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6.11-11. - Page 8 of 27 (r■o% . -think waste aste- M.-anagement BA Wa:tr - M. -agement Authority A Public Agency STAFF REPORT To: SBWMA Board Members From: Hilary Gans, Senior Contracts & Operations Manager Date: February 28, 2019 Board of Directors Meeting Subject: Presentation on MRF Processing Equipment Upgrades Recommendation: This staff report is for discussion purposes only and no formal action is requested of the Board of Directors. Summary In the wake of the commodity market challenges and the need to improve fiber commodity quality to ensure market outlets, SBWMA and SBR staff have analyzed many options to improve material quality. Automation of MRF sorting has emerged as a key strategy towards this goal. The Bond Refunding process provides a unique window to access capital for these future capital projects. MRF Phase I - Sort System Upgrade Cost: $7.31VI (firm quote) Equip. Useful Life: 12 Years; ROI Payback: 7.6 -year payback (see attachment A) Net Agency Benefit: 4.4 years Designs have been completed and a quote for Phase I MRF Upgrade has been obtained from BHS. The Phase I Upgrades includes three projects with financial, commodity market, and operational enhancements that benefits the agency for the next decade. Phase I Upgrades are designed to be installed prior to Phase II so that the improvements in commodity quality can be assessed in the final design of Phase 11 Upgrades. Optical Sort of Small Fiber ($4.2M) Description — BHS optical sort systems are used at Shoreway for high-speed separation of containers. This same optical sorting technology will be applied to sorting contamination out of mixed paper to capture more commodity revenues. Benefits — Optical sorting will capture cardboard and containers that can be sold at a $1.31VI/year in additional revenues (these materials are currently lost to mixed paper), 2) mixed paper will be cleaned up to High -Grade paper that sells at a $70 per ton premium (see attachment B). 2. Robotic Sorting of Residue/QC System ($1.6M) Description - BHS manufactures a robotic sorting system (Max -AI AQC) that utilize advanced recognition and Al technology to identify and sort a wide variety of materials. Applying this robotic system to the MRF residue will result in a reduction in sort labor expense and the capture of more recyclable materials that are currently "lost" to residue/disposal. Additionally, this recognition system will be installed at the end of SBWMA BOD PACKET 02/28/2019 AGENDA ITEM 10B - p1 195