The City of Ann Arbor’s Solid Waste Fund reportedly decreased this year due to other Post Employment Benefits and the shutdown of the Materials Recovery Facility, which resulted in higher recycling costs. Yet, despite largely distorted fund statuses during a meeting with City Councilmembers and the Environmental Commission, the City reports the fund is currently at a healthy balance.

The Solid Waste Plan manages a system for recycling collection, which is financially supported by the Solid Waste Fund, an enterprise fund operating in a business format. According to Councilmember Chip Smith, D-Ward 5, the 2013 to 2017 Solid Waste Resource Plan does not adequately meet the Council’s recycling and solid waste goals; moving toward a financially sustainable Zero Waste plan. As a result, the city is in the process of drafting a revised plan for 2018 and has already released a Request for Proposal.

“The plan does not adequately identify or address steps to get to zero waste,” Smith wrote in an email interview. “We also need to look at how we pay for solid waste, recycling and compost services.”

However, miscommunication between the City Council and the Environmental Commission raised concerns about the status of the Solid Waste Fund. Based on a staff report, Susan Hutton spoke before the Council at last month’s meeting and discussed her concerns of drastic Solid Waste Fund decreases and understaffing.

“In 2015, the Solid Waste Fund balance was $15.1 million,” Hutton said. “In 2019, the fund is projected to fall to $3.2 million, a drop of almost $12 million in four years. $5.2 million was spent on retirement expenses, which was necessary. All of the other $6.7 million was not.”

In contrast to Hutton’s data from the staff meeting, City Administrator Howard Lazarus emphasized the inaccurate statistics presented to the Environmental Commission.

“There was a presentation made to the environmental commission that was incorrect in terms of the fund status,” Lazarus said. “The Solid Waste Fund is actually in reasonable shape. The fund balance actually is not dropping in the way it was represented and it’s not because of staffing.”

According to Craig Hupy, public service area administrator, the Solid Waste Fund revenue in an average year is approximately $14 million and will only drop significantly if a drastic scenario occurs. However, Lazarus reported higher projected numbers for the end of the fiscal year than Hupy.

“The end of year balance for the Solid Waste Fund is forecasted for the end of the fiscal year to be $22 million,” Lazarus said. “There’s a drop in what’s called the unrestricted fund balance, this is at $8.5 million, but that’s forecasted to rebound in the fiscal year of 2019 to go up to $10 million.”

The Solid Waste Fund sources primarily from dedicated property tax millage, according to Lazarus. Both recycling and solid waste are supported by the Solid Waste Fund. Smith explained in an email interview the closing of the Materials Recovery Facility significantly impacted the fund.

“Two major things have impacted the fund — The first is recycling; the shutdown of the materials recovery facility or MRF has resulted in significantly higher cost for recycling at the same time markets for these materials have declined,” Smith wrote. “Second, the fund had to account for pension and other post employment, which was a huge hit to the fund balance. On the plus side, the new landfill contract is 30 percent cheaper than our previous one, which about offsets the increased recycling cost, but what creates long term deficits though is the MRF, which cannot be safely operated without significant investment.”

Mayor Christopher Taylor released a recycling report explaining the termination of the City’s contract with ReCommunity, the former operator of the MRF, and their new relationship with Recycle Ann Arbor. The new agreement is not a long-term, sustainable solution but is functioning as a temporary service.

“The MRF remains inactive, but RAA utilizes the location to organize and loose load materials for hauling to recovery facilities in Ohio and Taylor, MI,” Taylor wrote in the statement. “Although hauling recyclables to Ohio is not a long term solution, the facility does provide improved glass recycling.”

Based on Hutton’s report before the Council in December, the City’s inadequate staffing is a major factor in the Fund’s drop.

“Between 2010 and 2014 the City lost four experienced solid waste Full Time Equivalents and did not replace them,” Hutton said. “The City has one FTE in field operations and a few positions with some solid waste responsibility. The position you authorized in 2016 still remains unfilled. The City is deferring this hire until it updates the Solid Waste Plan, which expires at the end of this month.”

However, Communications Specialist Robert Kellar discounted Hutton’s report, saying staffing is not the primary concern, since the City has had similar levels of staff in solid waste as six years ago. Hupy also claimed the City has accounted for FTEs over the past several years.

“We only have one FTE open right now and we’re interviewing for it,” Hupy said. “So the FTE’s that we’ve had have been pretty consistent over the last six years and as we’ve had turnover we’ve filled them.”

Overall, Hupy emphasized prioritizing different aspects of the plan based on the City Council’s goals toward zero waste.

“Part of the planning effort will have to be prioritization of what items get done first and with what resources,” Hupy said. “This isn’t an unlimited amount of money so you have to decide what gets done first so that’s why the solid waste plan goes back through council so they can mold it to make sure it reflects their values.”

Kellar highlighted recycling as the primary concern for the 2018 Solid Waste Plan based on the community’s priorities.

“Recycling is part of our sustainability goals, whether it costs the city money or makes the city money within the Solid Waste Fund, we’re going to continue doing it because it something the community has said is of value,” Kellar said.

The City is reportedly satisfied with the current status of the Solid Waste Fund. The new plan aims to fulfill zero waste goals but will be changing their approach toward recycling through community collaboration in the process.

“I think people have looked at recycling in one way for a very long time because it was a very stable and an under-the-radar market, but that has changed dramatically so people are going to have to think about recycling in new ways,” Kellar said.

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