The Warren County trash contract
In an even more exciting drama than the school board confrontation, the Board voted to approve the contract with Warren County to bring Warren’s trash to the Battlecreek Landfill. The approval was subject to an amended line item that said the trash had to be “generated in Warren County”. The Warren County Board now has to decide if it will agree to that amendment. Charlie Hoke added the amendment, in response to a concern that Warren County might sell their excess capacity to someone else, and make money off of it while Page bears the risk.
Here’s the gist of it: Warren County will pay Page County $31 a ton to bring “up to” 225 tons of trash per day to Battlecreek. The contract lasts for 15 years and it escalates at a rate of 25 cents per ton per year. The landfill is approved for 350 tons a day, and Page County generates a lot less than 100 tons of trash per day, so if we reserved 125 tons for ourselves and our growth, this would effectively use up all available capacity, if Warren used its limit of 225 tons.
Warren County only uses about 110 tons per day now, so the excess capacity granted to them is presumed to allow for potential growth in Warren County over 15 years. Apparently, no growth is expected in Page County that would take us over 125 tons per day, so using up all our capacity in this way is logical management. There would then be no available capacity to sell to anyone else for the next 15 years.
Here is the logical argument of it:
1. The landfill costs our citizens $1.2M in operating costs, plus the $600K + for 40 years to pay off the buyback loan, plus the money we borrow now and then to buy capital equipment and close and open cells (another $700K every few years, more or less). For the last two years, we’ve been desperately changing our budgets to cover that very serious amount of money.
2. If Warren County will bring their trash in at their normal rate of 110 tons a day, that would almost cover our annual operating costs of $1.2M. If Warren County grows and brings in more trash than normal, the revenue could almost cover the costs to Page County. If this could be secured for 15 years, it would be a great service to the county and solve many, many of our budget problems.
3. It would be nice if we could get more than $31 a ton, but we’ve been trying to negotiate this contract for three years, and this is the best we think we can do. If it works, then the Board of Supervisors will have solved the landfill problem for Page. This would be a great legacy for the Board.
Now, once this contract is approved by both Boards (Warren and Page), then Page has turned over all its excess landfill capacity to Warren. If a recycling company moved into Warren County, and wanted to send its trash to the Page County landfill, it could, because that would be trash generated in Warren County, and there is excess capacity on the Warren County contract. So the upside of this contract is: if all goes well, and bringing in this extra trash does not increase our costs to operate the landfill, then the contract will relieve Page County citizens of a $1.2M burden. This would still leave us with the debt and the capital equipment and the opening and closing cells costs, but at least it would cover the operating costs.
Supervisor Gerald Cubbage asked that the approval of the contract be delayed until we could hold three town meetings and inform the citizens about what was happening, the benefits and risks. Chairman LaFrance said that wasn’t the subject they were talking about. They were talking about the amendment Mr. Hoke added, to change the language to say, “only trash generated in Warren County”. There was concern on the part of Mr. Belton that to change the language would delay the contract approval in Warren County, and delay the start of the contract, and take a further $100K plus out of our planned budget. The contract was supposed to start this coming Monday, and if it weren’t approved “as is”, that would delay the start for another month or two.
Mr. Cubbage pointed out that the cost of diesel fuel is a major cost of the landfill operation. He pointed out that the cost of excavating a cell is going to triple, and the only escalator in the contract is 25 cents a ton per year for fifteen years. He pointed out that signing a contract for 15 years without considering escalating costs is a major risk to the Page County citizens, one which could end up causing Page citizens to subsidize the trash of Warren County citizens. He asked a second time to delay the contract until citizen meetings could be held.
Then they voted to amend the language in the contract to include the words “Warren County’s daily generated trash”, so that Warren couldn’t sell the excess capacity to a commercial operation. Hopefully. Unless, of course, a commercial operation were to just LOCATE in Warren County and use the excess capacity. After all, if it’s a good rate, and it becomes even better due to rising fuel costs, why wouldn’t they?
Gerald Cubbage made one more shot at it. He said, “since we’ve just voted to amend the contract, and that will mean we have some time before Warren County can finally approve it, can we hold the citizen informational meetings while we’re waiting?”
But apparently they couldn’t.
