Documents pertaining to the landfill have been made public since the signing of the contract between the Town of Colonie and Waste Connections, and although Republican candidate for supervisor Denise Sheehan said they show the town underestimated the true value of the landfill, town maintains the numbers reveal otherwise.
Sheehan has claimed the town’s landfill was worth $600 million in gross revenue after reviewing a study from Clough Harbor and Associates, an engineering firm. She said she believes the town should have held out for a better deal other than the $100 million over 25 years it is expected to get from Waste Connections.
Department of Public Works Commissioner Jack Cunningham said that value, however, is not based in reality.
“I used to do real estate appraising,” he said. “The one thing you learn is you have the value set when you have a willing seller and a willing buyer. You can say something is worth $600 million, but no one is ever going to give us $600 million.”
In a study by Clough Harbor and Associates, published on May 23, it projected the amount of revenue the town could make if it had expanded the landfill in certain areas. If it expanded on the Southern end, it could realize $98.4 million per year in gross revenue with a net income of $9.1 million, along with increasing the lifespan another 10 years. If it were to do a South-West expansion, the site life would be extended by 31 years with an estimated $304.8 million in gross revenue over the life of the expansion and bring in a net income of $28.3 million. If it were to do a Northern expansion, it would add 6.5 years to the landfill’s lifespan and would bring $65.5 million in gross revenue over the life of the expansion with $6.9 million in gross income.
All of these figures did not include the environmental permitting process the town would have to go through, nor the legal fees, engineering costs or construction costs.
Although there was no study that showed the landfill’s worth totaling $600 million, Sheehan said she arrived at the number by combining all three of the suggested plans to expand the landfill. The town has said, however, that some of those plans are mutually exclusive of each other.
“It doesn’t say anywhere in there that the options can’t be combined,” Sheehan said.
Cunningham said if the town was to build out in one direction, it would end up taking some of the space mentioned in the other plans, essentially not allowing it to combine all three. He also said the number Sheehan is projecting is only the gross revenue, which he said does not establish the value of the landfill.
He added that the path the town took has left it with several options in the future for the landfill.
Sheehan contends that the option of looking at fully selling the landfill was not looked at and the current deal allows Waste Connections to come in and make money off the town’s asset.
Cunningham said this deal gives the town the option to sell the landfill when it wants to.
“If you own an apartment and hold onto it, you collect rent,” he said. “You can sell the building and get out from under it. We could sell to another landlord that could have Waste Connections as their tenant, or we could sell it to Waste Connections. We have a lot of options down the line.”
Sheehan said the town should have established what something is really worth before a bid was put out. As an example, she pointed to negotiations between the town and Clifton Park over the purchase of Stony Creek Reservoir. Those negotiations stalled once Colonie said offers must start at $8.7 million.
“You’re not putting this thing on eBay,” she said. “You have to ask, ‘Are you getting what it’s worth?’”
Of the six different landfill bids, five of them had proposed to bring the town $100 million over a 25-year time period, with varying upfront payments. Waste Connections came in the highest with $23 million. Cunningham said those six proposals gave the town an idea of what the landfill was worth.
Sheehan also criticized the town for transferring employees from the landfill to positions created within the town. Sheehan said the move forces taxpayers to pay the salaries of 21 new employees. One of the other landfill bidders, Interstate Waste Services, had proposed in its operating agreement that it would help in transitioning employees at the landfill into its company. Sheehan said it is something the town neglected to put on the negotiating table with Waste Connections.
“I used to do real estate appraising,” he said. “The one thing you learn is you have the value set when you have a willing seller and a willing buyer. You can say something is worth $600 million, but no one is ever going to give us $600 million.”
Cunningham said that situation would not be ideal for a private company because many of the town’s employees are unionized and came in through civil service. He said the other proposals were not nearly as lucrative as Waste Connections was and that it fit into the community much better.
He also added that the town had been preparing for this situation for quite some time.
“When positions opened up, we weren’t filling those positions,” he said. “It made a zero sum transfer out. There will be no need for additional revenue raisers to be built into the budget.”
The town will also be reducing the amount of private contracting in departments for tasks such as snowplowing and some operations at the Sewer Department. All of these tasks will be done in house, ultimately saving the town more money, Cunningham said.
Sheehan said she is also concerned about the amount of oversight the town will have over Waste Connections at the landfill. There is a provision in the contract that allows a representative from the town to inspect the records at any reasonable time, but Sheehan sees it as “a hands-off approach.”
“The company should be reporting to the town on a regular basis,” she said. “I think we should have an onsite monitor who keeps tabs and have it be paid for by the company.”
Cunningham said the town will be doing the same sort of checking-in it has done in the past. He said there is someone who will hold the position of managing the contract and the permit. He will be working out of Cunningham’s office and will act as liaison between the town and Waste Connections.
“As the need arises or issues arise or as we see the need to be checking in on things,” he said. “Once we get there we will have a sense of how much oversight we’re going to put in there. … It’s not like we can just walk away.”
The documents are available through the town attorney’s office by a FOIL request, and contain all the bids received by the town, as well as different studies the town did on the landfill. They also include the email exchanges between the town’s Landfill Exploratory Committee its findings over the past year.