My Name Is Dale Olmstead, I Am Currently the Chairman of the Regional Waste Systems Board

STATE OF MAINE

BOARD OF ENVIRONMENTAL PROTECTION

My name is Dale C. Olmstead, and I reside at 2 Bears Run Road, Freeport, Maine. I am the Chairman of the Board of Directors of Regional Waste Systems, Inc. (“RWS”), and I also serve as Town Manager for the Town of Freeport. I am testifying on behalf of Intervenor RWS, with particular attention on the events and actions regarding the relationship between RWS and the City of Westbrook's obligations under 38 M.R.S.A. Section 1305.

I have listened to the tape recording of the December 7 meeting of the Board of Environmental Protection. As Chairman of RWS, I cannot let the record stand without correcting what I believe were inaccuracies. While the statements, initially, may seem irrelevant to the pending application filed by Pine Tree Waste, Inc. ("PTW"), in fact both the City of Westbrook and RWS recognize that this Board should take into account the impact of this project on the statutory obligation of Westbrook and each of the RWS municipalities to provide waste disposal services.

At the meeting of the Board of Environmental Protection on December 7, 2000, the Administrative Assistant to the Mayor of the City of Westbrook implied that Westbrook was speaking in favor of this Application because RWS would not accept waste generated in the City of Westbrook. Nothing is further from the truth. RWS neither left Westbrook without a place to dispose of its municipal waste nor anything of the kind. In fact, it is my opinion that Westbrook devised a business plan with Pine Tree Waste that would result in significant harm to the surrounding cities and towns which own and operate RWS. I further believe that Westbrook’s actions were begun well in advance of any actions by the RWS Board of Directors.

For your information, RWS, which has been in existence since 1974, is a quasi-municipal, nonprofit, non-stock corporation, formed by interlocal agreement among twenty one cities and towns to meet their statutory obligation under Maine law to provide a solid waste disposal facility for all residential and commercial waste. In 1990, ten additional municipalities, including Westbrook, entered into contracts with RWS as Associate Members for a ten-year period. See Exhibit I-28. The following 21 municipalities are the owner-members of RWS: Bridgton, Cape Elizabeth, Casco, Cumberland, Falmouth, Freeport, Gorham, Gray, Harrison, Hollis, Limington, Lyman, North Yarmouth, Ogunquit, Portland, Pownal, Scarborough, South Portland, Waterboro, Windham, and Yarmouth. The following eight municipalities are currently associate contract-members: Baldwin, Durham, Hiram, Naples, Parsonsfield, Porter, Phippsburg and Standish.

RWS does not make, has never made and is not intended to make a profit. RWS is financed and subsidized by its owner citizens, for the most part through their property taxes. The owners govern the system through a 28-member Board of Directors representing the cities and towns based upon population.

During the 1980's, in response to the State’s policy to move towards waste-to-energy, there was a huge investment (over $300 million in bonds) in the four plants located in Biddeford, Portland, Auburn and Orrington. In RWS’s case, as of June 30, 2000, the towns have $82,465,000 of debt outstanding of which $53,450,000 is attributed to the waste-to-energy plant. On behalf of its Member Municipalities, RWS currently owns:

• a 550 ton per day waste-to-energy plant located at 64 Blueberry Road in Portland;
• a 43 acre balefill landfill (licensed under Order #91-1171-05200) located off Running Hill Road in Scarborough (adjacent to the proposed transfer station) and which has been closed (under Final Closure License #S-01171-WO-U-N);
• a 70 acre ashfill/balefill located off Green Road in South Portland and Scarborough (licensed under Order #L-013127-07-A-N);
• a 20.5 acre parcel of land located in Scarborough and South Portland adjacent to, and reserved for expansion of, the ashfill/balefill;
• a 262 acre parcel of land in Gorham which is under option to American National Power; and
• a 25,000 ton recycling processing center located at 64 Blueberry Road that also has the ability to process solid waste.

RWS utilizes these facilities to comprehensively manage approximately 190,000 tons of solid waste generated in its member municipalities per year. In planning development of these facilities, numerous options were available that RWS municipalities could have pursued. For example, we could have built a 1,000 ton per day plant and imported waste from non-member Maine municipalities and from out-of-State. Instead, our towns elected to restrict the size of the plant to 550 tons per day, enough to serve only the participating owner cities and towns. Regional solutions to regional solid waste problems was, and continues to be, the direction from the State; the municipalities which formed RWS have fully complied with this policy. Decisions regarding the size of the facility, the technology to be used, the type of air pollution control systems and other options were the direct result of public deliberations at the municipal, regional and State level. Furthermore, RWS and the Board of Environmental Protection, along with two intervenors, examined the RWS project during five long days (and nights) of public hearings in November 1985 that ultimately provided RWS and the State of Maine with the most comprehensive review of any waste-to-energy project in the State.

