SMA awaits more information about landfill purchase offer

A standing-room-only crowd of more than 60 decidedly partisan citizens jammed the city council chambers Monday to learn more about the future of the landfill, as well as to make sure the Sallisaw Municipal Authority knew how they felt about an unsolicited offer from CARDS Holdings Inc. to purchase the landfill and sanitation collection services for $21.5 million.

The public hearing, which lasted more than an hour, featured comments from 11 citizens, 10 of which left no doubt that they were against the sale, sharp criticism that drew wide applause from the crowd.

Although Sallisaw City Manager Keith Skelton emphasized in his opening remarks to begin the public hearing that “the Board of Trustees and city staff are in the early stages — and I stress, very early stages — of evaluating this offer,” citizens were determined to draw battle lines for the future of the 1,200-acre landfill.

Skelton tried to assure citizens that no decision has been made, and that any decision made will protect current landfill customers.

“Our intent is to ensure the offer is properly vetted, and that Sallisaw, Sequoyah County and all our current landfill customers are properly protected with continued use of the landfill,” he told the SMA and those assembled for the public hearing. “Early review of financial numbers, and future projections of the landfill and collection services show the offer to be very beneficial to the city in the long term financially.”

Skelton said the offer includes a tonnage royalty for the city of $1 per ton covering all tonnage brought to the landfill after the sale. The offer also includes the city retaining 100% of all methane royalties from Sparq Renewables once the methane collection system is operational, which SMA chair Ernie Martens said “could be anywhere from $300,000 to $500,000 a year just on the methane gas production at the landfill.”

Skelton said the financial evaluation is centered around two scenarios. Both scenarios include:

• Instant budget relief for the city and SMA

• Retainage of employees who wish to stay employed with the city

• Relief from any future landfill environmental liabilities

• Yearly investment revenue that would be generated by investing up to $12 million or more of the cash received at closing

• Relief from accruing landfill closure/post-closure cost liability now required by the Oklahoma Department of Environmental Quality. Currently this sits on our balance sheet at $2.8 million, a liability to ensure that the landfill’s properly enclosed In the first scenario, the SMA sells both the landfill and collection services. Skelton estimates the net benefit for this scenario at $2.3 million yearly.

In the second scenario, the SMA sells only the landfill, and continues to operate the collection services. The net benefit for this scenario is currently estimated at just over $2 million yearly.

In looking toward continued discussions by the SMA, Skelton could not predict the outcome.

“CARDS may not be the company, could maybe be another company. We may come in tomorrow and someone offers $50 million, I don’t know,” Skelton said. “But I think it’s pertinent for the board to continue the evaluation and let staff discuss this more, or discuss it with CARDS, and discuss it with other outside sources and just see what we come up with.”

And he reminded the board members that they do not have all the information they need to make a decision.

“It’s our responsibility to give you all the information that you need. I have not given you all the information that you need as of tonight (Monday). I hope to give you the rest of it Tuesday at the budget meetings,” Skelton told the board members, who also serve on the Board of City Commissioners. “It’s my duty to bring it to you and discuss it, my duty to provide the information to you.”

CARDS is based in northwest Arkansas. CARDS and its affiliates operate hauling companies, transfer stations, recycling centers, recovery facilities and landfills throughout the Midwest. CARDS and its affiliates are focused on establishing a reputation for unmatched service, and remain committed to the communities they service. In addition to hauling and recycling operations, they currently provide services to 16 municipalities in Arkansas, seven in Oklahoma, six in Missouri and one in Anna, Texas.

Other business Aside from the public hearing and continued discussion of the landfill purchase proposal, the SMA also approved a purchase order to Graybar of Maryland Heights, Mo., in an amount not to exceed $125,000 for the purchase of fiber materials for the Highway 59 project. The materials are needed to relocate telecommunications infrastructure on U.S. 59. Once the materials and related invoices are received, staff will submit those to the Oklahoma Department of Transportation for reimbursement per the city’s loan agreement.

Skelton also led a discussion on the Grand River Dam Authority Power Cost Adjustment. New PCA for June, which was announced Wednesday at the GRDA board of directors meeting, is $0.03451 per kWh, which continues a downward trend for 2023. PCA was $0.03548 for May, $0.03742 for April, $0.03746 for March, $0.03822 for February and $0.03806 for January.

“Gas prices have gone down, so it’s going to be interesting to see what the PCA comes in at this month,” Skelton said Monday. “This is really the month (June) I’ve been waiting on to see what it’s gonna go to, see if there’s anything significant or not.”