Howard residential trash fees to rise with end of 'golden' contract

County officials warn residents of likely fee hike to dispose of trash, but say that pension costs are not a concern

March 03, 2011|By Larry Carson, The Baltimore Sun

Howard County's trash disposal honeymoon is nearing an end — which likely means higher fees for residents — but public employee pensions are sound, county officials told a citizens committee studying levels of spending and borrowing for the next fiscal year.

County budget director Raymond S. Wacks wanted the group, which met at the George Howard Building on Wednesday morning, to review opportunities, like the influx of federal defense-related jobs in and around Fort Meade, and potential challenges, like the cost of trash disposal and employee pensions. General county pensions are 94 percent funded, said finance director Sharon Greisz, and police and fire pensions are at 77 percent. County Executive Ken Ulman is to present his budget for next fiscal year on April 20.

The county is nearing the end of a long, stable period of relatively low trash-disposal costs, officials said.

"We've been living in this golden contract for years," Wacks told members of the county's Spending Affordability Committee, which meets every year. For more than a decade, Howard has benefited from a long-term contract with Waste Management Inc., a large private trash hauler, to ship the county's garbage to a private landfill in Northern Virginia for about $37 a ton.

But that contract will expire in April 2013, said Evelyn Tomlin, the county's chief of the Bureau of Environmental Services, and when it does, the contract price will shoot up at least 47 percent to about $55 a ton, based on what nearby counties are paying under newer contracts. That will mean the county's 15-year-old trash fee, now $225 a year for most people, will rise, perhaps as soon as on the tax bills residents receive next year, in July 2012.

"It's going to be money out of people's pockets," Wacks commented.

Tomlin laid out for the committee members the multiple benefits of the county's current contract, and the growing recycling program that the Ulman administration has pushed as a way to cut trash costs and help the environment.

"We've been getting a real bargain all these years," Tomlin said, noting that shipping trash to Virginia has also helped preserve space in the county's Alpha Ridge Landfill, which is no small benefit, given the growing scarcity of open land in the county.

"Where would you put a new landfill in Howard County?" asked Greisz.

In addition, the county is bringing in $25 to $50 a ton for recyclables this year, depending on the highly volatile market for paper and aluminum cans, worth an estimated $800,000 to $1 million this fiscal year. Howard recycles about 43 percent of its trash now, double the minimum state standard.

"Many people disparage recycling as being for tree-huggers," Wacks said, "but we get $25 a ton and save $37 a ton, plus landfill space."

Once the landfill 's current trash cell — the area where the garbage is kept — reaches capacity, the county would have to spend $11 million to safely close it up or cap it, according to Tomlin, and building a new cell would cost more than $2 million.

Alpha Ridge, which opened in 1980, is 39 percent full, Tomlin said, and the county is working to recycle as much as possible, including discarded building materials, roofing shingles, carpeting and batteries.

Because of all the publicity about public employee pensions, Greisz also wanted to brief the committee on Howard's situation, which she described as good.

The general county employees' pension fund now holds $245 million and paid out $7.8 million this fiscal year. Workers contribute 2 percent of their pay and the county makes a contribution equal to 11.6 percent of workers' pay. The average pension is $17,500, she said.

Police and firefighters have a separate, newer pension fund established in the early 1990s, which has $276 million in assets and is to pay out $12.7 million this year. Participants contribute 11.6 percent of their pay to the fund and the county put in 29 percent of workers' pay this year. The average pension is $49,000 for public safety workers, who can retire earlier with more generous benefits than other county employees. Pensions are based on base pay, not including overtime.

"This plan is less than 20 years old and needs time to get up" to a higher funding level, Greisz said.

Both plans are benefiting from a better-performing stock market this year, after suffering losses in 2008, she said. County teachers' pension costs are paid by the state government.

"What has been bothering me is that people talk about these very rich pension plans. We have reasonable pension plans that are reasonably well funded," Wacks said. Greisz said that despite the recession, both funds have had an average return of 7.22 percent since 1997.

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