Auditor questions high landfill fee

Missouri may be charging too much for each ton of solid waste going into landfills, state Auditor Tom Schweich said Wednesday. His 11-page audit of the Natural Resource’s department’s Solid Waste Management Program also suggested that lawmakers have required too many audits for solid waste management districts.

Lawmakers created the program to reduce the state’s solid waste in landfills, and to help prevent illegal dumping and other environmental problems.

The 20 solid waste management districts were established in 1990.

Schweich’s audit, which covered the 2011 and 2012 state business years ending on June 30, 2012, recommended that DNR “perform a comprehensive review to determine the most cost effective method to deliver solid waste management services statewide, including whether the current tonnage fee can be reduced or the funding allocation formula should be revised.”

But the audit also rated the program’s overall operations as “good.”

Lawmakers this year created a special, 10-member Joint Committee on Solid Waste Management District Operations, which will hold its first meeting next week.

It is charged with examining “district operations, including ... the efficiency, efficacy, and reasonableness of costs and expenses of such districts to Missouri taxpayers.”

The state charges $2.11 a ton for solid waste that is taken to any landfill, and the money collected is paid into the state’s Solid Waste Management Fund.

After the first $1 million collected is divided between the state’s Environmental Improvement and Energy Resources Authority and management districts that get fewer funds from the current state formula than under a previous formula, the rest of the money is split between the statewide program, 39 percent, and the 20 districts, which share 61 percent of the money. Each district gets state money based on a formula that includes the district’s population and number of landfills.

Districts may spend no more than 50 percent of their state funding on administrative costs, and auditors found the operating cost percentages in 2011 and 2012 ranged from a low of 7 percent to a high of 50 percent, with a statewide average of 32 percent of the $13 million state funding provided to the districts.

During last spring’s legislative debate, several lawmakers questioned the wide difference in administrative costs.

Schweich’s audit said the money currently given the districts through the state formula is “more than needed for current operations, resulting in some districts accumulating significant reserves for future operations and grant programs.”

The audit said the Solid Waste Management Fund’s balance on June 30, 2012, “included $7.6 million in unspent district allocations.”

At the same time, the audit found, only two of Missouri’s eight neighboring states had higher tonnage fees than Missouri’s $2.11.

Iowa charges range from $3.25 per ton to $4.75 per ton, while Arkansas’ fee is $2.50 per ton, the audit reported.

“We didn’t try to verify this, but we’ve heard that garbage operators like to take their waste to Kansas or, now, even Illinois, because their fees are lower — so Missouri loses out on those tonnage fees,” said audit manager Mark Ruether.

The audit calledt is difficult to compare Missouri’s program to other states.

“However, the high tonnage fee compared to contiguous states, coupled with significant variations in administrative cost percentages (and) the existence of significant fund reserves ... suggest the delivery of solid waste management services could be performed more cost effectively,” the audit said.

And Deputy State Auditor Harry Otto added, the auditors didn’t look at any effect the higher tonnage fee might have on reducing the amount of waste headed for landfills.

“These things should be breaking even,” he said. “You shouldn’t gig somebody on one side so that somebody on the other side was getting a break.”

The Legislature’s joint committee has until the end of the year to write a report and recommend any changes in current law for the General Assembly to consider.

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