5.7. SR 11-21-1994
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**ITEM 5.7**
MEMORANDUM
TO:
MAYOR AND CITY COUNCIL
DATE:
STEPHEN ROHLF, BUILDING
AND ZONING ADMINISTRATOR
NOVEMBER 14, 1994 ;If-.
SUBJECT: THE MINNESOTA OFFICE OF
ENVIRONMENTAL ASSISTANCE
(OEA) SOLID WASTE FEE STUDY
FROM:
The Minnesota Office of Environmental Assistance (OEA) has prepared a
study on solid waste fee's. This study is to be submitted to the Legislative
Commission on Waste Management and the environment and natural
resources finance committees and divisions by December 1, 1994. The study
contains data on all solid waste fee's collected by the State, Counties, and
Cities.
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Attached to this memo, is the page out of the study that directly applies to
the City of Elk River. Currently the City is allowed to use seventy-five cents
out of every dollar of surcharge monies collected from the landfill for general
fund purposes. This accounts for approximately $150,000 dollars of general
fund revenue for the City each year. The City of Elk River has obligated
these monies for payments on City Hall and the Library expansion, among
other things.
OEA's recommendation is to require all landfill surcharge monies collected by
cities to be used for solid waste activities. The attached letter dated October
27, 1994, is staffs response to OEA's recommendation. However, it is staffs
opinion that OEA will not change their recommendation to the Legislative
Commission.
With the Council's permission, staff will take the following actions to counter
OEA's recommendation on City collected surcharge fees:
1. Recommend that the City Council pass the attached resolution.
2.
Provide staffs comment letter dated October 27, 1994, and the
Council's resolution to the Legislative Commission on Waste
Management.
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P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
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3.
Contact our new legislator, Bruce Anderson, and let him know our
feelings on this issue.
4. Contact the League of Cities to gain further insight on this issue to
better prepare our strategy for dealing with it.
5. Have the City Attorney research the issue and make further
recommendations regarding a possible lobbying effort.
This is an important issue to the City of Elk River. Staff will be at Monday
night's meeting to further address this subject with the City Council.
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RESOLUTION 94-_
RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION MODIFYING RESOLUTION NO. 87-63
ESTABLISHING AN ECONOMIC DEVELOPMENT AUTHORITY
FOR THB CITY OF ELK RIVER, MINNESOTA
WHEREAS, Minnesota Statutes 469.090 et seq. (the Statute)
authorizes the City of Elk River (the City) to establish
an Economic Development Authority pursuant to the
procedures and subject to the restrictions set forth
therein; and,
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WHEREAS, on October 7, 1987, the City Council for the City of Elk
River (the City Council) adopted Resolution No. 87-63
creating the City of Elk River Economic Development
Authority (the Authority); and,
WHEREAS, on February 12, 1990, the City Council adopted Resolution
No. 90-5 to expand the Authority from five (5) to seven
(7) Commissioners by including two (2) residents to serve
the Authority at-large; and,
WHEREAS, the City Council finds that it is in the best interest of
the City and its residents to further broaden the
representation on the Authority.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Elk River, Minnesota, as follows:
1. Paragraphs 2(a) and 2(b) of City Council Resolution
No. 87-63, the enabling resolution for the Economic
Development Authority for the City of Elk River,
Minnesota, are hereby amended to read as follows:
2. Commissioners
(a) The Commissioners of the Authority shall
include the Mayor of the City of Elk River,
three (3) additional members of the City
Council of the City of Elk River, and three
(3) residents of the City of Elk River who
are not members of the City Council. The
Mayor shall make all appointments to the
Authority, with the approval of the City
Council.
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(b) The terms of the Commissioners who are
members of the City Council shall coincide
with their term of office, unless a
Commissioner resigns earlier to accept the
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position of Vice Mayor of the City of Elk
River. Commissioners who are not City
Council members shall serve six (6) year
terms. .
Passed and adopted by the City Council of the City of Elk River,
Minnesota, this 21st day of November, 1994.
Henry A. Duitsman, Mayor
ATTEST:
Sandra A. Thackeray, City Clerk
PKB:JM1S
2.
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SOLID WASTE FEE REPORT
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OFFICE OF ENVIRONMENTAL ASSISTANCE
DISCUSSION DRAFT - October 21, 1994
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7 .3.4 Rest~~!Urethe'€i~aDd"T OWIi' SolidWasfe Fee' (Minn:-Stat. ~ 115A.921)
Twenty cities and nine towns reported revenues from solid waste facilities collected under Minn.
Stat. SI15A.921., totaling $7 million. Of this amount, $4 million was spent on solid waste
activities in 1993. The remainder was usually set aside for future expenses related to the facility,
or transferred into the city's general fund for purchasing or maintaining parks, roads, buildings,
or other public infrastructure. State law requires cities and towns to spend 25 percent of fees
collected at solid waste facilities and two-thirds of fees collected at construction waste facilities
towards solid waste purposes. Four of the twenty cities reporting revenues from facility fees
indicated that they are spending the maximum amount allowable on general fund activities.
In keeping with theOEA's recommendation to move away from additional facility-based fees,
the OEA suggests that the fee be restructured so that all revenues from the fee.are used only for
solid waste activities. This change may lead cities and towns with facilities to reduce their
reliance on additional facility-based fees to fund a variety of activities. As a result, the fees
should more accurately reflect the cost of waste management in that area.
7.3.5 Work to increase efficiency and collections within the current solid waste fee system.
A. Greater Minnesota counties and cities could continue the trend of establishing
dedicated environmental funds for solid waste revenues and spending.
