1994-01-13 Work Session
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
WORK SESSION, JANUARY 13, 1994
BOOK 23
PAGE 896
ASSEMBLY
The New Hanover County Board of Commissioners held a Work
Session on Thursday, January 13, 1994, at 10:00 A.M. in Room 501 of
the New Hanover County Administration Building, 320 Chestnut
Street, Wilmington, North Carolina.
Members present were: Commissioners Sandra Barone; WilliamA.
Caster; William E. Sisson, Jr.; vice-Chairman E. L. Mathews, Jr.;
Chairman Robert G. Greer; County Manager, Allen 0' Neal; County
Attorney, Wanda P. Copley; and Clerk to the Board, Lucie F.
Harrell.
Chairman Greer called the Work Session to order for the
purpose of discussing residential and commercial collections.
DISCUSSION ON OPTIONS FOR RESIDENTIAL COLLECTIONS IN UNINCORPORATED
NEW HANOVER COUNTY
Assistant County Manager, Dave Weaver, reported staff has
prepared several scenarios with cost estimates for each option.
The following scenarios were presented using 25,000 households
in the unincorporated County with a trash flow in FY 1994/95
projected at 145,000 tons broken down as follows: 110,000 tons of
municipal solid waste; 77,000 tons commercial; 33,000 tons
residential; and 35,000 tons miscellaneous waste disposed at the
Landfill:
SCENARIO ONE: FUND BY FEES:
1) Residential Collection: Establish a County Collection System
with Voluntary Subscription and County Billing: Exclusive
contracts would be awarded by either negotiation or bidding for
this service to haulers for sub-areas of the unincorporated County.
The County would pay the hauler based on the number of households
served. The hauler pays the tip fee, the cost of which is passed
on to the County through the contract and then to the resident by
the County through bi-monthly billing. The per household per month
cost would be $17.55.
The estimated cost to the County for this type of system would
be $4.6 million annually plus $150,000 for administration for a
grand total cost of $4.74 million, which averages out to $17.55 per
household per month. At this point, this fee does not include the
cost of disposal or tip fees.
The disposal costs under this scenarlO are as follows:
$11,300,000 -
(1,300,000)
(1,400,000)
$ 8,600,000
Environmental Management Fund Expenditure
Steam and Electric Sale Revenue
Tip fee revenues for miscellaneous Landfill
wastes
- The remaining Environmental Fund expenditures
to be covered by municipal solid waste tip
fees.
TiD Fee Revenues Generated
Trash Generated
$25/T $30/T $60/T $79/T
Residential 33,000 T/YR $820,000 $990,000 $1,980,000 $2,580,000
$100/T $98/T $86/T $79/T
Commercial 77,000 T/YR $7,770,000 $7,610,000 $6,620,000 $6,020,000
Total 110,000 T/YR $8,600,000 $8,600,000 $8,600,000 $8,600,000
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
WORK SESSION, JANUARY 13, 1994
BOOK 23
PAGE 897
Additional tip fee cost added
to residential monthly fees
25/T
$1.88
$17.55
$19.43
$30/T
$2.25
$17.55
$19.80
$60/T
$4.50
$17.55
$22.05
$79/T
$5.93
$17.55
$23.48
Monthly Collection Fee
Total Monthly Fee
SCENARIO TWO: FUND BY PROPERTY TAXES
After discussion, staff was directed to eliminate this option
since the Board is not in favor of increasing the property tax.
SCENARIO THREE: FUNDED WITH BOTH FEES AND TAXES
Residential Collection: Establish a County Collection System with
Voluntary Subscription and County Billing: Exclusive contracts
would be awarded by either negotiation or bidding for this service
to haulers for sub-areas of the unincorporated County. The County
would pay the hauler based on the number of households served. The
hauler would pay the tip fee, the cost of which is passed on to the
County through the contract and then to the resident by the County
bi-monthly billing. The per household per month cost would be
$17.55 by billing to individual residents.
