Superior may be closer to cash for trashPaying for trash out of pocket instead of through property taxes may be inevitable.
By: Shelley Nelson, Superior Telegram
Paying for trash out of pocket instead of through property taxes may be inevitable.
And the Superior City Council could find itself making a decision sooner because action in the Wisconsin Legislature could tie the city’s hands if local government doesn’t act soon.
That’s not how the city administration planned it, but an amendment made by the Joint Finance Committee to the state budget would give the city little lateral to deal with nearly a $1 million expense in the general fund that would have to grow to cover a deficit, and leave the city struggling to pay for essential services — public safety and public works.
The state provision would prohibit municipalities from creating fees for services at a time when local government revenue is held flat with tax levy limits unless the local government lowers the levy by the same amount.
That could leave the city trash collections competing with the city’s most expensive department — police — at a time when grants are helping to pay for officers and there are still fewer of them on the street.
Finance Director Jean Vito said she doesn’t see a scenario where the landfill would win the fight for funding against public safety. That could leave the city facing deficits in the millions or forced to privatize the landfill, a scenario that would inhibit the city’s ability to do an annual spring cleanup and address emergencies like last summer’s flooding.
The landfill is already facing a $200,000 shortfall in its 2013 budget.
The Superior City Council discussed at length Tuesday a proposal that would create a new $20 per month fee for garbage services.
The fee would fill the gap on costs and revenue, and eliminate the annual taxpayer-funded transfer. It would also better position the city-owned landfill financially when the contract with the Western Lake Superior Sanitary District — the largest source of revenue supporting landfill operations — ends in 2019.
It would also alleviate problems in the city’s annual budget that have developed as state aid and taxing authority to pay for state-mandated services has diminished.
New pay model
Facing the city’s first deficit in the city landfill enterprise fund, Mayor Bruce Hagen contacted the city’s first planning director, Robert Larsen, to evaluate the city enterprise. Larsen is an expert who teaches solid waste management at Texas State University-San Marcos.
Among his top recommendations, the former Superiorite recommended eliminating the “archaic” fund transfer and establishing a user-based fee to fund the operation.
“That’s a strong word, but I use it purposefully, because it is something that is typically not used any longer,” Larsen told the council Tuesday night.
One way to soften that blow is to go to a “pay as you throw” system, which would have graduated fees based on waste generated, Larsen said. He said the city could offer different size cans at different prices because a single person isn’t likely to generate as much waste as a family of four. The overall average would be $20 per month per household, but those who generate less garbage would pay less, and those who generate more would pay more.
That prompted questions from councilors on how the city would police the problem of people ordering smaller cans than they need and overstuffing them or leaving trash beside the can.
Larsen said the solution Austin, Texas, developed was to sell a sticker that has to be placed on the bag for collection. The inconvenience and expense of obtaining the sticker — costs that double when there is no sticker — encourages people to right-size their cans, he said.
Councilor Dan Olson still found the new $20 a month — $240 annually — fee to be exorbitant and questioned a lesser fee; however Vito said when she ran the numbers for $15 per month, based on his recommendation, it would still leave the city with a shortfall in the landfill.
In Duluth, where homeowners contract with haulers for garbage and recycling services Public Works Director Jeff Goetzman said his garbage bill is $34 a month.
The cost of collecting trash from city residents has remained relatively flat over the years; the cost of disposal has not, according to Goetzman.
Increasing regulation and complexity in managing waste has greatly increased the cost. Vito said the city never had to bond for landfill cell construction prior to 2011.
That, combined with the increasing number of permits the city is required to obtain for the expansion, adds to the cost — expected to be about $2.3 million for the second phase of constructing the latest landfill cell.
But the costs don’t end there.
In an effort to curb out-of-state waste from coming into Wisconsin landfills, the state Legislature more than doubled the environmental and recycling fees — tipping fees — the state collects on each ton of waste taken in at the landfill in 2009.
“I found it quite astonishing that (the) DNR has an environmental and recycling fee of $13 a ton,” Larsen said. “… I find it outlandish. In Texas, that same fee is a buck and a quarter. … and if you have recycling onsite or adjacent to your site, you get a rebate on that. That is really a discouraging amount of money to take that right off the top.”
However, even if the city were successful in convincing the Legislature to reduce that fee, which has supported economic development in the state since 2011, the reduction in the tipping fee would mean reduced costs for WLSSD, per the contract, but would only have a minimal impact on the city’s costs for waste management.
The contract with WLSSD covers almost $3.5 million of the landfill’s $5.4 million operating budget.
However, Vito said seeking a reduction in the tipping fee remains a medium-range priority because it puts the city in a better position to negotiate its contract with WLSSD in 2019.
After more than two hours of debate on the issue, the Superior City Council authorized the city administration to hold a series of public meetings to give citizens an opportunity to weigh in on the issue and educate the public about the challenges the city faces. They will be held at 11 a.m. and 6:30 p.m. June 19, 27 and July 10 at the Superior Public Library.
City administration is slated to report back to the council July 16 before the council weighs its options.
Options include doing nothing and letting deficits grow or privatizing the landfill, Larsen said.