The San Juan County Council gave the Public Works Department conditional authorization Tuesday to proceed with plans to convert the San Juan Island transfer station to a “drop box” facility to enable it to continue to operate after June 30.

The council asked to be consulted again if the cost of conversion was to be higher than $50,000 or if the facility could not be modified to handle trash packer trucks from the Town and franchise hauler San Juan Sanitation deposited directly in the drop box.

“The county has been attempting to replace or upgrade the San Juan Island transfer station since 2002,” county Communications Manager Stan Matthews reported. “Its latest effort ground to a halt in April when the Town abruptly announced it had decided not to sell the leased property, including the current solid waste tipping floor, to the County.”

The issue is more complex than that. The Friday Harbor Town Council in April withdrew “for the time being” its offer to sell the Sutton Road site to the county, citing concerns about the county Solid Waste Division’s debt.

“We were distressed to read about the $700,000 projected debt in the County Solid Waste Disposal District fund,” the Town Council’s letter stated. “Due to the uncertainties of the future financial health of the District and the Town’s possible need to perhaps fully utilize our facility on Sutton Road, we feel at this time that it may not be in the public’s best interest to declare any portion of our 26 acres as surplus. Therefore, regretfully we must withdraw for the time being our offer to sell the County approximately 6.7 acres of the Sutton Road property.”

Town Administrator King Fitch said Monday that the withdrawal is not final.

The letter to the County Council, authored by Fitch, was the town’s response to the county’s ordinance setting new solid waste rates. The county raised the town’s rates, as well as rates for San Juan Sanitation and self-haulers, to help fund capital improvement costs. But town officials believe the town’s rates include money to help pay for environmental monitoring of the county’s landfill on Orcas Island.

The solid waste transfer station is owned by the town and leased by the county. A 1994 lease agreement set the county’s annual lease payment at $10 a year; in exchange, the town expected its rates would not include any costs related to the county’s landfill on Orcas Island. The first rate agreement, signed in 1995, set the town’s rates at $130.70 a ton.

In addition, in its lease agreement the county agreed to maintain and operate the waste transfer station in compliance with applicable local, state and federal laws; and to maintain it in a “neat, orderly and sanitary condition.”

The relationship between the town and county regarding the site has long been contentious. At one point, the county offered to buy the site. That prompted the town to buy a site for a public works yard (it stores some of its equipment and materials on Sutton Road). But then the county backed out.

The town determined the structural integrity of the tipping floor roof was compromised by damage, and ordered the county to fix it or take it down. But the town didn’t order the county to replace it. So the county, which had its eyes on moving, took the cheap way out and took the tipping floor cover down, leaving refuse exposed to the open weather.

In April 2009, County Administrator Pete Rose told town officials he wanted to rebuild trust between the town and county, and agreed with Town Council members Anna Maria de Freitas and Liz Illg that the county should share the costs of cleaning the current waste transfer station site. The county is under orders from the state Department of Ecology to install a new tipping floor roof.

Matthews reported Tuesday that the county had planned to erect a cover over the tipping floor as one of the capital improvements required to retain its permit to operate. However, the County Council and administration are reluctant to make the investment “as the term of the lease ends in 2014.”

Public Works Director Jon Shannon said converting the San Juan Island station to a drop box facility will mean trash must be deposited directly into a container, rather than dumped on the tipping floor and pushed in. He said that most self-haul customers will notice little difference, but accommodations will need to be made to allow packer trucks to operate. Those trucks now push compacted trash onto the floor as the loads would spill over the long-haul trailers as they are now configured.

Shannon believes the utility will be able to create a low-cost, temporary means of keeping the transfer station’s doors open before the operating permit expires, but said the accommodation would be temporary. He said the root cause of the utility’s current financial and regulatory problems is the long-term lack of funding for capital improvements. He said postponed maintenance and equipment replacement — and a patchwork of short-term, make-do solutions — has left the utility vulnerable.

“We might be able to make it to 2014, I don’t know, but you’re not going to make it indefinitely, it is absolutely unsustainable, because at some point a key piece of the infrastructure will fail and you’ll have no way to pay for it.”

He added that revenue from tipping fees can not support the operation of three separate transfer stations.

The council briefly discussed the need to put either a bond issue or a property tax increase on the ballot to help finance the utility’s capital needs and agreed a detailed proposal should be developed before voters are asked to pay more.

Council Chairman Richard Fralick, Orcas West, said the discussion on solid waste utility funding and operations will continue at future meetings.