City Beat: AT&T settlement's millions go to pension fund

Springfield City Council will direct about $10.2 million from a lawsuit settlement with AT&T Mobility into the Police and Fire Pension Fund.

Council voted March 9 to put into the pension fund the entire settlement from its AT&T back-taxes suit. While the contribution only makes a dent in the $200 million-underfunded plan, it covers shortages in the city's actuarial recommended contributions between fiscal 2004 and fiscal 2007, including interest that would have accrued since then.

City Manager Greg Burris said this is welcome news after a citywide sales tax to fund the pension plan failed at the polls in February. He also commended council for not settling the lawsuit earlier for less money, despite pressure from both media and local legislators.

"We told the big phone company they needed to pay the tax just like the little guys," Mayor Tom Carlson said. "Even though they can put 100 lobbyists on the floor, we stuck to the principle that they needed to pay the tax."

The settlement stems from a suit filed in U.S. District Court in 2004 against multiple phone companies. The city settled with Sprint Nextel in September 2007 for $1.54 million; litigation continues with Alltel and AT&T's landline division.

Put or pay

Council heard first reading of a "put-or-pay" agreement with the city's two largest waste-disposal companies - Allied Services LLC and Waste Corp. of Missouri - to deliver a specific amount of waste to the city landfill beginning in July 2010.

Discussions on the idea began in September, when the Citizen's Solid Waste Committee recommended a compromise with the companies as opposed to forcing them to deliver to the city landfill as allowed by a 2007 U.S. Supreme Court ruling.

Allied and Waste Corp. each agree to deliver 175 tons per day starting July 1, 2010, and pay the city's landfill-tipping fee for the delivery. The fee is currently $28.65 per ton, though the companies will receive a 3.5 percent vendor discount.

At that rate, the city stands to receive more than $9,600 a day, or roughly $2.5 million the first year. The companies will then increase their deliveries by 2 percent a year during the 10-year agreement.

If the companies fail to deliver the required tonnage, they are obligated to pay the city the same amount had they delivered - thus the term "put or pay."

In exchange, the city agrees not to increase the tipping fee more than the construction cost index, with a maximum increase of 10 percent per year.

Councilman Dan Chiles expressed some concern that diverting trash from the companies' own landfills could reduce recycling efforts already going on at those facilities. Public Works Director Marc Thornsberry, however, noted that recyclable items are exempt from the agreement. He added that revenue the city gets from the program could go to expand hours and services at other parts of the city's integrated solid waste management system, including the household chemical collection center and recycling drop-off centers.

Council is expected to vote on the agreement at its March 23 meeting.