Is it time to dump the landfill?
JANESVILLE The city's sanitation fund continues to shrink, and closing the landfill in 2015 and sending the city's trash elsewhere is one option the council will consider at a Tuesday study session.
No decision is expected Tuesday, but the council will consider options that include a mix of raising fees, property taxes or both.
John Whitcomb, operations director, said the city is at a "critical juncture as it relates to all things sanitation. It's a tough situation, and it's going to require some tough decision making."
The balance of the sanitation fund dropped to about $295,000 by the end of 2012, down from a high of $2.7 million at the end of 2008.
Future borrowing expenses include:
-- $1.3 million to close a landfill cell and $1 million to care for water that circulates through the landfill this year.
-- $2.7 million to build a cell in 2014.
-- $1.6 million to close a cell in 2016.
-- $5.6 million to build a cell and close two cells between 2018 and 2023.
City officials say city residents have never paid the true cost of collecting and recycling trash. For many years, it was subsidized with $400,00 to $500,000 a year from the city's general fund.
In 2005 in response to state-imposed property tax levy limits, the city council opted to generate revenue by taking in trash from elsewhere. By 2007, waste dumped in the landfill had more than doubled to 272,000 tons.
In 2008, residents and council members began questioning the wisdom of importing trash and more quickly filling costly landfill space. The council voted to take less outside trash.
In 2009, the Great Recession pushed down trash intake to about 220,000 tons. As trash intake dropped, so did landfill revenue from tipping fees.
In 2011, the council voted to charge city residents a collection fee of $40 a year. That was raised in 2013 to $58 a year. The fee covers about half the cost of collecting and disposing of trash. Costs include a state Department of Natural Resources surcharge of $13 per ton and the value of the space consumed at the landfill, estimated at $22 per ton.
The user fee also does not offset the cost of the recycling program, which was $385,656 in 2012.
By the end of 2013, the city will lose two contracts with outside firms.
About 156,000 tons of garbage were accepted at the landfill in 2012, but that will drop to 141,000 in 2013 and 119,000 in 2014. Landfill revenue will drop, too.
The council will consider at least four options:
-- Increasing the trash fee to $94.18 in 2014, up from $58, to generate an estimated $851,363 in additional revenue. The annual user fee would be adjusted annually and would average $102.86 per household through 2023.
Under this option, the sanitation fund's balance would be negative $8.9 million.
-- Raising the user fee in 2014 and shifting $1 million annually through 2023 in sanitary debt service to the general fund. That means another $30.83 a year in property taxes for the owner of the average home assessed at $120,100.
This would create a sanitation fund balance of $1 million by 2023.
-- Closing the landfill and increasing trash collection fees. This option would save the expense of opening and closing two landfill cells, and it would reduce maintenance costs by $500,000. Savings in debt are estimated at $10.8 million.
The resident user fee would be increased to fully cover the cost of residential waste collection and the cost of hauling it to a landfill outside the city.
In 2014, the fee would be $94.18. The average annual fee in 2015, when the landfill would be closed, is projected to be $108.51 per household.
The average annual user fee from 2016 through 2023 would be $115.77 per household.
This option leaves a negative sanitation fund balance of about $10 million by 2023, which is about $1 million worse than if the landfill was left open to bring in revenue, Whitcomb said.
-- Shifting all debt payments to the general fund through 2023.
Trash collection fees would remain at $58 per year.
Shifting the debt would increase property taxes on the average home assessed at $120,100 by $50.16.
This option leaves a sanitation fund balance of negative $3.5 million.
"The landfill itself remains a sound business, even with the lower tons," Whitcomb said.
"What's happened here is, the marketplace has changed, and, as with other municipal landfills, what we're finding is, it's getting a little more difficult to compete because there are fewer larger facilities.
"The market has changed and rates have dropped," Whitcomb said. "Whether that's a permanent change or not, we won't know for some time, and whether or not you can survive that type of thing becomes a question."