Shifting landfill debt would cost Janesville residents about $28 a year

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Neil Johnson
Thursday, July 24, 2014

JANESVILLE—The city's operations director is asking the Janesville City Council to shift landfill debt payments back to the city's general fund and allow more “flexibility” in garbage contracts and where garbage could come from. 

In a proposal the council will look at Monday, Operations Director John Whitcomb will ask the council to consider keeping the landfill open, and to shift landfill debt payments away from the city's sanitation fund to shore up the department's listing finances.

The recommendation comes as the city has been discussing whether to close or sell the landfill and as the city tries to market the landfill for potential sale or operation by private companies.

Whitcomb is recommending the city keep the landfill open and shift at least part of the landfill's debt payments—which total about $1 million a year currently—back into the general fund, according to a memo sent to the council.

The sanitation fund is projected to be in the red $223,173 at the end of this year. Whitcomb projects that if the council doesn't act on a plan, a deficit could grow to $4 million by 2027, when the landfill would close.

If the city keeps the landfill open and shifts all of the landfill debt payments to the general fund, it would mean a combined increase of $28 in fees and taxes for the average resident, according an analysis provided by Whitcomb.

Other options, such as keeping the landfill open but creating a user fee to cover debt payments, would mean a $40 fee hike for residents, according the analysis.

It would cost residents $28 extra in taxes if the city closed the landfill and rolled debt back into the general fund, according the analysis.

The council had directed the city in April to seek private-sector proposals to take the landfill off the city's hands or at least privatize operations. Whitcomb said the city's only had one formal offer: a proposal by Santek Waste Services, a company based in Cleveland, Tennessee, to operate, but not buy, the landfill. 

Whitcomb in the memo said the proposal would not have saved the city money, but he suggested the city should not close the door on the potential for future deal with Santek.

He has recommended the council allow the city to continue talks with the company for “contracting operations in the future,” according to the memo.

“We need to have some more dialogue with them. I think it has at least enough merit, but there are a lot of unanswered questions. It's a pretty complex relationship,” Whitcomb told The Gazette.

Whitcomb said city staff is still in discussions “internally” over a potential deal with Santek, and he wouldn't characterize what “unanswered questions” remain.

Other unanswered questions: How the city can shore up a sanitation fund balance that's plummeted from $3.7 million in 2008 to $285,000 last year, according to an analysis by Whitcomb.

Most of the landfill debt is tied to construction and closure of landfill cells, Whitcomb said.

Prior to 2009, the city paid landfill debt from the general fund. Since then, debt has been paid out of the sanitation fund, an approach Whitcomb said has soaked up more revenue, even though municipal collections fees doubled in 2014.

While city records show sanitation expenses dipped from $6.3 million in 2012 to $5.5 million in 2013, sanitation revenues have remained stable, hovering around $6 million since 2009, according to city records.

At the same time, waste tonnage from private haulers continues to shrink, in part because of garbage hauling market competition and because the city enacted policies in 2009 limiting where trash can come from.  

Tonnage has fallen from over 200,000 tons prior to 2009 and is on pace to total less than 100,000 tons this year, according to city projections.

The landfill has about 1.9 million tons of garbage in its cells now, and it has a capacity of 3.5 million tons.

At a time when the city has been marketing its landfill to private entities, Whitcomb said he believes the market is improving for waste hauling. That's part of the reason why he's asking the council to consider policies that would create more “flexibility” at the landfill. 

Whitcomb said some changes could include a change in maximum annual tons of waste the landfill would accept along with contract extensions and discounts for high-volume haulers.

He suggested the city could even look at taking out-of-state trash.

“Does it matter if it comes out of county or out of state?” Whitcomb said. “It doesn't matter. You're running a business.”

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