General Manager John Walker met with Lismore City Councillors this week to give them a briefing on the state of waste at the Lismore Resource Recovery Center. He then generously gave his time to the Lismore App to update the community.

The bottom line is the Resource Recovery Centre is an inoperable mess that won't be ready to resume operations for at least another 2-3 years.

During that time, Lismore City Councillors will need to reassess their Waste Management Strategy because, while it is good to say that Lismore is leading the way in recycling in the Northern Rivers, the reality is that it is costing ratepayers a lot of money to make that claim and with operational conditions worsening in the last few years the future is looking bleak and decisions have to be made.

Here are the details.

The tip, along with the Lismore Sewage Treatment Plant next door, was totally destroyed in the flood and that means we can't put rubbish, any rubbish into the tip. All rubbish is being trucked to Ipswich in Queensland. There are also issues with recyclables in terms of plant damage and capacity.

Mr Walker said, "We wanted to have a look at the way forward and to do that you have to look at how we are travelling today."

"We need a baseline from a business perspective. Now, if you look at the financial performance over the years, the accounts don't necessarily tell the true story. Because of the way we account in local government, and so our view is, for example, in the current year, it looks like it might be slightly profitable, but that's because we picked up an insurance payment from a fire that happened a few years ago. Overall, our view is that the waste business is costing as somewhere in the order of $3-4 million dollars a year loss, which is significant."

"At the moment, we're trucking our rubbish to Queensland because we don't have a tip to put it in and that's in line with most of the other councils in the Northern Rivers, who are doing the same at the present time. But we don't want to do that long term."

"Then you get into the issues of waste levies charged by the government. It is often cheaper to put them in trucks and take them to Queensland than putting it in our own tip and being charged a levy by the state government."

"So, at the moment, we have no choice but we need to look at what is the best long-term solution. How do we rebuild the cell? How do we rebuild the capacity to put it in there? What is the effect of the financial movements around transport against the levy and some of those issues."

The NSW Environmental Protection Authority (EPA) charges local councils a fee to put their own rubbish into the ground that council operates and maintains. In return, the Lismore City Council (LCC) receives some funding.

The numbers are just over $18 million going to the EPA and $1.5 million coming back in over the last 12 years.

"Now I'm sure the government and the EPA will say, well, that pays for regulation, someone's got to pay for the EPA to keep an eye on things. You know, education and the like, but in raw numbers, we give a hell of a lot more than we get."

"The levy is a big issue for us," Mr Walker said, "The other issue really important is volume."

"Making smaller losses or profits out of waste only works if you have volume, and our volume has dropped significantly in the last few years."

"Our own recycling measures dropped volume because we used to get a lot of commercial waste but they have chosen to go elsewhere. And we used to get waste delivered from a number of surrounding councils and they've all chosen to go elsewhere."

"So, we've got very low volume but similar overheads that we had when we were taking volume, so, costs are where they were and revenue is a lot lower as well."

"Then there is what's colloquially known as a China Sword. That was a couple of years ago when Asian countries stopped taking waste from Australia because of the contamination and their own policy changes."

"That affected us in a big way because the plant had been built to the specifications that were then required which meant no more than 10% contamination and they changed the rules to make it 1% contamination and our recycling facility can't do it. So, we can't produce or separate our waste in a way that's acceptable, and so, that's an issue too."

Less volume has an upside because you put less waste into the ground, so you get a longer life cycle on a waste cell. From a business sense, it doesn't make sense to maintain a recycling facility, with the associated costs, and dump it anyway.

"In simple terms," Mr Walker explained, "We pick up rubbish from the curbside, we take it to the waste facility, we separate out the recyclables, we bury our own non-recyclable material and we sell our recyclables. That's the theory but it doesn't work."

"We're effectively losing money, mostly out of paper and plastics. They're the ones where we haven't got markets. So, if you're separating and you haven't got a market, you're storing it or holding it and that means you're not getting any revenue for it. So, you're spending the money to separate but you can't sell it."

LCC has contracts in place with companies to take some of the recyclables but Mr Walker said it's not a financially viable option.

The big question revolves around the environmental issues and the financial costs associated with that choice.

"You've got the environmental issue, of course, we need to separate, of course, we need to recycle, but from pure financial costs, if you're separating at a high cost, and you have nowhere to take it or sell it, then it changes the equation. What is the answer to that? I don't know but we know we've got a bit of an issue there."

Historical council decisions are also impacting the financial position of LCC because of the waste plant that was built. It is always easy in hindsight to look at decisions made as poor or sound, in this case, it appears as though the facility built was not lifecycle managed.

"When it was built, it was designed for 10,000 or 12,000 tonnes in output and we were shoving through, years ago, 20 to 25,000. So, the plant was overworking, which means it's degraded. Now, whether that was to produce more profit to make it look good, we don't really know, but that short-term benefit has caused a long-term degradation on the equipment."

"We haven't spent enough money on maintenance over the years, so we've now got limited capacity that we can actually put through it. We can't put any more than 7000-tonne throughput until we can fix it or upgrade it. So, we've got a plant that can't make money."

This is where LCC's vision of being a recycling leader in NSW takes a big hit and faces some huge challenges.

