The Town of Colonie and Waste Connections, Inc., put ink to paper on Thursday, Aug. 4, and signed the Solid Waste Facility operating agreement.
The town will still remain the owner of the landfill, according to the contract, but Waste Connections will be in charge of managing, maintaining and operating the facility for the next 25 years. The company will be also be responsible for the closure and post-closure care requirements until the New York State Department of Environmental Conservation has agreed those requirements have been met.
The town is now expected to receive $23 million with the signing of the contract. Supervisor Paula Mahan said this will effectively clear the deficits in both the governmental fund, as well as the fund for the landfill in the budget. Any money received after that must go toward paying off debt the Town of Colonie owes.
There is a provision in the contract that if Waste Connections were to intentionally fail or neglect its duties at the landfill and not fulfill the agreed upon requirements, the town has the right to complete those actions at the company’s expense and with interest starting the day money is spent. According the contract, the town must do so within 30 days after a written notice of the failure is given to the company. The company could also complete those actions within that same time period.
The contract also states that the town is in no way a partner of the company in any of the company’s business or joint ventures. Town Attorney Mike Magguilli has said earlier that this particular provision protects the town from any liability issues.
There are some obligations for the town to fulfill under the contract. The town is not allowed to amend any of the existing contracts that deal with waste disposal and must also provide any billing records of customers of the landfill to Waste Connections.
Another section of the contract explicitly states the town must join and fully support any application for permits for operation or expansion of the landfill that is deemed necessary by both the Waste Connections and the town. The town is allowed to review any “reasonable request by the company” to acquire more property Waste Connections would deem necessary for operation or expansion of the landfill “…and shall determine in Town’s sole discretion, whether to comply with Company’s request to exercise said authority,” according to the contract.
There is also the previously talked about cap on solid waste collection rates. The contract states that the annual increase of the rate will be no higher than 3.5 percent or the annual increase of the Consumer Price Index, which reflects changes in fuel prices or any new laws and regulations. The fuel adjustments will be based on the Energy Information Administration of the United States Department of Energy’s Weekly Retail on Highway Diesel Prices for the Central Atlantic. There is no cap for businesses or for customers living outside of the Town of Colonie.
There is another provision in the contract in regards to eminent domain. This occurs when any government agency, whether it is state or federal, attempts to take a piece of property for a public purpose or need.
According to Department of Public Works Commissioner Jack Cunningham, the agency would be required to pay a “reasonable price” for whatever portion of the landfill is taken. Waste Connections would then determine whether the facility would still be usable or if it could be repaired. Still, the company would be paid and the town would receive that money from Waste Connections.
“If the whole regional authority thought the landfill was necessary to have, in theory, they could take the landfill through eminent domain,” Cunningham said. “They would have to pay out Waste Connections for the rest of the contract.”
In its 2010 Annual Financial Report Update Document, submitted to the Office of the New York State Comptroller, the Town of Colonie reported a deficit of $10.4 million in governmental funds and $10.6 in the landfill fund, equaling out to a total deficit of $21.1 million. The landfill’s deficit was up $2.9 million from 2009, which Mahan said led the town to decide that this contract with Waste Connections was a “no brainer.”
The $23 million the town is receiving will eliminate the $21.1 million deficit, and will leave it with $2.5 million to pay off other debt such as the $25 million in bonds the town took out for the landfill. According to Deputy Comptroller Chris Kelsey, the town is legally not allowed to pay off all of their debt right away. He said this is because there are people that own town bonds in the IRA and expect a level of interest every year till it matures.
The governmental funds deficit, which is paid for by the taxpayers, has actually gone down $1.5 million since the current administration took office, according to Comptroller Craig Blair.
“Most of the increase came from the landfill, which supports why we’ve come to this operating agreement because we can do so much better for the residents now and far into the future,” Mahan said.