Danville council reviews amendment to increase share and threshold for host-future fund

Brandon Lawson, a member of Danville’s host-future fund committee, told the Town Council the fund receives revenue from landfill tip fees and that an amendment to a 1999 ordinance would raise the share directed to the fund and increase the threshold at which those funds may be spent.

The committee’s aim, Lawson said, is “to 1 day have that fund at a level where in perpetuity, the town can draw from those interest and dividends and receive basically what we're we hope to receive now.” He said the fund currently holds about $7.9 million and the amendment is intended to accelerate growth toward a $25 million target so a 5% return would produce roughly the town’s present annual revenue from the landfill.

The nut graf: the change before council seeks to alter how much of the landfill fees are deposited to the reserve and to raise the balance required before the town may expend funds. Proponents said the change would protect long-term revenues if landfill receipts decline or cease; some council members cautioned it could postpone use of funds for current priorities.

Committee members and councilors reviewed the 1999 ordinance’s original schedule, which directed increasing percentages of fees into the fund with annual caps (initially $100,000, rising to $150,000, then $200,000). Lawson said the town now receives more than $1 million a year in landfill-derived fees but the fund still receives a much smaller capped annual deposit under the existing rule.

Mark Potter, who serves on the host-future committee, said the original ordinance set the fund so that “if we can accumulate $10,000,000, that would give us a $500,000 return,” and that current receipts justify revisiting the target. Potter added the committee has replaced its financial adviser and the fund’s return has averaged “over 5% since we've been man since I've been on this committee since 2017.”

Several councilors warned against “moving the goalposts” so far that the council could not use the money for pressing needs. One councilor asked whether raising the required balance would leave the town unable to use the fund “if the landfill leaves us in 10 years and it's sold,” noting that dipping into the fund before it reaches the new threshold could mean the town loses ongoing annual income derived from current landfill receipts.

Council members and staff also discussed ancillary issues raised by the amendment, including whether the town should continue to budget routine annual expenses from host funds and the effect of a larger restricted balance on grant applications. Lawson and Potter said having an explicit savings target also makes the town more competitive for matching grants in some cases but that grant reviewers have sometimes questioned applications when a large restricted balance is shown.

The ordinance was introduced for first reading; councilors discussed options including tying annual spending to a percentage formula rather than fixed dollar caps and adding emergency provisions that would permit limited spending before the fund reaches the targeted balance. No final vote was recorded on the ordinance at this meeting.

Looking ahead, councilors indicated they will consider more detailed numbers and possible revisions before a second reading.