In summary for the Recycle Operation, we don't have volume, we don't have a plant that can handle volume even if we did and we can't sell it.

Mr Walker gave us the example of composting. Composting was seen as something simple and an easy way to make money.

"They got the numbers wrong around demand and the cost of processing and we're suggesting, looking in hindsight, that over seven years, we've lost quite a bit of money."

"So, it is a good environmental objective, but it loses you a lot of money and we were pretty lucky at the end because we had a stockpile that was contaminated. It got contaminated in the end because of flooding and leachates so it couldn't be sold. Luckily in the flood, Public Works were out there using the space and cleaning up and they took it away. That saved us a big loss but this is just an example of something that appears good as an environmental outcome but you can't make it pay unless you've got more volume and unless you've got more market."

"What sounds like a good outcome is actually costing the ratepayers a lot of money. That is the same for glass and other products as well."

"We're not saying we want to abandon the principles of good recycling but we are saying that you really need to understand your business and the dynamics of your business and the inputs and your outcomes before you embark on something that sounds good and costs you money."

One of the more immediate issues for LCC is the waste cell that all of our rubbish is tipped into. The cell lining is damaged, the walls are broken and it's full of water. Council cannot remove the water because it needs to go through the sewage treatment plant and it can't go through that because it too is damaged. The timeframe is believed to be 2-3 years so in the meantime it is just sitting there.

For the next 2-3 years LCC will be trucking its waste to Queensland. On the surface it sounds expensive, however, Mr Walker says not paying the EPA levy is actually saving council money.

"That's what a lot of councils are looking at. It costs more to actually look after your own landfill than it does to simply put it in a truck and send it to Queensland. That's not environmentally good but that's what's happened. We don't have a choice."

The Waste Facility itself is also damaged and needs repairing.

"We've got some relatively small amounts of investment, $135,000 to do some short-term maintenance but it is a problem due to increased contaminations with asbestos. So many bins at the moment contain asbestos and therefore it's not just that bin that's contaminated, as soon as you put other contaminants onto a pile the whole pile becomes contaminated."

"We've got leachate, which means basically that water gets into your stockpiles. The roof is leaking so needs repairing."

"So, the facility is not in good shape and it's not working well and it can't do volume anymore so we have some big decisions to make. What do we do about that?"

"We're suggesting to just bring it up to compliance to make it work well will cost quite a bit of money. There are no grants and we don't have reserves so we've got to find that money if we choose to do that."

"This information is only relatively new, council is going to have to look at its strategy going forward."

"Effectively if we are going to continue to separate and do what we have been doing then we need to spend money to get the facility up to compliance and that's not improving it, it's getting it to where it has to be."

Post-February 28, the solutions that are being researched and then discussed are regional solutions, what is good for the entire Northern Rivers. For some reason, waste is not heading in that same direction, it appears to be each council for itself.

"You would think that waste is one of those great examples of how all the councils should cooperate, they should work together. That would give you the volume, that gives you whatever outcome is chosen. Nothing has really happened."

"We know Richmond Valley were pursuing the energy-to-waste facility, which is colloquially known as the incinerator but they put that on hold and that was being done on behalf of the region. So, that's not happening and we don't have a reasonable outcome."

"The big issue is can we all come together to find a solution that has beaten everybody for 10 years or so that I've been around? If you can't find a regional solution you have to find solutions for yourself."

"Then you're faced with choices. What's our investment? How far is our philosophical commitment to the environment against how far is our commitment to economics? and ideally, it should all be taken into account. At the moment, we are dropping money and we're not achieving good environmental outcomes."

"So, we're saying time to return to basics, and let's understand what we're doing. This all summarises to ultimately get to the ideological view of a circular economy, where everything goes around and everything's carbon neutral and the like, and we'd all like to get there, but in the interim, we have to understand this business more. We have a really a lot of hard work on the drivers, the input factors, the costings, and what's possible."

"We haven't got answers at this stage. But, you know, we've identified the problem, probably a lot of people knew that. We put some qualification around it, but we're going to get stuck in now into a complete financial overview review, understand what's possible, get the real numbers and understand the business and then come back to council and say, well, here's your options."

When we asked Mr Walker about how LCC Councillors received the information, he replied, "I think everyone in the room supports environmental outcomes., So, there's no argument in recycling and circular economies is the right thing to do and that's clear."

"But you can't just throw money away, you can't just run a business like it is and expect to get those outcomes. You really have to look at every aspect of what we're doing and what we're trying to achieve and that comes right back to basics."

"We don't have a tip, we've got to get one. We don't have a recycling plant that's effective. We don't have markets for incoming material and where it goes and we've got overheads that are always going to be more than our potential income."

There is no time to waste for council to make suggestions and councillors to agree on a strategy because the approval process to fix the damaged cell takes time and we have 2-3 years before these considerations can be implemented. The Lismore App understands that this cell was coming to the end of its life anyway and another cell would have to be built to replace it, again an exercise that takes years to achieve.

For now, council will pull the business apart and come up with the right analysis, that is financial, social and environmental and then look for guidance from councillors. That work is going to take around 3-4 months by which time we will have a new General Manager.