BioCycle March 2010, Vol. 51, No. 3, p. 38
Public/private venture with a soil amendment company, processing and transporting yard trimmings from other municipalities and expanding into commercial organics benefit the bottom line in Hutchinson, Minnesota.
BioCycle West Coast Conference 2010 Related Session:
Regional Collaboration To Build Economies of Scale
Tuesday, April 13, 2010
Public-Private Partnership Expands Compost Markets
Doug Johnson and Gary Plotz, City of Hutchinson, Minnesota
Mike Marsollek, Garick LLC
IN an age of financially-strapped local governments and service cutbacks, the city of Hutchinson, Minnesota’s CreekSide Soils composting operation stands as a rare example of a self-supporting public service. By developing relationships with other local governments, small composting facility operators, compost distributors and retailers, CreekSide has become one of the most successful composters and mulch producers in the Midwest. The 24-acre facility has evolved from a pilot project to a profitable enterprise that has not only operated in the black, but will contribute $100,000 to the city coffers in the next year.
One of the keys to that success, according to General Manager Doug Johnson, has been forming business relationships with other compost operators and dealers “who might have otherwise been considered competition.” Notes Johnson: “Instead we have worked with them, purchasing compost they cannot sell, and bagging it with our equipment.” CreekSide has an annual operating budget of about $2.5 million. Production has steadily increased, jumping from 1.2 million bags of compost in 2007 to nearly 2 million bags in 2009, shipped to customers in a five-state area.
CreekSide began as the brainchild of Hutchinson city administrator Gary Plotz. “This was his vision,” Johnson says. It grew out of an organics collection pilot project in the city’s northeast neighborhood in the late 1990s, funded by a $100,000 state grant, and the city’s equal match. The composting facility was originally built to process source separated organics from residents of Hutchinson and the rest of McLeod County. “We’ve been processing that material since 2001,” says Johnson. Eventually, CreekSide expanded to collecting wood and yard trimmings and then branched out into the Twin Cities metro area, contracting to process yard trimmings collected by several other municipalities.
For five years, its largest client was the city of Minneapolis, 60 miles to the east. That contract ended last September; CreekSide chose not to renew. In 2009, CreekSide also had a contract to collect leaves from the southern Minnesota city of Mankato as part of a pilot project. “Just about everything we get from outside the county is unbagged yard waste,” Plotz notes. Since ending its contract with Minneapolis, CreekSide has been able to make up the difference by servicing smaller municipalities in McLeod County, which are between 10 and 20 miles away from Hutchinson.
“In addition to Hutchinson, there are eight other cities in McLeod County, ranging in size from about 500 to 600 people to Glencoe, with a population of about 10,000,” says Johnson. “Each one of the communities has a collection site for the yard waste. There is no charge to residents to drop off grass, leaves and brush. Prior to 2009, the municipalities hired private haulers to bring the yard waste to CreekSide in its raw state. Grass and leaves aren’t a big issue in terms of volume, but with the wood limited how much could fit into the trucks bringing the material here.”
In 2009, CreekSide began servicing the dropoff sites. Residents were asked to separate materials into brush and grass and leaves. All yard trimmings have to be debagged. Last fall, the city of Hutchinson brought its mobile Vermeer horizontal grinder, front-end loader and walking floor trailers to each dropoff site. “We waited until after the first snowfall to be sure all the materials that residents would drop off were there,” says Johnson. “If we came in September or October, material dropped off after that would have sat until this year. We ground and loaded the material right into the trailer, which has a capacity of 100 to 115 cubic yards – rather than the 25 cy dump trucks being used before. The towns were not charged for the service; instead, the county covered our costs for fuel and trucking. We ended up with about 1,000 tons of brush and yard trimmings in 2009 from this program.”
The dropoff sites have the capacity to store yard trimmings for a season (spring through fall). Prior to 2009, however, the towns sent material at least two different times during the season because of the unprocessed volumes that had to be transported. The expense prompted McLeod County to approach CreekSide about what sort of savings it could offer to these municipalities for the grinding and hauling service. “The county wanted to cut its costs by 20 percent, or about $15,000 to $20,000,” explains Johnson. “We gave them an estimate, which was presented to the County board, and our proposal was accepted. Through the process [of grinding then hauling], we ended up saving the county $25,000 to $30,000.” Due to the success of the program, CreekSide will be talking to other towns about offering this service.
On the finished compost side, Johnson has had discussions with a number of smaller, privately owned composting operations – producing 10,000 to 20,000 cubic yards/year – about using CreekSide’s copackaging services. “We’ve been putting the word out,” he says. “Some of them are struggling a bit because they don’t have markets for their finished products. We’re working with two operations now – a greenhouse and nursery and a sawmill.”
EXPANDING SSO COMPOSTING
CreekSide has also been working with other private sector entities to expand its source separated organics composting operation. CreekSide planned to begin a pilot project in early 2010, accepting deli food waste from about a dozen Wal-Mart stores within a region that includes the southern half of Minnesota and North and South Dakota. “We hooked up with them through one of their waste collection vendors who contacted us, and we were able to come to an agreement on cost,” Johnson says. CreekSide expects to receive about 8 tons/day of food waste from Wal-Mart for a price between $25 and $35/ton.
