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Explanation of the GAT GAT FRAMEWORK The Service Agreement The Service Agreement defines the relationship between the Authority and the three participating Counties. Among other things, the Service Agreement, which became effective May 1, 1989 for a 25 year period, contains the following provision
Guaranteed Annual Tonnage The Service Agreement requires that the Authority estimate the number of tons of GAT refuse and garbage which is generated within the geographic limits of each participating County during each calendar year. GAT refuse and garbage is composed of residential, commercial, and non-hazardous industrial solid waste which is determined by the Authority to be compatible for disposal with other solid waste at Authority facilities and excludes sewage sludge. This estimate is based upon historical, demographic or other data which in the opinion of the Authority is considered to be a reliable basis for such an estimate. The GAT for a particular County is established annually at 95% of the annual estimate of waste generated. The Authority is required, by October 15th of each year, to establish each County's GAT for the following year. Aggregate GAT The Aggregate GAT is the sum total of the GAT's of the three individual Counties. Service Agreement Shortfall Safeguards Given that the GAT is an estimated number, the Service Agreement makes provisions for the actual waste delivery to vary from the estimated GAT.
Delivery Shortfalls If in any calendar year, the amount of GAT solid waste delivered from all three Counties to the Authority shall be less than the Aggregate GAT, the County or Counties responsible for the shortfall shall pay to the Authority, from its or their own funds, a shortfall subsidy in an amount equivalent to its share of the shortfall in the Aggregate Guaranteed Annual Tonnage multiplied by the maximum fee during the year in which the shortfall occurred for acceptance of GAT solid waste. If more than one County is responsible for the shortfall in the Aggregate Guaranteed Annual Tonnage, each of the responsible Counties share of the shortfall shall be determined as follows:
Such shortfall subsidy as calculated shall be due and payable by the responsible County or Counties within 60 days of billing by the Authority, unless the shortfall occurred as a result of an Event of Force Majeure (except a Change in Law) or the responsible County exceeded its recycling goals. In either event, the Authority shall adopt a resolution modifying the shortfall subsidy and serve notice to the responsible Counties by March 15th of such year. In the event that it becomes evident that a shortfall will occur during a particular year, the Authority may accept solid waste originating from outside the Authority's operating area to offset the anticipated shortfall. Deliveries of Excess Tonnage If in any calendar year GAT deliveries from a particular County exceed one hundred ten percent (110%) of the GAT, such County shall pay a surcharge for all waste in excess of one hundred ten percent (110%) of the GAT ("Excess Tonnage"). The surcharge shall be calculated by multiplying an amount equal to 10% of the maximum tipping fee for the year in which Excess Tonnage was delivered by the amount of the Excess Tonnage. The Governing Board of the Authority at a meeting prior to March 1st of the calendar year following the surcharge must adopt a resolution demanding payment of such a surcharge. The Authority must serve notice of the demand for payment to the responsible County prior to March 15th. Deliveries of excess tonnage have occurred in the past. All resolutions relating to the issue of excess tonnage can be found in Section 10 of this document. Enforcement of the Service Agreement Both Montgomery and Otsego Counties experienced a GAT shortfall in 1995. The Authority billed for the shortfall in accordance with the Service Agreement. Montgomery County paid their shortfall but Otsego County refused payment on the grounds of the Carbone decision (see Flow Control below). In May of 1996, the Governing Board directed to proceed with legal action to collect the GAT shortfall penalty from Otsego County. The Authority commenced litigation and a motion was made for summary judgment. The motion was granted except for the issue of whether or not the 1995 GAT was calculated pursuant to the provisions of the Service Agreement. The Supreme Court of Schoharie County found in favor of the Authority and determined that the method used to calculate the GAT was indeed in conformity with the Service Agreement. Otsego County was ordered to pay the shortfall penalty, interest and legal fees to the Authority. Flow Control Under the terms of the Service Agreement, the participating Counties are obligated to annually deliver solid waste to designated Authority facilities in an amount at least equal to their GAT. Prior to the landmark Supreme Court decision, issued May 16, 1994, which ended flow control, the Authority's enabling legislation empowered the Counties to establish local laws requiring that all wastes generated, originated, or brought into the County were to be delivered to Authority facilities. The Montgomery-Otsego-Schoharie Solid Waste Management Authority Act empowered both the Counties and municipalities within the Counties to enact Flow Control laws or ordinances with the provision that County Flow Control take precedence over municipal ordinances. After the Carbone decision, commercial haulers could take their trash anywhere they wanted. The Carbone decision said that the Constitution's interstate commerce provisions apply to garbage, just as it does to any other commodity. Therefore, haulers can now seek the facility with the most competitive rates for disposal of their refuse. Some municipalities in New York State have established waste districts to control the flow of waste. This system appears to be acceptable to the courts. Alternate GAT Calculation Methods At its meeting on May 27, 1998, the Governing Board of the Authority agreed to hire Cashin/Cahill Joint Venture to review and refine the system for estimating and monitoring the total number of tons of GAT solid waste generated in participating counties. In September of 1998, Cashin/Cahill Joint Venture issued a report entitled "Alternative GAT Calculation Method -- DataGAT". The calculation as described in this report was performed in two parts. The first part established each counties share of the aggregate GAT using an economic activity index published semi-annually. The second part determined the aggregate GAT by using population estimates and per capita rates. The result was a very different GAT than had been established in the prior years using the historical method. After reviewing the report, the Governing Board determined that the GAT would not be based on the report. |
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