Allegations that revenue from a proposed contract for residential waste and recycling collection islandwide will create a "slush fund" has ruffled some Town of Hilton Head Island officials, namely the mayor.
The Town Council voted 5-2 Nov. 3 on the first reading of an ordinance awarding a five-year franchise for residential waste and recycling collection to Republic Services. A separate contract with Sonoco Recycling to process the materials collected will come before council later, town manager Steve Riley said.
Council will vote on a final reading at its meeting Wednesday and is expected to approve the franchise with Republic.
Town officials say contracting with one hauler will lower costs for most, improve efficiency and air quality, reduce wear on roads, and increase recycling rates.
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"This is not a slush fund," said Mayor Tom Peeples, despite comments to the contrary from some residents at town meetings. "And it's not a huge amount of money. The money is there to market and administer the program and get buy-in from residents to get more people on this island recycling."
The contract would generate $3.2 million in revenue, based on 72 percent of households -- 14,122 -- choosing to participate at an average rate of $19 per month. Five percent of that, about $160,000, would go to the town to administer the program.
Residents could opt out of the trash and recycling pickup service but would have to haul garbage and recyclables to a county-owned convenience center.
Hilton Head would collect another $44,000 to $80,000 a year under a $18-per-ton rebate from Sonoco on recycled material collected, estimated to be 350 to 650 pounds a year per household, according to town projections.
Community Development Director Charles Cousins said the town plans to administer the program with its current staff.
"If it becomes too much of a burden for staff, we'll have to reassess how to address that," Cousins said.
Money from the franchise and rebate fees will offset the loss in business license fees the town now collects from haulers, Peeples said.
The size of the loss from business license fees was not immediately clear; town finance director Susan Simmons could not be reached for comment.
Peeples said if more money is collected than is needed to administer the program, the town would use that to further market "green efforts," such as water conservation.
The town also contracts beach services, phone and cable service, and electric service.
Money from franchise fees and business licenses are put in the town's general fund, which is used to pay for public safety, personnel, public projects and facilities, and other operating costs, according to the town budget. The town collected more than $600,000 in franchise fees in the fiscal year ending June 30.
The quarterly fee to collect trash and recyclables -- ranging from $52.50 to $60 for single family homes -- would be less than what many trash haulers now charge, according to information from service providers.
The cost would be $35 to $42 per unit every three months for condo complexes, apartments and villas.
Hilton Head's plan excludes commercial properties and residential complexes where trash is placed in Dumpsters. Town officials said service for those communities will be addressed later.