ALBANY -- A consultant hired to do a financial analysis on the future of the Dougherty County Landfill told commissioners this week that tipping fees will have to be adjusted by at least 2.3 percent each year if it intends to stay fiscally solvent.
The landfill is a separate entity from other departments under control of the commission in that it operates from an enterprise fund rather than the taxpayer-funded general fund.
That enterprise fund operates solely based on the fees paid by the customers who use the landfill, Assistant County Administrator Mike McCoy said. Those "tipping fees" are structured so that the more tonnage the landfill takes in, the more money it takes in to cover the costs associated with day-to-day operations.
Additionally, the landfill recovers enough in its fees to pay for the cost associated with closing and sealing the various cells that comprise the landfill unit. Those costs average around $3.5 million to close three cells. If the current amount of waste coming into the landfill doesn't dramatically drop or increase -- current levels are at roughly 108,000 tons per year -- the county will have to pay a total of $9.5 million in cell development and closure costs by 2043, R.W. Beck Consultants' Abby Goldsmith said.
In her presentation, Goldsmith said that if current tonnage amounts stay relatively the same, the Dougherty County Commission would have to increase tipping fees at the landfill by 2.3 percent annually to raise enough money to meet that obligation and mounting maintenance costs.
Currently the county charges $30 to its biggest customers, such as the city of Albany, and $34.25 per ton for everyone else.
The analysis comes after the county was forced to raise tipping fees last year for the first time in several years because of economic factors and a drop in the tonnage coming into the landfill. When it did, the county caught officials with the city off guard, prompting concerns that nearly led the city to look at contracting with another company to handle its landfill needs.
But both sides were able to negotiate an amicable compromise that raised rates, but not to the level the city was facing.
Albany Public Works Director Phil Roberson said that the city is prepared for small rate adjustments, even if the county's rates become higher than other landfill sites.
"At this point we're committed to the county," Roberson said. "Anything under 3 percent is workable for us. The problem last year was that the jump was a little more than that and we were already in our budget discussions, so it just caught us off guard. The county does a good job and we aren't going anywhere yet."
The city uses garbage rates to cover tipping fees.
Goldsmith said that numbers were crunched for several different scenarios that fluctuate to give the commission varying pictures of what its policy decisions and budgeting concerns will be under various situations.
If the commission were to wait two years to raise fees and then increase at the cost of inflation each year -- maybe hoping to clear the effects of the recession before tacking on the added costs -- Goldsmith said that landfill would go into a deficit for the first time by 2028 and would continue plummeting downward unless rates were raised to $37 per ton to compensate.
Under another scenario, if the commission wanted to make sure its biggest customer, the city, continued to receive a discounted rate, Goldsmith said that it could raise the rates for the city to $33.75 per ton and the rates for all others to $35.75 per ton in FY 2011, followed by increases of 2.3 percent each year. The county would end up with slightly less money at the end of the landfill's life expectancy than if it forced both to be at the same rate level of $35.25.
In scenario 2, Goldsmith contends that if the county were to pick up another municipality or government's waste, 10,000 tons or more each year beginning in 2011, and the city and other government's rate dropped to $27 per ton, with all others paying $35 per ton, and with both increasing with inflation, the county would end up with more money than the base scenario, but would shoten the life of the landfill by four years.
In the final scenario, Goldsmith said that her company was curious to see what would happen if, instead of using enterprise fund money to fund a landfill gas system that is going to pump methane and other gases over to the Marine Corps Logistics Base, the county were to use 1 percent sales tax money. The city could pay $33.25 with others paying $35.25 -- with both increasing for inflation -- and the county would come out slightly ahead still.
So what's the bottom line?
According to Goldsmith, under current conditions, the standard rate would have to increase by $1 per ton for all users beginning in 2011.
Bringing in additional waste by having a contract with other governments could reduce costs for all users, but would shorten the life span of the landfill, she said.
Covering the landfill gas system with sales tax revenues could reduce costs for users, and combining the sales tax use with the increase in waste, costs could dip below current levels.
The issue, however, according to County Administrator Richard Crowdis, is that while one or two municipalities have expressed interest in using the landfill, they want to use it at a rate that would be impractical.
Another obstacle is that many governments have long-term contracts with their landfills that wouldn't allow them to jump right into a new one with Dougherty County.
Commissioners will use the information provided by Goldsmith to make a determination in the coming months on how much, if any, to increase the tipping fees at the landfill to conform with the budgetary process.
Last year was the first time in many years that the county had increased the tipping fees, Crowdis said. Before last year, the county was able to augment any losses from reductions in revenue with money from reserves. But with those reserves beginning to fall, the county is looking for alternatives to using those funds.