Solid-waste fund running deficits; council debates disposal fees at Merck Miles transfer station

City staff on Feb. 11 told council the city’s sanitation program — including the Merck Miles transfer station — ran at a deficit in 2024 and will likely run short again in 2025 unless adjustments are made.

Solid-waste coordinator Gordon Burkett briefed council on revenues and expenses. He said the solid-waste program had actual revenues of about $9,374,000 in 2024 but net expenses exceeded revenues after a $1,800,000 one‑time purchase of carts, producing a negative result. Burkett said the Merck Miles operation had an operating agreement fixed cost of roughly $420,000 plus disposal of roughly $193,000 last year, producing total operating costs around $613,000 and a profit-sharing-related loss just over $600,000.

Staff summary and recommendations: Burkett said disposal rates have increased (about a 9% rise recently) and that the solid-waste fund had absorbed roughly $2,500,000 in initiatives without a fee increase, with the general fund covering the shortfall. For 2025, Burkett estimated a $408,000 shortfall in the fund and urged the council to consider options including keeping the current fee and continuing the subsidy, or increasing fees.

Resident-fee debate: Council members discussed whether resident disposal pricing should be made more favorable. Councilman JC Sebastian and Councilman Lewis (referred to in the meeting as Councilman Lewis) argued that many residents cannot afford higher unit costs and urged re-evaluating the current per-weight thresholds. Councilman Lewis said the city’s sanitation bill currently includes a line-item of $17.57 that she characterized as the city’s subsidy for Merck Miles and proposed restoring a 360‑pound customer tier priced at $10 for residents (the fee level previously in place). Staff cited a model prepared in October that estimated returning to the 360‑pound/$10 resident tier would increase operating losses by approximately $66,348 annually (staff projected that change would increase disposal tonnage and vendor costs). Burkett also said about 60% of customers at Merck Miles currently fall under the 150‑pound/$10 tier.

Other operational details discussed: staff said the facility serves roughly 1,500 vehicles per month and that curbside recycling remains a revenue‑neutral part of the sanitation agreement. Burkett confirmed the city does not own Merck Miles — the facility remains under county arrangement tied to a county consent decree — and that nonresident and commercial users are charged higher rates; nonresident/commercial rate was reported as $20 up to 150 lbs while resident rate is $10 for the same threshold.

Council direction: Several council members asked staff for disaggregated data showing the number of residents and nonresidents at each weight tier, amounts of revenue by tier, the proportion of material brought by contractors versus households, and the cost impact of altering the resident tier. Councilwoman Natasha Williams Brown asked staff to prepare an options memo with costs for expanding city-provided bulk pickup and litter pickup so council can weigh paying for more collection versus changing Merck Miles pricing.

Next steps: Staff said they will prepare the requested breakdowns and return with modeling of options, including the fiscal impact of changing disposal tiers, account-level counts by tier and recommendations on fee timing.