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Resolution
No. 2002-1
BACKGROUND: The Lancaster
County Solid Waste Management Authority ("LCSWMA")
is responsible for providing long-tem planning for the proper
processing and disposal of solid waste generated within Lancaster
County, including being responsible for designing, financing,
constructing and operating Lancaster County's solid waste
disposal system.
One of the principal components of Lancaster
County's solid waste disposal system is a landfill located
at Creswell in Manor Township, Pennsylvania. The current operations
at Creswell are known as the Frey Farm Landfill, which is
projected to be exhausted by the year 2020. Under existing
agreements, LCSWMA's obligations to provide an integrated
solid waste disposal system for Lancaster County continue
until at least 2030. There is no technology or process currently
available, or foreseeable, which would eliminate the need
for future landfill capacity, and LCSWMA believes that landfill
capacity will be required for disposal of solid waste generated
by Lancaster County residents and businesses following exhaustion
of the Frey Farm Landfill. Therefore, in August 1999, LCSWMA
began the process of planning for facilities which will be
needed following exhaustion of the Frey Farm Landfill. In
connection with LCSWMA's planning process, LCSWMA asked ARM
Group, Inc. ("ARM") to evaluate alternatives.
After a comprehensive evaluation of all
of Lancaster County, ARM concluded that continuing operations
at the existing landfill would be the best long-term alternative
and clearly preferable to locating at another site.
Based on ARM's recommendation, at its
regular public meeting on June 16, 2000, LCSWMA's Board of
Directors, after considering ARM's conclusions, adopted a
Resolution which authorized LCSWMA's entering into negotiations
to acquire options to purchase properties which may in the
future be needed by LCSWMA. Following the June 16, 2000 meeting,
LCSWMA proceeded with negotiations to obtain options to purchase
properties owned by the Barley family. Those negotiations
resulted in proposed option agreements whereby LCSWMA acquired
options to purchase nine (9) tracts of land (which are known
as Parcels 4, 5, 7, 13, 14, 16, 18, 19 and 40) containing
approximately 345 acres adjacent to LCSWMA's existing landfill
facility. At its regular public meeting on November 17, 2000,
LCSWMA's Board of Directors reviewed the proposed option agreements
and, after receiving public comment, determined that entering
into the option agreements was appropriate and necessary in
connection with LCSWMA's obligation to provide long-term planning
for Lancaster County's solid waste disposal system. LCSWMA's
Board of Directors approved entering into the proposed option
agreements. At the November 17, 2000 public meeting, LCSWMA's
Board of Directors also directed the Executive Director to
continue with all actions which are appropriate or necessary
in connection with LCSWMA's future decision whether to exercise
its options.
In accordance with the November 17, 2000,
actions by LCSWMA's Board of Directors, ARM continued with
its evaluation of the nine tracts which are the subject of
the option agreements.
At LCSWMA's August 17, 2001 public meeting,
LCSWMA's Board of Directors received and discussed information
developed by ARM regarding reuse of LCSWMA's Creswell landfill
as an alternative in planning for Lancaster County's need
for future landfill capacity. As a result of public comments
and discussions at the August 17, 2001 meeting, ARM proceeded
with a more in-depth evaluation of reusing the Creswell landfill.
By letter dated January 23, 2002, ARM
advised LCSWMA that the most favorable alternative from a
technical, regulatory, land use and economic basis is the
reuse of the Creswell landfill. In addition, ARM advised LCSWMA
that it is essential for LCSWMA to control the tracts which
are known as Parcels 4, 5 and 14 in order to preserve the
option of reusing the Creswell landfill; and ARM recommended,
for the reasons set forth in its January 23, 2002 letter,
that LCSWMA acquire Parcels 4, 5 and 14. Parcels 4, 5 and
14 contain approximately 158.3 acres. ARM also recommended,
for the reasons set forth in its January 23, 2002 letter,
that LCSWMA acquire Parcels 13, 18 and 40. Parcels 13, 18
and 40 contain approximately 6.1 acres. Finally, in its January
23, 2002 letter, ARM recommended that LCSWMA terminate the
option agreements with respect to Parcels 7 and 16. Parcels
7 and 16 contain approximately 180.9 acres..LCSWMA's Executive
Director has recommended that LCSWMA's Board of Directors
accept ARM's recommendations. LCSWMA's Board of Directors
has considered ARM's recommendations and the recommendation
of LCSWMA's Executive Director. The recommended actions were
also reviewed and discussed at the Citizens Advisory Committee's
(the "CAC") public meeting on February 13, 2002.
