Report on Refuse District

Mr. Lynam has emailed me a report on the Greater New Bedford Refuse District year end results that he will present to the Finance Committee tonight in room 315 of the Town Hall. I asked him if I could publish it here and he consented, so here it is. The post below has only the text of his report. You can view the report with the spreadsheets here.

FY08 has come to a close and the Greater New Bedford Regional Refuse Management District [ Dump ] reconciliation report has been submitted and accepted, having been so voted on November 18th, 2008. I thought this 4th of December, 2008 is as good a time as any to give ya'all a situation report on the facility.
Fy08 was a good year, all in all. The District realized $879,041 in revenues in excess of those projected. That coupled with an under-expenditure of the Fy08 budget of $347,845 totaled $1,226,886 in available monies at years end. In accordance with District policy, all available revenues will be retained and allocated to various reserves.
With the exception of the initial funding needed to start the Landfill District, it has been the policy of the District to "Pay-As-We-Go", thus avoiding the interest and other borrowing costs associated with expansion of the facility. Given the finite life of the facility it was thought to be unwise to enter into long term borrowing that might outlive the life of the landfill itself, resulting in a negative cash flow to the member municipalities [ Dartmouth & New Bedford ] at the end of its useful life . Fy13 will be the final debt payment, leaving the District debt free.

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Phase 2, cells 3 & 4 have just been completed and are entirely paid for. Phase 2, cells 5 & 6 are estimated to cost $6 mil. Of the $1,226,886 available, $ 626,886 will be deposited into the reserve intended to fund this next phase of construction. This deposit will bring the construction reserve to $2,009,376 or 33.5% of its goal ...... and on target.
The district has completed the GASB45 assessment which addresses the monies necessary to guarantee the future health benefits of all current and retired employees. Our current liability is $1,028,000, a number that changes with rates of return realized on fund investments, personnel characteristics and other factors beyond our control. From the year end revenues, $400,000 will be added to this fund bringing the balance to $662,158. .... 64.4% of the current target. GASB45 is not yet required by the state, but given the finite life of the facility, failure to address this liability today would saddle the member municipalities with a large and growing bill in the future. That will not happen .... we are on target to reach this goal.
$150,000 will be deposited into the Land Acquisition Reserve bringing that fund balance to $1,019,000. Land acquisition is always a controversial issue, but the need to own surrounding properties is based on experience. As fancy as its long name would suggest, this is a dump after all, and dumps smell despite the best efforts of man and technology. To avoid impacting the ground water, these facilities are built mostly above the ground and rise quite high into the air. Mt Trashmore is not as majestic to look at as is Mt Rushmore. The views and the occasional odors threaten to bring about law suits intended to put us out of business and / or limit future expansion. If successful, such action would cost 'us' collectively $millions in closure costs, monitoring costs and, of course, the cost of now disposing of our trash at full industrial prices.
We have to date spent considerable funds fighting legal actions from a neighboring manufacturing plant [ Ahead Headgear Inc. ] located in the Industrial Park. We have successfully fended off those actions but at a cost in excess of $100 K. It has been the practice of the District to acquire any parcels that border the land fill when they become available in order to fend off future challenges to its operation. There are two key parcels yet to be acquired... value undetermined.
When the Landfill is finally retired, the value of these bordering properties will be considerable. Their eventual sale will bring a windfall of monies to both Dartmouth & New Bedford. For FY08 the cranberry bogs, rental income from a District owned single family home and the sale of hay grown on the property added revenue totaling $83,835, helping to keep our annual assessment low. Our target for this fund is $3mil ... with this deposit we will be at 34% of that goal.
The "Environmental Contingency Reserve" is a set aside to cover the insurance deductibles and other costs associated with the unlikely occurrence of ground water contamination due to a leak in a cell liner. Should local well contamination occur, we would be required to pipe-in water from the New Bedford municipal water supply. We do have insurance designed to mitigate these expenses. The goal for this contingency reserve is set at $500,000. With this deposit of $50,000 the fund will now total $ 322,000 or 64% of goal.
Other reserves are Closure & Post-Closure Reserves are required by DEP to insure the cells are properly capped and monitored for the legally required period of time. These amounts are recalculated each year by the District's engineer to adjust for additional cells built and for existing cell areas that have been capped.
The District Agreement divides the facilities operating costs among the two participants according to the tonnage received at the Landfill. Dartmouth's Pay-As-You-Throw program has caused a significant drop in our tonnage, effectively shifting the cost burden in New Bedford's direction. The result is that Dartmouth's share of the operating costs for its 6,595.98 tons is 13.06% where New Bedford's 43,910.64 tons accounts for 86.94%.
These figures are different from what was estimated for Fy08 resulting in $46,638 being 'owed' to Dartmouth. This amount will be deducted from Dartmouth's FY10 assessment. Bottom line is that Dartmouth paid ( $109,155 / 6,595.98 tons ) = $16.55 / ton in Fy08. We charge private haulers $71 / ton.
New Bedford has greatly stepped up its recycling efforts and this shift is not expected to continue .. in fact it is expected to begin to shift back the other way. Because of the large disparity in tonnage between Dartmouth & New Bedford, recycling success on the scale of Dartmouth's would result in a significant increase in future assessments to Dartmouth as our percentage of deposited waste climbs while New Bedford's falls.
The recyclables NOT deposited into the Landfill that led to this low per ton cost generated $149,336 in recycling revenue for Dartmouth in Fy08 [ $313,073 for New Bedford ] essentially resulting in FREE disposal of our solid waste ... PLUS a little profit. This money is held in separate accounts custodially by the District for the member communities . It is released upon request for use in recycling efforts. Such efforts include the purchase of trucks, 'Blue Bins', promotional material and the like. That's the good news ......
.... The bad news is that the prices paid for recyclable materials have been depressed because of the global economic condition :
Paper hit a high of $110 / ton this summer ... now it is worthless. China, a big purchaser of old paper, has stopped buying it. Some customers are having to PAY to recycle their paper or have their shipments refused. This means that paper would have to be land filled, raising our tonnage once again. A.W. Martin is still accepting our paper and cardboard ... at $0.
Commingled Containers [ i.e. metal cans, glass bottles & plastics ] was paying $ 12 / ton, now $0. A few years ago they charged us $30 / ton to take it off our hands.
Scrap Metal went as high as $200 / ton, dropped to $30 / ton and currently is at $60 / ton.
The two municipal recycling accounts held on the behalf of Dartmouth & New Bedford are used to pay the recycling expenses. Normally a profit is realized, but very little money is expected to be coming in for at least the next 6 months. The current balances of $109,000 for Dartmouth and $ 117,000 in the New Bedford account 'should' tide us over.
Summary:
The Landfill was originally envisioned to last 20 years, until the year 2015. Its current life expectancy is another 10 years beyond original estimates to at least 2026.
Exceptional efforts have been made to generate revenue from the facility and its properties. Income realized from these efforts include the rental of the facility owned single family home, the sale of scrap metal recovered from the land fill, the sale of hay, 20% of the gross value of each crop of cranberries and the capture and sale of Methane Gas, which by itself brought in $565,996 [ including $397,634 in energy credits ] All total, $654,425 in "Other Income' was realized for FY08.
Costs are under control and debt is low and going lower. The future and all reasonable contingencies are planned for, quantified, goals set, the means to hit the goals identified and progress toward those goals is on target.
The Greater New Bedford Regional Refuse Management District is a great resource that is expertly managed both for today and for our many tomorrows.
Greg

Thank you Mr. Lynam for allowing me to publish this information.