Landfill dollars don't add up
An independent study conducted by Geosyntec Consultants in Knoxville found that the Loudon County Solid Waste Disposal Commission was not collecting enough revenue as part of the tipping fee at Matlock Bend Landfill to pay for future costs associated with closure and post-closure care.
"Our auditor has been telling us that we have been not accumulating money at the proper rate to close the landfill ... and this report confirms that," Steve Field, solid waste commission board chairman, told Loudon County Commission on Monday.
As per the solid waste commission's current contract negotiated in 2007 with waste management company Santek Waste Services, the landfill is charging a fee of $1 per ton, or 5 percent of the tipping fee, to accrue funds necessary to close the facility in the future.
Santek has submitted an application with the Tennessee Department of Environment and Conservation to expand the landfill from the currently permitted space of 41.5 acres to about 67 acres.
According to Geosyntec's report, the closure-post closure rate of $3.86 per ton would need to be applied to the current landfill space, and $2.32 per ton would be needed for the expanded area.
"Who sets the rate?" Commissioner Sharon Yarbrough asked about the $1 per ton rate. "Why wouldn't we have a rate that's appropriate?"
Field said the rate was set based on the contract between the solid waste board and Santek. The contract runs for 20 years and expires in 2027.
"If I had the opportunity to redo the contract again there would be a lot of things I'd put in there that are different, but the contract that we have is the contract that we have," Field said. "Santek in their bid essentially set the gate rate and also provided the rate to the stakeholders as part of the bid process."
Field said in a follow-up interview that numerous steps must be taken to close a landfill and safeguard against environmental pollution, including capping the site to make it impenetrable to rain, adding top soil, monitoring the landfill and possibly adding a gas collection system to curb potential leakage.
"It's a fairly engineering intensive and expensive phase of the landfill life," Field said, noting that part of the reason for the study was to get input from an outside source familiar with landfill operations.
The intent was to "see what potential liabilities Santek should have relative to closure, and then try to come up with some dollar figure based on what they interpret to be the closure, post-closure liability, so that way when it comes time we can make sure that the board has enough funds available so that we can close the landfill, and we won't have to go to the county hat in hand looking for more money."
Field said the $1 per ton figure was calculated at the time based on counsel from the solid waste commission's attorney and through consultation with the University of Tennessee's County Technical Assistance Service.
Commissioner Harold Duff asked Field what percentage of responsibility would the county, solid waste commission and Santek have in closing the site.
"If you read the report, Geosyntec outlines a number of places where they point to the obligation that Santek has to close the landfill up to everything where they're putting in waste," Field said, adding that the solid waste board would have to work with Santek on a more well-defined plan going forward.
Field said during a later interview that the closure-post closure security fee of $1 per ton did not take into account inflation over the life of the contract.
"Part of the challenge of the whole thing is not only looking at the cost, because you're estimating the cost today, but you're going to do it (close the site) in potentially 30 years, so you need to apply an inflation factor to that amount of money, and that's one of the things that I think was lacking in that initial pricing structure," he said. "There were a number of things that weren't anticipated that should have been included."
He told commissioners while the Geosyntec report suggests Santek bears some responsibility for the facility's closure, "the ultimate responsibility for closure will be on the solid waste commission, and we'll have the funds available to cover that."
In an unrelated matter, Finance Director Tracy Blair presented commissioners with an adjusted health insurance rate for county employees. The rate through Blue Cross Blue Shield of Tennessee will increase 4.97 percent in the next fiscal year. County employees will contribute 18 percent toward the premium, up from 15 percent in the current year, while the county will contribute 82 percent.
Last summer, commissioners agreed to increase the employee contribution by 3 percent each year until the ratio reached 75-to-25.
Duff suggested the budget committee potentially look at a salary increase to help offset rising insurance costs. "Some consideration should be given to that," he said.
In other business, the board:
óŹ Considered a request to rezone two acres at the intersection of Loudon Ridge Road and Snodderly Drive from A-2 rural residential to R-1 suburban residential.
óŹ Considered a request to rezone 7.65 acres located at 16746 Highway 11 East from R-1 suburban residential to O-1 office professional district.