Gerald pointed out that numbers we’ve used for costs to breakeven were $35/day and we were selling for $31/day, with no adjustable escalation for a very long term, so why were we selling our capacity below cost, and Mark Belton, our County Administrator and the negotiator of the contract answered, “Bird in Hand. It’s all we could get.”
They then voted to accept the contract, provided Warren County will agree to the amended word change that says “trash generated in Warren County”. Mr. Cubbage voted against the motion to accept the contract, and all others voted for it.
Why this looks like History
The Battlecreek Landfill was indeed a major debacle, and a severe damage to the citizens of Page County, in the past. Every property owner in Page County pays about $250 in their property taxes to cover this, every year (counting the retirement of the $14M debt, the capital equipment, and the operating expenses.)
But the Board of Supervisors who generated this debacle, did not intend to harm the citizens or to do anything corrupt. They were well meaning citizen-legislators, attempting to come up with a way to pay for the schools, by starting a business. That’s all they intended to do. (See “The History of the Landfill” on the site at http://www.PageCountyWatch.org )
Gerald Cubbage was on the Board when all of that happened.
Throughout the decision-making, Gerald consistently, as reflected in the minutes of the meetings, brought up the objections, asked for citizen informational meetings, and voted against the actions. But he was ignored.
Just like last night.
The minutes of last night’s meeting will read very much like the minutes of the meetings when the landfill got to be what the landfill got to be. Our Board of Supervisors are well intentioned. They truly want to do good. They expect this contract to help us. They see it as a good financial decision.
The Board that got us into the contract with Tellurian felt the same way, if you read the Board minutes.
What’s different? Only that the Board has direct management over the landfill, as opposed to contracting it out. The other elements: selling our capacity to someone else for a long term at a price potentially below cost with no recourse – that’s the same.
Can it turn out that this contract is really good and helps us solve the problem? It might. It could be true that the economies of scale will kick in, and the costs won’t increase over fifteen years, at least not to the point of causing Page to subsidize Warren.
But are we really sure we know what we are doing well enough to take that risk?
I can understand why Mr. Cubbage’s request to hold citizen informational meetings was ignored. The answer “Bird in Hand” would not go over well in that forum.
Mr. Cave pointed out that the landfill is managed by a Board of Directors, and that Board is the county supervisors. I don’t know a lot of commercial boards that would have proceeded with an action this risky on the basis of a Bird in Hand.
August 19, 2008 at 8:13 am
Well if history repeats itself here, what will probably happen will be something similar to the approach taken with the recent SWBA Chairman. Make promises, don’t keep their end of the bargain….then wait a year and make extremely distorted comments about the facts in a news article blaming someone else (Mike Clapper) for what was originally their responsibilty. It sure is sad, that this appears to be what has become the norm of how to do business in Page County.
I just wonder how they manage to take a bath if most of the time is spent thinking they walk on water? You can get pretty dirty with this type of self image.
Good luck Page County Citizens.
August 15, 2008 at 6:46 am
The New County Administration Complex
Get ready dear Citizens, it has been announced that during Tuesday’s Board of Supervisors meeting the “County Office Building Update” will be discussed, notice this is the last item on the agenda. One must wonder why last, maybe because everyone will have heard enough and will have gone home. However, those who remain will hear the news, it will cost more than originally thought, and the number has climbed to something around $10 million – not a fact, just thinking out loud.
One might wonder, what has the Board of Supervisors done to ensure that the needs of the citizens have been met? Or is this a case where the outgoing members of the Board are getting a little bit concerned about whether or not their name will appear on the plaque which will adorn the front of the building? Or, does the Board not want to waste the time to do an analysis to determine what the citizens want because they do not care what the citizens want? We know what the Board wants, a 50,000 square foot building on their $600,000 lot, but is that what the citizens of Page County want?
So, where does the BOS plan to get the money to build this complex? Is it new taxes? Or, will they rob Peter to pay Paul? This Board is known for telling the citizens one thing and doing something else. Maybe they have been enticed by the contract with Warren County. Were we not told that that money would pay off the landfill in the next 40 years?
July 18, 2008 at 10:13 am
Rick, the supervisors are free to call and meet with Mark Belton at any time — but by law they aren’t allowed to gather together in a room of more than two of them at the same time, unless they announce the meeting and invite the public. So in order to learn about things, if each of them were briefed by Mark, he would have to do it at least three times, so that no more than two of them would be in the room. Needless to say, this isn’t likely to happen.
