The Monroe County Solid Waste Management District legally cannot double its property tax rate next year, even to pay for state-mandated corrections of multiple violations at the Monroe County Landfill.

And that places the district at the brink of financial insolvency, with the potential for collapse by the end of the month if a solution isn't found.

And none was anywhere in sight Wednesday.

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An ashen-faced district controller Judy Tedesco gave the grim word to the district board at its latest crisis-management meeting Wednesday afternoon — word she had received from the Indiana Department of Local Government Finance literally only minutes before.

The district board had voted last month to ask the Monroe County Council to allow it to double its property tax levy next year from the current $1.2 million to $2.4 million to pay off loans it needs to stay afloat this year.

The district is in an immediate financial crunch because the landfill closure from a January fire cost it $185,000 in landfill fees, plus around $50,000 in out-of-pocket costs for putting out the fire.

It took another unexpected hit when the premium for its new liability insurance package rose by more than $100,000 over what's in this year's budget — with a pay-it-all-up-front requirement.

And atop all of that is more than $700,000 worth of corrections to a long list of violations at the landfill. The district must make these corrections or risk hundreds of thousands of dollars in fines and loss of its license.

The district board had swallowed hard and voted to ask the county council to approve a doubling of the district's property tax levy for 2005, an option it thought the law allowed.

But after beginning to get conflicting legal opinions on that score, Tedesco called the Indiana Department of Local Government Finance, the ultimate arbiter, for an opinion.

At 3:50 p.m. she got it, and it wasn't good. Because the district already is at its maximum allowable property tax levy for 2004, it can only increase that by a maximum of 5 percent for 2005.

The news rocked the district board, which is composed of county commissioners Iris Kiesling, Herb Kilmer and Joyce Poling, county council member Jeff Ellington, Bloomington Mayor Mark Kruzan, city council member Stephen Volan and Ellettsville Town Council member Patrick Stoffers. (For the third straight special meeting to deal with the district's problems, Stoffers was absent.)

"Mary Ellen and I have not had a chance to sit down and discuss this," she said, referring to new district director Mary Ellen Gray. She also said she has not had a chance to discuss the state's legal interpretation with the district's attorney, Robert Mann, who wasn't at the meeting.

"The truck's on fire and we don't have a hose," Ellington said of the situation. Poling added it's now imperative that the district look at every conceivable cost-cutting measure immediately.

"We're talking about days," she said.

As it is, Gray had told the county council Tuesday night that the district has less than a month's revenue left.

Kilmer suggested an option that has not been well-received in the past: To allow Brown County, which has no landfill, to haul trash to the Monroe landfill to gain an infusion of landfill fees.

At a meeting last week, district officials told the board that the Indiana Department of Environmental Management was telling them they needed to be taking in more landfill fees. But according to Gray at that time, the state was thinking about raising fees rather than taking in more trash. But Kilmer said raising landfill tipping fees could lead to reduced business.

At present, the district board has four private-firm proposals before it for dealing with the landfill and its problems. But three of them wouldn't help with the current financial crisis.

Bloomington environmental company Earth Tech has offered to foot the bill up front for fixing the landfill, doing the work itself. But it would have to be repaid. Two other companies, Hanna Enterprises Inc. and Young Trucking, have offered to lease, manage and operate the landfill, but only after the waste district corrects all violations.

The fourth proposal, by trash giant Hoosier Disposal, is to buy, fix and close the landfill, then accept all county trash such as that from the district's five rural trash transfer sites. Part of the revenue it would collect would go to recoup landfill closing costs.

"That is not an option," district board president Iris Kiesling said after the meeting. The reason, she said, is that it could lead to putting up to 100 small trash haulers and their collective 500 employees around the county out of work.

Wednesday's turn of events led to criticism of the board from county council member Scott Wells, who told them they're paying the price now for prior penny-pinching.

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Wells noted that during the first three years of the district's existence, from 1991 through 1993, it was collecting almost its full allowable property tax levy each year. But from 1994 through 2002 it did not. Finally, in 2003, it did so again.

Wells said the potential tax revenue the board gave up by approving less than the full allowable 5 percent property tax levy increase adds up to $1.12 million.

"That's about the kind of money we need now, isn't it?" he said, alluding to the district's need to increase the levy by $1.2 million in one jump in 2005 to pay its bills.

The problem, he argued, is that board members all are elected politicians. "They want to be re-elected. It comes down to four words: 'Don't raise my taxes!' We've been penny-wise and pound-foolish."

He said "I don't know what we're going to do now" because if the district is forced to close the landfill, "we're talking about a monopoly" for Hoosier Disposal. And he said that would increase trash disposal costs for Monroe Countians and potentially deal a blow to the district's recycling programs, which he said are very valuable to the county.

After the meeting, Ellington disagreed with Wells' argument that the district's problem was too little tax revenue.

The problem hasn't been too little tax revenue but rather too much mismanagement, he said.

Reporter Kurt Van der Dussen can be reached at 331-4372 or by e-mail at kvd@heraldt.com.