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12/30/12

Atlantic County Utilities Authority retires $28 million in solid waste debt; assumes ownership of Pinelands Park Landfill in Egg Harbor Township

In an unprecedented move, the Atlantic County Utilities Authority (ACUA) was able to retire more than $28 million in solid waste debt. The early retiring of the debt was made possible by the Authority's decision to request from the New Jersey Department of Environmental Protection (NJDEP) that ownership of the closed Pinelands Park Landfill (PPL) be transferred to them and that the excess closure funds be used to retire debt the Authority incurred to build and operate Atlantic County's solid waste disposal system.

On Nov 26, 2012, the Atlantic County Utilities Authority (ACUA) officially assumed ownership of PPL in Egg Harbor Twp. On that date, the transfer of ownership was signed off by the previous landfill owner, Republic Services, Inc. of Phoenix AZ and the NJDEP. With funds of $21 million made available from this acquisition, ACUA will retire its solid waste debt in full, more than $28 million on December 31, 2012.

"ACUA spent the better part of a year in discussions with NJDEP on the transfer of ownership of PPL and liquidation of excess funds which enabled ACUA to pay down their debt,” said Maria Mento, executive vice president and chief finance officer of ACUA.

“These funds were originally deposited by Atlantic County users of PPL in the late 1980s and it made perfect sense to use these excess dollars now to pay down ACUA’s total outstanding debt. This agreement allows the Authority to reduce its budget by 8 million dollars a year for the next several years, and provides much needed rate relief to Atlantic County municipalities, businesses and other Atlantic County users of the ACUA landfill,” said Mento. “Without this fix, tip fees could have gone up as much as $30 per ton, which was not an acceptable scenario,” Mento added.

In prior years, state government assisted with funding debt service payments related to solid waste for facilities in New Jersey, including ACUA, but cut or reduced that assistance significantly over the last few years. This was ACUA's solution to the loss of state assistance. It was also a way to keep the excess funds in Atlantic County. Otherwise the excess dollars would revert to state government for use by NJDEP.

PPL accepted waste for 8 years in the 1980’s and was officially closed in 1990. At that time, the ACUA’s solid waste facilities came online and began accepting waste from throughout Atlantic County.

History

The ACUA was designated by the Board of Chosen Freeholders as the implementing agency for the Atlantic County Solid Waste Management Plan. Prior to the freeholders’ action, trash generated in the county had been buried in dozens of unlined landfills, many of which were polluting groundwater and drinking water resources. The New Jersey Pinelands Commission required that all landfills be closed by August 8, 1990, including Pinelands Park Landfill. This requirement, with other national and state landfill and environmental regulations, along with New Jersey's Mandatory Recycling Act, necessitated Atlantic County to implement a comprehensive new system of solid waste management. Starting in 1990, the ACUA established a nationally recognized system to recycle, compost, and dispose of solid waste. A double-lined landfill, recycling center, composting site, transfer station, and ancillary facilities were built on a 360-acre site known as the Howard “Fritz” Haneman Environmental Park. The park is located on Delilah Rd. in Egg Harbor Township.

Landfill Closure Funds

Landfill closure funds for PPL were paid by Atlantic County ratepayers during the years that the landfill was actively accepting waste and earmarked for closure activities. Closure funds are a state requirement to insure that landfills are properly maintained and monitored once they are capped and closed. Closure funds are paid as part of tipping fees (disposal costs). In the case of PPL, it has been determined that the amount set aside in escrow far exceeded what was actually needed to safely manage and maintain the closed site.

In the last four years, debt service assistance previously provided to Atlantic County and other NJ counties by the State of NJ has been significantly reduced and in 2012 completely eliminated. With State debt service funding a thing of the past, Atlantic County officials and the ACUA identified the PPL closure fund as a major source to retire existing solid waste debt and stabilize the solid waste system going forward. As the implementing agency for solid waste, it is the ACUA’s responsibility to insure that the ratepayers of Atlantic County are guaranteed a safe and secure system for managing waste. After using the excess closure fund to retire debt, $25 million remains in the PPL closure fund to provide continued closure protection for the next 10 years. Going forward, the ACUA will assume all responsibility of ownership and for closure. As owners of PPL, ACUA is responsible for maintaining environmentally sound closure for the landfill in accordance with all state and federal regulations.

Up until the acquisition, PPL was owned and operated by Republic Services, Inc., a national waste management company. As owners of the closed landfill, Republic could utilize the fund for post-closure expenditures for monitoring and maintenance activities only. By transferring ownership of the landfill to ACUA, Republic is absolved from any responsibility and liability at the landfill.

“By the ACUA paying off its solid waste bonds early and taking over ownership and responsibility of the closed Pinelands Park Landfill, we are bringing Atlantic County's trash disposal/recycling system full circle," said ACUA President Rick Dovey.

“In the 1980s Atlantic County government and ACUA took aggressive action to assure that adequate closure funds were collected and put aside to make sure Pinelands Park Landfill did not become another Price's Pit,” said Dovey. “More than 22 years after closure, no significant environmental issue has occurred or is anticipated. The closure funds were put aside and were utilized prudently and protectively, allowing $46 million to accumulate. It has been determined that the closure accounts are overfunded by $21 million, and that $25 million will remain for closure costs in the future. In addition, the ACUA will also provide $30 million in additional environmental liability insurance, far exceeding any financial protection for a closed landfill of Pinelands Park landfill type in NJ,” Dovey added.

“The $21 million in excess funds have been approved by NJ DEP to be transferred for use to retire the ACUA's solid waste bond debt. This debt was incurred in 1990 to put into place a comprehensive solid waste system to replace Pinelands Park and other landfills in Atlantic County as required by the NJ Pinelands Commission. Now the system has been financially stabilized for the future and we can move forward debt free and maintain a pay as we go program. The whole deal is a unique series of agreements and steps that were put forth by the ACUA and Atlantic County government and agreed to by Republic Waste Services and the State of New Jersey,” Dovey noted.

About Pinelands Park Landfill

The total landfill area is approximately 160 acres with a permitted landfill footprint of 134 acres. In 1992, the landfill entered its 30-year post-closure period.

The Pinelands Park Landfill contains several lining and cover systems, as well as two stormwater management infiltration ponds, a leachate storage facility, and an active landfill gas extraction system, including an enclosed flare. The surface of the landfill was redeveloped into a golf course in 2002 by the Township of Egg Harbor after working through an agreement with Republic Services Inc and the NJ DEP. The golf course opened on Memorial Day 2002 as. McCullough’s Emerald Golf Links. At the time it was the first golf course to be built on top of a closed landfill in New Jersey, setting the path for a number of closed landfills in New Jersey that have been re-developed into a useful, attractive properties as golf courses. The ACUA’s  assumption of ownership of PPL will not change how the golf course has  operated over the last 10 years. The Township of Egg Harbor holds a long term lease to build, maintain and operate the golf course that will continue with ownership transfer to the ACUA. McCullough's Emerald Golf Links 18-hole course is designed as a unique tribute to famed European courses such as St. Andrews. Water comes into play on five holes and McCullough's offers the region's only 100-foot elevation changes - providing players tremendous vistas of the course and countryside. As golfers travel from green to green or travel in carts over the winding paths, they are likely unaware that the rolling green hills was once the 100-acre Pinelands Park Landfill that received municipal solid waste from the 1950's until its closure in 1992. The landscape design for McCullough's course was chosen as much for its charm as it was to keep within the regulatory guidelines of NJ DEP. Trees, for example, are unable to be planted upon a closed landfill, as the roots could dig into and break the protective impermeable cover.

 



 
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