Washington and Ramsey counties believe they’re paying $8.4 million more than they need to, every year, just to deal with trash.
But county officials admit that the alternative they seem to be heading for — a $26 million public buyout of a privately run trash processing plant they now pay to use in Newport — carries risks as well.
“It’s not an easy decision,” said Washington commissioner Ted Bearth. “The government shouldn’t do all things.”
Judy Hunter, senior program manager for Washington County’s Department of Public Health & Environment, said the discovery that it should cost the public $61 a ton to handle trash, when a private firm collects $86 per ton, “was a real eye opener for us. We believe the gap is the profit margin.”
A decision on a public buyout is coming Thursday from a board consisting of Ramsey and Washington commissioners. Each County Board would then act in June, after studying the question since 2013.
The move to a buyout has been percolating for years.
In 2012, Washington County’s decision to pay the private firm $2.3 million a year to help ensure haulers use the Newport plant, led then-Commissioner Autumn Lehrke to lament:
“When they’re asking for a subsidy like this, I think we have every right to see their books. I just have a hard time taking hard-earned tax dollars and subsidizing their profit.”
Chris Gondeck, chief operations officer for Resource Recovery Technologies, the firm that owns the plant, said:
“All along we’ve told [county officials] that we can’t comment on our financial statements, not even to say ‘you’re close’ or ‘not close.’ So, ‘no comment’ there. But we’ve told the counties to make the assumption that we’re economically viable and focus on what the counties could do as far as savings.”
The plant opened in 1987, billed at the time as the “great garbage experiment,” a way of making energy out of trash rather than just dumping it into the ground. The plant processes raw waste into a substance that can be burned for electricity.
But Gondeck said the counties were elevating the cost of the business by leaving the plant in private hands. Without public ownership, the counties couldn’t legally require haulers to use the Newport plant.
That meant haulers needed to be lured into using it financially, given the cheaper option of a Wisconsin landfill. And it meant some tonnage still ended up in Wisconsin.
To compensate, the plant owner needed to pull in trash from Dakota and more distant counties. “And it’s more expensive to bring it in from other counties — to facilitate that with the haulers,” he said.
Once you can require all the garbage to go to Newport, Hunter told Washington commissioners, “the county subsidy declines to zero; the tipping fees pay the full cost of processing.”
The timing of the buyout talks stems from the expiration of the current contract — at the end of 2015 — between the counties and the private firm. The counties could stick with the public-private combination, but they don’t seem inclined to do so.
“The advantages of public ownership appear to stack up quite well,” said Zack Hansen, Environmental Health Director for the St. Paul-Ramsey Department of Public Health. It’s more cost effective, he said, and it allows the counties to better plan for things like an expansion of recycling. “How can we design a system that maximizes value,” for instance by turning organic waste into fuels such as biogas or ethanol, Hansen said. “It’s about improving the system overall.”
Independent local haulers mostly support the change, Hunter said, because it levels the playing field among competitors: No one saves money by shipping refuse across state borders more cheaply.
Newport was nervous about losing tax revenue from a private entity, officials said, but the county will make sure the city doesn’t lose out by making what’s known as a payment in lieu of taxes, commissioners were told at a recent meeting.
Public ownership adds another form of stability, said Washington County Commissioner Fran Miron.
“A tremendously aspect of this whole issue,” he said, “is that if the property were to be sold for some other purpose, permitting a facility like this anywhere else is probably nearly impossible to achieve.”