Secret Landfill Windfall: Cumberland Receives $2.5 Million, Stays Silent On Details

Published 3:07 pm Tuesday, February 24, 2015

CUMBERLAND — During a budget work session last week, Chairman Lloyd Banks made a joke that isn’t new to Cumberland County. How much do you need, he asks department and agency heads, “we have a truck around back filled with money; $1,000 bills.”

But, this time, it might be a little true. Not the truck, but the money.

County Attorney and Administrator Vivian Giles confirms that the County has received $2.5 million from Republic Services as a result of the County’s host agreement with the company. Supervisors began spending the windfall even before a public announcement had been made regarding receipt of the payment or ongoing negotiations regarding the landfill. During the board’s February 19 work session, supervisors unanimously voted to pay off a $1.1 million debt using the funds, without ever explaining their origin.

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The County entered into a 56-page host agreement with Republic Services in 2006. The agreement stipulates that at least 90 days notice and a “liquidated damages fee” of $2.5 million (“along with host fees or other fees”) will be paid if the company desires to terminate the host community agreement. Up until now, the County has been receiving annual payments of $500,000 as a part of the agreement, although the landfill was never constructed. In all, the County has received $3,525,000, in addition to the recent deposit of $2.5 million.

Giles told The Herald on February 19 that Republic has not exited from its agreement with the County.

When pressed for additional information on Friday, Banks stated that the County could provide no additional information at this time due to ongoing negotiations.

The board met in closed sessions regarding the agreement on both November 18 and February 10 to consult with legal counsel. On February 10, Andrew McRoberts, a lawyer from Sands Anderson PC’s who specializes in local government, also entered into closed session with the board in addition to Giles.

They had not made any motions regarding the matter in their public meetings until the Thursday night budget work session, when they unanimously voted to apply some of the funds to pay off the debt. The matter was not listed on the agenda of the work session, which was focused on meeting with department and agency heads regarding budget requests.

Banks brought up the matter between appointments. “We have approximately 2.5 million dollars in available reserves,” he said, “and we’d like to apply some of that to repayment of a loan.”

The board remained mum as to the source of the windfall, called “the 2.5 million” throughout the discussion, although County staff referenced a recent deposit.

When Supervisor Parker Wheeler, District Five, asked for the current fund balance, Finance Director Tracie Wright said it was at $3.3 million, but that did not include “the deposit” of $2.5 million. She later confirmed that the $3.3 million was undesignated general fund balance, also known as reserve funds. Giles stated she’d received an email that the County received the $2.5 million deposit on February 5.

The loan the board paid off is from AMERESCO. According to previous County staff reports, the debt was incurred during an energy savings study at the Middle/High School Complex, as well as a portion of the construction at the Luther P. Jackson Adult Education Center and energy savings there. When asked by Banks, Giles told the board that the interest was 4.85 percent and there was no prepayment penalty. The annual payment for the loan would be $142,000 this year, Giles told the board.

“So that would reduce our expenditures by 142 [thousand dollars],” said Banks

“I think it would be in our best interest to go ahead and follow through with that payment, paying off that loan,” said Ingles.

Giles asked and members confirmed that the payment was to come out of the “2.5 million”.

When asked by The Herald what “the 2.5 million” was following the board’s motion, Banks responded, “I don’t know who was best to answer that question.”

“To be known at a later date,” added Wheeler.

After The Herald pointed out that the receipt of money was a matter of public record and information could be requested using a Freedom of Information Act request, Banks responded: “We won’t make you do that…I will allow the administrator to discuss the $2.5 million.”

Giles then confirmed that it was a payment from Republic out of the host agreement.

When The Herald then asked if Republic has exited from the agreement, Giles replied, “No.”

When asked if it was part of the annual payment, Giles turned to Banks, saying “I don’t think we should answer any other questions.”

What will the County do with the remaining one million dollars of Republic’s payment? Will it receive more? These questions are as yet unanswered.

The 2008 recession greatly impacted trash volumes, Republic officials have previously told supervisors, delaying the construction of the commercial landfill, which was slated to be located on Route 60 near the Cumberland/Powhatan County line. Republic has spent over $18 million on the landfill site. In 2010, full implementation of the landfill would have cost an estimated $13 million.

If fully operational, officials had estimated the landfill would have brought Cumberland over $100 million in fees over the course of several decades.

Contacted on Friday and Monday, Republic Services did not reply to The Herald’s inquiries.