Trash Plant Generating More Problems Than Revenue : Resources: The facility is losing millions of dollars a year, and many millions more are at stake in a lawsuit against the builder. A recycling plan also has floundered.

City officials had a straightforward plan: build a trash-gobbling refuse-to-energy plant and add a recycling program to help cope with the 460,000 tons of garbage that spews forth from Long Beach each year.

But more than a decade later, Long Beach has a refuse-to-energy plant that is losing millions of dollars a year. And the city is still trying to get a citywide recycling program up and running.

From the start, city officials put most of their energy into the Southeast Resource Recovery Facility, the refuse-to-energy plant that fired up on Terminal Island in 1988. But the plant is mired in money problems, according to city officials.

“This thing has been on thin ice,” said Councilman Warren Harwood, chairman of the SERRF Joint Powers Authority Board. “It doesn’t perform and generate the revenue it is supposed to.”

The plant, three incinerators coupled with steam-driven generators, was supposed to make enough money through electricity sales and trash disposal fees to cover operating expenses and to pay off $170 million in bonds that were sold to finance construction.

But SERRF has borrowed $10 million over the last two years to make ends meet, officials said. And the plant is facing a projected $8-million deficit for the fiscal year that began July 1, Public Works Director Raymond T. Holland said.

City officials attribute most of the financial problems to faulty construction of the plant. They contend in a lawsuit against the builder that the plant is more expensive to run and produces less electricity for sale than it was supposed to.

Holland is studying ways to increase revenues and cut expenses, which includes reducing administrative staff at the plant.

“We’ve made all of our debt payments and will continue to,” Holland said. “But it requires us to manage the plant very carefully, to reduce expenses wherever we can.”

The plant was supposed to go hand-in-hand with a citywide residential recycling program. But while other cities in the county started their programs, Long Beach waited because of the cost, Holland said.

Environmentally conscious residents have had to haul bottles, cans and newspapers to a handful of recycling centers in the city.

“It’s been put off and put off,” said Virginia Siegel, a local activist who for years has called on the city to start the recycling program.

It now appears that Long Beach will have a residential recycling program in place by the end of the year. The City Council will consider within the next month whether to award a contract to one of three competing companies to collect bottles, cans, newspapers, cardboard and used motor oil from homes citywide, city recycling coordinator James Kuhl said.

The three bids range from $3.4 million to $4.2 million a year. If the council accepts the low bid as expected, residents would be billed $2.65 a month to cover the cost of the recycling program, Kuhl said.

State law has prodded the city to act. By 1995, California cities must recycle 25% of what they would throw away in landfills. The recycling requirement will jump to 50% by 2000. Long Beach may qualify for a partial exemption because of its refuse-to-energy plant.

Long Beach is now recycling 12% of its garbage, Kuhl said. The efforts of residents and businesses and a recycling program at City Hall contribute to the effort.

Officials hope the citywide program will raise that rate to 20%. City-organized recycling programs for business, industry and large apartment buildings, plus a yard waste recycling program, probably will follow, Kuhl said.

The city gave priority to SERRF because it produces enough electricity to power about 35,000 homes in addition to reducing the amount of trash going to landfills, Holland said.

SERRF reduced about 439,000 tons of trash to 140,000 tons of ash for disposal last year at the Puente Hills Landfill, Holland said. The trash SERRF burns comes primarily from Long Beach, Lakewood and Signal Hill.

The city’s emphasis on SERRF angered some environmentalists, who said the smoke-producing plant had no business being in the smog-choked air basin.

SERRF has had difficulty at times meeting the region’s strict air pollution regulations. But the plant made progress, and last February, the South Coast Air Quality Management District finally granted the facility a full-fledged operating permit.

But the plant still puts out too much pollution on occasion. SERRF exceeded its hourly emissions limits for either carbon monoxide, sulfur dioxide or oxides of nitrogen 26 times during April and May, according to AQMD emissions reports.

A plant incinerator, for example, put out 35 pounds of sulfur dioxide in one hour on April 6, exceeding the 12 pounds-per-hour limit. The AQMD must still determine whether the plant will be cited for the high emissions, spokesman Bill Kelly said. SERRF will not be cited if the high emissions were due to breakdowns that did not involve poor maintenance or operator error, he said.

SERRF operations officer Charles Tripp said the excessive emissions were due to breakdowns or maintenance. “Our compliance (with pollution regulations) is extremely high, but there are breakdowns at times,” he said. Although the plant exceeded some hourly limits, it complied with daily pollution regulations, according to AQMD reports.

SERRF also has other problems, which contribute to its financial distress. The city is entangled in a costly legal battle with the builder of the plant, the Dravo Corp. of Pennsylvania.

The city sued Dravo alleging that the firm botched the construction job, leaving Long Beach with a plant that produces less revenue than expected and is more costly to run.

Long Beach has spent more than $10 million correcting plant deficiencies, plant official Ed Hatzenbuhler said. The corrections affected everything from air pollution control equipment to the cranes that pick up the trash and dump it in incinerators, according to city records. But Dravo contends that it has met its obligations and filed a countersuit against the city.

Tens of millions of dollars hang in the balance, Councilman Harwood said. A trial date has not been set, but the city already has spent $4.5 million in three years on legal fees and other costs related to the lawsuit, Assistant City Atty. Robert E. Shannon said. The plant’s operating budget includes $1.1 million to cover legal expenses this year.

City officials also are dealing with another costly problem, one they do not blame on Dravo.

The ash SERRF produces contains toxic heavy metals, Holland said. The city has been dumping the ash in the Puente Hills landfill, but a state law that takes effect Oct. 1 requires that the ash be treated or disposed of at a costly hazardous waste dump.

The city opted to build a $5-million ash treatment system. It raised trash bills 5.8% earlier this month to cover the estimated $1.7-million annual operating costs.

To help balance its books the last two years, SERRF arranged a $10-million advance payment from Southern California Edison Co., which buys the electricity SERRF generates. Holland said the plant’s trash disposal fees eventually will be raised to make up for the advance.