State budget limits options for landfill fixWisconsin's budget is a game changer for the city's plans to charge residents for garbage service.
By: Shelley Nelson, Superior Telegram
Wisconsin's budget is a game changer for the city's plans to charge residents for garbage service.
It's left the city administration without a solution to recommend for solving financial problems at the landfill after a series of public meetings to discuss the proposal to institute a $20 per month household fee to replace an annual transfer from the city's general fund.
The budget signed by Gov. Scott Walker on June 30 prohibits the city from raising fees without cutting its annual tax levy by the same amount.
In June, the city's administration presented the council with a proposal to adopt the fee as the landfill faces a $200,000 shortfall this year. It's a number that is expected to grow in coming years.
The recommendation came after Bob Larsen, a expert with 40 years of experience in waste management, reviewed the city-owned enterprise. Larsen advised the council most landfills are paid for through user fees.
However, the state budget would require the city to reduce its tax levy by the same amount the new fee creates.
The city would still need to make more than $1 million in cuts to core services such as police, fire and public works to make up the difference, Mayor Bruce Hagen said.
We don't have a recommendation at this point, he said.
That leaves the council with two options based on Larsen's analysis: Do nothing and let the landfill deficit increase, or privatize the city landfill and garbage service at a greater potential cost for residents.
The mayor questioned if selling the landfill would even be feasible because it is located on only 40 acres of city owned land.
The mayor is certain of one thing: Selling the landfill should be the last resort.
Public Works Director Jeff Goetzman said there are advantages to the city owning its own landfill, such as being able to offer free landfill days to residents four times a year, the city’s annual spring cleanup and adapting for emergencies like the flooding last year that left many with water-soaked items that needed disposal.
Almost 65 percent of the cost to operate the landfill is paid through the city's contract with Western Lake Superior Sanitary District, a contract that runs to 2019. With WLSSD facing a $13 per ton tipping fee imposed by the state of Wisconsin and less costly alternatives in Minnesota, Hagen said he believes the contract will end when it expires, leaving the city with a loss in revenue of almost $3.5 million of the $5.4 million budget based on today's numbers.
While rural trash haulers contribute about $721,000 annually to the revenue stream for the landfill, WLSSD is the only outside contract the city has for landfilling services.
The situation as we know it today is the landfill is losing money, Hagen said.
The difficulty in filling that hole is exacerbated by state-issued limits on the tax levy that has maintained a city budget of about $27 million annually over the last five years at a time when state shared revenue and payments for city services has been on the decline.
Hagen said while the Wisconsin Department of Administration has estimated the cost of providing city services to state-owned facilities such as the university to be about $558,000, the city will only receive about $250,000 for those services.
The problem that we're running into is that we're doing an annual transfer from our general fund, said Finance Director Jean Vito. It's become very difficult to continue with that transfer.
The city makes about $1 million transfer from the taxpayer supported general fund to the landfill's user-fee supported enterprise fund annually.
Right now, the landfill is competing with the police department as the highest cost operation in the city, Hagen said.