The CAC by unanimous vote concluded that LCSWMA should proceed
with the recommended actions. LCSWMA's Board of Directors
has also considered the comments and suggestions provided
at LCSWMA's regular meetings and at special meetings held
on February 13, 2002 and March 7, 2002.
LCSWMA's Board of Directors believes that
it is in the County's best interests that LCSWMA control Parcels
4, 5, 13, 14, 18, 19 and 40 so that these properties are available
for the County's future needs.
LCSWMA also believes that it is appropriate
to take action at this time.
The option agreements (for the tracts
which are known as Parcels 4, 5, 13, 14, 18 and 40) provide
for a purchase price of $45,700 per acre. The purchase price
per acre was based upon a December 31, 2000 closing and increases
at the rate of 4.5% annually after December 31, 2000. In order
to continue an option in effect, LCSWMA is required to make
monthly payments as provided in each option agreement. If
LCSWMA were to earn 6% or more on its invested funds, the
interest earned would offset the economic effect of the increase
in the purchase price and the monthly payments. However, interest
rates have declined and currently are substantially below
6%.
The purchase price for the properties
(Parcels 4, 5, 13, 14, 18 and 40) is less than the value of
the properties to LCSWMA. In fact, the value of these properties
to LCSWMA is significantly more than the amount agreed to
be paid. The properties are needed in connection with LCSWMA's
obligation to continue to provide an effective, efficient,
reliable and environmentally safe system for disposal of solid
waste generated by Lancaster County businesses and residents.
Purchasing Parcels 4, 5, 13, 14, 18 and 40 at this time will
eliminate the 4.5% annual price increase and the monthly option
payment, which is significantly higher than the rate of interest
being earned by LCSWMA on the funds which are available for
this purchase.
LCSWMA's Board of Directors also
believes that it should terminate its options with respect
to Parcels 7 and 16. LCSWMA's Board of Directors' recognizes
that discontinuing the payments with respect to Parcels 7
and 16 will result in the owners of those parcels retaining
the amounts (approximately $2,284,000) paid by LCSWMA to acquire
and maintain the options. LCSWMA attempted to negotiate a
transaction which did not involve LCSWMA's acquiring an option
for Parcels 7 and 16. However, the owners of Parcels 7 and
16 were unwilling to conclude an agreement except on the basis
that LCSWMA would enter into agreements for all nine tracts.
LCSWMA believes that the overall cost to purchase Parcels
4, 5, 13, 14, 18 and 40 (including the amounts paid with respect
to Parcels 7 and 16) is fair, reasonable, consistent with
the value of the properties to LCSWMA, and consistent with
LCSWMA's functions and mission.
RESOLVED, THEREFORE;
- LCSWMA's Board of Directors hereby
reaffirms and ratifies all prior actions regarding acquiring
the properties known as Parcels 4, 5, 7,13,14,16,18,19 and
40 in the Creswell area of Manor Township, including specifically
entering into the option agreements;
- LCSWMA's Executive Director,
together with LCSWMA's solicitor, are authorized and directed
to take all actions which are appropriate or necessary to
purchase the tracts which are known as Parcels 4, 5, 13,
14, 18, 19 and 40;
- LCSWMA's Executive Director is authorized
and directed to discontinue payments with respect to the
Agreements pertaining to Parcels 7 and 16; and
- LCSWMA's Executive Director,
together with LCSWMA's solicitor, are authorized and directed
to continue with all actions which are appropriate or necessary
in connection with carrying forth the provisions of this
Resolution.
Approved this 15th day of March, 2002
Lancaster County Solid Waste Management
Authority
By:
William K. Ebel Jr., Chairman
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