Increasing costs in the sanitary landfill requires an increase of 4.1% from local municipalities

Article content

It will cost local municipalities, and subsequently taxpayers, 4.1% more to have their garbage in landfills and process their recyclable materials in 2022.

Article content

The Essex-Windsor Solid Waste Authority’s proposed budget projects expenditures of $ 35.9 million and revenues of $ 34.7 million, translating into a deficit of $ 1.2 million. The deficit will be funded by its rate stabilization reserve, created to mitigate the big financial swings EWSWA often encounters.

“At the end of the day, the solid waste authority is definitely providing an essential service and there aren’t many discretionary opportunities. Those fixed costs are what they are, ”said Windsor Ward 9 Coun. Kieran McKenzie, who sits on the EWSWA board. “We have to collect the waste, we have to process it properly,” and then there are the legislated costs of keeping landfills closed in perpetuity, he said.

Article content

Starting in 2022, one of the big additional expenses is a new transportation contract, for truck waste left by garbage trucks in city and county warehouses at the regional landfill, adding more than $ 1 million. a year, according to general manager Michelle Bishop. . One component of that new contract jumped from $ 740,000 to $ 1.4 million. He explained that the previous transportation contract was nine years old and long at the time. When it came time to request new offers, “we were expecting a big increase,” he said.

Another perpetual added cost is the fallout from the two-decade MFP Financial Services leasing scandal, a 26-year high-interest obligation that will end up costing EWSWA $ 151 million by the time it is paid off in 2031.

Article content

Sun Life’s obligation is the result of a 2005 legal agreement with MFP, which requires the city and county to pay $ 62.8 million over 26 years. The scandal erupted in 2002 over financing schemes that began in the 1990s and were touted by city administrators as money savers. Leases for the landfill, buses, fire trucks, and gym equipment were supposed to cost the city and county $ 91 million (at 4.1 percent interest), but ended up costing $ 314 million (at 10 , 4 percent).

Payments to Sun Life are increasing, from $ 3.1 million paid in 2006 to $ 6.5 million in 2022 and jumping to $ 10.8 million in 2030 and then to $ 15.6 million last year in 2031. EWSWA has smoothed that out by using a reserve fund so that payments increase more gradually and steadily by around $ 200,000 annually. The 2022 contribution is $ 5.9 million.

Article content

“I can’t really talk about it because it was way before my time,” Bishop said of the aftermath of the MFP debacle. “I only have the payment schedule and it is built into our budget.”

All the contracts that the solid waste authority has with private companies have adjustments in the Consumer Price Index, which by 2022 is expected to increase significantly.

“It has its processors in the recycling centers, it has all its recycling trucks that circulate on the street every week, we have treatment costs for the transportation of leachate. All of those contracts have an annual escalation clause built into the contract and that pretty much represents the balance of the increase, ”Bishop said.

Expenses are increasing from $ 32 million to $ 35.9 million, an increase of 12 percent. But that increase is partially offset by revenue increasing from $ 29.5 million to $ 34.7 million. Part of that revenue increase comes from the fixed charge to municipalities that increases from $ 8.9 million to $ 9.4 million and the tip rates charged to municipalities increase from $ 39 to $ 40 per ton.

Article content

But another big contributor is the money the authority recovers by selling recyclable materials. Last year, it budgeted just $ 1.8 million, but ended up with $ 5 million thanks to an explosion in the value of many commodities. It raised $ 345,000 from the sale of cardboard instead of the $ 64,900 that was budgeted, and $ 1.3 million from corrugated cardboard instead of the $ 511,500 budgeted.

“The market is pushing prices up,” Bishop said, explaining that during the pandemic, carton is selling at record levels. “And that’s because there is a box with a smiley face (Amazon) that is delivered to many houses many times a week today.”

The last time the authority approached the current high prices of raw materials was in 2012. In 2019, prices reached an all-time low.

Bishop said the forecast is that the market will remain strong in 2022 but then return to historic levels.

The solid waste authority board, made up of politicians from local municipalities, approved the budget earlier this month, but it still needs municipal and county council approval.

[email protected]