Regional partners will discuss how best to distribute more than $2.6 million in profits generated through a regional landfill this week. The discussion comes as area cities begin budgeting for the next fiscal year.
The Texoma Area Solid Waste Authority is expected to debate how much each of the three member cities could get when it meets at 8:30 a.m. Wednesday at the TASWA offices, located at 25090 State Highway 56 in Whitesboro.
“We’ve got some issues relating to TASWA that have a direct impact on our budget not just because we take our trash there,” Sherman City Manager Robby Hefton said Thursday at the city’s annual budget workshop. “I think we have some issues that have a direct impact on how we make things work in this coming year and for the foreseeable future.”
TASWA was formed by the cities of Denison, Gainesville and Sherman in the mid 1990s as a part of plans to open a regional landfill in Whitesboro along SH 56. These plans ultimately came to fruition in April of 2005 when the landfill officially opened for operation.
In recent years, the landfill has seen an increase in usage not only from municipal sold waste disposal but also from the increasing construction taking place in the region. This has led to TASWA generating more revenue than expected or needed to finance continued operation of the landfill.
Sherman officials said as of October, the authority will have enough revenues to maintain operations while also maintaining a $5 million fund balance to finance the construction of the next phase of the landfill, which is expected to be needed in the 2021 fiscal year. TASWA also plans to put about $1.2 million of funds aside each year for the future expansion needs.
This will leave the authority generating nearly $2.6 million more annually than it needs to continue current and future operations. In this event, TASWA bylaws offer two ways on how best to resolve the additional revenue. The first option would reduce the fees assessed by the landfill in tipping fees, while the other calls for a distribution of the excess funds to the three founding cities.
However, the bylaws are not specific on how to distribute these funds. Instead, the bylaws call for them to be distributed equitably based on the relative use of the facility and the initial capital investment. While all three cities made the same initial investment, they vary greatly on usage, Sherman officials said.
Of the member cities, Sherman is the largest user with 27 percent of the annual tonnage with Gainesville and Denison following with 15 percent and 12 percent, respectively. The remaining 46 percent of usage comes from non-member organizations.
The options currently being considered include a equal distribution, a distribution based on a usage and a third option combining the two. Under the combined distribution, the city of Sherman could receive about 41.6 percent of the distributed funds.
Hefton said he was in favor of the usage or combined rates.
“I can make a strong case that the revenue generated in excess of what’s needed has been generated not on an equal basis but relative use,” he said.
Meanwhile, Denison City Manager Jud Rex said the city plans to pursue the option based on equal distribution, stating that the three cities went into the project as equal partners.
“Our position is the three owner cities of TASWA equally paid into and supported TASWA and I feel any distribution of profits of excess funds should be distributed equally,” he said, adding that he sees no reason to change the tipping fees.
Rex said Denison is not currently budgeting for any payment from TASWA. If the city does receive funds from the distribution, these would go toward one-time expenses that were not able to be included in the budget.
The city of Sherman is going into budget season with plans for the additional revenues. During Thursday’s workshop, city officials announced plans to increase the city’s property tax rate to about $0.502 for each $100 of assessed value, an increase of about seven cents.
The city is already proposing a $4 decrease in its solid waste pick up fees as a relief from the tax increase. The inflow of revenue through a distribution would allow the city to potentially lower these fees even more and offer increased relief, city officials said.
Michael Hutchins is the local government reporter for the Herald Democrat. He can be reached at MHutchins@HeraldDemocrat.com.