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County Landfill fees to jump 134-percent

Monday, June 18, 2012

Hike needed to help resolve financial crisis

Expenses have been trimmed, more than 20 jobs have been eliminated including the former manager and assistant manager, the Pot-O-Gold at the end of the rainbow formerly known as the garbage pellet machine is shut down and for sale, and landfill fees in the County will increase 134-percent by July 1 of this year as the Cherokee County Solid Waste Commission labors long hours to keep the landfill financially sound enough to continue operating.

The crisis has largely resulted from a variety of circumstances both in and beyond the Commission's and landfill management's control.

The largest debt load, and one that has nearly broken the bank, is the landfill's pellet producing machine that today sits idle - a gigantic "white elephant" in the room that has drained the landfill coffers because it didn't create the anticipated windfall revenue stream that was initially forecast.

That, coupled with cheaper than anticipated natural gas, and a weakened ethanol/biodiesel economy, combined to negatively impact the landfill operation.

The pellet machine was purchased and installed a few years ago by the Commission with the promise of user fees more than compensating for the up-front expense and ultimately handsomely feeding the operation's coffers.

In 2009, Cherokee County initially issued an estimated $3 million, 10-year G.O. Bond to finance the pellet system, and then last May rolled it over to 20 years for capitol to compensate due payments.

Also last May, the Commission requested and received another $427,000 to pay construction fees on a new cell for the landfill. The County issued a separate G.O. Bond not to exceed $450,000 to cover that shortfall.

Among the anxious users lined up initially to purchase the pellets made from garbage to be burned for fuel was a proposed Biodiesel Fuel plant near Marcus, a new boiler system for the Cherokee Mental Health Institute, and a handful of other prospective high-volume users who would purchase and truck the pellets from Cherokee to their facilities to be used to fuel their heating systems.

However, in the midst of it all, the Biodiesel plant and MHI furnace never came to fruition, State taxation regulations ate into the budget, and the Environmental Protection Agency (EPA) instituted new and stricter regulations on the fly alleging that the pellets now did not satisfy air quality regulations.

The pellet system takes in municipal solid waste, removes the recyclables and toxic materials, and condenses the remains into a solid fuel pellet then burned in a boiler for fuel. At its peak, the Cherokee Landfill employed 25 for sorting out recyclables and feeding the pellet machine.

In an informational meeting with the Cherokee City Council last week, County Solid Waste commission Chairman Mark Leeds, a County Supervisor who was appointed to the post earlier this year when the crisis hit the fan, explained how the Commission has done verything in its power to formalize a plan that would make the landfill operation financially stable while enabling the Commission to pay down on its existing debt.

Working closely with Donna Burkhardt of Burkhardt & Dawson CPAs of Cherokee, the Commission's former auditor, the group has come up with "Plan B" designed to stabilize the landfill operation so it can proceed into the future.

Burkhardt & Dawson now serves as the Commission's Bookkeeper and will no longer do its auditing.

The 134-percent fee hike for all county users would increase the monthly fee for the City of Cherokee residents from its current $7 per household to an estimated $16.38 per month, factoring in all administrative costs.

With current landfill charges in parenthesis following the new monthly rates based on the 134-percent increase, a breakdown of all cities in the County as specified in Plan B are:

Aurelia - $12.66 ($5.25); Cherokee - $13.49 ($7); Cleghorn - $13.34 ($5.85); Larrabee - $11.33 (0 City pays fee); Marcus - $11.28 ($5.25); Meriden - $12.36 (No report); Quimby - $11.67 ($5.17); Washta - $13.42 ($5.50); County Rural - $13.17 (No report).

The annual landfill fee cost per household based on the Plan B formula will be Aurelia $151.95, Cherokee $161.94, Cleghorn $160.14, Larrabee $135.97, Marcus $135.36, Meriden $148.27, Quimby $140.08, Washta $161.06), County Rural $158.01.

The Commission will begin billing the new rate July 1, according to Leeds and Burhardt, simply because time is money in a financial crisis.

The Cherokee City Council will be asked to consider an ordinance raising the landfill rate adjustments at its next meeting June 26.

In a related matter, the Recycling Operation at the Cherokee County Landfill will also be eliminated, with Sanitary Services transporting the collected recyclables to a private vendor in Le Mars.

Mandatory recycling in Cherokee is still on the books and residents are strongly encouraged to continue their improved recycling efforts as nothing will change in the Sanitary Services pick-up operations.

The more recycling done, the less volume of garbage is dumped into the landfill, which will help extend the life of the cells.

At last week's meeting, Eric Lundell of Sanitary Services advised the Council that Cherokee's recycling increased from 1.8 tons per week to 6-7 tons per week since the mandatory recycling took effect.

"Our residents are doing a great job with recycling and we hope they continue to do so," said City Administrator Don Eikmeier.

As the Commission began exploring ways to increase revenue, raising user fees for area counties hauling their garbage and/or recyclables to Cherokee County's landfill was proposed.

Plymouth, Buena Vista, and Ida counties bring their household waste to Cherokee, but Plymouth and BV balked at the proposed rate increases and quit, which further dented the landfill's revenue stream. Ida County has remained a team player, accepted the fee hike, and continues to haul its garbage here.

According to Leeds, the Landfill initially accepted the other county's garbage because it was needed to help make pellets.

Leeds said the current Landfill cells will last about 80 years if the Commission reverts back to just accepting Cherokee and Ida County garbage. If Plymouth and BV continue to bring household waste here, the cells will last no longer than 40 years without the pellet operation, which is now a distant memory dead in the water.


Comments
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Taking on other cities waste was supposed to help keep the landfill solvent and then the machine to transform that waste into pellets to be used fuel was supposed to eventually make the landfill a profit generating venture. Seems to me that this was poorly researched in the first place.

I would like to know what is going to happen to families or seniors on limited budgets where they do not have between $131 and $161 annually in their respective budgets. Has the Council taken those things into consideration ... NO!

This article states that the Cherokee City Council will be asked to consider an ordinance raising the landfill rate adjustments at its next meeting June 26, yet it also states the Commission will begin billing the new rate July 1! With minimal advance notice we are forced to accept this rate increase to bail out the landfill.

We the consumer, are now being forced to pay for someone's very bad business decision. Not a good way to do business! Perhaps the entire Comission and accounting firm should be replaced after they are forced to pay for their bad business decisions, rather than take it out of the hides/budgets of all the residents of Cherokee County.

-- Posted by LynneR on Tue, Jun 19, 2012, at 6:58 PM


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