The disposal costs varies in this option because the $8.6
million will have to be paid to the Environmental Management Fund
as presented in the following options:
Tip Fee Options $25/T $30/T $42/T $60/T
Revenue Generated $2,750,000 $3,300,000 $4,600,000 $6,600,000
Tax revenues needed $5,850,000 $5,300,000 $4,000,000 $2,000,000
TOTAL $8,600,000 $8,600,000 $8,600,000 $8,600,000
Tax rate lncrease 7.5 6.8 5.13 2.56
$25/T $30/T $42/T $79/T
Add'l tip fee cost $ 1. 88 $ 2.25 $ 3.15 $ 5.93
added to residential
monthly fees $17.55 $17.55 $17.55 $17.55
TOTAL MONTHLY FEE $19.43 $19.80 $20.70 $23.48
The tax increase would be a county-wide property tax because
it represents disposal costs, which benefits every resident of the
County. If a tip fee is included as a revenue source, the cost
would have to be added to the $17.55 per household per month.
Discussion was held on the funds needed to operate WASTEC.
Deputy County Manager Atkinson reported at a $60 tip fee, there is
still a shortfall of $2 million that must come in from other
revenue sources. Does the Board wish to continue to use the 1/2
cent sales tax for the Environmental Management Fund, or allow this
tax to return to the Water & Sewer District where revenue is badly
needed; or does the Board want to continue the general fund
contribution which is listed under Scenario 3?
Commissioner Sisson commented on waste disposal being a tax
that will have to be paid by the residents living in New Hanover
County; however, trash should not be lost to surrounding counties
and the cost for disposal should be spread equitably. A user fee
should be equitably distributed with the people generating the most
trash paying for that volume and people generating less trash
paying for that volume. With the County contracting for services,
this should reduce the volume of materials now going into WASTEC
and the volume of materials going into the Landfill with the
opening of the Construction & Debris Center along with the
collection of more recyclables. Also, if WASTEC is in the position
to receive garbage from surrounding counties, the County should
have a mechanism in place to accept these materials.
Discussion was held on controlling waste coming in from other
counties. Assistant County Manager Weaver reported a disreputable
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
WORK SESSION, JANUARY 13, 1994
BOOK 23
PAGE 898
hauler could come into the County from surrounding counties and it
would be difficult to differentiate the trucks. Chairman Greer
responded that, in his opinion, this will not occur frequently
because the haulers will be contracting with the County and could
lose their contracts.
Mr. Eddie Dick, representing Waste Industries, reported the
ultimate goal of New Hanover County is to maintain enough control
over the waste stream to make its disposal operation financially
viable. In his opinion, for the County to perform the billing is
not practical. As a hauler his company performs the billing, and
as a service provider, he does not like having anyone between the
company and his customer. Most counties bill for disposal through
taxes, a separate tax district, a fee system, or the general tax
fund. His company is in favor of the County dividing the
unincorporated county into zones and contracting with the haulers
for residential collections which will require the haulers to carry
the trash to WASTEC. Most residential homes are serviced through
establishment of an average amount of tonnage produced per year
used across the board. The services contracted should be for
garbage collection and curbside recycling; however, since yard
waste pick-up and bulky item pickup varies in volume, the County
should consider eliminating these items from the contract and
allowing the individual citizens to select their provider, or carry
these items to the disposal center. On the commercial side, the
volume should dictate the cost, which is done in other counties,
and billed directly. The commercial billing, which is complicated
because of daily changes, should be performed by the hauler.
Mr. McKeithan totally disagreed with the haulers performing
the billing. Waste Management, Inc. has experienced a problem wi th
bad debt. The purpose of establishing a residential collections
system was to provide all the services being received by City
residents to County residents. Each hauler should be responsible
for providing the garbage, curbside recycling, yard waste and bulky
item collections in their zones. If a hauler elects not to perform
curbside recycling, the County should divide that area among the
other haulers. The County should perform the residential billing
in order to eliminate the collection problems; however, a system
should be worked out to eliminate the County collecting the money
with a fee paid to the hauler inclusive of disposal costs with the
hauler then having to turn around and pay the County for disposal
costs. The County should bill for collection services and
separately for disposal.
