Contract might not a rubber stamp

Wednesday, April 23, 2008

04-20-2007 - Marshall County commissioners shouldn't fear terms of a contract with Cedar Ridge Landfill next week when they deliberate three proposed resolutions on how to respond to a request for permission to expand the landfill, according to the county attorney's office.

"We don't have the 'elephant in the room' of a contract over us," Walter Bussart said Monday afternoon with his law partner Lee Bowles who attempted to persuade Chancellor J.B. Cox to remove a section of the landfill contract before commissioners vote on the expansion request.

While Cox declined to sever a section from the contract that Bowles said requires the county to "rubber stamp" landfill expansion requests, the chancellor refused a request from John P. Williams, attorney for Cedar Ridge Landfill and Waste Management Inc. which wanted the county's petition dismissed.

The legal showdown foreshadows a decision by county commissioners when they meet at 6 p.m. on the Courthouse Annex on Lewisburg's public square. The decision may have consequences affecting other cities and counties because the landfill is running out of space for solid waste. Given the current rate of disposal, Cedar Ridge could be full in less than three years, according to Robert Cheney, business development manager for Waste Management. The requested expansion could allow eight years of operations. Trash from Bedford County convenience centers and the Franklin transfer station is sent to the landfill just west of Lewisburg.

The contract signed in 1999 established a host fee paid by the landfill to the county. That money is split with half used by Waste Management to operate convenience centers it built for Bedford County residents' household trash disposal. The other half of the money is used by the county to pay for operations of its Solid Waste Department. County Commissioner Lavoy Ledford, chairman of the commission's Solid Waste Committee, said he believes denial of the expansion could be a breach of contract and Marshall County might have to impose a surcharge on waste deposited at the landfill since the host fee system would be void and Waste Management could stop managing convenience centers. While switching from a host fee to a surcharge may seem like a distinction without a difference, it's unclear whether the different charge would provide the county with sufficient revenue to cover trash disposal costs.

State law included in the contract specifies eight criteria commissioners should use when deciding whether to approve expansion of the landfill. However, another part of the contract uses words that Bowles said requires approval of any request for expansion. That's a conflict between a contractual agreement and state law, Bowles said, adding that state law should trump the contract, so the "rubber stamp" requirement should be removed from the contract.

Williams said there is no conflict in the contract. Its terms include provisions of the Jackson Law, named for the state senator who wrote the bill.

"Under the Jackson Law, if the county denies the [landfill expansion] request, there is a provision that allows the company to appeal to the chancery court," said Williams.

And because the county commission hasn't voted on the expansion, the county's request for a declaration from a chancellor is premature, he said. Williams was part of the negotiating team for Waste Management when the contract was drafted during some 6-8 months, he said during a recess in the hearing on Monday.

"It is premature for the court to declare [a section of the contract as void] at this juncture," Cox said after returning to the courtroom from his chambers.

The chancellor was "proud" that county leaders had come to him for a ruling on the contract, he said.

County leaders and close observers indicated in court they recalled Bowles' argument in a case concerning a proposed quarry that the court shouldn't act before a commission vote because of the separation of powers between the legislative and judicial branches of government.

Nevertheless, Cox said, "Putting myself in the position of trying to interpret the contract does not pay respect to the legislature" which enacted the Jackson Law, including the appeal process that's to include a full trial with open court argument instead of a case decided on written records.

Recognizing that avenue of appeal for Waste Management if its expansion request is denied, and noting that the commission vote was then one week in the future, Cox reserved the right to act later. Having said so, he refused to dismiss the county's petition as requested by Williams and agreed with Bowles that issues she'd raised about the contract were suitable for argument in court.

Cox, Bowles and Williams indicated that if commissioners deny the expansion request and if Waste Management appealed, then the court would be in a position of making its own determination on whether the expansion should be permitted when its effect on the county is compared to the criteria listed in the Jackson Law.

The criteria include: Type of waste; method of disposal; the projected impact on surrounding areas from noise and odor created by the proposed landfill; projected impact on property values of surrounding areas near the landfill; the adequacy of roads to carry increased traffic; the economic impact on the county and its municipalities; compatibility with development nearby and; any other factors which may affect public health, safety and welfare.

Three resolutions were forwarded from the solid waste committee to the county commission for its consideration on whether to grant the expansion. Committee Chairman Ledford explained them as follows.

One is to have the commission determine whether the contract is valid. If it's seen as valid, then commissioners would examine the Jackson Law to see if expansion should be allowed, given the criteria. If commissioners see the contract as invalid, then they may feel free to deny the expansion request.

Another resolution would simply be approval of the expansion request.

The third resolution would deny the expansion request based on the criteria in the Jackson Law.

If the expansion is denied and the contract is seen as invalid, then the host fee paid by Waste Management to the county would be stopped, Ledford said. If that happened, the county could impose a surcharge.

Williams disagrees with the conclusion that denying the expansion voids the contract. That happens only if one or both parties decides to do something about a conflict.

Even if the county approves the expansion, Cedar Ridge won't automatically be able to use the 11 acres within its current compound because there's a year-long state approval process yet to be completed, Cheney said.

Waste Management must "demonstrate to the Tennessee Department of Environment and Conservation's Solid Waste Division that the permit should be granted," Cheney said.

If expansion of Cedar Ridge Landfill is denied, then the final destination for the solid waste collected at Bedford County Convenience Centers is at issue, Cheney agreed. Transfer stations in Nashville are one of the options.

"And then there's Quail Hollow," the Waste Management business development manager said of a landfill in Bedford County.

While that landfill has not been used by Waste Management for years, it is still a permitted landfill that can be reopened if market conditions are right, Cheney said.

Years ago, Bedford County commissioners imposed a surcharge on the deposits of solid waste at Quail Hollow, he said. The dollar amount of the charge was seen by Waste Management as greater than what the market would bear, thereby making the continued operation of that landfill unpractical.

However, as times change and the price of fuel used to haul waste from convenience centers to landfills continues to increase, Cheney said, "It would definitely be with having a conversation over that" idea of reopening Cedar Ridge Landfill.