At the expense of losing its commercial haulers, the Connecticut Resources Recovery Authority Board of Directors unanimously approved a steep increase in its tipping fees Thursday for members of its Mid-Connecticut Project.
After two-hours of discussion and a last ditch effort by one of its board members to cut the tip fee to $72 per ton, the trash authority’s board approved a $76 per ton tipping fee for its 70-member towns. The fee is jumping as much as 25 percent for some member towns.
Board member James Francis of West Hartford attributed most of the increase to costs associated with closure of the Hartford Landfill. “If we had not had this issue, our tip fee would have remained the same,” he said.
It will cost the trash authority $8.7 million in 2009 to begin closing the Hartford Landfill, which is the only publicly-owned ash landfill in the state. Over the next three years closure costs will reach about $27 million, CRRA Finance Director James Bolduc said Thursday.
However, if the state Bond Commission releases the $13 million the legislature has approved for the landfill’s closure, the fiscal picture may perk up a little for the agency everyone loves to hate.
CRRA President Thomas Kirk said the agency informed its member towns that there would be significant costs associated with closing the Hartford Landfill, but apparently some local officials haven’t been paying close attention and may be surprised at the closure’s steep pricetag. Apparently only a handful of member town officials have been attending the trash authority’s annual breakfasts, at which local officials get to provide feedback on things like rising tip fees. The next breakfast is scheduled for 7:30 a.m., Wednesday, Feb. 27, at the Rocky Hill Marriott.
Shelton Mayor Mark Lauretti, who also is a trash authority board member, said Thursday that if the towns think the fee increase is out of line, then they are welcome “to come sit with us and do the math.” Since July 1, the tip fees have ranged between $60 and $69 per ton based on a direct order from a judge, board member Ray O’Brien said.
“A judge decided who would pay what” while the authority was under two separate gag orders, he said.
O’Brien was referring to the December 2007 decision in which a judge required the authority to refund some $36 million to its member towns after a venom-filled legal fight over the disappearance of its $220 million investment in Enron Corp. (The authority was eventually able to recover $152 million through both litigation and the sale of its Enron bankruptcy claim to Deutsche Bank).
Meanwhile, Waterbury Judge Dennis G. Eveleigh awarded the towns $27 million, while the attorneys representing the towns received $9 million. The latter sum is being held in escrow pending appeal.
West Hartford Mayor Scott Slifka said he plans to set aside his anger over the Enron litigation to join the rest of the member towns as they take a step back to look at the authority’s proposed budget before they decide to go back to court.
Slifka said there are two issues the towns will examine.
First, they’ll look at whether the proposed budget meets the “net costs of operation” as defined in the trash authority’s contracts. Slifka said that the authority sometimes keeps more money in reserve than is necessary, and the towns will be looking at how much is adequate.
Based on the authority’s budget handouts, it looks like the it has about $12 million in reserve to close the Hartford landfill – far less than the $115 million it said it will need over the next five years.
The second issue, Slifka said, is whether there are any Enron-related costs in the rising tipping fee.
Anticipating that this may have been an issue before Thursday’s vote to set the fee, James Francis, the West Hartford board member, asked James Bolduc, the authority’s finance director, if any Enron related expenses were included in the tipping fee.
“In terms of the tip fee, there are no Enron related reserves on the balance sheet,” Mr. Bolduc replied.
Mr. Kirk said the $76 per ton tipping fee is what the trash authority must charge to meet its net costs. He said if the authority didn’t have to pay the towns the court-ordered $36 million settlement, tip fees would have dropped from $69 to $66 per ton. He said the $36 million represents about $10 per ton.
“Towns can choose to use the settlement to offset tip fees,” CRRA Chairman Michael Pace said.
Waterbury Mayor Mike Jarjura, who also is a CRRA board member, said his city has already spent its settlement money. For Waterbury’s sake, maybe he was only joking.
Click here to read the first part of the budget document and here for the second part.