After a lengthy discussion staff was requested to prepare a
residential collection system as follows:
1) The
providing
of zones
routes.
County will contract with the haulers currently
service to the unincorporated area with assignment
to each hauler. This will eliminate overlapping
2) The haulers will collect refuse and contract or
subcontract for the collection of recyclables, yard waste, and
bulky items.
3) The County will negotiate the cost of the system with the
haulers, and the County or its subcontractor will be
responsible for billing customers for collection and disposal
costs.
4) Residential subscription will be voluntary.
DISCUSSION OF COMMERCIAL COLLECTION IN UNINCORPORATED NEW HANOVER
COUNTY
Assistant County Manager Weaver presented the following
methods for commercial collection:
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
WORK SESSION, JANUARY 13, 1994
BOOK 23
PAGE 899
Option #1: The County would contract with the haulers on a non-
exclusive basis to compete for commercial accounts for the cost and
service required to collect the trash. The haulers would submit
the bills to the County; the County would bill the commercial
accounts based on the submitted charges; and the County would then
pay the hauler. The tip fee is paid by the hauler and is included
as part of the bill negotiated with the commercial account by the
hauler.
ADVANTAGES:
(1) The existing competitive
collection is maintained, except
billing agent for the hauler.
system for commercial trash
the County would act as the
(2) Commercial haulers would continue to deal directly with their
accounts concerning levels of service and fees.
(3) Flow control would be accomplished, and the hauler would
continue to pay the tip fee.
(4) The commercial accounts would receive only one bill for trash.
The bill would come from the County.
(5) The County would have no involvement in setting the amount
billed to commercial accounts, except indirectly by the imposition
of a tip fee charged to the haulers as is presently done.
DISADVANTAGES:
(1) The County would incur a cost of $150,000 to run this system.
(2) The haulers have expressed concern about releasing billing
information to the County. The County Attorney has made it clear
that confidentially of records could be legally maintained.
Assistant County Manager Weaver reported if the Board does not
desire to charge a tip fee at WASTEC or the Landfill, this option
should not be considered. After further discussion, it was agreed
not to consider this option.
Option #2: The haulers would continue to provide and bill
commercial accounts for the cost of trash collection. The County
would estimate the amount of trash produced by a commercial account
and bill the customer to pay for the cost of disposal. There would
be no tip fee. The County would require the hauler, through
regulation, to provide adequate information to assist the county in
estimating the amount of trash produced by a commercial account.
ADVANTAGES:
(1) The existing competitive system for commercial trash
collection is maintained.
(2) Commercial haulers continue to deal directly with their
commercial accounts concerning levels of service and billing.
(3) Flow control may be accomplished by the elimination of a tip
fee.
DISADVANTAGES:
(1) The haulers have expressed concern for the release of
commercial account information to the County.
(2) All commercial accounts would receive two trash bills, one
from the hauler for collection and one from the County for the cost
of disposal.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
WORK SESSION, JANUARY 13, 1994
BOOK 23
PAGE 900
(3) The County could be facing a bureaucratic problem if required
to establish a program that would estimate trash volumes generated
by individual commercial accounts for billing purposes. This
system may be more susceptible to abuse.
(4) The absence of any tip fee charged at WASTEC or the Landfill
could lead to unwanted trash being brought in from outside the
County.
(5) The cost for administration of this option would be more
expenSlve and burdensome.
