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HomeMy WebLinkAboutMinutes 02/24/1998 UTILITY ADVISORY COMMITTEE Port Angeles, Washington February 24, 1998 I. Call to Order: Chairman Doyle called the meeting to order at 3:03 p.m. II. Roll Call: Members Present: Councilmen Campbell, Doyle, and Williams, Bill Myers and Joe Michalczik. Members Absent: None. Staff Present: C. Knutson, K. Godbey, J. Pittis, K. Ridout, B. Titus, C. Hagar, T. McCabe, and S. McLain. Others Present: Pam Tietz. III. Approval of Minutes: Bill Myers moved to approve the minutes of the February 9, 1998, meeting. Councilman Campbell seconded the motion, which carried unanimously. Chairman Doyle moved Item B. up on the agenda, as Ms. Tietz was present for the discussion. IV. Discussion Items: B. Discussion of Request by the Housing Authority for Solid Waste Rate Reduction Ms. Tietz explained that an error had been made in the solid waste figures she had presented at the last meeting. Sewer charges should not have been included. The memo in the packet from the Public Works Department contains the corrected figures. Councilman Campbell stated he was sympathetic to the Boys and Girls Club; however, he did not feel it should be funded from the solid waste utility. The solid waste utility is experiencing some problems, and it would be inappropriate to fund Human Services activities with solid waste dollars. He emphasized the importance of the Club, but felt it should be funded via Human Services allocations. Bill Myers, Joe Michalczik and Chairman Doyle echoed the concerns and feelings of Councilman Campbell and felt it inappropriate to fund the Club via the solid waste utility. Joe Michalczik reminded the Committee that solid waste rates are built upon a cost of service and suggested the Club be funded through the City's General Fund. - 1 - Utility Advisory Committee February 24, 1998 Discussion ensued, and it was the general consensus of the Committee to have the City help the Boys and Girls Club seek funding, but not from the solid waste utility. Councilman Campbell moved to deny funding for the Boys and Girl Club from the Solid Waste Utility rates and seek other sources of funding to start the Boys and Girls Club. Bill Myers seconded the motion. Discussion followed, and Councilman Campbell felt Human Services funding should be utilized for this purpose. Joe Michalczik asked if the Housing Authority could at least be granted a 50% reduction in self haul. Councilman Doyle stated the current ordinance covers nonprofit, charitable organizations and to accomplish this for the Housing Authority, an ordinance amendment would be necessary. Attorney Knutson agreed to review the ordinance regarding this and reminded the Committee that it would be legal, by statute, to give the Housing Authority this reduction. Attorney Knutson reminded the Committee that this issue would go to the Council as a recommendation. At that point, the Council can be asked to allow the self haul reduction. Councilman Campbell amended his motion to recommend to the City Council that landf'IIl charges incurred by the Housing Authority as a result of self haul garbage be given a 50% reduction in tipping fees. Bill Myers agreed to the amendment as seconder. A vote was taken on the motion as amended, which carried unanimously. A. Draft Solid Waste Financial Analysis Director Pittis stated this is a solid waste financial analysis at this point, as a cost of service study has not yet been performed. Guidance from the UAC is necessary before staff can evaluate the rate. Director Pittis stated that the report contained in the packet is through the year 2000 and this trial period will be used to evaluate the utility, as it is the most conservative being the FAA has said we must close the landfill in 2000. Director Pittis then provided background to explain why staff is being so conservative in its estimates. Using these conservative figures and funding everything in cash, the financial analysis shows that there will be a $2.3 million deficit in the year 2000 for landfill closure. Most business would not fund everything in cash; expenses would be deferred and financed over time. Director Pittis felt bonds for the landfill would not be a good idea because of the useful life of the landfill. The transfer station, however, could be bonded, as it would have a long, useful life. The City could also apply for Public Works Trust Fund loans for the transfer station and closure costs. Staff is asking for the guidance of the UAC regarding these costs and how they will be addressed. Director Pittis then recounted the statutes establishing post closure operation funding. Finance Director Godbey informed the Committee that the City does not have to have actual cash in the bank to finance closure, but the utility's net assets must meet or exceed the amount needed to close the landfill. Discussion followed, and Directors Godbey and Pittis responded to questions posed by the Committee and provided clarification on funding issues. - 2 - Utility Advisory Committee February 24, 1998 Joe Michalczik noted the cell three extension is planned for this year and inquired how long it would take to fill this cell. Director Pittis stated it would take until 2006. He reminded the Committee that, if the landfill closes in 2000, we originally thought that the third cell could still be used as a demolition debris site beyond closure for municipal solid waste. We have since determined, however, this would be uneconomical, as the closure of the landfill and demolition site would overlap. Discussion followed regarding the third cell. Scott McLain, Power Manager, explained that, if the landfill can remain open until 2002, sufficient revenues will have been raised to pay for capital expenditures