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The Bartholomew County Solid Waste Management District needs thousands of tons of trash from Rumpke Indiana LLC and the associated fees to break even, according to a financial analysis by an Indianapolis accounting firm.
The waste district’s board is scheduled to consider today whether to renew or to extend a contract with Rumpke worth about $1.5 million annually or to seek more bidders to operate the county-owned landfill on County Road 450S.
But with new information from the financial analysis, some board members said they are ready to stop delaying a decision and sign again with Rumpke.
The district, at the urging of board member Columbus Mayor Kristen Brown, paid $25,000 for the financial analysis from H.J. Umbaugh and Associates of Indianapolis to better understand the district’s finances. Brown has hoped to find a way to pay for a countywide curbside recycling program through the solid waste district.
Solid waste meeting
What: Bartholomew County Solid Waste Management District
When: 9 a.m. today
Where: County Council Chambers, governmental Office Building, 440 Third St.
Agenda: Extension of landfill contract, bids for convenience station operation, write-off of Golden Castings uncollectable debt
County Commissioner Rick Flohr, a member of the solid waste district board, thinks the report showed conclusively that sticking with Rumpke is the best course. He has argued at previous meetings that there is not enough time left this year to prepare the bid specifications before the contract expires in January.
“I haven’t been as patient with the process as everyone else because the way I see it, we have got Rumpke who has been our service provider since 1998, and they have done a great job, and they continue to do a great job,” Flohr said. “We know the quality of their work, and we have a good relationship with them. To me, in business, it is more than just contracts and deadlines and specifications. It is about relationships, and you don’t just throw that away like an old shoe.”
Although the district has the option of a one-year extension on the contract, it could extend the contract for 18 years. Flohr said he thinks the contract should be extended as long as possible, because the county is getting 1998 prices in 2014 and any renegotiation would end up costing more.
“What business can you be in, where you can be guaranteed to be in the black for 18 years?” Flohr said. “Eighteen is a little ridiculous, I know that, but five would be wonderful.”
But Brown said the report was a snapshot of the way things are today and the current break-even points. The board could change those numbers by doing things such as increasing the tipping fees — the amount trash trucks pay to dump their loads.
“The blanket statement that we are dependent on all that trash volume to break even is not accurate,” Brown said. “There are other levers, other factors in the equation.”
The district could raise more money by eliminating free dumping by residents, she said. A county resident can dump up to 200 pounds of trash daily, for free either at the landfill or at the convenience stations set up around the county.
Those free loads from residents make up about 9,000 tons of trash a year, or about 10 percent of the trash going into the landfill, according to waste district numbers.
If those loads were charged at the same rate as tipping fees, $27.50 per ton, that could raise $247,500 per year for the waste district.
Brown said that the solid waste board has a conflict of interest because it both operates the landfill and is tasked under state law with reducing the amount of trash that goes into the landfill, she said.
“The mission is to be focused on reducing what goes in to that landfill, but at the same time we are a landfill operator, and a landfill operator wants to maximize the amount of trash, the amount of revenue going into the landfill,” Brown said.
Doug Baldessari, an accountant with Umbaugh, reported back to the board last month that the county needs to receive between 77,000 and 99,000 tons of trash a year at the landfill to break even.
Rumpke, the largest supplier of trash to the landfill as well as the operator, brings in an average of 30,600 tons of the landfill’s 81,500 tons of trash a year. Under county ordinances, all of the trash going into the landfill is generated within Bartholomew County.
Carl Lienhoop, president of the solid waste district board and of the County Commissioners, said the analysis had no surprises on that point.
“It pointed out that revenues are directly related to the tonnage we receive,” Lienhoop said. “So that if the tonnage dropped in two, we would definitely have to have a higher tax rate to offset the work of the landfill.”
The solid waste district’s 2014 budget of $3.8 million makes it the largest department in county government, with about $700,000 more in spending than the sheriff’s department. It receives about $850,000 in property taxes every year.
Lienhoop said that he thinks the board must extend the current Rumpke contract.
“We have reached the 11th hour because it will take a set of specifications to go out to bid, and my personal opinion is that we have probably run out of time to open up that thing up,” Lienhoop said. “That being said, I think the financial analysis shows that our current operation is very acceptable.”
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