RD343 - Annual Report on the Waste Tire Pile Cleanups in Virginia


Executive Summary:
Introduction

Chapter 101 of the 2003 Acts of the Assembly included a provision that increased the Virginia tire recycling fee from $0.50 to $ 1.00 per tire sold at retail from July 2003through June 2006, with all additional revenue dedicated for the removal and recycling of tires from waste tire piles. It also required the Virginia Department of Environmental Quality (DEQ) to submit a report by December 1 of each year to the Chairman of the Senate Committee on Agriculture, Conservation and Natural Resources and the Chairman of the House Committee on Agriculture, Chesapeake and Natural Resources on the use of these funds and the progress in cleaning up tire piles. This report is submitted to fulfill this requirement. Note: Chapter 407 of the 2006 Acts of the Assembly included a provision that continued the $1.00 fee through June 2008. These annual reports will continue through that time.

2006 Activities

As noted in the 2005 Report to the Virginia General Assembly, DEQ began "Clean Sweep" in late 2004. It was a state-wide, multi-contractor effort to rid Virginia of the remaining 280 tire piles by mid-2006.

By mid-2005, work was proceeding well with all 5 contractors. However, by October 2005, it became clear that there would be insufficient funds in the Waste Tire Trust Fund to complete all cleanups covered by these contracts during the time frames specified in the contracts. The reason was that actual piles sizes were much larger than anticipated and budgeted. Accordingly, on November 1, 2005, all new work was suspended. Several contractors were in the midst of cleanups that had to be completed so some work was allowed to proceed; the last of eleven such projects was completed on April 7, 2006. Clean Sweep had addressed 148 piles, but left 132 unabated.

The cleanup work during 2006 included only the work after the suspension date:

2006 Activities: Post-suspension cleanups
Tires Removed: 344,600
Cost: $881,755

Recognizing the insufficient resources in the Waste Tire Trust Fund, the 2006 General Assembly extended the $1 recycling fee to June 30, 2008. This extension is expected to provide an additional $5 million to continue the cleanup process.

Even with the extended fee, renewal of Clean Sweep contracts cannot begin immediately (see Financial Management). Accordingly, during the remainder of 2006, DEQ pursued planning and low cost ancillary activities to support future cleanup work:

• Sent letters to owners of piles not reached under Clean Sweep;
• Developed new field surveying techniques to arrive at more reliable estimates of tire pile sizes; A statewide re-surveying initiative began in August 2006 and will continue through the end of 2006;
• Conducted studies and projects to close 4 cleanup sites;
• Began a multi-year plan to balance cleanup work with available revenues.

2003-2006 Results

Because most of Clean Sweep's accomplishments were quantified in the 2005 Report to the Virginia General Assembly, the results for 2006 are substantially less. The results below are all activities since 2003.

Year: 2003
Tires Removed: 1,657,000
Cost: $1,349,525

Year: 2004
Tires Removed: 369,000
Cost: $369,128

Year: 2005
Tires Removed: 4,149,200
Cost: $8,896,711

Year: 2006
Tires Removed: 344,600
Cost: $881,364

Totals:
Tires Removed: 6,519,800
Cost: $11,497,119

Financial Management

The 2003 fee increase was designed to provide $7,800,000 over its 3-year life to clean up an estimated 4,500,000 tires. Since 2003, DEQ has cleaned up 6,519,800 tires and spent $11,497,118 but has collected only $7,657,491 in revenue. While the $3,839,628 difference was paid from deposits to the Waste Tire Trust Fund prior to 2003, this level of expenditure over income could not be sustained by the Waste Tire Trust Fund. The Fund balance as of April 30, 2006, was $79,923.

While the 2006 fee extension will provide additional revenue, DEQ will not be able to commence additional cleanups until sufficient cash balances have accrued. DEQ is preparing a Cash Flow projection through 2009 to effectively manage cash resources and expenditures for both the Base Program and cleanup efforts. Coupled with accurate tire pile size projections, this planning will allow DEQ to establish contracts to complete all work within a region and have the cash resources on hand to fund contracted work. Once the statewide re-survey of all remaining piles is complete, DEQ will be better able to determine the number of tires remaining and the total cost to abate all sites.