responsibly and will not contaminate the environment.
  • A place you can feel proud of. We can set an example for other communities by investing in a facility that will, through continued education and innovation, significantly reduce the amount of waste we generate and create a cleaner, healthier community for our kids.

Affordability:

The Nanaimo Recycling Exchange has already contributed 1.5M towards the development of the new facility that will be located at 2491 Kenworth Rd. The NRE will continue to pay for the mortgage of the land at an annual contribution of $120,000/year on the 1.1M remaining on the mortgage. To cover the 6.05M for the construction of the facility, the city is being asked to pay the annual debt servicing on the construction loan through a grant. The city would contribute an estimated $467,000 annually for 25 years based on a 6% loan. Although the decision of where the funds would come from resides solely with council, a city report put the annual per capita cost between $10-15 per household if the source of funding is from property tax or sanitation user rates. That is 80 cents – $1.25 a month per household for a new Nanaimo Recycling Exchange.

In the unlikely event the new Nanaimo Recycling Exchange did not thrive, the entire facility and land would revert to the city to recover costs.

Facility Costs:

The new facility is designed with the utmost cost effectiveness in mind while still meeting all the municipal and provincial codes necessary for a modern recycling facility necessary for safety and environmental protection. Although this facility is designed for a leading edge material recovery operation, the buildings themselves are simple in order to keep construction costs down.

Building Cost Breakdown:

Escalation & Contingencies

Total Cost
$6,053,488.11

Notes:
1) Above estimate excludes GST (Nanaimo Recycling Exchange is registered charity and all GST is returned)
2) Market escalation is calculated at 1% per month from the time the original estimate was prepared on 2017.08.15, assuming a construction start in 2018.08.15

NRE Operating Costs, Revenue and Interim Funding Requirements

The Nanaimo Recycling Exchange is a non-profit society providing a community service, all surplus revenue is returned to the organization to cover operating costs. Yearly operating expenses on the previous site were in the range of $1M. Revenue was typically in range of $1M to $1.2M. Because of process delays the NRE was not able to build the new facility and relocate without disruption to services and therefore revenue. Nanaimo Recycling Exchange operational reserves were depleted to pay severance and vacation pay, and the large costs of demolition of the old site which was planned to come from the construction loan for the new facility. These circumstances have resulted in the NRE requiring interim funding to pay for the mortgage on the property for the new facility while construction is being completed and while there is no operational revenue. In addition, start-up operational costs are required for 3 months of operation, while the NRE waits for its accounts receivables to return and provide the regular operational revenue. Interim mortgage requirements till the projected September 2019 opening would be $170,000. Start-up costs while accounts receivable are waited upon to return are in the range $270,000. There are other costs involved over the interim, if it is desired to have an Nanaimo Recycling Exchange educational presence, and to have an organizational presence to provide construction oversight. These costs are still being finalized and will be presented in the business plan.

Benefits to the Community

Environmental

  • 90% diversion becomes reality
  • One-stop convenience increases diversion
  • State of the art liquid waste collection facility prevents pollution
  • Upstream waste prevention: reduces downstream garbage
  • Addresses the problem of plastic

Economic

  • Preserves life of landfill
  • Green footprint promotes a green economy
  • Zero Waste is good for business
  • Normalizes 0% contamination and increases market demand for Zero Waste recycling
  • Recycling correctly saves everyone money
  • Re-use and repair programs create jobs

Social

  • Educates residents, business owners, and community groups
  • Employment training opportunities reduce social isolation
  • Hub of community drive toward sustainable living
  • Increases Nanaimo’s ability to become a sustainable city

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