MALONE — Tip fees were increased and more trash was accepted, but the Franklin County Regional Landfill still ended its budget year $240,000 in debt.
Officials say the deficit was caused by the Solid Waste Management Authority’s associated costs for a recent purchase of land so it can expand the landfill’s footprint to last for the next 100 years.
The authority received the County Legislature’s backing this spring to borrow $4.81 million to buy 686 acres near its County Route 20 facility.
At the same time, “we had to close Cell 2, which cost more than we anticipated,” said authority board member Greg Paye.
That meant an account the authority is obligated to fund for future cell closures was shy by about $787,000 and had to be made up at the same time the normal operating obligations had to be met.
HIGHER TIP FEES
The authority raised the tip fee, which is the amount paid to dump at the landfill, from $85 to $90 a ton at its three transfer stations in the fall and raised the fee from $70 to $75 a ton for those dumping trash at the landfill itself, which is located in the towns of Westville and Constable.
At the same time, more garbage was accepted at the dump than ever before, which helped ease the financial pressure.
A total of 74,016 tons of trash and acceptable cell-cover material was handled at the landfill in 2011-12 compared to 67,703 tons in 2010-11, the audit states.
But the authority still ended up with a loss of $242,526 this year after showing a surplus of $58,113 last year, according to the audit.
Paye said the year-end fund balance was $181,838, which is down from the $424,364 the agency started the year with, “but at least we’re still headed in the right direction.”
The annual audit, prepared by Crowley & Halloran CPAs of Watertown, also showed two significant deficiencies.
One concerned some accounts for services that were not recorded by the end of the fiscal year. The accountants said there was an “inadequate design of internal controls over the accounts-payable process.”
But, in response, General Manager George Eades wrote that that specific engineering invoice didn’t impact the year-end figures. He also said the small staff at the authority means “a perfect set of controls is not possible.”
Short staff was also blamed for the second deficiency: lack of segregation of duties.
The audit states that the agency’s bookkeeper collects all of the cash and deposits and prepares the bank reconciliations. She also hands out cash, works on the pay sheets, processes payroll and assigns user rights and passwords for the scale-software system.
The auditors said they understand it is a small staff but recommended the authority continue having the board chair verify and sign voucher requests and have either Eades or the treasurer review them and sign the checks.
The audit also found instances where the authority has not made scheduled payments to a debt-service fund, as required by the terms of its bond. This was a problem mentioned in the authority’s 2011 audit, too.
And, using the exact wording from last year’s response, Eades said, “management was dealing with a difficult cash-flow situation” but by the end of the fiscal year “all obligations were met.”
NEW SOURCES SOUGHT
He added, both this year and last, that finances will be more solid in the coming year through “increased revenue from new external sources of municipal-solid waste.
“We hope to formulate new sources of MSW in 2012-13,” Eades wrote.
Eades is in negotiations for new trash sources, Paye said, but he said he couldn’t name them because of the ongoing contract talks.
The 2012 report pointed to an issue identified during the previous year’s audit that showed the landfill-closure account was $71,000 short, which is against the terms of the agency’s bond obligations.
“The authority has insufficient cash flow to make required deposits, meet ordinary expenses and pay the bond installment that was coming due,” the report states.
It also states the “status was corrected during the year.”
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BY THE NUMBERS
The Franklin County Regional Landfill in the towns of Constable and Westville is operated by the Solid Waste Management Authority and permitted to accept a maximum of 125,000 tons of trash a year.
The authority ended up in the red $242,526 for fiscal year 2012 after showing a surplus of about $58,113 last year, according to its annual audit.
The site was at 86 percent capacity in June, leaving about 2.9 years of capacity left, with anticipated closure in 2016.
Tip fees were increased in 2012 from $85 to $90 a ton at the transfer stations the authority operates in Lake Clear,
Malone and Tupper Lake and from $70 to $75 a ton at the landfill site itself.
In 2012, the landfill took in 38,259 tons of municipal-solid waste, compared to 33,345 tons in 2011. It also took in 19,857 tons of trash from outside the county, compared to 17,034 tons last fiscal year.