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Palo Alto in 'uncharted' territory on compost

Original post made on Oct 18, 2012

The future of organic waste in Palo Alto remains hazy, but city officials hope to solve this messy and divisive dilemma by early 2014 and are now looking to the free market for help.

Read the full story here Web Link posted Thursday, October 18, 2012, 12:11 AM

Comments (18)

Posted by Timothy Gray, a resident of Charleston Meadows
on Oct 18, 2012 at 9:05 am

Dear residents that want to make sure that this project is responsible to Planet Earth and our pocketbooks:

The project's hypothesis is that the waste-to-energy plant on the 10 acres of Bixby Park will be less expensive than shipping waste elsewhere.

Let's stand together and protect the integrity of this evaluation by making sure that the City's enthusiasm for being Green doesn't ignore the green of the budget.

I attended the meeting Wednesday, and know that the City staff is diligently working on the analysis, so we cannot yet discuss details. However, there are a few simple principles that must be followed:

1. The City's cost of preparing the ten-acre site must be fully accounted for. (This is a major earth-moving exercise, and possibly involves moving many truck loads of landfill to another dump site.)

2. State law requires that the use of City property and resources be compensated at fair market value. The feasibility study must include a lease payment for the ten acres based on the fair market value of a $100 million valuation.

3. While Bixby Park was used as a dump, the Refuse Enterprise Fund paid "rent" to the Parks fund. That ended, so now each day that the Compost project delays the conversion to Park Land must be accounted for as a start-up cost of the project. This is simple accountability.

4. The City costs, as described, will be matched with savings from not having to pay to have the waste to a regional facility.

Palo Alto needs to quickly quantify the above items and have them clearly stated in the request for proposal (RFP). The lease needs to reflect a commercial rate, vs. any attempt to use the City's tax-exempt bond rates.

If the above reasonable expectations cause our Green inspirations to be in the red, then we need to move on and get our waterfront ready for the recreational destiny that has been held in check for 50 years.

As a note, the City staff I talked with at the meeting indicated a sincere desire to present an economic evaluation performed in a very judicious manner.

Let's get it done sooner, rather than later.

Timothy Gray www.vote4gray.com


Posted by jerry99, a resident of Barron Park
on Oct 18, 2012 at 10:57 am

So far most "green technologies" have been a complete failure, five companies that the EPA granted money have been complete failures and have declared bankruptcy and cost the US taxpayers more than 500 billion dollars.
Every month in our utility bill we receive the nonsense marketing propaganda for "wind power", if we agree to pay an additional 10$/month. People don't realize that the wind turbine blades kill birds on their wind driven natural flight paths and like solar power, cost a lot more than coal or gas fired utility plants and never will be cost effective. But the "green lobby" keeps lobbying for this nonsense.
Just close the dump and turn the land into a new or add to the existing public park.
We also don't need any nonsense program to collect food scraps separate from other recyclable waste, we are spending too much money for this effort already.
The taxpayer is not an endless piggy bank looking for new and stupid ways to spend money.


Posted by Carl King, a resident of Midtown
on Oct 18, 2012 at 10:57 am

In principal this idea has incredible potential for us and our environmental impact. However, when one of the most knowledgeable principals Phil Bobel is quoted "It's uncharted ground," , we should look at this with healthy skepticism. Municipalities do not have a strong track record at pioneering advanced technologies, and the consequences of a potential multi-million dollar mistake must be carefully weighed against the potential benefits. Cities have bitten off more than they could chew with even old-technology waste conversion and treatment plants.

Re: Tim Gray's 4 simple principles "The feasibility study must include a lease payment for the ten acres based on the fair market value of a $100 million valuation." Thanks for the comments, we need transparency and reliable numbers though "firm pricing" is a challenge esp for pioneering technologies. Please cite your source for "fair market value" of $100MM; I can't imagine this land with entitlements only for parkland or composting has anywhere near that value. It would require comparable sales of 10 acres of parkland for $100MM, with no commercial or residential development possibilities for the land.


Posted by WilliamR, a resident of Fairmeadow
on Oct 18, 2012 at 11:17 am

I, too, would like to know where the $100-million value comes from. Doesn't that imply that the land could be sold commercially for that price? I could see $100-million for land 'in town' because someone could build on it and make money, but this is just a transfer between the City Parks Department and the Utilities Department, isn't it?


