IRC confronts financial issues

The Intermunicipal Relations Committee has money in savings, but it’s dwindling at the rate of about $55,000 a year, which means that in seven to 10 years, it could be gone – without even taking into account capital needs that will surface in the interim.

The committee discussed the problems at a recent meeting.

One way to erase the operational deficit may be for member municipalities to levy recycling fees through addendums on water bills or by selling leaf bags with logos, according to Executive Director John Frederick.

The alternative may be contributions from the four member municipalities – Altoona, Logan Township, Hollidaysburg and Tyrone, he said.

Other, more radical alternatives could create a wholesale change of framework for trash and recyclable collection in the IRC communities, eliminating the solvency worries and the need to add a new charge on residents, according to Frederick.

It actually could reduce residents’ costs, he said.

Capital needs alone will be about $1.7 million over the next 10 years, with $700,000 of that need surfacing during the first five years, Frederick said.

That is $170,000 a year for a decade.

Most of the big expenses are for replacement of machinery like a horizontal grinder and a windrow turner.

Grant money could cover maybe half of the need, Frederick predicted.

But the committee’s operational deficit will make it hard or impossible to set aside money to cover the rest.

“It’s very sobering,” said committee member Patrick Plummer, a member of Hollidaysburg Borough Council.

The committee tries to maximize income and minimize expenses, “but you can only squeeze the budget so much,” Frederick said.

No one doubts the staff has been frugal, said Mark Schroyer, Hollidaysburg manager.

The committee could earn more by selling more compost at its compost facility at the Buckhorn and by earning more tip fee income, but that’s “not a silver bullet,” Frederick said.

The committee could also get bigger performance grants, if it can convince the people in the area to recycle more diligently, said committee member Erik Cagle, an Altoona city councilman.

Committee member Jim Patterson, a Logan Township supervisor, wondered whether privatizing the compost facility near the Buckhorn would help.

The downside to privatization might be larger tip fees, Frederick said.

The committee accumulated the “nest egg” that subsidizes the operational deficit during approximately 12 years when it had no staff and therefore only truck maintenance expenses, Frederick said.

During that time, city workers, or Frederick, employed as a contractor, applied for and received periodic performance grants between $30,000 and about $90,000 from the state Department of Environmental Resources, he said.

The grants would have been larger, if not for mediocre recycling numbers and occasions when city staffers lacked enough time to gather complete data, according to Frederick.

Since then, recycling numbers have improved, but the state has reduced the performance grant amounts by revising the formula, Frederick said.

The state cut the grants 40 percent in 2012, said Katrina Pope, the committee’s education and enforcement coordinator.

The performance grants now don’t even come close to paying for curbside collection of recyclables, Frederick said.

Changing the framework could mean changing the current private-subscription model of trash – and more recently recyclable – collection to a contract system, Frederick said after the meeting.

There’s a continuum that includes a single hauler for recyclables, and at the extreme, a single hauler for all four communities, responsible for trash collection, recyclable collection, yard waste collection and perhaps even other responsibilities like collection of bulky waste, electronics, hazardous household waste and composting operations.

Such a contract could reduce the bill for the average household from the current $21 to $26 a month to perhaps $17.25 to $18.25, he predicted.

It could reduce that cost because a single hauler can be more efficient – going house-to-house on every street.

In the current setup, even the most efficient haulers criss-cross one another on routes and frequently have long distances between pickups, Frederick said.

Haulers protested such a one-hauler proposal about 10 years ago in the city, leading City Council to back off the proposal, helping to cement the current 44-year-old system in place.

But there are ways to include the private haulers, even if the IRC municipalities would adopt a new framework, Frederick said.

One way would be to partition the IRC area into territories, each served by a participating hauler, awarding contracts for those territories based on where each hauler has his heaviest concentration of customers, Frederick said.

Portland, Ore., has chosen this setup, he said.

If the IRC municipalities should adopt a contract-hauler framework, the committee would still have a necessary role as a “shepherd” of the program, helping to ensure the four communities fulfill their legal trash collection and recycling responsibilities – responsibilities that have grown in number in recent years, Frederick said.

Funding for the committee could come from performance grant money or the contract income or both, he said.

“The discussion is just getting started,” Cagle said.

At budget time this year, the committee will need to “get down to the nitty-gritty,” Schroyer said.

Mirror Staff Writer William Kibler is at 949-7038.