With this background, let me answer the accusations made against RWS by the City of Westbrook's representative at this Board's public meeting in December. In March 1999 James Bennett, Administrative Assistant to the Mayor of Westbrook, met with Charles Foshay, the RWS General Manager, and me, to discuss Westbrook’s future solid waste disposal plans. At that meeting, Mr. Bennett advised us that representatives of the City of Westbrook were talking to other parties, but that Westbrook’s solid waste “business is yours to lose.” Mr. Bennett conveyed the view that the only issue which could prevent extension of Westbrook’s agreement with RWS was the inability of RWS to handle construction and demolition debris (“C&D") generated in Westbrook. Since Westbrook and most of the other RWS municipalities utilized the C&D facility owned by the City of Portland, I suggested to Mr. Bennett that he contact Robert Ganley, Portland’s City Manager. Since Portland was a charter member of RWS, and Mr. Ganley was Vice Chairman of the RWS Board of Directors (which also included three Portland City Councilors and five other representatives of the City of Portland), I was confident that any issues involving disposal of Westbrook’s C&D would receive a fair, expeditious and positive audience in Portland. However, to be absolutely certain, subsequent to the meeting with Mr. Bennett, Mr. Foshay and I met with Mr. Ganley, reviewed what we understood to be Westbrook’s position, and told him to expect a call from Mr. Bennett. I was later told by Mr. Ganley that he never spoke to Mr. Bennett regarding this matter prior to a meeting which they both attended at RWS more than a year later .

Since the agreements with Westbrook and the other associate member municipalities were scheduled to terminate during 2000-2001, the Board of Directors sought to obtain information on the long-range plans of RWS’ municipal partners. For example, by letter dated June 4, 1999 to Mayor Donald Esty of Westbrook, RWS asked for a response from Westbrook on its interest regarding extension of its agreement with RWS. (See Exhibit I-20) RWS never received a response to this letter. (It should be noted that similar letters were sent to the other associate members, who then entered into dialogues with RWS.)

The RWS Board of Directors scheduled a special meeting for November 10, 1999 to discuss extension of the Waste Handling Agreement with officials from the City of Westbrook. The RWS Office Manager called Westbrook City Hall and was told that the meeting was on the calendar of the Administrative Assistant and that someone would be attending. The Mayor, the Aldermen and the Administrative Assistant were invited, but no one from Westbrook attended the meeting. Since Westbrook’s representatives did not explain why they decided not to attend, the RWS Board took this as a sign of disinterest in any further contractual relationship.

On March 29, 2000, the Board of Directors, at its regularly scheduled monthly meeting, was provided with a copy of an article in the American Journal that gave a full report on the pending agreement between PTW and the City of Westbrook for disposal of Westbrook’s solid waste. . (See Exhibit I-25.) Although Westbrook had been an associate member of RWS for ten years, and RWS had repeatedly sought an opportunity to discuss Westbrook’s future plans, this article provided to RWS the first confirmation of Westbrook’s proposed agreement with PTW

It is clear that the City of Westbrook and PTW are aware of RWS’s financial situation and they both know, because we are a publicly owned and operated facility, that RWS has faced the loss of flow control, RWS has faced the loss of electric revenue through deregulation, and now, as a result of the agreement between PTW and Westbrook, RWS faces the threat of a 1,000 ton per day transfer station that could impact efforts of the Southern Maine region to comply with the State’s Solid Waste Plan which "must provide guidance and direction to municipalities in planning and implementing waste management and recycling programs at the state, regional and local levels". 38 M.R.S.A. Section 2122. While PTW and other private entities are not subjected to the requirements of state and federal law to provide waste management services, Maine municipalities have been encouraged to implement regional solutions, even at significant public cost. (E.g. Municipalities are authorized to form non-profit public waste disposal corporations by interlocal agreement for the purpose of owning and operating one or more waste facilities. 38 M.R.S.A. Section 1304-B(5)). Given that Westbrook had refused to respond to RWS or to provide any information (other than through the media), at the conclusion of the meeting on March 29, 2000, the Board of Directors directed me, by a vote of 19 to 1, to send a letter to Mayor Esty, advising him that the associate member agreement would not be renewed. (See Exhibit I-22.)