Posted by Timothy Gray, a resident of Charleston Meadows
on Oct 18, 2012 at 11:35 am

RE: Land Valuation

During a recent City Council discussion on other land in the same area, Larry Klein stated that the land would have a value of "five to ten million dollars per acre" so I was referencing the higher end of that scale. My comment was not advocating that price, but that a fair price should be set. How much would it cost to buy private land that borders the park, as "replacement cost" is a common measure of value. The land is being developed so where else in Palo Alto could you buy ten acres and what would it cost? It may not be $100 million, but finding it would be tough. Perhaps we should look at the purchase price of the land that Palo Alto bought from Los Altos some years ago.

We just need to be unified in the fact that just because it is Park land, it is not free.

Thanks,

Tim


Posted by Jo Ann, a resident of Embarcadero Oaks/Leland
on Oct 18, 2012 at 12:01 pm

Tell me again why we voted to waste money on this mess?


Posted by Carol Muller, a resident of Duveneck/St. Francis
on Oct 18, 2012 at 2:17 pm

This reporter has *consistently* mis-represented the vote. The proposition for which the people of Palo Alto voted in the affirmative was NOT to build a factory for anaerobic digestion; it was to STUDY the value of doing so.

The ballot measure may in fact have been put on the ballot by a coalition of self-designated "environmentalists" but it was also strongly opposed by other environmentalists.

The bias of the articles by this reporter about this topic in the PA Weekly have been astounding, since they do not reflect the Weekly's typically more balanced reporting of issues in our city.


Posted by Bill, a resident of Community Center
on Oct 18, 2012 at 2:26 pm

Carol,

Read the story again. It says just what you are suggesting....that the passage of the ballot measure didn't resolve the issue, only made the site available.


Posted by Bob Wenzlau, a resident of Crescent Park
on Oct 18, 2012 at 4:38 pm

Bob Wenzlau is a registered user.

Carol Muller, while you are correct that the initiative only allowed use of the land and did not authorize a project, many initiative proponents know that sustainable, cost effective green energy solutions should be developed, and this vote was one step to enabling that outcome. For the most part, those that cry "this is just a study" are the same that raise "we must charge enormous rent" -- each is a stone thrown when they lost a vote on a project direction that enjoyed incredible community support.

Tim, I have found the "rent payments" a tremendous wedge thrown against this project. Did you know that for one reason or another, the water pollution control plant does not pay rent, the airport pays negligible rent, and most city offices and libraries don't pay rent, nor the municipal service center --- but a green energy facility that our town wants has to pay rent? Smells a bit of politics doesn't it -- a deal for every facility? Why don't you take a stand that this project could pay the same rent as other city facilities - like the airport? The rent payment is a political choice the council can decide.


Posted by CC, a resident of Barron Park
on Oct 18, 2012 at 9:26 pm

All I can say is that the utility bill keeps going up on every god year. And now they told us PA is in 'uncharted' territory' on Compost. Without a doubt, another raise is on the horizon! You bet.


Posted by common sense, a resident of Midtown
on Oct 18, 2012 at 10:41 pm

Bob,

Surely someone who has studied the matter, knows that the Utility department pays around $11 million per year in rent to the general fund already - it's been well documented, that the city leases some parcels of land from Stanford for $1/year, and charges the utilities (which are the residents) hundreds of thousands of dollars per year for the same parcel.

I don't see why any proposed use of the land for compost should be any different.

And that is not the end of how the the city extracts more money from the residents through the utility department. The city also wants a "return on investment" from the utility department - around $16 million per year. So any compost facility would be expected to add an additional burden on the "return on investment" the city government would use to justify extracting more money from the residents.


Posted by Timothy Gray, a resident of Charleston Meadows
on Oct 18, 2012 at 11:56 pm

Common sense, you are correct that there are some abuses in the transfer pricing and "rents" that essentially allow the CIty to "raise taxes" on the residents without representation. We need to re-evaluate the fairness of some of this transfer pricing.

The leased land that you mention is an excellent example, as it was always intended for use in water storage, however it is escalated to a current market rate because the City owns title.

Stanford extended the favorable lease for the benefit of the customers of the utility, but now that benevolent gesture has been highjacked by the CIty's general fund.

The key is really the historic purpose that the land was originally dedicated. That provides a big part of the answer to Bob's question. For example, the libraries and parks are dedicated to specific purposes, and are assets held in trust for those specific purposes. The same is true for the airport. They are legacy uses that comprise the nature and fabric of our town.

On the other hand, the Compost proposition is a make or buy business analysis that has to stand on its own. If the refuse enterprise fund had land, then it would be an entirely different equation. In this case, the City Council has a fiduciary responsibility to the Parks and Recreation to handle the use of park assets for the purposes of recreation, or in cases like this where the voters have agreed to potentially allow an outside use, the full market value of the lease must be collected and dedicated to recreation, to mitigate the reduced recreational asset.

