Despite slight improvements, the city’s Solid Waste Fund has shown a negative balance for several years, prompting officials to look at curative actions.
The Solid Waste Fund is used to track revenues and expenses relating to the collection of solid waste from residences and businesses and its disposition into landfills.
The City Council on Tuesday, Sept. 27, opted to take the recommendation of the Finance Budget Committee and transfer $1 million of General Fund reserves to the Solid Waste Fund this year and then increase the solid waste charges incrementally in 2023 and 2024 to reflect inflation cost increases.
Council members approved the recommendation on the consent agenda, that is, unanimously and without comment.
The Finance Budget Committee during its Aug 9 meeting had weighed that and two other options for improving the fund, increasing the amount charged to residents and businesses solid waste collection and disposal and increasing the property tax revenues allocated to the Solid Waste Fund.
Each option was targeted to have the ending fund balance be between $50,000 and $100,000, according to a memo from Deputy City Manager Dave Stoneback. Even at $100,000, the fund balance would be far short of the 16.6% operating reserve – nearly $1.2 million for the Solid Waste Fund – required by the city’s financial policy. It voted to forward the last option to the City Council, which was approved
Expenditures outpace revenues
Charges to residents for collecting and disposing of solid waste comprise about 76% of the budgeted revenues in the fund. In addition, the city has collected fees from the waste transfer station, 1711 Church St., in accordance with a host agreement dating to 2016. Garbage truck enter the transfer station and dump their loads, which are then picked up by other trucks and transferred to larger facilities, principally the one in Glenview.
Neighbors have complained for years that the transfer station emits foul odors, attracts rodents and that the heavy trucks damage streets and shake buildings in the area.
The revenues paid under the host agreement were never intended to be used to subsidize the general expenses of the Solid Waste Fund but were to be used to improve the neighborhood around the transfer station.
Recognizing that formally, City Council in July of this year authorized the transfer of nearly half a million dollars in host-fee revenues to the Capital Improvement Fund and directed that future host-fee revenues be deposited into a dedicated Business Unit within the Capital Improvement Fund.
This measure, according to Stoneback’s memo, “reflected Council’s intention that host fee revenues should only be spent on improvements in the waste transfer station area and brought accounting in line with existing understandings and policy.”
It also, of course, reduced the fund balance in the Solid Waste Fund.
Stoneback’s memo also noted that the Solid Waste Fund did not increase charges for services in 2022 and added that projections show that without the host fees, the Solid Waste Fund will show “a thin 0.8% margin,” $46,000, of revenues above expenses in 2022.
Expenses, meanwhile, continue to increase because of existing and future contracts as well as rising fuel and vehicle costs. Contracts with the waste-management firm Groot for refuse and compost collection and with LakeShore Recycling Systems for refuse collection make up 47% of expenses in the fund.
These contracts, Stoneback wrote, “include automatic annual increases tied to the Consumer Price Index (CPI), with a minimum 1.5% increase and a maximum 3.5% increase. Staff anticipates the maximum 3.5% increase for the foreseeable future. These contracts must be renegotiated in 2026, at which time annual increases may exceed 3.5%.”
For more than 35 years, there has been a solid waste facility on Church Street just west of Darrow Avenue, having grown from a family-owned business that handled mostly Evanston-generated refuse to the present transfer station used by more than 75 large garbage trucks each weekday. The refuse collected by these trucks is then transferred to trucks that haul it to landfills.
In 1983, the city approved the transfer station, and the Illinois Environmental Protection Agency permitted it in 1984. Such a permit would not be granted today, because current standards ban transfer stations from operating within 1,000 feet of the nearest residence, but existing transfer stations were exempted from the new standards.
According to information provided by the city in 2016, there are 250 residences within 1,000 feet of the transfer station. Because the area is home to primarily low-income minority households, some people have suggested that the continued operation of the transfer station fits a pattern of environmental racism.
In 2012, the City of Evanston imposed a transfer station fee of $2 per ton on waste brought into the transfer station, and the then-operator of the transfer station filed a lawsuit challenging the fee. While the lawsuit was pending, the fees were paid and held in a reserve fund. In 2016, the lawsuit was settled, allowing the City to retain the fees.
Under the settlement, the operator of the transfer station agreed to pay a host fee of 75 cents per ton beginning Jan. 1, 2018. The $456,740 in host fees that was held in reserve was the amount transferred in July to a dedicated fund within the Capital Improvement Fund.