Assistant County Manager Weaver expressed concern for creating
a bureaucratic nightmare in trying to estimate the charge per size
container on a daily basis and stated after discussion with other
counties staff feels this would be a very difficult billing process
to administer. Also, the receipt of two separate bills could be a
problem, particularly if a commercial customer is experiencing
financial problems and pays the hauler to continue to remove the
trash, but decides not to pay the disposal cost to the County.
Chairman Greer stated the County may have some bad debt which
would have to be incorporated into the cost of doing business;
however, he does not feel this would occur frequently.
Mr. McKeithan recommended considering the following system.
The County would bill only for disposal. The hauler would
bill for the service according to the size of the container
and specialized equipment, which is the information that the
haulers feel should be kept confidential. The tons per year
or the $8.6 million figure for the Environmental Management
Fund is the County's disposal costs. A portion of the
County's disposal costs is residential, which can be derived
by estimating how much each resident generates every month.
The residential amount would then be removed from the waste
stream. The haulers using roll-off containers to pickup
construction debris would bill their customers for the service
plus disposal. The figure used for billing is derived by
weight at WASTEC. Both the County and the hauler have this
information and know the exact disposal cost. The remaining
disposal cost is for the commercial dumpster style container
service. The haulers providing container service would
provide the County a compatible disk with a list of every
commercial customer, the size of the container and the
frequency. The County would use the disk sorting the
customers alphabetically with adding the container storage
yards. The total container storage yards divided into the
weight or dollars would provide a rate per container storage
yard. This would provide a billing by volume. Once this
system is placed on the County's computer system, the only
change monthly would be the number of new businesses, number
of businesses going out of business, and normal changes in
commercial accounts. Each hauler would advise the County of
the changes monthly. This method is not simple but would
accomplish reducing the volume of the waste stream, place all
the haulers on level ground, and eliminate the waste stream
from going out of the County.
Discussion was held on the commercial customer paying the
hauler, but not paying the County. Mr. McKeithan reported the
contract should require the commercial customer to pay for the
serVlce; therefore, if he does not pay the County, the hauler will
stop the serVlce.
Assistant County Manager Weaver commented on Option #1 and
inquired as to whether the haulers only concern lS the
confidentiality matter?
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
WORK SESSION, JANUARY 13, 1994
BOOK 23
PAGE 901
Mr. McKeithan expressed concern for County employees having
access to this information, which in his opinion, cannot be kept
confidential.
Mr. Dick reported the customer should be served by the free
enterprise system, and in his opinion, under Option #1 the County
has more control than his firm is willing to give after being in
business for 23 years. Also, there would be no way to control the
confidentiality factor.
Assistant County Manager Weaver reported the County would
simply serve as the billing agent without becoming involved with
negotiations between the hauler and commercial customer.
A lengthy discussion was held on the billing procedure and the
problems involved with sending out two separate bills.
County Manager O'Neal reported the first responsibility of the
Board of County Commissioners is to the citizens of New Hanover
County. Trash must be disposed of in an environmentally sound and
safe manner. This has been accomplished with the WASTEC Facility
and Landfill. Also, the collection method must be kept as simple
as possible for residential and commercial collections. The County
has spent numerous hours in discussion with the haulers to work out
an agreement that will be in the best interest of the citizens and
acceptable to the haulers. At this point, there seems to be a
conflict; therefore, he would recommend two options: (1) work out
an agreement on one of the options presented, or (2) submit
proposals for trash collections through one bid, which is the free
enterprise system. Perhaps, the County should consider one bid for
trash collections.
Chairman Greer recommended scheduling another Work Session to
discuss commercial waste collections.
Consensus: It was the consensus of the Board to schedule a Work
Session on January 20, 1994, at 8:45 A.M. until 12:00 noon in Room
501 of the New Hanover County Administration Building, 320 Chestnut
Street, Wilmington, North Carolina.
ADJOURNMENT
Chairman Greer expressed appreciation to the haulers for
attending the meeting and adjourned the meeting at 12:50 P.M.
Respectfully submitted,
Lucie F. Harrell
Clerk to the Board