Increase in Montgomery County garbage fee further stresses Amsterdam finances, mayor says

Montgomery County is raising its garbage transfer tipping fee, and Mayor Michael Villa of Amsterdam isn’t happy about it.

Last Tuesday a split vote of the Montgomery County Legislature approved an $8.50 increase per ton of garbage to raise its tipping fee from $72.50 to $81 per ton.

District 9 Legislator Robert Purtell explained that Montgomery County’s garbage disposal costs rose when the county was forced to stop disposing its garbage with Fulton County. He added that the increased tipping fee is meant to help the Montgomery County break-even on the service.

“Our costs have been around $80 per ton, so basically we’ve been subsidizing the rest of [Montgomery] County for about the last six months,” Purtell said.

Fulton County pulled out of a 10-year intermunicipal agreement with Montgomery County in June 2018. The deal had allowed Montgomery County to use Fulton County’s landfill, paying only $37.95 per ton in 2018. Fulton County accused Montgomery County of taking in waste from other counties, charging those garbage haulers Montgomery County’s tipping fee of $72.50 and pocketing the difference, raking up an alleged $2 million profit over the course of the deal since 2015.

While Montgomery County and Fulton County filed lawsuits against each other in 2018 over the matter, they have now reached a settlement agreement whereby Montgomery County will pay Fulton County $450,000, with $225,000 up front and the rest by the end of 2020.
Legislators Kelly (District 1), Sweet (D-2), Dimond (D-3), Headwell (D-4), Pepe (D-7) and Wilson (D-5) voted in favor of the increase, while the three legislators representing most of the city of Amsterdam — Duchessi (D-6), Isabel D-8, and Purtell D-9 — voted against it.

Villa said he has no idea where his city is going to get the money to pay for a tipping fee increase caused by a contract violation Amsterdam did not cause.

“We were totally blindsided by this. I had followed the situation when the contract was broken, and obviously that’s something between both counties, but to drop this on us now — when we’ve already been through a budget process,” Villa said. “This is another blow to the city.”

Villa said City Controller Matt Agresta has estimated the increase will cost city taxpayers between $50,000 and $70,000 depending on how much garbage the city sends to Montgomery County’s transfer stations.

Amsterdam recently passed a $33.1 million 2019-20 budget that broke the New York state tax cap and raised the city’s tax rate about 8 percent to $17.37 per $1,000 of assessed value. While the budget is expected to help lower Amsterdam’s estimated $8.4 million accumulated budget deficit by about $300,000, it didn’t include an unanticipated garbage tipping fee increase.

A “home rule” deficit finance bill recently passed both chambers of the New York state Legislature. The bill would allow Amsterdam to borrow money to pay off the deficit, and then pay off the borrowed amount over time plus interest.

Villa said Montgomery County should use its reserves to cover the cost of the increase for Amsterdam for its 2019-20 budget.

“Look, as the city goes, so goes the county, so they can assert that the city has a responsibility, but they should realize that we are in a situation that is not of the norm, and now they’re asking us to come up with $67,000 that simply is not in the budget, which I believe is unfair, unjust and something that we should not be responsible for in this current budget,” Villa said.

In January, Montgomery County inked a three-year deal with its garbage hauler GottaDo Contracting to haul its garbage to the Seneca Meadows landfill, with tipping fees set at $29.77 for 2019, $30.36 per ton for 2020 and $30.96 per ton for 2021.

While Purtell said the tipping fees are lower at Seneca Meadows than Fulton County, the increased cost of hauling the waste 160 miles increased the overall per ton cost to about $80. He said a proposal was made Tuesday night to allow the increase for the city of Amsterdam to be paid gradually, but it was voted down.

Montgomery County Executive Matt Ossenfort said the increased cost of disposing of garbage has exceeded the revenues the county takes in for tipping fees by $150,000 through the first six months of 2019 and would have cost the county between $250,000 and $300,000 by the end of the year if they didn’t increase tipping fees. He said when Montgomery County had the contract with Fulton County it was sometimes able to operate with a “surplus of revenue” that allowed Montgomery County to put the extra money into its general fund.

“I wouldn’t say we were ‘profiting’, but when there were times when we had a net surplus we would put that money in the general fund, so it would be there for situations when we needed to replace equipment, a [garbage] scale breaks, whatever the issue may be, you put that into reserves for expenses you can’t predict,” he said.

Ossenfort said Montgomery County hired Barton & Loguidice to do a market study, which determined Montgomery County’s tipping fee price was too low compared to Albany ($100), Catskill ($105), Otsego County ($80) and Schoharie County ($83.50).

“We can’t operate that at a loss, that’s why we had to move forward with a resolution,” Ossenfort said. “I think that was the biggest concern among the legislature at a time when we’re trying to bring our budget to the point where we’re not relying on fund balance, and our [property tax] revenues are capped, we can’t afford a quarter of a million dollars hit to our budget for solid waste. It wasn’t something we wanted to do, but it would have been irresponsible not to do it.”

Ossenfort said Montgomery County has an estimated fund balance reserve of unspent revenues of between $7 million to $9 million.

Villa said Amsterdam will need to explore all of its options in terms of finding a cheaper way to dispose of its garbage.

“These costs are going to increase every year, and basically we have no control over it. We need to know, on our own, what our anticipated costs are going to be. This is exactly what we don’t need, expenditures that are not accounted for in the budget,” he said.

Ossenfort said Montgomery County only pays per ton of garbage, so it won’t cost the county money if any of its participants decide to leave the county transfer system.

“No one has to bring their waste to the Montgomery County transfer station,” he said.

Town of Amsterdam Supervisor Tom DiMezza said his town contracts with a company called County Waste to haul its garbage to Montgomery County’s transfer station in the town of Florida at a cost, before the tip fee increase, of about $6,500 to $8,000 per month. He said he’s not sure if it would be an option for the town of Amsterdam to unilaterally dispose of garbage with Fulton County.

“I’m not sure if Fulton County would accept our waste, given that we are part of Montgomery County. We would need their permission to do that, if that could happen, it would be an interesting question…” he said.