Back to the make or buy business decision. We are issuing a request for proposal for companies to provide on-site composting services as a substitute for trucking the materiel away. If it turns out that it is cheaper to haul the sludge and compostable materials to a regional facility, we will be obligated to follow that path.

What about the carbon emission saving we might ask? Well, that is value that will have to brought into the equation. Carbon Footprint of onsite composting vs. carbon footprint of hauling will give the answer, once multiplied by a reasonable value of each ton of carbon emissions. Then the analysis gets interesting, but we must pledge ourselves to objectivity and do the arithmetic committed solely to the scales of justice.

As a side note, when we get to the topic of Carbon emissions and remediation, we must keep in mind that CO2 gas is related to its impact on the whole planet, not just the skies of Palo Alto, so we might end up using some money to buy open space in the Palo Alto Hills to be less expensive in reducing our carbon footprint, vs. having an expensive Green trophy that really only delivers bragging rights vs. having the greatest benefit to Planet Earth. Let's take it all one step at a time and honor an objective discovery process, vs. starting with the desired outcome, and then finding the numbers that support our desire.

In this equation, we are providing land to a outside enterprises that want to compete with companies that will perform the service on a regional basis. Therefore, State Laws that Prohibit Private Inurement simply require a market value payment for use of City assets. It is the law. Now we may choose to pay more for a service that has a better environmental outcome, but we can really pay no more than the price that the City is receiving from the Cap and Trade system for carbon reductions. You see, the variables are knowable, and we can find an expedient answer, as long as we are loyal to objectivity. We can't expect anything less.

Thanks for following the reason and logic to this approach. By the way, the value of these kind of discussions is not in being right, but being willing to advance the discussion for the betterment of the CIty. We can all welcome new and better information as the conversation progresses.

Timothy Gray www.vote4gray.com



Posted by Wayne Martin, a resident of Fairmeadow
on Oct 19, 2012 at 10:40 am

> the airport pays negligible rent,

The Airport pays about $1/year--which is hardly "negligible", it's a give away.

This idea of "rent" is nothing but a stealth tax. It's time to get the whole idea of "rent" on the table, and come to see just how much these "rents" are impacting the costs of service from the Utility, at least.


Posted by Craig Laughton, a resident of College Terrace
on Oct 19, 2012 at 11:11 am

It is rare for me to agree with Bob Wenzlau, however I do agree on this 'rent' issue. The proposed anaerobic digestion (AD) industrial plant can be operated as a non-profit, public benefit operation. In that sense, it would not be different from operating a park by a private vendor, for the public benefit. Or the airport or golf course. Or our libraries. The essential issue is 'public benefit'.

I don't favor AD, because I think it is the wrong technology for the given problem. I have explained my position several times before, on this forum. I predict that no outside vendor will want to make a serious proposal on this AD industrial plant, start to finish, even at zero rent. It will require a significant, and ongoing subsidy from the city of Palo Alto, and it will still not succeed... primarily because mixing human sewage sludge into any compost product will be very hard to get rid of.

Bottom line: AD is not a public benefit in Palo Alto.


Posted by Not Yet, a resident of Another Palo Alto neighborhood
on Oct 19, 2012 at 8:29 pm

I would like to see another jurisdiction experiment with a waste-to-energy plant before Palo Alto goes headlong into the abyss of endless cost overruns.


Posted by Anon, a resident of Another Palo Alto neighborhood
on Oct 20, 2012 at 10:56 am

Years ago, when Palo Alto had unusually low utility rates due to both good planning and good luck, these "rents" made economic sense. Unfortunately, due to many factors, including (ahem) "Enron", these "rents" no longer make sense, and should be phased out.


Posted by Real or Fantasy, a resident of Palo Alto Hills
on Oct 20, 2012 at 4:03 pm

Like Craig Laughton I too would like to know whether the following is yet another Drekmeier fantasy or a practical plan:

Clean-energy proponents such as Peter Drekmeier and Walt Hays have expressed enthusiasm about a "wet" anaerobic digester, which would accept biosolid waste and food scraps and yard trimmings. And be sellable.


Posted by carla carvalho, a resident of Duveneck/St. Francis
on Oct 22, 2012 at 8:18 pm

So am I the only person on the planet that thinks global warming and the hole in the ozone are real? Does anyone have any other bright ideas for conservation? It's nice to knock a "risky", yet forward thinking plan, but what's your alternative? Criticism without alternative plans is not productive.


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