Faced with spiraling trash costs that can be close to one-tenth of a town's annual budget, four members of the 35-community North East/South Towns trash consortium recently agreed to cancel their contracts with American Ref-Fuel's trash-to-energy plant in Niagara Falls, and seek new bids.
Last week the three largest trash-burning towns met with Ref-Fuel in an effort to obtain both a new bid and a downward adjustment in their current tipping fees, before they enter any new pact. Those fees are more than $50 a ton, approximately double the tipping fees at area landfills.
"For us, even a $10-a-ton price cut means $180,000 saved in our budget" said West Seneca Town Attorney Timothy Greenan. "Trash is a multi-million-dollar budget item for us, that's why we spend so much time over it."
Greenan, a negotiator for the consortium, said he "really cannot report anything now, since talks are under way. But unless (Ref-Fuel) can justify their pass-through environmental costs, I don't see much happening."
The problem is the long-term pact to burn 98,184 tons of garbage generated by the 14 Ref-Fuel members of the consortium. Cheektowaga, West Seneca and the Town and Village of Lancaster together generate two-thirds of that total.
Another 22 members produce an additional 84,000 tons of garbage but use landfills and have contracts that are substantially lower.
The current Ref-Fuel pact calls for annual cost-of-living adjustments and allows a pass-through for "environmental costs." Ref-Fuel floated bonds worth $165 million in 1994 and 1996, and at least some of that has been passed through as an environmental cost. Consortium members, who say their bills doubled because of that, have not yet seen supporting documentation for the fee hikes.
"Our current pact calls for a five-year notice of cancellation," said consortium executive director Jerry Knoll. "All of us have either canceled or will do so. Ref-Fuel, CID and Modern Disposal say they'll bid on our business." That, taken together, amounts to 182,000 tons of garbage annually, only slightly less than what Buffalo generates.
CID has offered current Ref-Fuel towns a three-part deal, according to Lancaster Supervisor Stan Giza.
"If we could jump ship now, it would cost us $27 a ton to landfill with CID, locked-in for five years. If we let our contract run out with Ref-Fuel, say in five years, we could sign with CID today to pick it up at that locked-in price.
"But there's a third option: We could let our (current burning) contract play out, but sign a five-year pact with CID for a higher price and, in the interim, they would rebate $10 a ton annually. For us, that would mean $140,000 a year to offset our trash budget. I'm for that, because it gives taxpayers some immediate relief."
Lancaster spends $1.56 million to collect and burn 14,000 tons of trash. Of that amount, approximately $800,000 goes to Ref-Fuel.
"We believe that we have been overcharged by more than $1 million in the last few years," Giza said, "but forgetting that, we could save $400,000 a year by going to someone who will give us today's landfill prices."
Ref-Fuel representatives were unavailable to comment, but they have been willing to negotiate lower prices with client communities.