A apparent misunderstanding about the contract amendment between Loudon County Solid Waste Disposal Commission and Republic Services to manage the Matlock Bend Landfill could involve millions of dollars of liability for the county.

Under a 2007 contract signed between Santek/Republic and the SWDC, the county would be responsible for the cost of closing the landfill. Among the achievements of a recent amendment to the contract was the transfer of closing costs to Republic.

The amended contract has been a point of contention between the SWDC and Loudon County commissioners who did not approve of the contract, largely because they felt the county did not receive a big enough share of the fees paid to dump at the landfill.

At a special June 1 called meeting, commissioners reviewed the contract and were assured by SWDC members and the county attorney that Republic would assume all liability for closure and post closure of the landfill by posting an assurance bond for $13.1 million.

During the public comment period, Tellico Village resident Richard Anklin asked why the bond was written for $8.4 million when the county was led to believe Republic had to pledge $13.1 million for closure and post closure.

SWDC attorney Kevin Stevens said the bond was only for closure at about $8 million, a figure set by Tennessee Department of Environment and Conservation. Loudon County has always been liable for the cost of post closure, Stevens said.

Kelly Littleton-Brewster, SWDC chairwoman, said clarifying the issue was important because they had presented the contract amendment to commissioners based on the higher amount.

“We sold it to the county as $13 million,” she said.

SWDC member Larry Jameson added that the credibility of the waste commission was at stake.

“We are looking at a pot here and it’s black,” Jameson said. “We sold a black pot. OK, so we need to have some definite answers.”

County Commissioner Van Shaver said he was concerned about the issue of post closure from the beginning. Post closure responsibility runs for 30 years after the closure of the landfill.

“I knew there was nowhere in the contract that it said Republic was going to be responsible for post closure,” Shaver said.

In a Jan. 19 letter from TDEC to County Mayor Rollen “Buddy” Bradshaw, the county was notified to amend its closure plan to account for a revised cost estimate for closure and post closure of about $13 million.

“It should be noted that the new amount of financial assurance will replace the existing amount currently on file,” according to the letter. The amount previously on file was about $8.4 million, a number that has been used in previous discussions regarding what the county needed to accumulate by the time the landfill closes.

A financial assurance worksheet attached to the letter breaks down the total cost for closure into three separate categories, including closure, post closure and operation. Closure is defined as the estimated third-party costs to close the solid waste unit and is listed as $8.4 million. Post closure is listed at about $4 million and is defined as the cost of 30 years of maintaining the landfill after it closes. Operations costs of about $580,000 include a definition based on 450 tons per day multiplied by 30 days at $43 per ton.

Stevens told the SWDC he was not sure exactly what operations costs involved.

“That’s a point for discussion,” he said.

TDEC spokesperson Kim Schofinski said the $580,000 charge for operations represents the cost to a third-party contracted by the state to operate the facility for at least 30 days prior to executing closure as required by law.

Republic has the option of how it closes the landfill. A consultant recommended to SWDC that the landfill be closed in stages as each cell is filled, which ensures closure is completed and costs will not rise due to inflation.

Following concerns expressed by county commissioners about county liability for closure of the landfill, Littleton-Brewster requested review of the contract amendment and an opinion from the county attorney.

A May 24 email from Loudon County Attorney Robert Bowman to SWDC Attorney Kevin Stevens, which was forwarded to Littleton-Brewster, assured her the amendment to the 2007 contract included Republic would have liability for post closure.

“My review of the amended agreement and my conversation with Mr. Stevens confirms that Loudon County is relieved of its post closure financial obligations based on the terms in the amended agreement, although the legal obligation remains in place under state law,” Bowman wrote.

Bowman described the amended contract as “a huge win for Loudon County as it is no longer responsible for the post closure financial obligations associated with the landfill.”

Bowman had not responded by presstime to an email inquiry about the issue.

According to a summary of the proposed amendment provided the county by SWDC for a June 1 meeting, Santek agreed to be fully responsible for closure of all 53 acres of the amended footprint, adding that “based upon TDEC estimated closure/post closure cost this would result in an expenditure by Santek of up to $13.1 million.”

SWDC member Pat Hunter, who was elected interim chairwoman Aug. 9, said she is concerned the difference between closure and post closure will mean the county is still liable for more than $4 million in post closure costs.

“The contract says nothing about Santek/Republic paying for post closure costs,” Hunter said.

Shaver said he is also skeptical about the $4 million estimate for post closure because that will be taking places decades from now.

“That’s so far out in the future we don’t know what it might cost,” he said.