Priority will be to finalize lease extension that will provide $70 million in tax relief
RAHWAY, NJ–Daniel P. Sullivan, whose work as a Freeholder helped save the Union County Utilities Authority from insolvency in 1998 and has served as a Freeholder liaison to the Authority, has been appointed UCUA Interim Director.
As his priority, Sullivan said he will work to oversee the finalization of the 15-year lease extension, plus a five-year option with Covanta, the current operator of the Union County Resource Recovery Facility (UCRRF). This will result in at least $70 million in additional revenues—and tax relief—during the lifetime of the extended lease to Union County and 14 municipalities that are already contracted to bring waste to the facility. The lease extension, plus option, would go until 2031.
“With local governments suffering from revenue reductions, it is more important than ever that we seek to maximize an asset can help deliver tax relief to our taxpayers,” said Sullivan, who as Freeholder Chairman in 2010, helped to champion the lease extension. “We achieve this while guaranteeing that our municipalities maintain low disposal rates.”
The seven other municipalities whose residents use private contractors to dispose of waste at the facility would receive an annual environmental grant for tax relief based on the tonnage they generate. The lease extension is set to begin in September, and will be retroactive to January 1st, this year.
Sullivan, who was selected last night by the UCUA Board of Commissioners, succeeds Sunil Garg, who recently resigned. As Interim Director, Sullivan will be paid an annual salary of $130,000, and serve the UCUA Board through April 19th of next year.
“The Union County Utilities Authority has worked with Dan for the better part of a decade and the result has been $100 million in savings to taxpayers,” said UCUA Board Chairman John Kulish referring the lease deal in 1998 with Covanta which saved the authority from insolvency. Kulish was also chairman during that period. “Dan is a strong, knowledgeable leader who will take the UCUA to the next level and complete this transaction that will save taxpayers $70 million more.”
James Kennedy, former Rahway Mayor who serves on the UCUA Board, said Sullivan understands the economic issues of the UCUA and needs of County residents.
“Dan understands the value of the Resource Recovery Facility, and in these economic times, we have an obligation to explore any source of revenue which will provide lower cost options to the citizens of the County,” Kennedy said. “Dan is also a capable day-to-day leader who will work to maximize operational efficiencies going forward.”
Kennedy noted he reached out to Sullivan and contacted him to gauge his interest in becoming interim director.
Sullivan, a resident of Elizabeth, will continue to serve as a Freeholder but forego his salary and health and benefits package as a Union County Freeholder.
The State originally mandated all 21 of New Jersey’s County governmental entities to build their own incinerators during the early 90s, a mandate Union County reluctantly complied with at the time.
The UCRRF, which originally began operation in 1994, has delivered significant economic value to the County.
The average cost of municipal solid waste disposal in the County in 1995 was around $120 per ton. In 2011, the average cost is around $82 per ton. The taxpayers of the County have already realized well in excess of $100 million in savings when compared with other waste disposal options in the 17 years UCRRF has been in operation, Sullivan noted.
At the UCRRF, municipal solid waste is burned at high temperatures in combustion chambers, and the heat is used to generate steam which drives a turbine to produce 45 mega watts of clean, renewable electricity enough to satisfy energy needs of 35,000 homes annually.
The plant is one of the five newest, among 89 plants operating in 27 states, energy from waste facilities in the US, and the most modern in New Jersey.