STATE OF MAINE

BOARD OF ENVIRONMENTAL PROTECTION

PINE TREE WASTE, INC.
WESTBROOK, CUMBERLAND CO.
TRANSFER STATION
#S-022074-WH-A-N / )
)
)
) / TESTIMONY OF DAVID COLE,
TOWN MANAGER OF
TOWN OF GORHAM

My name is David Cole and I reside at 118 Queen, Gorham, Maine. I am Town Manager of the Town of Gorham, and I am on the Board of Directors of RWS, as the representative of the Town of Gorham. I am testifying on behalf of Intervenor, Town of Gorham.

TRAFFIC

The Town has extensive traffic problems, and the proposed transfer station will cause additional burdens to the Town’s already congested traffic system. I have reviewed the testimony of Diane Morabito with regard to analysis of traffic issues and accept her conclusions. However, I also recognize that the Comprehensive Solid Waste Management Agreement between Casella Waste Systems, Inc., Pine Tree Waste, Inc., and the City of Westbrook (the “Solid Waste Agreement”) provides for an annual Spring Clean-Up Period and a Coupon System, at Sections 7.5 and 7.6 of the Solid Waste Agreement, respectively. (See Exhibit I-24)

With regard to the Spring Clean-Up Period, the City of Westbrook is entitled to deliver Spring Clean-Up Waste during a two-week period, to be designated on or before March 1 of each fiscal year. During the Spring Clean-Up Period, the City is entitled to deliver an unlimited amount of Spring Clean-Up Waste to the Transfer Station.

Under the Coupon System, each household in the City shall be entitled to a coupon entitling the household to deliver up to 300 pounds of Spring Clean-Up Waste to the Transfer Station at any time during the fiscal year. According to
Section 12.1 of the Solid Waste Agreement, there are 5,200 stops, and, therefore, presumably 5,200 households, which would be entitled to a coupon, potentially resulting in 5,200 additional vehicle trips and 1.6 million pounds of additional waste.

I do not believe that the Vehicle Movement Analysis submitted as Attachment 10 to the Application includes consideration of the additional traffic which will be generated by these special benefits provided in provisions of the Solid Waste Agreement.

REQUIREMENT FOR DISPOSAL SERVICES

As a Member Municipality of RWS, the Town of Gorham has joined with 20 other Member Municipalities in the Southern Maine Region (representing a combined population of approximately 205,000) and 8 other Associate Member Municipalities (representing a combined population of approximately 22,000 ), to provide solid waste disposal services for domestic and commercial solid waste generated within the Town of Gorham, pursuant to the requirements of 38 M.R.S.A. §1305. As previously set forth in 38 M.R.S.A. §1304-B(1), the Legislature found, and many municipalities have subsequently concluded that, in complying with the statutory requirement of providing disposal services, “energy recovery reduces the cost of solid waste disposal.” In its efforts to “promote the recovery of resources from solid waste by creating one of the conditions which make energy recovery economically feasible” the Legislature sought to provide municipalities with authority to guarantee a steady supply of solid waste to specific waste facilities. This authority, known as “flow control” was relied upon by municipalities throughout the country to ensure adequate revenue to support the long payback periods for energy recovery facilities which have high capital costs, as a result of highly complicated technology. However, in 1994, a Flow Control Ordinance in New York State was overturned by the United States Supreme Court, which determined that it constituted an unconstitutional violation of the Commerce Clause of the U.S. Constitution. The ruling changed the rules of the game after the game had begun and changed the face of waste-to-energy completely, since haulers became free to seek the lowest cost of disposal at whatever facility, regardless of where located and regardless of market fluctuation.

For example, in the case of RWS, 50% of all the waste (with its corresponding revenue) is generated by commercial customers, and, rather than providing the economic support upon which the municipalities, the banks and the Legislature relied when establishing state policy favoring development of waste-to-energy facilities, those commercial customers are free to take advantage of daily market price changes to dispose of this waste at the cheapest location. Residential waste from the member towns (the remaining 50%), although subject to the same ruling and similarly free to seek other disposal locations, continues to be delivered to RWS, since the RWS cities and towns make direct payments for disposal of residential waste, thereby removing any incentive for waste to seek such other disposal locations.

During the two budget years after the Supreme Court ruling, the cities and towns experienced an 85% increase in their costs. In contrast, during the four years following the loss of flow control, RWS system expenses increased by an average of only 2% per year. Based on conversations I have had with citizens of Gorham, it is my understanding and belief that the fees charged by haulers during this period remained unchanged or even increased, even though the costs for waste haulers were significantly reduced. For example, in Fiscal Year 1995 and 1996, the Member rate for disposal of Gorham’s waste went from $55 to $95 per ton, while, at the same time, the commercial rate for haulers dropped from $68 to $40 per ton, which resulted in a system-wide transfer of revenues from the pockets of local property tax payers to the bottom line of haulers, equivalent to $28 per ton, or a total of approximately $2.5 Million Dollars a year. The direct impact on the Town of Gorham was, and continues to be, that this substantial reduction in fees paid by the haulers required a subsidy from local property taxes paid by the residents of the Town.

The total capacity at the RWS waste-to-energy facility is 550 tons-per-day, and to the extent that revenue is not received from tipping fees, the amount which the Towns must subsidize, increases. For example, loss of revenues resulting from diversion of 100 tons-per-day, equivalent to only 10% of the proposed capacity of Pine Tree's transfer station, would result in a weekly shortfall of $44,400, or an annual shortfall of $2,300,000. Such a shortfall would have to be made up by an increase in Gorham’s municipal tip fee, and therefore the property tax, of $31.50 per ton, or an annual increase of Gorham’s property tax of $106,942.

DATED this day of January 2001.

DAVID COLE

STATE OF MAINE

CUMBERLAND, ss.

Personally appeared the above-named DAVID COLE before me this day of January 2001, and made oath that the above-stated facts are upon his own personal knowledge, information or belief, and he swears that he believes them to be true.

Before me,

Notary Public/Attorney-at-Law

(Print Name)

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