LOUDON — The Loudon County Solid Waste Disposal Commission
continues to struggle with the challenge of saving enough
money for closure and post-closure costs associated with the
Matlock Bend Landfill.
According to a draft of the most recent yearly audit, which
was released last week, the commission has failed for seven
straight years to accrue additional funding for closing the
landfill. The audit also showed an increase in estimated
liability for the closure costs.
Current and former members of the commission said the
problem is that the commission spends too much money and
doesn't receive enough of a share of the money generated by
the landfill.
A draft copy of the commission's audit for the period ending
June 2014 shows a net operating loss of about $71,000 on
about $384,000 in revenue. The commission has suffered a net
operating loss — sometimes more than $200,000 per year —
every year for at least the past four years, according to
the audit.
The landfill is ostensibly managed by the waste commission,
a seven-member intergovernmental agency created by the
county and the cities of Loudon and Lenoir City.
Santek Environmental Services of Cleveland, Tenn., manages
the day to day operations of the landfill and collects the
tipping fees, a portion of which are given to the commission
to invest for closure costs.
The commission has accrued almost $3 million in the fund
since taking over management of the landfill in the early
1990s. With about 13 years left on the 20-year contract,
estimates peg closure and post-closure costs at more than $7
million.
Since the contract was signed in 2007 however, the fund has
been depleted due to lower revenues and an investment
strategy in which the cost of managing the funds exceeded
the interest paid.
"It's extremely important that we address the closing
costs," said Kelli Littleton-Brewster, a Loudon County
commissioner and a member of the solid waste commission.
One of the biggest challenges to improving the bottom line
is the 2007 contract, she said.
The contract — negotiated under the guidance of Knoxville
attorney Bud Gilbert — allows Santek to set the tipping fee.
The fee at the Matlock Bend Landfill is $28.70 per ton.
Santek has the right under the contract to set even lower
tipping fees for customers on contract.
By comparison, the Alcoa-Maryville-Blount County Landfill
charges $42 per ton and McMinn County charges about $38.25.
In addition to tipping fees, Santek also makes money hauling
trash to the dump, noted Loudon County activist Pat Hunter.
"It's win-win for them and lose-lose for us," she said.
Because Santek is not responsible for the closure costs of
the landfill, it's in the company's interest to set the
tipping fee as low as possible and to deliver as much waste
as possible to the Matlock Bend landfill, Hunter said.
In recent discussions with Santek, the company offered to
add about $1.29 per ton to the tipping fee. Santek has also
suggested extending the contract past 2027 to have more time
to save for closure.
Extending the contract without first putting out for
competitive bids might not be legal under state procurement
rules, Hunter said.
Among the ideas that might make a big difference in building
the closure fund is a surcharge added by Loudon County
Commission to every load dumped at the landfill, Hunter
said.
"We need to look at all options," said Littleton-Brewster.
County commissioners last year estimated that it would take
a surcharge of at least $3 per ton to put the fund on track
to meet the projected closure costs.
Santek did not respond to requests for an interview or to
written questions submitted by email.
Aileen Longmire was one of the first members of the waste
commission back in the 1990s when she also served as
treasurer. She said that in addition to not bringing in
enough money from the tipping fees, the current commission
is fiscally irresponsible.
The commission doesn't have a yearly budget and doesn't
properly review expenditures on such items as travel and
attorney's fees, she said.
According to Littleton-Brewster, the commission has been
taking steps to cut expenses, including moving commission
attorney Kevin Stevens to a flat monthly fee of $2,500.
Commissioners also eliminated their own $50 per meeting
stipend.
Loudon County Mayor Buddy Bradshaw was answering questions
about the landfill even before he took office in August. He
wants the waste commission to understand that it has a
responsibility to the residents of the county.
"It's a big potential liability," he said. Bradshaw said he
appointed Littleton-Brewster to the commission because she
is not afraid to ask questions. As a county commissioner she
also understands her financial responsibility to the
tax-payers.
Last month Bradshaw announced that Tom Paul, who represents
Tellico Village on the waste commission, would not be
appointed to a new six-year term. Paul, who had been
appointed last year to fill out the term of another
commissioner, came under criticism earlier this year for
excessive spending on a trip to a conference in Gatlinburg.
Longmire said that Paul's reimbursement of about $900 for
the conference was an example of excessive spending. "There
was no budget, there was no amount set aside for expense for
the conference for attendees and no votes on the
expenditures," she said.
According to waste commission Chairman Steve Field, the
actual reimbursement given to Paul was about $860. The
increased cost was a result of late registration, Field
said.
"It's still three times the average cost of any other member
that attended the same conference," Longmire said.
Bradshaw replaced Paul with Tellico Village resident Bruce
Hamilton. County Commissioner Henry Cullen said Hamilton is
a retired IBM manager "with a good head on his shoulders."
The waste commission has tried to reduce the management fee
charged by the county trustee's office. Over the past few
years the fee has been more than the interest the commission
earns on the closure funds. State laws require the funds be
invested in low-risk, low-yield investments. A recent
attempt to challenge the fees resulted in an opinion from
the state attorney general's office that the dispute was a
local matter.
A proposal to transfer the closure fund to Santek so that
the company could invest the funds itself for higher yield
was described by activist Hunter as "letting the fox guard
the henhouse."
The waste commission also has looked into creating new
sources of revenue. Several years ago the commission
discussed a "gasification" project that would tap into the
natural gas or methane created by the landfill.