Special funds and enterprise funds, unlike general funds, allow jurisdictions to easily track the
collections from solid waste revenues and intragovernmental grants and the spending associated
with those revenues. Establishing this structure would help ensure that all funds collected are
used for solid waste activities. As is shown in Table 7.1, a number of counties have moved
toward this structure in the past seven years~ the OEA recommends that additional counties and
cities with solid waste activity adopt this account structure.
B. Counties should avoid financing parts of solid waste programs with general tax
revenues that provide no incentive for solid waste abatement
Local governments should avoid financing parts of solid waste programs with general tax
revenues. Instead, governments should use specific, identifiable fees. This issue is especially
important for those jurisdictions that have had to drop tip fees at facilities in 1994 and have lost
program revenue. The OEA recommends that counties make up this revenue through the use of
an identifiable charge that provides an incentive for solid waste abatement (by being tied to the
amount of waste generated, for example) rather than through the use of general tax revenues so
that waste generators can continue see the true cost of waste management reflected in their bills.
In addition, the fee amount in the 46 counties that currently charge solid waste service fees
should reflect the total cost of solid waste management. Currently, some governments have
OEA - Page 53 - DRAFT
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~l'k River
October 27, 1994
Tricia Conroy
Minnesota Office of
Environmental Assistance
Research and Planning
1350 Energy Lane
Suite 201
St. Paul, MN 55108
RE: COMMENTS ON DRAFT OF SOLID WASTE FEE STUDY AND
RECOMMENDATIONS.
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Dear Ms. Conroy:
It is with great concern that the City of Elk River reviewed the OEA's Study
of Solid Waste Fees, and offers the following comments:
1. COMPREHENSIVE REVIEW OF FEES
The City of Elk River is supportive of the comprehensive review
of solid waste fees being conducted by the Office of
Environmental Assistance. We were especially interested in the
possibility of devoting additional SCORE revenues to solid waste
activities. We suggest OEA look at allowing SCORE funds to be
used to maintain existing programs and not just to expand into
new areas.
2. OFFSET NEGATIVE AFFECTS OF SOLID WASTE
FACILITIES
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The City of Elk River is outside of the metropolitan area, but is
logistically close enough to the metro area to make it attractive
to a variety of solid waste activities. Elk River is the host city
for a regional landfill, a refuse derived fuel processing plant, and
a power plant that burns refuse derived fuel.
P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
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conroy-srlbz
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Because very few structures are needed in association with a
landfill, there is very little property tax benefit to the City for
having this facility in the City. Further, the refuse derived fuel
processing plant and the power plant that burns that fuel have
large portions of their facilities classified as recycling and
pollution control related, and therefore are non-taxable. The
City suffers the negative connotations of having these facilities
without the ability to collect sufficient tax revenues from them
to offset the negative effects they bring such as littered roadside
ditches, extra truck traffic, above normal wear on roads, and an
overall negative image to the City. We feel that it is important
that part of the surcharge monies the City collects from the Elk
River Landfill continue to be allowed to offset the negative
affects of these facilities.
3.
USE OF LANDFILL SURCHARGE MONIES NOT ALLOTTED
TO SOLID WASTE ACTIVITIES
Since existing State statute allows 75% of the surcharge monies
collected from the Elk River Landfill to go to general fund
purposes, the City of Elk River has obligated these monies to
good uses, helping to offset the negative image created by this
facility. The most notable of these uses are aid to our Street
Department for repair and maintenance of roads damaged due
to the high volume of garbage truck traffic, partial funding of
the Elk River City Hall and Police Station, and assistance in
financing an expansion to our Public Library.
Further, the City is concerned with a trend from the State and
Federal levels of government, to mandate new environmental
programs on the local units of government without providing
adequate assistance to help fund these additional programs.
Some of these new programs include the Wetland Conservation
Act, Shoreland Management, Floodplain Management, and
Recycling. Not all of these are solid waste issues, but they are
all environmental issues that require City resources. Therefore,
we feel that it is logical and appropriate that some portion of the
surcharge monies collected from the Elk River Landfill, go back
into the general fund to aid in accomplishing non-environmental
activities as currently allowed by law.
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4.
USE OF LANDFILL SURCHARGE MONIES ALLOTTED TO
SOLID WASTE ACTIVITIES
The City has put that portion of the Landfill Surcharge that is
earmarked for solid waste activities to good use. We have
developed and adopted a comprehensive solid waste ordinance.
We believe we are the only City in the State that licenses a
landfill, and we are very active in monitoring environmental
activities at the Landfill. This year the City of Elk River has
approved a $70,000 grant to the Elk River Landfill to help
mitigate local risks from that facility by aiding in the
construction of an active gas venting system. Also, we have
done numerous other solid waste activities with these monies
such as organized and mandatory garbage collection and
recycling, etc.
Summary
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As you can see, the City of Elk River has used its surcharge fees for projects
that benefit all of the citizens of our community. We strongly feel that these
have been appropriate uses of these funds. Currently, the law allows cities to
use the funds for general fund purposes; we would suggest that rather than
changing the law to limit the uses of the funds, any abuses or perceived
abuses be addressed and monitored individually so that the remaining cities
can use the funds to benefit their citizens. We have pledged future landfill
surcharge fees for the payment of debt on both the City Hall and Library.
The elimination of this source of revenue will mean that substantial real
estate tax increases will be forced upon our citizens. We think you will agree
that this is not necessary.
Thank you for your time yesterday. We are looking forward to meeting with
you to discuss our concerns on this issue. We are encouraged by the similar
response you have already gotten on this issue and know that you will
reconsider your recommendation to change the allowable uses of landfill
surcharge fees.
L/,fAJ ).~
Lori Johnson
Finance Director
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Respectfully,
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Stephen Rohlf
Building & Zoning Adm.
(Environmental Officer)
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