Over 45 years, we have been in many businesses, for profit and non-profit. We have had many good results but, at times, when we ventured out of our core expertise, also big flops.
Thus our concern that the management of Lancaster County Solid Waste Management Authority ( LCSWMA) is suffering from hubris and putting the Lancaster public at great risk. They have decided to transfer about $150 million in investment that were earmarked for expansion in Lancaster County to Dauphin County to acquire a long troubled incineration project, where the investment will come closer to $200 million, including project repairs. They are taking over a historically troubled facility which apparently was unsuccessfully designed and, according to the Harrisburg Patriot-News, continues to have serious problems.
The Harrisburg incinerator project is of the size and at least the risk of the Convention Center / Marriott Hotel undertaking. Yet hardly anyone here in Lancaster appears to be paying attention.
We read in the Harrisburg Patriot-News how major benefits in the form of promised lower tipping fees will accrue to Harrisburg residents and to a lesser extent to Dauphin and I presume Cumberland County inhabitants. Little has been written on how Lancaster County will benefit. YET IT IS OUR MONEY!!!
If a failure, then tipping fees in Lancaster will need to be raised to make up losses. The potential consequences are just as grave for county residents, if not more so, than the misguided Convention Center / Hotel project. The sponsors refused to provide a legitimate feasibility study and when one was commissioned by the commissioners it recommended scaling down or finding a different use for the site.
To the citizen, a dollar spent paying higher taxes or higher tipping fees amounts to the same thing.
James Warner, the authority’s CEO, promises that the project will be reviewed by financial institutions. This is true, but it will not be on the basis of the merit of the undertaking but rather on the ability of the LCSWMA to pay; to make up losses from the Harrisburg project through higher tipping fees in Lancaster and elsewhere. If Warner wanted the LCSWMA to open a string of hot dog stands, based upon Authority annual earnings, no bank would turn him down. But that doesn’t mean they believe the hot dog stands will prove financially viable. They only care about assurance of being paid back.
This type of risk is fine for a private business, assuming the matter has been researched and outside experts been commissioned to review management’s contentions. It is highly questionable for a non-profit Lancaster authority to take on such a commitment based upon its own history of success in related areas and without qualified outside overview.
To summarize what is to take place: ‘Heads Dauphin wins, tails Lancaster loses.’ This smacks of the ‘moral hazard problem’, where profits can be pocketed in higher pay and prestige and losses passed on to stockholders or, in the case of an authority with a trash monopoly, to the public.
We don’t necessarily object to the project, although 55 years of business experience causes visceral concern. We absolute object to the project moving ahead without a qualified third party performing a thorough feasibility study BEFORE commitments are made.
It is irresponsible that Lancaster Waste Authority be allowed to risk $200 million of its money and borrowing capacity on the basis that they have been successful over the years without the proposal being thoroughly vetted by legitimate outside consultants, our commissioners and local newspapers. It is not too late to hold hearings and request a feasibility study.
Where are your conservative values when the public really needs them? Isn’t one Convention Center fiasco enough?
Best wishes for the holiday season and the coming year.
Robert Field