and cell closure without raising rates. Director Pittis felt confident the USDA report would be positive regarding managing the bird problem, and possibly that FAA could be convinced to allow the landfill to remain open for the life of cell three. Councilman Campbell felt the City should be building a transfer station if the landfill must be closed in 2000. Director Pittis stated more discussion will be held with Parametrix, and no final decisions can be made until all the facts are known. Further discussion ensued and Director Pittis provided further clarification and responded to questions. Director Pittis distributed copies of a memo from July 1997, regarding survey results for container conversion. The conversion costs are part of the financial analysis. More than half of those surveyed were willing to convert to a biweekly collection program. Director Pittis stated the problem with biweekly collection would be in setting rates. In order for container conversion to work, more than 22 % of the customers must convert to biweekly pick up so that the City can use current equipment and manpower. Staff examined half of the containers currently in use, and approximately 25% need to be replaced. The City could purchase two 90-gallon containers for the same price as one 300-gallon. A 300-gallon container serves approximately three houses. The 9O-gallon containers last about twice as long as the 300-gallon. The purchase of new containers is included in the Solid Waste Financial Analysis; however, rates must be established, an implementation program devised, and the package returned to the UAC for recommendation to Council. Scott McLain reviewed the landfill options and requested direction from the Utility Advisory Committee. Further discussion ensued regarding landfill closure costs and funding and container conversion. Director Pittis stated it would be best to convert all containers in the same year, rather than spreading it out over a two or three-year period. Councilman Campbell felt it would be best to make the container conversions in 1998 and enhance the recycling program through a differential in pick up rates. He suggested the current rates be used for biweekly pick up, and a $2.00 rate increase be given to those who wish weekly pick up. Further discussion followed regarding container conversion. Bill Myers suggested the default collection be weekly with a $2.00 increase, and biweekly pick up remain the same. Director Pittis stated recycling would remain weekly, as the City has a contract to this effect with Waste Management. Councilman Williams suggested a public relations campaign be used to advertise biweekly service in a positive manner. At Councilman Campbell's request, staff will investigate Department of Ecology grants and/or loans to finance the conversion. Joe Michalczik asked staff - 3 - Utility Advisory Committee February 24, 1998 to investigate having apartment complexes enter into the recycling program. No action was taken. C. Request by Jefferson County for Disposal at Port Angeles Landfill Director Pittis stated that, in the past, when trying to find ways of filling the landfill cell, it was suggested that other areas be courted for their refuse. Jefferson County was asked what its approach might be when its current contract expired. Jefferson County has now approached the City regarding possible use of the Port Angeles landfill. The initial offer is $21.15 per ton for tipping fees, as this is what they currently pay to Rabanco for the tipping fee portion of their long haul contract. The fee to Rabanco is made up of a transportation fee and tipping costs, with the refuse hauled to Klickitat County. Approximately $30 per ton is paid to Rabanco by Jefferson County simply for transportation. The transportation savings will be significant, as the distance from Port Townsend to Port Angeles is considerably less than from Port Townsend to Klickitat County. Director Pittis pointed out that $21.15 per ton is considerably less than the lowest rate the City now charges. However, the City could consider lowering the rates for the local long haulers and residents as a result of accepting the Jefferson County waste. If the City accepts $21.15 per ton, the revenues realized would be approximately $650,000 over two years. Director Pittis felt Jefferson County should be approached to share the transportation savings it would realize, thereby increasing the amount the City would get for use of its landfill. Director Pittis suggested staff continue negotiations with Jefferson County to obtain a higher tipping fee. Discussion followed, and Director Pittis responded to questions and provided clarification. Councilman Campbell felt the opportunity to get extra revenue would pay some of the costs reflected in the Solid Waste Financial Analysis as discussed earlier and would decrease the $2.3 million shortfall for landfill closure. Councilman Campbell was comfortable with staff's concepts including sharing of the transportation savings and sharing revenues with the citizens and contract haulers. Director Pittis stated coming up with a dollar figure to reduce rates would be difficult, but Scott McLain is working on it. Following further discussion and clarification, Councilman Campbell suggested staff get more information regarding disposal and transportation costs and bring this information back to the next meeting. Councilman Doyle announced that he and Councilman Campbell would be out of town at the time of the next meeting. Therefore, the Committee agreed to reschedule the next meeting to March 16, 1998. - 4- Utility Advisory Committee February 24, 1998 V. Late Items None. VI. Next Meeting: There will be a special meeting March 16, 1998, at 3:00 p.m. VIII. A4joumment: ~);?' ~~0~ - 5 -