An intelligent alternative to the Solid Waste User Fee

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ROCK HILL - I have been very critical of the recent passage of the Solid Waste User Fee.  I feel it is my obligation as a County Legislator not only to protect my constituents from bad and unfair policy and taxation, but to also propose an intelligent alternative to this new tax which is unfair and unaffordable.

There is an alternative to fatally flawed Garbage Tax that was recently passed to fund the Sullivan County's Solid Waste System. 

First, let’s review some facts.

There is a major disconnect between the aim of the Garbage Tax and the goals of the Solid Waste System. 

The projected cost of the Solid Waste System under the Chairman's zero tip fee models is $13.2 million comprised of $4.5 in debt service of existing debt-plus $6.1 million for exportation and an additional $2.7 to operate convenience centers, the materials recovery facility and cover post closure activities.  The projected exportation cost assumes that the County will export between 85,000 to 100,000 tons of waste annually. 

In 2009, the County handled between 55,000 to 60,000 tons of Municipal Solid Waste (MSW).   The projected tonnage for 2010 represents an increase of between 30,000 to 40,000 tons of MSW annually - over a 50% increase.  That’s a big disconnect.

By the County Administration’s budget projections, the Zero Tip Fee will add over $2 million annually to the cost of operating the County's Solid Waste System just in the amount of MSW we have to handle.   This increase reflects reductions in recycling, inflow of out-of-county garbage and presumably recapture of tonnage that is presently leaving the County that’s another big disconnect.

The Rouis Administration’s goal of quickly pushing the passage of the Garbage Tax seemed to be maximizing the amount of tonnage we export so that we would get a slightly lower exportation cost per ton. 

In the end, it still means we are paying more for solid waste disposal. 

Instead, the goal must be to increase recycling and to reduce the tonnage of municipal solid waste we export. 

Look at this way, the cost to export 50,000 tons at $71 a ton is $3.55 million annually.  The cost to export 100,000 tons at $61 a ton is $6.1 million. 

While the latter cost less per ton, it still cost us $2.65 million more annually than a Solid Waste System that embraces recycling.  It also results in a loss of $588,000 annually in revenue from the sale of recyclables [actual 2008 revenues].   

Our goal for the 2010 Solid Waste System should be to handle no more than 70,000 tons of MSW of which we should recycle 10,000 tons through the expanded Materials Recovery Facility [resulting in $1.2 million in recycling revenue].  This would result in the exportation of 60,000 tons of MSW at $71 a ton for a 2010 exportation cost of $4.26 million. 

The net exportation cost factoring in recycling revenue would be $3.06 million - less than half of the anticipated $6.1 million cost of the Garbage Tax that was envisioned with the recently enacted Local Law.

So what do I propose as an intelligent alternative?

To begin with, we need a user fee system that is fairer to our small businesses and residents and rewards recycling while providing stricter enforcement of recycling laws.

First, pay-as-you-throw must continue to be part of how we pay for our solid waste system.   Under pay-as-you-throw, a resident that brings their trash to a transfer station would only pay for the trash they dispose of and not their recyclables.  

This gives our residents an incentive to recycle and will increase the revenue the County would derive from the sale of its recyclables. 

If the County mandates clear bags, then local haulers and municipalities could offer a pay-as-you-throw option for local residents.  

The less you throw away the less you pay. 

This is a win-win situation.  We already have a pay-as-you-throw system in place at the transfer stations and it needs to be a broader part of our solid waste system.

Second, the present Garbage Tax should be scrapped.  We should instead take a hybrid approach that includes a much smaller Solid Waste User Fee while maintaining an $80 tip fee to discourage out-of-county waste from finding its way to our transfer stations. 

We would expect to process 70,000 tons in Year 1 under this system.  The tip fee would raise $5.6 million annually. The balance could be raised through an average residential annual solid waste user fee of $60 [raising $3.2 million] and an average non-residential annual flat user fee of $300 [raising another $2.75 million]. 

