OGUNQUIT — The Town of Ogunquit is looking to end a 20-year relationship with Ecomaine, the nonprofit recycling and waste collection agency, based in Portland, that manages waste disposal and recycling for 25 percent of the state’s population.

Ogunquit is one of 21 Maine municipalities that bought into the nonprofit as owners several decades ago.

According to Town Manager Thomas Fortier, Ogunquit has been an owner-member of Ecomaine since its inception in 1985. Ownership, he said, guaranteed waste was going to an environmentally friendly facility, as well as a say in the management of the organization. In return, owner municipalities like Ogunquit took on infrastructure debt in the form of an assessment, and paid a contractual disposal fee, called a tipping fee, for all of their waste.

In recent years, as more and more consumers have embraced recycling, the waste disposal industry has seen a decrease in the amount of waste deemed as trash.

“In Ogunquit, residents recycle over 55 percent of their trash, which has greatly reduced what goes into our disposal containers. Our transfer station budget has been reduced by over $300,000 in the last five years,” Fortier said.

Meanwhile, commodities like cardboard and metal have become highly sought-after on the private market. According to Fortier, the current Ecomaine contract charges the town to dispose of those items, leading local officials to question whether the fee structure of Ecomaine was keeping pace with the industry.

Last November, the Ogunquit Board of Selectmen voted unanimously to terminate its contract and walk away from its share of the $29 million organization. The reasons cited were the high assessments and the opportunity to tap into the free market for trash recycling and disposal.

“Trash costs money and recycling generates revenues. We are getting $70 a ton for cardboard as opposed to spending monies to dispose of it as trash,” Fortier said in a recent interview about the November decision. “We are always looking for ways to be efficient and to reduce our costs, and we feel that it will be advantageous to end our contractual agreement at this time.”

Ecomaine values Ogunquit’s share of the company at 2.87 percent, which translates roughly into $832,000 in cash, not including real estate values of Ecomaine facilities, according to Frank Gallagher, communications director for Ecomaine. If an owner leaves, that investment reverts back to Ecomaine.

“We haven’t received a notice of termination from Ogunquit, but there are very specific requirements in the withdrawal clauses that are worth noting,” said Gallagher. “Ogunquit is walking away from nearly $1 million of their investment made over time.”

In addition to Ogunquit, the Town of Bristol has discussed withdrawing its membership in Ecomaine. After reviewing the legal and financial implications, Gallagher said he believes Bristol has changed its mind about leaving.

“You can go out on the market and try to find a better solution, but we think that’s difficult. Ogunquit is going to live and die by the bankruptcies of the private market,” said Gallagher.

He acknowledged that the market has been difficult over the past few years, but said the stewardship of the organization has allowed Ecomaine to pay off its debt four years early.

In January, the Ecomaine board voted unanimously to eliminate assessment fees and rolled back tipping fees by 20 percent. As of July 2014, he said owner communities could see profit sharing from the sale of some recyclable commodities.

Assessment fees were created to generate a revenue stream and to finance debt when Ecomaine was created. While Gallagher would not say if the board’s vote to eliminate assessment fees was driven by Ogunquit’s decision, he did say the company’s price structure is dramatically different from where it was a year ago.

“We are now in a position to propose a plan that would accelerate financial relief by eliminating assessments,” he said.

As of July of 2014, owner municipalities would see a 20 percent reduction in tipping fees, from $88 per ton to $70.50 per ton.

“When we eliminated our long-term debt, we knew we needed to pass savings along to our communities for the most efficient price possible. The tipping fee is now the only cost paid by communities that send their waste to us,” said Gallagher of the board’s January decision.

“Regardless of whether they do business here, (Ogunquit is) still on the hook for liabilities related to anything that has happened here during their ownership that might come up in the future,” Gallagher said. “If a regulatory authority were to come here and say we had to cap our ashfill, Ogunquit would be responsible for their share of that.”

Ecomaine’s published financials show Ogunquit’s cost dropping 66 percent since 2001, going from approximately $105,000 to around $35,000 for this year.

Under their contract, if the material is sent elsewhere while the contract is still in force, Ogunquit would still owe a per-ton fee of 125 percent of the tipping fee, Gallagher said.

Ogunquit Transfer Station Manager John Fusco said the issue it’s facing is size and proximity, noting that the town still has to pay a third party to transport containers of waste to Ecomaine ”“ be it cardboard, construction, bottles and plastic containers, paper or metal.

Since taking over as transfer station manager in 2007, Fusco has reduced his budget by $100,000, going from $450,000 in 2006 to $360,000 at the end of last year.

He attributes much of that to efficiencies made at the transfer station to better organize waste. Sorting items by cardboard, scrap metal, and soon food composting, could provide the town an even higher return over time.

“We’re just a tiny community. Now that metal, cardboard and other commodities are becoming more valuable, we can be paid directly for these at market price,” said Fusco, who is reliant on local haulers to transport containers to waste disposal facilities.

“For larger communities, such as Scarborough and Cape Elizabeth, who are closer to Portland, remaining with Ecomaine makes more sense. Last year, we had to pay our hauler, based in Eliot, for the distance to come from Eliot to Ogunquit and then back to Portland,” Fusco said.

Gallagher said that should Ogunquit choose to return to Ecomaine, it would be welcome back as a member community, rather than as an owner.

“We have new member communities joining all the time,” said Gallagher.

The most recent was the City of Saco, which signed a 20-year contract with Ecomaine after the recent closure of the waste incinerator in Biddeford.

The next step for Ogunquit is to issue a request for proposals. In addition to a more competitive price per ton, Fortier said that a good environmental record would be a requirement of any new agreement. He also noted that much of Ogunquit’s direct waste could still end up in Ecomaine incinerators, but at a reduced rate to Ogunquit.

“With the debt repaid, owner communities have met their obligation, and we can now end our contract,” said Fortier. “Ogunquit is a conscientious-minded community, and I’m very proud (of the) community’s efforts to reduce our waste. In the best interest of our town, we owe it to our residents and taxpayers to solicit the spot market for our trash and recycling needs.”

— Tracey Collins can be contacted via the Journal Tribune at kristenm@journaltribune.com.