Expanding on landfill issues.

In a recent article, I provided a look at financial auditor BDO Wood Gundy's 2017 report on Municipal finances, while zeroing in on what the report had to say about the Municipality's liability towards its landfill sites. As discussed, despite the current good condition of the Municipality's finances, the future costs of closing its landfill sites represents a huge, potentially crippling, liability. Covering this liability will be a big challenge even if the Municipality has many years ahead to factor it into its budgeting, never mind if it becomes necessary to settle it in the near-term. But where does this leave the Municipality in terms of options to meet its future waste disposal needs?

A recipe for landfill troubles: waste generation is
accelerating, recycling is in decline, while Neebing's
population remains roughly constant 
(3.5% growth 2011-2016).

To clarify a point from my last article, it has been pointed out to me that while the Scoble landfill (East Oliver Lake dump) does in fact have 0 years remaining under current approvals, the 33 year life-span used by the auditor to estimate the Municipality's liability was a purposeful assumption, and is based on the Municipality's recent intention to apply for expansion of the site. In researching this article, it seems clear that this issue is an old one that goes back more than a decade. Current difficulties in determining the best way forward have a lot to do with many previous years of apparent complacency on the issue. The increasingly greater rate at which the dumps are filling up (Neebing News page 2 "We must do better") has never been factored into budgetary decision making, and insufficient budgetary priority has been given to covering landfill closure liability. Neebing has done little to prepare for the future of its waste disposal needs, yet "the future" is here. As far as I have been able to determine, expansion is the Municipality's only practical and realistic option at this point. While there is still room for discussion about less conventional waste disposal options, these are not feasible within the time-frame demanded by Neebing's current waste-disposal situation.

While costly in terms of meeting regulatory requirements, estimates are that expansion represents a fraction of the cost of meeting the closure liability of existing sites and applying to open new sites. While there are no strict guarantees that an application for expansion will be approved, in a March 13th meeting (page 25 of .PDF) with officials from the Ministry of Environment and Climate Change (MOECC), council was advised that given the alternatives (or lack thereof), existing landfill sites should be regarded as "gold" making the decision to expand Neebing's dump sites "the route to go". The same meeting concluded with comments that the MOECC was willing to cooperate with the Municipality towards a positive outcome, and that unless the Municipality did nothing, there would be no move to shut down the Scoble site. At council's meeting of May 9th, a resolution to proceed with the expansion of the Scoble site was passed so that work to meet the MOECC's regulatory criteria can begin. While the Sandhill site will also eventually require expansion, it is anticipated that it still has approximately 11.5 years of useful life remaining, leaving council some breathing space to defer that application and its associated costs.

The chief takeaway here is that it is going to cost a lot of money not only to expand our landfills for future needs, but also to fund coverage for the eventual end-of-life liabilities which will have been deferred but will always be lurking. These costs can unfortunately only be carried by the user and/or tax-payer. My own opinion is that it behooves the residents of Neebing to take interest in the care of their landfills. As funny as it may sound Neebing's landfills are it's greatest assets, and their proper management for the present and the future, probably its greatest legacy.

Report on Municipal finances.

At the regular meeting of council on April 18th, a deputation was heard by financial auditor BDO Wood Gundy concerning the Municipality's 2017 finances. A short version of the presentation could be summarized as follows: though the Municipality ran a deficit of just over $50,000 in 2017, its finances are currently in good shape. Despite the condition of its finances however, the Municipality faces a very significant budgetary challenge: how to deal with the Municipal landfill sites as they near the end of their life-spans under current approvals. Click here to see the auditor's full report.

The auditor's financial report specifies the Municipality's current liability for the future costs of closing the Scoble and Sandhill landfill sites at a whopping $747,797 (which is up dramatically from the 2016 liability estimate of $327,350).
As I understood the auditor's explanation, this figure represents the Municipality's liability to date based on estimates of remaining useful life. In other words, the current liability is just a portion of the anticipated total final cost, the remainder of which will continue to be factored in year after year as the landfill sites each get closer to being full. When it becomes necessary to close one or the other site, and the full amount of the liability for that site comes due, there will need to be sufficient funds available to cover the cost - this is a big budgetary challenge.


While growing a reserve fund large enough to cover the cost of dump closures in time to meet the end of their respective life-spans seems a daunting enough challenge as it is, there are also some important complications to take note of. First, the auditor's report indicates that they estimated the Scoble site's remaining useful life at 33 years, whereas in reality it is just about full already. Second, the cost of closing landfill sites is constantly going up, meaning the future cost of landfill site closure will likely be quite a bit more than current estimates indicate.

Given the potentially crippling costs of closing landfill sites, the big question becomes: what are the Municipality's other options, if any? In my next article I hope to provide a look into what those options might be, and which avenues have already been explored by the Municipality.

Correction 13/05/18:
In correspondence received by me from the Municipal Clerk, it was pointed out that while the Scoble landfill (East Oliver Lake dump) has in fact 0 years remaining under current approvals, the 33 year life-span used by the auditor to estimate the Municipality's liability was a purposeful assumption, and based on the Municipality's recent intention to apply for an expansion of the site. A resolution to proceed with the expansion of the Scoble site was passed at the meeting of May 9, 2018.