“To date, we’ve been processing about 2,200 tons per year, so this is going to be a significant change for us,” he adds. “We have a total of seven full-time operators. If this goes well we may need to add one more full-time operator. But this is going to significantly help our bottom line.”
Residential participation in the source separated organics program is about 95 percent, notes Plotz: “The composting program is much more popular than even the curbside recyclables program. It’s one of the most popular city programs we have. People saw it as an opportunity to reduce the size of their refuse container and save money. Most people had 60 or 90-gallon containers, and have generally scaled back to 30 gallons. Those who had 30 gallon containers have been able to switch to every-other-week service, which has been very popular.” In response to an advertising campaign touting the potential savings, about 80 percent of residences in the city have downsized their containers, he estimates.
PUBLIC/PRIVATE BAGGING PARTNERSHIP
On January 1, CreekSide started the third year of its contract bagging arrangement with Ohio-based Garick Corp., a wholesaler of compost to major retailers such as Home Depot. “Garick doesn’t have a facility in this region to set up a bagging operation such as ours,” explains Johnson. “It’s more cost-effective for them to have us copackage it.”
Last year, CreekSide packed more than one million 40-pound bags under the Garick contract. The company either buys the packaging material from CreekSide or supplies the bags. CreekSide also bags compost for several large nursery/garden store chains in Minnesota.
Separately from the Garick contract, CreekSide markets its products in a five-state area, through regional and local retailers including SuperValu and Cub food stores, United Hardware, Frattalone’s Ace Hardware and four wholesale distributors in Minnesota, Iowa and Wisconsin. Its bagged products are marketed under three different labels, with different formulations: Splendergro, its economy line; CreekSide, its premium line; and the professional-grade Wonderblend. Those labels include topsoil, an all-purpose potting soil, a manure compost, a straight compost and hardwood mulch. The Wonderblend line includes cow manure, and professional planting mix and garden soil. CreekSide contracts with a nearby dairy farmer to supply the manure compost.
Some of the products also are sold in bulk. To place its products with dealers, CreekSide uses a Minneapolis-based sales representative. “We have been successful with our two-tier appeal to both big-box stores, with our Economy series, and also a lot of attention to small garden and landscape shops,” says Plotz. “We also have very good customer service, and the quality of our products stands out in their minds.”
In Minnesota’s harsh climate, CreekSide begins its compost bagging operation in March, running one daytime shift, Johnson says. “At night the temperatures drop below 20°F, and that doesn’t work very well for handling soil.” During the summer and fall months “our goal is to run 16 hours a day,” he adds. “Looking down the road, running 24 hours five days a week would be optimal. When the machines are running we’re making money; when they’re just sitting idle, they’re costing us.”
The fully automated bagging line at CreekSide can package up to 29 1-cubic foot bags/minute. One operator oversees the line; a fork-lift driver feeds the empty pallet dispenser and moves wrapped pallets to the storage and shipping area. CreekSide also accepts and grinds high-quality wood waste that is used to produce mulch, including the colored varieties. There also is a concrete and asphalt-crushing operation. Those materials are combined to produce its Bit-Con paving blend, which is sold to paving contractors and private homeowners in the area.
PUBLIC SUBSIDY TO START-UP
What has the city learned about developing a successful, self-supporting composting operation? “To make it work initially takes some public subsidy,” Plotz says. “In our case we received a significant state grant of $1.35 million to get started.” Hutchinson also received a $1 million county grant for developing other projects related to CreekSide’s operations, and subsequently, a smaller, $275,000 grant from the county. The city also matched some of those funds with start up money from its water/sewer/refuse collection payment.
In addition to the horizontal grinder, CreekSide’s operation uses the following equipment: a Scat windrow turner; a McCloskey trommel screener; a Bivi-Tec deck screener; three Case front end loaders; five Wilkens 53-foot walking-floor trailers; a Premier Tech Model FFS-200 bagging line; 20 Engineered Compost System in-vessel containers; and a Buehler stationary compost mixer.
To date, CreekSide’s composting operation has far exceeded the city’s original expectations. “We opened in 2001 with the intention of diverting garbage from our landfill,” says Johnson. “We had not intended to be profitable or in competition with the private sector. The bagging operation has given us a very cost-effective means of getting rid of garbage at little or no cost to the residents. Over the past four years, the revenue we were getting from bagging was not covering everything, so the operation was costing residents a little bit. So we were asked to make this profitable.”
“With the relationships we’ve set up with private sector marketing we’ve made a profit for the second year in a row. In 2011, we’ll be able to transfer about $100,000 a year into the city’s general fund, while providing a service to the residents of Hutchinson and McLeod County, at zero cost to them.”
March 23, 2010 | General
Enterprising City Composting Operation
BioCycle March 2010, Vol. 51, No. 3, p. 38