Roselle Park Considers Extending Its Disposal Contract

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Published: October 23, 2010 @ 4:40 PM EDT
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During Thursday night’s Mayor & Council meeting, Jonathan Williams, an attorney from the Union County Utilities Authority (UCUA), spoke on a proposal to extend Roselle Park’s waste disposal contract at an estimated reduction of at least $12 to $14 per ton for waste delivered after January 2011.

Mr. Williams began by explaining that the Borough currently has a 25 year contract for its solid waste disposal that it signed in 1998. The facility, run by Covanta (formerly Ogden Martin Systems Of Union, Inc.), approached Union County in April and proposed that the County extend the current contract out for a 40 year term.  In explaining the reason, Mr. Williams stated, “The freeholders . . . have as many money problems as any other governmental entity. They contemplated selling the facility.”

In the end, the County directed the UCUA to negotiate with Covanta the lease extension. If Roselle Park chose to extend the contract, the Borough would be amending the current agreement with the UCUA to take the obligation to deliver Roselle Park solid waste to that resource recovery facility until 2045, with a possibility of a five-year extension.

Roselle Park contracted in 1998 a minimum amount of 4,200 tons to be delivered with a penalty fee if the Borough ever goes over the contracted amount by 25%. Recent records show that the Borough went over 5,250 tons (125%) in 2007, when the municipality delivered 5,400 tons.

After Mr. Williams gave his presentation, Mayor Joe DeIorio stated, “One of the concerns we had upon first review of the proposal were the minimum requirements.”

The mayor then asked what would the probability of risk be should Roselle Park delivers less than the required minimum of 4,200 tons.

“You have that risk since ’98,” Mr. Williams responded, adding that Roselle Park has always met that minimum and that Covanta has agreed to revisit the tonnage figure every five years but only for the purpose of adjusting for an increase in tonnage. There is no mechanism in place to reduce the fees the Borough pays if its tonnage is less than the  agreed upon minimum.

When asked which municipalities have already signed up for extending their contract to a 40-year term, Mr. Williams stated that, as of yet, no municipality has done so. In addressing the proposed contract, the UCUA would honor the current contract rates until 2023, after which the Borough would begin paying a rate higher than the new one proposed.

2nd ward councilman Joe Accardi questioned the proposed savings, “The cost that you have listed here, $64.44 per ton, is what we’re paying now. The contract cost is $61.00 per ton, yet you’re talking about $12 per ton saving.”

“The base contract fee will drop to $61,” Mr. Williams confirmed, “But we’re going to create a rate stabilization fund and we’ re going to further reduce to below $61 using that fund . . . to further reduce your rate down to between $52 and $49”

“I don’t want to be picky but it doesn’t say we will get that money back,” Councilman Accardi stated, referring to the summary that was presented to council. Mr. Williams asked council to look at the first amendment to the Municipal Waste Delivery Agreement; unfortunately council had a blank amendment in hand.

Mr. Williams read from the amendment he had with him.

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Mr. Accardi continued, “We’ve also discussed shared services with other communities. Could we do something like that with, say, Cranford and if we’re paying $61 a ton, do a shared services with private contractors in Cranford and charge them $70 a ton and make $9 a ton?”

“I don’t know the answer to that question,” Mr. Williams.

“We’ve talked about shared services and that would be the ideal shared service that we would make some money by helping a community that is looking for help in trash pick-up,” Mr. Accardi stated.

Mr. Williams then stated that the councilman’s proposal would go to the Borough’s minimum tonnage.

“I really have to wonder, do I want to mortgage my son’s future on this if there is a change in technology 20 years from now?”, Mr. Accardi asked regarding the proposed extension.

Mr. Williams responded, referring to the state requiring the facility be built years ago,  “The resource recovery facility is going to  have to be utilized under this system until all of  the debt is paid off.  In the meantime, do you want to continue to pay off that debt under the best available system? That’s what we’ve come up with.”

1st Ward Councilman Larry Dinardo asked, “Is there a time limit for which a municipality  (has) to adopt this? It would have to be before January 1st?”

Mr. Williams stated it would have to be before the end of the year.

Later in the meeting, after returning from closed session, council further discussed the proposal. Borough Attorney, Blake Johnstone asked that council consider looking to see if an opt-out clause can be added to the contract, “If this deal is as great as they’re trying to make it out to be, they should be saying, ‘Sure, put it in there because you’re going to stay with us anyway.'”

“Keep in mind that the paperwork that we had in front of us had the cost at $64.44 per ton right now and it would decrease to $61 per ton, “Councilman Accardi states, “It didn’t have any other language in there that decreased it to the $12 per ton less that he was talking about.”

Mayor DeIorio recommended that council contact the 13 other participating municipalities so they all can negotiate along the same lines as Roselle Park.