The Chairman can, and I can only assume does, spend a lot of time with him, but the rest of the Supervisors generally seem to get their information through the packets or individual phone calls. How much preparation they do I can only assume. But between the formal meetings, and the fact that they have regular jobs in addition to their Supervisor duties, strongly suggests that they don’t get much more information than we do.
Because this was a contract, one can infer that they talked about it in their closed sessions over time. If they did, and they still ended up with a contract this frightening, that’s another problem all together.
July 18, 2008 at 9:48 am
Thanks Alice. I was not sure how the relationship between the Board and the County Administrator worked. I thought there was free and constant exchange of questions, ideas, and facts between them. I thought what one knew, they all knew. I did not know things were done with information packages put together by a single source and given to the Board members as their sole source of information.
July 17, 2008 at 8:46 am
There is a fundamental flaw in the public hearing process. We have public hearings about things after it’s too late to do anything about them. The informational meetings about what decision is being made don’t occur until after the public has its chance to speak. So if anybody is going to speak, they’re going to speak without the knowledge about what they are speaking about. This happens on the budgets, it happened on the Emerald City land, and time and again.
The most disturbing thing is that it appears that the Supervisors don’t have the information, either. They have briefing packets, delivered a few days in advance, but no indication that any hard questions are being asked of the people who are briefing them.
This is not the behavior of a commercial Board of Directors, and not adequate for people who are spending $90M of taxpayer money every year.
What can be done? More must be expected of our county administrator in terms of disclosing, answering questions, briefing the supervisors and the public. It is not sufficient to negotiate a land deal for $66,000 an acre in a down market, and say “that’s all I could get.” It is not sufficient to sign a 15 year, no escalation, no escape contract, and say “it was a Bird in Hand.”
The Chairman of our Board was perfectly capable of badgering and questioning the School Board Superintendent about expenditures. But his job would be more effectively done if he started badgering and questioning our County Administrator instead.
July 16, 2008 at 11:28 pm
Sadly, it looks like a done deal, however, and until all parties sign the dotted line, it is not a done deal. I would appeal to every thinking Page County resident and hopefully, some retrospective supervisors to rise up in loud indignation, in any and all possible venues, to derail this absurd travesty before it can be consummated.
July 16, 2008 at 9:14 pm
Karl, I agree with you, but I also notice that it is a done deal. It appears the only way it will not happen is if Warren County doesn’t take the new wording. And you can bet they will as I see no reason for them not to. I keep these things in mind and vote at elections, beyond that, I see very little that can be done. This type of “leadership” without citizen input has caused untold damage through the years. I hope in future elections this becomes a major issue. I can’t understand the mindset that believes the board members know everything and don’t need citizen input. The flippant cliche does a good job of showing the depth of business sense.
July 16, 2008 at 6:15 pm
I have a lot of objections but I object most vociferously to the rush to evade citizen input! Especially with the illogical fiduciary terms that are currently on the table. Does no one on the Board of Supervisors or their consultants have a modicum of business intelligence??
1) Agreeing to a daily fee that is12% below costs is irresponsible to the extreme. If you’re going to sell something and know your not expecting to make a profit is one thing, but selling something for less than what it cost you is insane.
2) The 25 cent per ton increase per year is even more conspicuous for its ludicrous lack of economic cents (pun intended). Let’s see, we start the second year with only a 0.0080645% increase. That dismal annual cost-of-doing-business increase then decrements in the following years even further; i.e. Third year – 0.008%, fourth year – 0.0079365%, fifth year – 0.007874%, sixth year – 0.0073529 and so on.
The only competent means of applying an annual increase is to tie it to some universally acceptable percentage rate increase index. If a responsible contract can’t be incorporated then there should be NO DEAL. To me this piece of garbage contract (pun intended again) is a non- starter!
July 16, 2008 at 11:50 am
Gerald Cubbage makes a great point. The county wants to sign a 15 year contract in these financial times? Who knows how expensive diesel fuel will be in two years.
I appreciate that the Board of Supervisors is looking for sustainable ways to offset the cost of running the county, but there’s no need to rush into a 15 year contract.
Why not take time to get local citizens on board? This is a recipe for a lot of future resentments if an unpredictable problem occurs.