Tag: HCSWA

Questionable Executive Session Item for HCSWA Board

A very questionable executive session item has been added to the HCSWA (Horry County Solid Waste Authority) board meeting agenda for Tuesday.

The executive session item is listed as “Legal Advice Regarding Upcoming Board Member Appointment.”

Executive sessions are allowed by state law to be held in private, out of the public eye, for several reasons. The most normal reasons are the discussion of a matter regarding personnel of the authority over whom the board has ultimate control or legal briefing on pending litigation, contracts or other legal matters.

In the case of the questionable item on Tuesday’s board agenda, none of those reasons exist.

While HCSWA board members may be thought of as personnel of the authority, they are not hired, fired, or dealt with in any other manner by members of the HCSWA board or other agency officials. They are strictly within the purview of Horry County Council.

HCSWA board members are nominated either by the League of Cities or the Horry County Council. Board members are appointed by vote of county council Nobody associated with the HCSWA is involved in the process in any manner.

HCSWA board members receiving “legal advice regarding upcoming board member appointment” is akin to the HCSWA board receiving an executive session briefing on legal matters regarding the firing of former FBI Director James Comey.

The board has no authority in either above example and should not be wasting the time and money involved in receiving a briefing from the HCSWA counsel. Furthermore, it strikes me that the HCSWA counsel should know this is not an appropriate agenda item, especially in secret executive session.

Despite no need and no authority over the executive session item, expect the HCSWA board to go forward with this exercise in overreach.

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Questions Surrounding the HCSWA Board Member Elections

Nothing is ever simple and straightforward when it involves the Horry County Solid Waste Authority (HCSWA) Board of Directors.

Last Tuesday, Horry County Council voted to appoint two members to the HCSWA board from among three nominated candidates. Two of the candidates, current board chairman Pam Creech and vice chairman Norfleet Jones, were incumbents. Candidate Sam Johnson was the outsider in the voting.

Creech was reelected by a majority of council members. However, Johnson and Jones tied in two successive votes with six each. After the first vote, Creech was named to remain on the board by council chairman Mark Lazarus who proceeded to hold a second ballot with just Jones and Johnson competing for one opening, against the advice of Horry County Attorney Arrigo Carotti.

Jones and Johnson tied with six votes each on both ballots.

Lazarus announced the second opening on the HCSWA board would be filled by council vote during council’s regular May 16, 2017 meeting. However, Lazarus stated nominations for the second position would remain open adding an additional question mark to the process.

The voting, however, only showed minor problems compared to what transpired before the vote.

On April 28, 2017, Esther Murphy, HCSWA’s Director of Recycling and Corporate Affairs sent an email to Horry County Council Clerk Pat Hartley with copies to all 12 members of county council as well as HCSWA Executive Director Danny Knight, Creech and Jones.

The email began, “Board member Norfleet Jones asked that we contact you regarding his term on the Solid Waste Authority Board, which ends on June 30, 2017. Mr. Jones indicated he would be completing his first term and would like to be reappointed to the Board for a second term…”

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HCSWA Asking for Fee Increase

The Horry County Solid Waste Authority (HCSWA) will ask Horry County Council to approve an increase in tipping fees at the authority’s Hwy 90 landfill site.

The increase will be part of the HCSWA budget submission to council for the coming fiscal year which begins July 1, 2017.

The requested increase results from a Cost of Service and Rate Study recently completed for the HCSWA by independent consultant HDR Engineering.

According to that study, HCSWA has one of the lowest tipping fees in the state for municipal solid waste (MSW). The Hwy 90 landfill currently charges $29 per ton for MSW while the average MSW tipping fee at public and private landfills around the state is $42.71 per ton.

The HCSWA tipping fee has not increased in 18 years.

According to the HDR study, if the tipping fee at the Hwy 90 landfill does not increase, by 2024 the HCSWA will experience a cumulative budget deficit of over $32 million.

This calculation is based on a test year of 2016, with projected revenues and expenses at the HCSWA for years 2017 through 2024 inclusive.

What is interesting to note is the HCSWA had excess revenue of $4.093 million in 2016 with $8.46 million in tipping fee revenue against a revenue requirement of $4.369 million for the authority to break even.

In 2017, the excess revenue required jumps to $11.397 million against tipping fee revenue of $8.624 for a deficit of $2.77 million. The projected deficit increases year by year from that point.

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HCSWA Board Studies Tipping Fee Increase

During a pre-budget meeting last week, the HCSWA board directed staff to come up with a proposal for raising tipping fees for municipal solid waste.

