Authority hires special accountant to help with Bessemer withdrawal

IRONWOOD — The Gogebic Range Solid Waste Management Authority Board approved hiring a specialized accountant at the board’s May 12 meeting, to provide the board with insight into the financial implications of Bessemer’s decision to leave the authority.

The authority’s legal counsel, Michael Pope, said that as the actions taken by the authority were done with the support of the member communities, and that Bessemer’s decision to leave could negatively impact the authority, they needed an expert to calculate the impact of Bessemer’s decision.

“You need someone that has the training and indication to say ‘Bessemer owes x number of dollars over the history of 20 years. If they wrote you a check today, how much would that check have to be for for everybody to be happy,’” Pope said.

Hiring an outside accountant would also add credibility to the numbers, Pope said, as there wouldn’t be any claims of bias.

After hearing Pope review the candidates he found, the board agreed with his recommendation and voted to hire Shane Ellison with the accounting firm Anderson, Tackman and Company.

Pope praised Ellison’s expertise, noting that he actually serves on his local solid waste authority, giving him a comprehensive understanding of the issues.

“I just think he brings much more to the table than just ‘here are the numbers and what I came up with,’” said Pope.

Ellison will charge the authority $144 an hour, which Pope said was Ellison’s reduced municipal rate. While Pope said that it was hard to give concrete time estimates when dealing with a complex problem such as the bond issue, Ellison had provided a tentative estimate of two to three hours.

The board could also expand the amount of work Ellison performs, Pope said, having him calculate additional scenarios and providing a more comprehensive picture for authority members going forward.

Pope also provided board members of a summation of the meeting authority representatives had with representatives from the city of Bessemer.

“We discussed (the issues) for about an hour ... we got their side of why they wanted out and we put out our concerns with letting them out and discussed potential options,” Pope said.

Pope strongly denied public reports that the authority offered Bessemer a reduced rate to return.

“That’s an absolute lie. I don’t know where it came from, but it did not come out of our meeting,” Pope said regarding whether an offer was made to Bessemer.

Pope told the board that he sees two results from the discussion, that either Bessemer rejoins the authority or Bessemer leaves.

If Bessemer left, Pope said, the authority members needed to make sure that they weren’t left holding the bag.

“Specifically, what we are talking about is the bonds that are outstanding. Right now, there is about $190,000 in bonds that are out there, in which Bessemer has an approximate 25 percent share of,” Pope said.

Bessemer’s city council voted to leave the authority at its March 16 meeting. Bessemer City Manager Michael Uskiewicz told that Daily Globe that costs were one of the primary reasons the city was leaving the authority.

According to Uskiewicz, Bessemer was paying $120 a ton with the authority while only paying $62 a ton to have service provided by Eagle Waste.

He also said that the city has had issues with the way the authority has been managed, referring to the fact that the authority had to reissue bonds after it was discovered that a billing error from Waste Management had created an artificial surplus that the authority used to pay off the bonds.

When asked to comment on whether the authority representatives offered a reduced rate to the city, Uskiewicz said that the implication of a discount was certainly present.

“It wasn’t a firm offer, it was ‘if we can match $62 a ton, will you come back?’ ... The implication was there. The implication was there that we’re going to match your numbers,” Uskiewicz said.

Uskiewicz also said that the decision to leave, which he termed a “corporate divorce,” was the end of a six month process for the city and that the city wouldn’t be returning to the authority.

“We were deliberate in this, we were reviewing this,” said Uskiewicz.

Authority Administrator Chris Bressette disputed Uskiewicz’s claim regarding the amount he was saving by going with Eagle Waste, saying the city was paying a per-household rate rather than per-ton and therefor the per-ton rate the city would have paid couldn’t be calculated as the collection rates needed to be entered into the equation.

“It’s literally, I would think, impossible to come up with that amount that they would pay by the ton. Because how would they know what their (tonnage) is, because Eagle Waste is collecting it also,” said Bressette, adding that comparing the different prices was a matter of comparing “apples and oranges.”