COOPERSTOWN _ The Otsego County Board of Representatives unanimously approved a resolution Wednesday that calls on MOSA to guarantee its bonds, a move that could lead to a lighter garbage burden.
A similar resolution was passed by the Montgomery County board last month, and one may be considered by the Schoharie County board this month, according to Rep. Sam Dubben, R-Middlefield, chairman of Otsego's Solid Waste and Environmental Concerns Committee.
If the three member counties and the Montgomery-Otsego-Schoharie Solid Waste Management Authority board of directors approve matching resolutions, a fund would be set up to guarantee payment to the tri-county waste authority's bondholders.
According to Gilbert Chichester, MOSA's executive director, the authority owes bondholders ``between $8 million and $9 million.''
Money for the defeasement fund would come from MOSA's reserves, which totaled ``$12,268,979 as of December 2008,'' according to the resolution passed Wednesday.
The move to defease, or guarantee bonds, is meant to be a precursor to rewriting the service agreement that binds the counties.
By terms of that agreement, each year, MOSA's experts set quotas for garbage deliveries that the counties must meet or pay for undelivered tons.
This year, Otsego County is on course to fall about 3,000 tons short of its quota, which at $106 per ton could lead to paying a penalty of more than $300,000.
Last year, the county fell 2,274 tons short and paid a $237,000 penalty.
The service agreement and annual quotas, or guaranteed annual tonnage (GAT) contracts, are required by law to assure that bondholders are paid. By defeasing the bonds, the members and MOSA board would be free to renegotiate the service agreement and do away with the quotas.
For years, MOSA's high tipping fees _ the prices charged haulers and others at its scales _ were justified in part by the cost of paying down its bonds.
Defeasement would eliminate this pressure to keep tipping fees high.
Rep. Donald Lindberg, R-Worcester, said MOSA could lower its tipping fee by up to $21 a ton if bonds were not an issue. He spoke in response to a question from county Chairman James Powers, R-Butternuts.
With a lower tipping fee, MOSA could become a more-attractive option for haulers to use.
Chichester said the move to defease bonds came from meetings the three counties have held recently, sessions to which he was not invited.
Powers said he will push to have the bonds defeased this year so MOSA and members counties can eliminate the GAT. ``I believe this is something we have to get done,'' he said.
Rewriting the service agreement would not extinguish MOSA, which was created in 1987 by the state Legislature, but might make it a more viable entity, Powers said.