The increase is necessitated by increasing costs of running the Horry County Solid Waste Authority, especially delays in procuring equipment and making other improvements on the landfill site.

According to information provided at the meeting, the HCSWA preliminary budget for FY 2016-17 shows a deficit of $1,110,686. The HCSWA consultant engineer has also recommended an additional $1.25 per ton be added to reserve funds for future closure and post closure costs. The authority currently puts aside $6.25 per ton toward those future costs.

Additionally, several sources said the vertical expansion to the landfill, which will increase the life of the landfill until approximately 2035, is costing more than initially expected.

Each $1 increase in tipping fees produces approximately $250,000 in revenue for the authority. Therefore, an increase of from $4-$6 per ton in the MSW tipping fee will be studied.

The current tipping fee for MSW is $29.50 per ton of which $2.25 per ton goes to Horry County government for the county wide 911 communications system.

In 1995, the HCSWA was charging $30 per ton with no money going to county government, according to authority staff.

Therefore, it is not unreasonable for an increase in tipping fee to be needed at this time.

According to HCSWA staff, the statewide average tipping fee for MSW is $35 per ton.

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Charleston Contract Costing HCSWA

The contract between Charleston County and the Horry County Solid Waste Authority for the HCSWA to process Charleston County recyclables is costing Horry County money.

With five months (Aug thru Dec) of solid numbers behind us, the HCSWA has lost approximately $130,000 processing Charleston County recyclables.

When the HCSWA entered into the contract with Charleston County, it was estimated the contract would bring a profit of approximately $1 million per year. That certainly does not seem to be the case with revenues from sale of recyclables over those five months totaling approximately $1.860 million and expenses totaling approximately $1.990 million.

The only thing saving the HCSWA from even greater losses was a three month amendment to the contract, which allows Horry County to not pay Charleston County for transportation costs related to bringing the Charleston County recyclables to Horry County.

The contract calls for Horry County to pay Charleston County $425 per truckload of recyclables shipped from Charleston County. These payments have been suspended for December through February. The suspension allowed the HCSWA to realize a modest $20,000 profit in December.

Several other line items are puzzling from the HCSWA’s latest report. Expenses associated with Charleston recyclables are less than expenses associated with Horry County recyclables. However, Charleston County recyclables are approximately double the amount of Horry County recyclables.

Additionally, a total of 21,382 tons of recyclables have been processed in the five months while only 13,192 tons have been sold. This leaves 8,190 tons of recyclables unsold.

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HCSWA Board Hubris Round Three

Horry County Solid Waste Authority board chairman Lance Thompson sent a letter to Horry County administrator Chris Eldridge last month notifying Eldridge of the 5-2 vote by the HCSWA board recommending removal of Dan Gray from the HCSWA board.

The letter and its accompanying documents were obtained by GSD through a Freedom of Information Act request to Horry County government.

Included in the accompanying documents was a letter to Gray that states in part, “While the Board regrets having to make this decision, it has determined that you have engaged in an ongoing course of conduct, which appears to be designed to undermine the Board’s actions and to hamper the functioning of the Board in a deliberative manner.”

I submit the above statement is one of opinion, not fact. I further submit the HCSWA board rarely acts in a deliberative manner.

The HCSWA board certainly did not deliberate long on the decision to spend over $1 million of public money with a lobbyist to advocate against changing state law and local ordinances with respect to flow control of waste streams.

County council ultimately amended the county flow control ordinance over the objections of the HCSWA and its lobbyist.

I submit the entire issue of removing Gray from the HCSWA board is one of personal agendas of certain HCSWA board members, certain HCSWA staff and certain Horry County Council members. In other words, Horry County politics at its worst.

The HCSWA board has taken its vote and sent its letter. I expect that is as far as the issue will go.

Gray is a nominee of the League of Cities approved by vote of Horry County Council.

Council chairman Mark Lazarus has said he will not put the issue of removing Gray on council agenda if the League of Cities does not support the HCSWA vote.

Despite behind the scenes phone calls by some HCSWA board members to mayors in the county, sources tell me the League of Cities is firmly behind Gray remaining on the HCSWA board.

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HCSWA Moves to Cut Charleston Losses

The Finance Committee of the Horry County Solid Waste Authority board heard Thursday of moves to cut the losses the authority has sustained from its deal to process Charleston County recyclables.

According to HCSWA staff, Charleston County will pay the cost of transportation of its recyclables to Horry County for November, December and January in an attempt to allow the HCSWA to recoup its current losses.