Since the County is expected to pay $71 per ton for exportation in Year 1, it will realize an additional $630,000 in revenue (based upon exporting 60,000 ton).  In Year 2 when the exportation contract reduces the export cost to $61 a ton, the County will raise an additional $1.14 million annually from the exportation system.

The non-residential fee structure originally proposed by the Administration would have cost area businesses such as the Trading Post in Rock Hill $9,600 a year.  The smaller flat fee that I recommend for non-residential uses is a much sounder approach that, coupled with continued use of tipping fees, will encourage recycling.

In summary, the Year 1 Cost of the hybrid system would be $4.5 million [debt service], $2.7 million operating transfer station, MRF and post closure cost, and $4.26 exportation costs for a total cost of $11.46 million.  Year 1 revenue would be $5.6 million tip fees, $3.2 million residential user fee, and $2.75 million non-residential user fee and $1.2 annually from recycling revenue - resulting in total revenues of $12.75 million. 

To play it safe, the user fees should only be used for cost of the solid waste system going forward and not to cover the cost of the Phase 1 Landfill debacle and resulting debt service.

This hybrid approach with a much lower flat residential and non-residential flat user fee] will ensure that everyone helps to pay for the solid waste system while providing an incentive for people and businesses to control their solid waste expenses through recycling.  

If the Legislature is going to impose a Solid Waste User Fee, it must also enhance services.  Providing a means of disposing of household hazardous waste year-round at our transfer stations and expanding yard waste composting facilities are two services we should strive to provide our constiuents .

I will present this Hybrid approach this week at the County Legislature and hopefully some changes will be in store to start getting our fiscal house in order without brutalizing our taxpayers.

Don’t get fooled by the local news

ROCK HILL - The whitewashing of the passage and implications of the new Garbage Tax has begun. 

Recent newspaper accounts and op-ed columns have been very limited in information about the true nature and impact of this new tax on county residents.  Some are writing what the spin machine in the Government Center is putting out to them.

The beauty of writing my blog is that I can overcome the controlled flow of information to the public and let them know what is really going on at the Sullivan County Government Center, particularly on this issue

This is the bottom line. For years growth in the County Budget has been out of control.  Rather than living within our means, the Legislature has relied upon spending the County's undesignated fund balance to close budget gaps.  

Unfortunately, the County piggy bank has dwindled from over $20 million in FY 2000 to a mere $2.1 million in FY 2009.   

In 2007, realizing that the garbage flow was running out, the Legislature turned to increases in the County Sales, Tax, Mortgage Recording Tax, Room Tax and Motor Vehicle Licensing Tax.  

In 2010, we will now have the Garbage Tax.

The proposed Solid Waste User Fee is really a cynical approach to hide increases in real property taxes that are now necessary to close the budget gap.  The proposed user fee is only postponing the inevitable need to take a hard, critical look at County spending practices. 

For a while putting off hard decisions for tomorrow seemed to help, but tomorrow is now at hand. Now, there has been a huge backlash with all the tax increases.  The garbage tax is the straw that broke the camel’s back. 

The Rouis Administration is finally getting the message that Sullivan County taxpayers cannot endure more tax increases, whatever form they may be assessed by a government whose spending is out of control.

Thankfully, many of you also saw the flaws in the proposed Solid Waste User Fee and made your voices heard at the Legislative Meetings and through your letters to the editor.

Our concerns are finally being heard but the fight is not over.

We need to ensure that the Solid Waste User Fee that is ultimately adopted does not impose a financial burden on taxpayers and small business owners. 

It must also be equitable and legally defensible. We also need to ensure that the County Budget keeps county spending in line with revenue growth without the need for more taxes.

To that end, I encourage you to attend budget hearings this week and continue to email your legislators (hopefully, the computers will be working this week at the Government Center).

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Trash Talk-County Needs to Balance Budget on Real Revenues, not Garbage Taxes