Riverview seeks proposals to sell its landfill and golf course – The News Herald
Are you interested in buying a landfill or a golf course?
If so, the Town of Riverview is interested in hearing from you.
On January 18, City Council approved a motion authorizing Mayor Andrew Swift and City Manager Douglas Drysdale to solicit proposals from organizations interested in purchasing the Riverview Land Preserve and Riverview Highlands golf course.
According to city estimates, the landfill’s capacity expires in about eight years (at the current admission rate) and proposals to expand its capacity have not gone down well with many residents who live near the landfill. landfill, including those in surrounding communities.
The motion does not require the landfill to be sold. However, it introduces the idea of a new owner. The most suitable owner would probably be a private sector waste management company.
“My responsibility is to protect the ratepayers of Riverview,” Mayor Andrew Swift said. “Exploring this option is part of the due diligence our residents expect and deserve.”
But in many ways, this decision by the city raises more questions than it answers.
Before the city can truly market these properties, officials need to know their value. This is one of the reasons why the city is looking for proposals.
“We don’t know the market value of the golf course or the landfill,” Swift said. “The purpose of soliciting proposals is to determine the value of these assets on the open market. We need to know this to make a sound financial decision, either to continue the business or to sell the assets. As fiduciary representatives of residents, City Council and staff should consider all revenue-generating options to fund City operations. »
Something that troubled some Riverview residents was a graph that was recently shared on social media showing the town’s landfill losing money over the past two years. This raises two questions: who wants to buy a failing company and if that’s true, why is the landfill losing money?
Drysdale called the chart misleading because the landfill, as well as the golf course, uses accrual accounting that records both cash and non-cash expenditures as part of its operation.
To illustrate his point, Drysdale said that in fiscal 2020, the Riverview Land Preserve recorded a $12 million accrual for future closure costs, as required by accounting rules.
“However, this was a non-cash expense and future payments will be offset by the closing and post-closing escrow accounts that we are currently funding,” Drysdale said. “Additionally, there are accruals for pensions and OPEB (pensioner health care) also recorded which are non-cash expenses. Excluding these items, the land bank generated enough revenue to cover our cash expenses.
There is also another factor to consider, Swift added.
“Also, it’s no secret that Land Preserve’s revenue has declined over the past two years due to the downturn in the economy,” the mayor said. “We have taken a hit in commercial and demolition equipment with so many businesses and major accounts like Comerica Park, Ford Field and Little Caesars Arena reducing their events.
However, the pandemic has had an opposite effect at Riverview Highlands Golf Course.
According to city officials, at the start of the pandemic, the number of games on the golf course began to increase.
“We think the reason is twofold,” Swift said. “First, golf was one of the few activities you could safely enjoy outdoors. And second, with the improvements we’ve made to the course, golfers are coming back in exponential numbers. The golf course has achieved profits over the past year and it’s only going to get better with Jeff Dobek and Mike Kettler leading the way.
Drysdale agreed with Swift’s assessment, adding that the golf course generated nearly $2.2 million in revenue in the 2020-21 fiscal year. Operating expenses were $1.6 million, with net operating income of approximately $600,000.
But one problem in trying to sell the landfill, or so it would seem, is the fact that it’s only about eight years old in capacity. How many potential buyers would be willing to shell out such a sum of money for a relatively short-term business?
Swift said estimates call for up to 10 years of capacity, but the fact remains that even if Riverview doesn’t get the expansion that city officials have tried in the recent past, a private owner might be able to. to do so, extending its life for many years. .
“Private society can decide it’s worth expanding east and west,” Swift said. “It is quite reasonable to expect multiple proposals if the land bank and the golf course are sold as one. Plus, it’s no secret that the state of Michigan won’t be allowing new landfills soon or in the distant future. So that makes ours very attractive to all waste haulers in the industry. I would expect proposals that would number in the hundreds of millions.
The city’s previous plans to expand the landfill’s capacity have been fraught with controversy, resulting in crowded town hall meetings and protests outside the landfill to shut down such talks.
The landfill operations affect residents of neighboring communities as much if not more than many who live in Riverview, in bordering communities such as Trenton, Brownstown Township and Woodhaven.
Expanding the network even further, closure of the landfill over the next decade, or eventual expansion that would sustain it for many years, would impact the majority of downstream communities, most of which dispose of their solid waste in Riverview. .
While all members of the public have the opportunity to voice their opposition or approval of any future plans to expand landfill capacity, that decision will begin with the residents of Riverview.
At a special meeting of City Council on August 11, 2021, a resolution was passed to place an advisory question on the next available ballot regarding additional mining capacity of the Riverview Land Reserve. The next available election will be on May 3.
However, this will no longer happen. At the council meeting on February 7, members took the advice of city administrators to put a stop to this voting issue.
“Due to the timing of the election, the administrative staff offered to contract with a company to conduct a professional investigation instead of the election process,” Drysdale said in an information section on the agenda. the meeting. “Wayne County requires that the ballot proposal request be formally canceled by the local governing body. Staff are currently working on proposals from interested businesses and plan to present them to City Council at an upcoming meeting. »
Additionally, city officials said the sale of the landfill and/or golf course would also require voter approval. Swift said that’s why it’s up to council to provide as much information as possible to residents about the impact of a sale.
But what if no suitable buyer is found and the landfill is forced to close within the next 10 years?
According to Swift, the city submitted a myriad of options.
“One option is to sell some of the city-owned parcels back to the tax rolls,” the mayor said. “Another option that staff are currently working on (is) with a company interested in buying all the methane created by the Land Preserve. This alone could mean millions a year for the city. Combine these options with reimbursement of certain debts and the funding of our OPEB bonds at the time of the closure of the land bank will alleviate the pressure to increase taxes.
Drysdale said staff, with the help of the city council, had been planning for the possibility of the landfill closing in the near future for years. He expanded on one of the options Swift mentioned, specifically mentioning that city-owned properties along Sibley Road, Grange Road and the Jefferson Avenue area could be developed.
“We have been diligent about keeping our debt levels low and getting good returns on our retirement investments to ensure the system is fully funded over the next 10 years,” Drysdale said. “Additionally, we have a state-approved corrective action plan to fund our OPEB liabilities, and we are reviewing other options to pay them off sooner.”
The last option is the one that affects most residents of Riverview. Drysdale said the administration will review the current property tax mileage the city levies and may eventually begin to separate levy mileage for services that are currently covered by the city’s operating mile.
“That would include the library, garbage collection and potentially public safety,” he said.