A Plan That Lowers Risk & Costs

Transcript:

I’m Will Radle. With 20 years experience serving on state, regional and local public committees as well as non-profit boards, my focus remains creating effective, sustainable solutions to the challenges confronting our community.

Friends, you have the privilege and the responsibility of advocating the best interests of Fairfax County and our people.  We have an interesting history.  In 1988, Fairfax County issued $251.9 million dollars in revenue bonds to construct this incinerator following a unanimous vote by the board to issue up to $300 million dollars in revenue bonds on October 28th, 1986. Tom Davis and Chairman Jack Harrity voted for it.

Now, you may buy the same incinerator at fair market value and keep the same operator.  Fairfax County is engaged in active discussions with Covanta at this time because of our previously negotiated purchase option.

I am here to provide good counsel.  Rather than renting the incinerator through 2031 when Covanta’s land lease expires, or buying the incinerator now, or facing an unknown market in five years and competing for trash solutions, I recommend a fourth choice that has not been discussed.

In my opinion, a wiser choice would be acquiring another purchase option set for 2016.  This new purchase option benefits both the County and our contractor as it puts our decision point at or near our change point in 2016. Covanta will be able to offer terms at that time and we will make an informed decision knowing better the trash and energy markets as well as the regulatory environment of 2016. Our community will be more certain of the consequences and the benefits of our decision in 2016.

My plan lowers risk  and costs. I recommend we structure the new purchase option as a compromise between the do nothing and the rent options put forward by the Department of Public Works and Environmental Services.  Rather than increasing tipping fees by 30% and then up to 50% by 2016, we cut the proposed fee increases in half leading up to 2016.  Our reserve posture in negotiations remain doing nothing and entering the open market in 2016 for at least 15 years. According to county staff doing nothing remains the lowest cost option for the next 5 years. Fairfax County should not reduce our revenue participation when we may grow energy revenues exponentially through PJN.  As increased revenues materialize, we can offset increased fees.

In closing, let’s see a show of hands.  Who is ready to look into the eyes of a parent, the parent of a child who does not have access to full day kindergarten and explain how you voted to invest $418 million dollars to buy an incinerator that may or may not enable us to burn trash more cheaply in 18 years?

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