In a final effort to clarify any misunderstandings regarding intentions of the parties and to explore the possibility of any options, on May 2, 2000, a meeting was held at RWS which included Mayor Esty, Mr. Ganley, Mr. Bennett, Mr. Foshay, Nicholas Mavodones (Portland City Councilor and, then, the Mayor of Portland) and me. During the course of the meeting, Mr. Bennett again expressed his view that the only issue which prevented either extension of the agreement with RWS or full acceptance of RWS membership, was RWS’s inability to process C&D. When Mr. Ganley asked Mr. Bennett why continued disposal of Westbrook’s C&D at the Portland site was not satisfactory, Mr. Bennett responded that Westbrook’s contract with Portland for disposal of C&D included a provision which allowed Portland to terminate the agreement unilaterally upon 30 days notice. This concern had not previously been shared, and Mr. Ganley, while acknowledging that he was not familiar with the specific contractual provision, stated that he knew of no reason which would prevent removal of the 30-day termination language. Mr. Bennett and Mr. Ganley agreed that they would both review the C&D contract and that Mr. Bennett would call Mr. Ganley’s office to schedule a meeting where representatives of the two cities could finalize the necessary modifications. Finally, the Westbrook representatives indicated that the Westbrook City Council could reconsider its approval of the agreement with PTW, and the RWS representatives indicated that its Board could reconsider its decision regarding Westbrook membership.

On July 13, 2000, Westbrook, Casella Waste Services, Inc. ("CWS") and PTW entered into a Comprehensive Solid Waste Management Agreement (the "Solid Waste Agreement" See Exhibit I-24), under which PTW agreed to build a transfer station in Westbrook, and Westbrook exercised its option to extend the three-year term of the existing Municipal Waste Collection and Transport Agreement with PTW, dated June 24, 1999, (the "Waste Transport Agreement" See Exhibit I-23) for a fourth and fifth contract year (ie. until June 30, 2004). If the transfer station is not operational prior to June 30, 2004, either party may, at its option, terminate the Solid Waste Agreement. Furthermore, PTW is obligated to collect, transport and dispose of Westbrook’s MSW until the transfer station is operational, and, not withstanding any other provision of the Solid Waste Agreement, Westbrook has the option, at its sole discretion, to extend the Waste Transport Agreement until the earlier of 2021 or whenever the transfer station becomes operational. Thus, regardless of whether or when PTW builds the transfer station, Westbrook's MSW needs are ensured.

Finally, it also was stated at this Board's December meeting that RWS imposed an economic penalty on the City of Westbrook. That is simply not true. RWS offered the option of full RWS membership or extension of Associate Membership status to all of the original Associate Member Municipalities. The Towns of Naples, Parsonsfield, Standish, Hiram, Baldwin and Porter elected to extend their agreements. Westbrook and the Towns of Sebago, Durham and Phippsburg have not extended their agreements, despite the fact that RWS is prepared to provide capacity for all MSW generated in these municipalities. In my letter to Westbrook and the other municipalities which elected to allow their agreements with RWS to terminate, I stated that RWS would charge those municipalities the tipping fee provided in their agreements with RWS, rather than the lesser amount which they had been paying and which had been subsidized by locally generated commercial waste from the other member municipalities. Upon termination of these waste handling agreements, these municipalities will also be assessed a service fee under the Demolition Materials Handling Agreement with RWS, a fee which for the other member municipalities (and for Westbrook while an RWS member) is offset by waste handling fees. Rather than arguing about having to pay contractual fees mutually agreed upon, Westbrook could have acknowledged that during most of the term of its agreement with RWS, the property tax payers of all of the other member RWS municipalities voluntarily subsidized the waste disposal costs of the residents of Westbrook.

I will not dwell further on what were unfortunate, inaccurate and, in my view, highly inappropriate statements by a municipal official regarding the actions and motives of officials of neighboring municipalities. Instead, let me leave you with my desires for the outcome of this proceeding.

While regulations governing waste disposal facilities and the State's solid waste plan are existing and enforceable criteria which you have decided not to consider, the 28-member Board of Directors of RWS requests that your decision regarding this application take into account the needs of the Southern Maine and Greater Portland region. In that regard, we specifically request that, if you determine that the applicant has satisfied the criteria for a transfer station, its size be limited to comply with the purposes of the State's solid waste management policies and the waste disposal needs of the City of Westbrook. In addition, if, following your review and consideration of the severe environmental and traffic impacts resulting from this project, you nevertheless decide to permit operation of a transfer station as proposed, we request that any approval include a condition that construction and operation shall commence only after construction of necessary improvements to intersections and roadways and only after implementation of all remedial measures necessary to address the environmental pollution and contamination of RWS property located in Scarborough caused by the abutting property in Westbrook. While RWS would have preferred that the City of Westbrook had extended its waste handling agreement, we do not object to construction of a transfer station for its waste. However, we do and will oppose any facility which will have severe detrimental impacts on the environmental conditions in, under or near property owned by RWS, on traffic within our member municipalitities, and on the orderly regional management of waste disposal services.

DATED this day of January 2001.

DALE C. OLMSTEAD

STATE OF MAINE

CUMBERLAND, ss.

Personally appeared the above-named DALE C. OLMSTEAD before me this day of January 2000, and made oath that the above-stated facts are upon his own personal knowledge, information or belief, and he swears that he believes them to be true.

Before me,

Notary Public/Attorney-at-Law

(Print Name)

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