WASHINGTON -- Lack of flow control authority forced Prince George's County, Md., to seek and win for the first time voter approval to issue about $60 million in general obligation bonds to finance solid waste management facilities.
In the past, the county financed such facilities with revenue bonds, which do not require voter support. But a Supreme Court ruling last May struck down the flow control authority that localities such as Prince George's County relied on to ensure a revenue stream to back the bonds.
The county will continue to push for legislation to restore its authority to direct the flow of garbage to county facilities and thus ensure a steady waste stream and associated revenue, said Eugene Lauer, director of Prince George's Department of Environmental Resources.
"The problem still exists out there, which is that without flow control, there is a lot of uncertainty" over the credit standing of bonds issued by local governments to finance solid waste facilities and future solid waste financings, said Micah Green, executive director of the Public Securities Association.
Lauer and Green are optimistic that a Republican-controlled Congress will not mean rougher sledding for legislation, which had strong bipartisan support this year.
But how the new Congress will treat legislation is uncertain because of possible House committee restructuring and questions about where potential new committee chairmen stand on the issue.
Sen. John Chafee, R-R.I., who is in line to chair the Senate Environment and Public Works Committee, blocked flow control legislation this year -- not on substantive grounds, but because it was attached to a more controversial measure addressing interstate shipments of waste.
Chafee has been "circumspect" about his position on flow control, said Diane Shea, associate legislative director for the National Association of Counties. A Chafee aide could not be reached for comment.
In the House, the chairmanship of what is now the House Energy and Commerce Committee is expected to be claimed by both Rep. Carlos Moorhead of California, the current ranking Republican, and Rep. Thomas Bliley, R-Va.
Neither Moorhead nor Bliley objected to a bill passed by the House on Oct. 7 that would have broadly grandfathered flow control laws and policies in effect as of May 15.
The ranking Republican on the House subcommittee on transportation and hazardous materials, which has first crack at any bill in the House, now is Rep. Michael Oxley, R-Ohio, who supported a broad measure and has a flow control problem in his state.
Two Ohio cities shut down incinerators partly because they lack flow control. But whether Oxley takes over the subcommittee, if the panel still exists next year, is an open question.
Prince George's County voters handily approved a $58.9 million ballot issue Tuesday that will provide a safety net for financing county waste facilities -- mostly landfills -- if Congress does not act.
The issue won with an estimated 72.1% of the vote. Voters approved a total of $176.7 million in GO bond issues on the ballot for various projects, including the solid waste issue.
Normally, bonds in the amounts approved by the voters are issued on a competitive basis over two to three years, said Steven Kaplan, administrative specialist in the county's budget office.
The last time the county asked voters for bonding authority was in 1990 for a total issue of $111.7 million. The increase on this year's ballot was for the solid waste bonds, Kaplan said.
Up until now, the county's waste facilities have been financed with enterprise, or revenue, bonds backed by tipping fees charged to haulers for waste deliveries, Lauer said. The county still may issue enterprise bonds in the future, he said.
However, without flow control, the county cannot force haulers not under contract to deliver waste to its facilities, and it is losing revenue as a result. Tonnage has fallen from about 650,000 tons a year to 590,000 tons, and associated revenue is estimated at about $6 million a year, Lauer said. No contracts have been broken, he said.
The county had a solid waste fund operating surplus of $12 million at the end of fiscal 1993, but that is projected to fall to zero by the end of fiscal 1995, Lauer said. The fiscal year ends June 30.
"Debt service is not at risk," but solid waste management services may suffer and the county may need to tap the $1.1 billion general fund revenues to make up the revenue shortfall, he said.
The tipping fees charged by Prince George's to haulers "certainly could be more competitive," Lauer said. "We are looking at fixing the system over the next six months," he said.
The county already has reduced its $72 per ton commercial tipping fee to $60, but its residential waste fee remains at $72. "We will be looking at what we need to set the tipping fee with or without flow control" to be more competitive, and at different ways of charging for services, Lauer said.
The county can operate its landfill system at the same cost as a private operator, but as a government, it has the ability to use tipping fee revenue to fund public-purpose programs such as recycling, "which doesn't pay for itself," and collection of household hazardous waste, Lauer said. Loss of flow control is an environmental issue because it would hurt such programs, he said.
Among other options, Prince George's County will explore taking over all refuse collection under existing authority, rather than relying on private operators, Lauer said. Centralizing waste disposal operations is another option, and $22 million of any GO bond issue already is earmarked to finance costs associated with closing one landfill, he said. The county also may expand its main facility, the Brown Station Road Landfill, by adding 10- to 12-acre cells a year at a cost of $3.5 million to $4 million each.