In addition, any amount above 14.5% of residuals will be shipped back to Charleston for disposal.

But, even if the excess of 14.5% is shipped back to Charleston, that won’t solve the other key assumption in the contract that must be met if the HCSWA is ever going to turn a profit from the deal.

Every ton of recyclables above the 14.5% residual threshold means lost revenue that is needed for a profit to be realized.

The estimated profit of $1 million per year is based on a residual rate of not more than 14.5% and the ability to realize an average of $135 per ton revenue from the remaining 85.5% of recyclables processed.

One other problem is the amount of recyclable waste going to the HCSWA landfill.

Horry County Council made it specifically clear that it did not want any Charleston recyclables going into the HCSWA landfill. That space must be saved for Horry County trash and extended as much as possible.

The HCSWA told council it had an arrangement to send C&D waste out of the county in an amount equal to the excess recyclable residual amount realized. This was an airspace neutral arrangement.

The HCSWA claims a historic 14.5% residual rate for recyclables from Horry County.

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HCSWA Charleston Recycling Review

The HCSWA recycling processing of Charleston County trash is now three months old and the results are not what were projected, at least yet.

Through the process to get Horry County Council approval of a contract between the Horry County Solid Waste Authority and Charleston County to allow the HCSWA to process Charleston County recyclables, a projected profit from the contract of $1 million per year for the HCSWA was often repeated.

According to numbers presented by HCSWA officials to the Horry County Infrastructure and Regulation Committee, through the first three months that the authority has processed Charleston County recyclables, the HCSWA material recovery facility (MRF) operations have lost approximately $133,000.

It’s been 50 years since I took Calculus I, but a $133,000 loss in the first quarter of operations did not then, and does not now, project out to a $1 million profit at the end of the year.

HCSWA executive director Danny Knight spoke of the necessity to replace three belts and 30 rollers in the recycling equipment. Knight said the maintenance replacement of this equipment was overdue and now became necessary because of the increased load of recyclables being processed at the MRF.

The HCSWA also obtained a new, larger front end loader for the MRF because of the increased material.

Those costs appear to be amortized over the life of the equipment so no large, upfront cost is included in the above numbers.

The excess cost problem appears to be in the amount of residuals being experienced.

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I&R Recommends HCSWA Contract

The Horry County Infrastructure and Regulation Committee voted Thursday to recommend passage of third reading of the budget amendment for the HCSWA recycling contract.

That recommendation will go forward to full council at its October 6, 2015 regular meeting.

If this recommendation is acted upon by full council with a favorable super majority vote, as it is expected to at this time, the recycling contract between the HCSWA and Charleston County will move forward without any further clouds over its head at present.

Part of that budget amendment requires HCSWA officials to come before the I&R Committee monthly with reports on recycling tonnage received, percentage of rejects in that waste stream, income received from sales of the recyclables and expenses associated with the running of the HCSWA material recovery facility among other items.

An additional requirement associated with the contract was a requirement by members of Horry County Council that any rejects or unsold recyclables that were taken to the HCSWA landfill for disposal were not to displace any available airspace for normal county uses.

As a result, the HCSWA entered into a contract to ship out of the county at least an amount of construction and demolition debris tonnage equal to the tonnage of recycling rejects and unsellable items taken to the HCSWA landfill for disposal.

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HCSWA Recycling Contract

The details of the HCSWA recycling contract with Charleston County should become clearer before this week is over.

The HCSWA board will meet this afternoon. Included on the board agenda is a timeline discussion by executive director Danny Knight to answer questions about why the process took so long from first discussions with Charleston County to reach the HCSWA board and Horry County Council.

The Horry County Infrastructure and Regulation Committee will meet Thursday. The I&R agenda includes a discussion about the contract between the HCSWA and Charleston County, including the assumptions that go into the calculation of profit for the HCSWA.

According to reports from Charleston County, the county spent $8 million on recycling at its Romney Street facility last fiscal year and recyclables sold garnered $1.7 million.

There are some questions among committee members and others interested in the project why the same recyclables, with the added cost of trucking, can be processed at a profit in Horry County.

Additionally, sources familiar with the contract approval process say the Charleston County has purchased (or is in the process of purchasing) equipment to repair its Romney Street facililty in order to process recyclables in county in the near future.

Those sources predict the contract between Charleston County and the HCSWA will be cancelled within 90-120 days regardless of what happens with third reading of the budget amendment ordinance by Horry County Council.

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