Superior council weighs user fee to shore up Moccasin Mike Landfill; awards Cell 5 Phase 2 contract

Mayor Hagan convened a lengthy briefing on the economic viability of the Moccasin Mike Landfill, telling the council the city currently subsidizes landfill operations from the general fund by about $1 million a year and that subsidy is projected to grow unless the city changes its funding approach.

The briefing, led by landfill consultant Robert (Bob) Larson, Assistant Finance Director Jean Vito and Public Works Director Jeff Goetzmann, summarized operational and regulatory changes that have increased disposal costs (liner systems, leachate and gas collection, monitoring and permitting). Officials said revenue from the city’s contract with the Western Lake Superior Sanitary District (WLSSD) — roughly $3.0–3.5 million annually under the current contract — masks the underlying shortfall in the landfill enterprise fund.

Vito told the council the landfill fund is not self-sustaining and that continuing to rely on the general fund transfer would create growing deficits. Financial analyses presented to the council showed that continuing the current subsidy path would produce a cumulative deficit by the end of the WLSSD contract; the city would face larger deficits if the general fund transfer were eliminated and no user fee adopted. Staff presented three broad options: keep the current funding (do nothing), privatize the service, or implement a user fee.

Larson, a longtime academic and solid-waste consultant, recommended a user-fee model that places the landfill on an enterprise basis rather than relying on tax-levy transfers. Staff proposed a household average fee in the $17.50–$20 range: one proposal shown to councilors averaged roughly $20 per living-unit equivalent, with a recommended compromise of $17.50 for the first three years and an increase toward $20 thereafter. Vito and Larson said the fee would cover operating costs, capital needs and debt service and reduce the likelihood of new debt issuance when the WLSSD contract ends in 2019.

Officials stressed the timing urgency. Vito said language in the state biennial budget under consideration would, beginning Jan. 1, 2014, restrict municipalities from implementing fees for services previously funded in part by the tax levy; that moved the council’s timetable from months to weeks. Staff asked the council to allow a fast-tracked public outreach program and a council decision in mid-July (staff cited July 16 as the target council meeting) so the city could build a billing system and, if approved, begin collections in 2013.

Goetzmann reviewed operations and capital work at the Moccasin Mike facility, including recent upgrades: modern cell liners, a leachate collection system that pumps to the wastewater plant, a gas-collection network serving a flare, recycling and reuse operations, and other environmental monitoring. He said compaction rates and day-to-day operations meet or exceed industry standards, but cell construction and permitted requirements have grown much more costly than in earlier decades.

Councilors asked technical and policy questions about the fee structure, billing logistics (monthly billing preferred), options for graduated “pay-as-you-throw” container sizes, how non-taxpaying entities such as schools and churches would be treated, and whether the state’s $13-per-ton environmental or recycling fee could be challenged or reduced. Staff acknowledged the $13-per-ton state fee makes the city less competitive for regional waste contracts and placed efforts to pursue changes to that fee in a medium-term work plan.

Councilors also pressed staff on contingency and enforcement issues: how the city would enforce container size limits, handle extra bags, and bill or collect delinquent fees. Larson and staff referenced standard tools used in other communities — sticker systems for extra bags, container serial numbers, targeted enforcement and ordinances against illegal dumping — and said those details would be refined during outreach and implementation planning.

On a related, formal action, Public Works requested and the council approved awarding the Cell 5 Phase 2 construction contract to Integrity Excavating in the amount of $2,645,722.81. The contract award was moved and seconded on the floor and approved by voice vote.

Mayor Hagan and staff outlined a public-outreach plan that would include several daytime and evening informational meetings over the weeks leading to the July decision and printed/email materials and Q&A for councilors to use with constituents. Vito said staff would return to the council with results of outreach and recommended ordinance language and billing proposals at the target July meeting.

No final fee ordinance was adopted at the meeting. Council discussion closed with direction to proceed with public outreach and to return with specific fee language, billing options and an implementation plan.

Ending: The council approved the Cell 5 Phase 2 construction contract and directed staff to carry out an expedited public information campaign and return with a proposed fee ordinance and detailed billing plan at the July council meeting, with a target decision date in mid-July.