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Item 1.O.
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| City Council Regular | |
| Date: | 07/11/2022 |
| Title: | Resolution to Establish Landfill Reserve for Future Capital Expenses |
| Presented by: | Jennifer Duray |
| Department: | Public Works |
| Presentation: | No |
| Legal Review | Yes |
RECOMMENDATION
Staff recommends City Council reconsider separating tipping fees collected by non-city residents into a separate landfill capital fund.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
At the conclusion of the December 20, 2021 City Council meeting, CM Ewalt proposed a council initiative to set aside 20% of revenues from out-of-city limits customers using the landfill to pay for future capital expenses at the landfill. This initiative was seconded by CM Yakawich and approved by Council.
During the FY 2021 budget process staff recommended Council set out-of-city landfill tipping fees to be 50% higher and out-of-state tipping fees to be 100% higher than in-city fees. This recommendation was inclusive of the 20% CM Ewalt had successfully included in the prior two tipping fee adjustments and increased resources for capital investments at the landfill. Therefore, staff believes we accomplished the Council's direction without adding unnecessary accounting work.
Public Works currently has an average of approximately $6.3 million of capital expenses annually programmed in the five-year Capital Improvement Plan (CIP), as well as planned compactors, grinders, and other large landfill equipment programmed in the Equipment Replacement Plan (ERP). The amount reserved will be utilized for these programmed capital expenses and approved by Council in the CIP and ERP, as well as through Council actions for landfill bid awards, agreements, and purchases of equipment.
During the FY 2021 budget process staff recommended Council set out-of-city landfill tipping fees to be 50% higher and out-of-state tipping fees to be 100% higher than in-city fees. This recommendation was inclusive of the 20% CM Ewalt had successfully included in the prior two tipping fee adjustments and increased resources for capital investments at the landfill. Therefore, staff believes we accomplished the Council's direction without adding unnecessary accounting work.
Public Works currently has an average of approximately $6.3 million of capital expenses annually programmed in the five-year Capital Improvement Plan (CIP), as well as planned compactors, grinders, and other large landfill equipment programmed in the Equipment Replacement Plan (ERP). The amount reserved will be utilized for these programmed capital expenses and approved by Council in the CIP and ERP, as well as through Council actions for landfill bid awards, agreements, and purchases of equipment.
ALTERNATIVES
City Council may:
- Approve the resolution establishing a landfill reserve for future capital expenses; or,
- Not approve the resolution. If not approved, the revenues collected from customers who pay outside Billings rates will continue to be used for solid waste personnel, operations and maintenance, capital, and debt service expenses.
FISCAL EFFECTS
The amount generated from twenty (20) percent of all landfill fees accrued from users outside the City of Billings is estimated to be approximately $900,000 annually. There is no actual fiscal impact as establishing the reserve merely requires a shift from the flexibility of spending this revenue on personnel, operations and maintenance, capital, and debt service to be spent only on capital expenses.