Supervisors set to approve $547 million deal to operate landfill
Published: Tuesday, April 23, 2013 at 8:42 a.m.
Last Modified: Tuesday, April 23, 2013 at 8:42 a.m.
Sonoma County supervisors Tuesday are set to formally approve a deal that would expand the county's central landfill by permanently turning over operations to a national solid waste contractor.
The switch, which keeps the 42-year-old Mecham Road site west of Cotati in public ownership, would begin under a 20-year-deal worth an estimated $547 million.
The main contractor would be Arizona-based Republic Services, which has been operating the dump on an interim basis for the county since late 2010.
The Board of Supervisors voiced support for the plan in its meeting two weeks ago. County approval Tuesday would set in motion a series of decisions by local cities to commit their garbage, a vital element of the plan.
The deal has been called the largest single public-private business contract in county history, but it could be overshadowed Tuesday by board discussion of an even bigger initiative: the county's bid to create its own power agency.
That 9 a.m. hearing is scheduled before the vote on the landfill deal and it could take up much of the morning.
The solid waste decision comes four years after a controversial and ultimately unsuccessful attempt by the county to sell the troubled landfill. It was closed for five years starting in 2005 because of water quality concerns raised by state regulators.
Many opponents of the attempted sale, including environmental groups and others, have endorsed the new landfill proposal or withheld any objections.
Supporters say private operation stands to succeed where the county couldn't. It would stabilize and cap annual rate increases — avoiding the steep average hikes imposed by the county over the past two decades — settle more than $90 million in county and city solid waste liabilities, increase recycling and ensure the existence of an in-county disposal site for at least the next two decades through a $60 million expansion the county couldn't afford on its own.
Republic Services would assume all closure and post-closure costs for the landfill in perpetuity.
Final landfill rates are not set, but the initial impact on curbside garbage service is projected to be no more than a 4 percent increase on the average monthly household bill.
“It's a pretty solid deal all the way around,” said board Chairman David Rabbitt.
For self-haulers, landfill rates under the deal would be limited to 5 percent more than what commercial haulers pay, though actual rates likely would be less, according to a Republic Services manager.
Critics, mostly from organized labor, contend the deal amounts to a lucrative and risky giveaway of a public asset. They've raised concerns about the environmental and labor record of Republic Services, the country's second-largest solid waste firm, with $8 billion in annual revenue and operations in 38 states.
A county union leader, citing some of those cases, two weeks ago called the deal a “disaster in the making.”
Republic officials have defended their record. Their subcontractor in charge of the county's five waste transfer stations would be the locally based Ratto Group of Companies, the county's dominant trash hauler.
Over 20 years, the two companies could earn an estimated $119 million combined (2013 dollars), or about $74 million in post-tax profit, according to the county consultant who evaluated the deal.
Republic and Ratto officials expect a steady decline in landfill waste to continue and have projected lower net profits of $63 million, or about $50 million and $13 million, respectively.
Garbage industry experts and county officials say the projected profit margins -- around 10 percent for Republic and 8 percent for Ratto -- are in line with similar deals for waste operations.
The agreement stems from a three-year effort by county and city representatives to resolve their long standoff over the landfill's future and what to do about shared solid waste liabilities, including roughly $40 million for seven former dumps across the county.
Under a recent revision, an annual report by Republic will include a presentation before the Board of Supervisors and the county's waste management agency. Another change strengthened a clause that gives workers at the landfill — including up to 15 former county employees that Republic is obligated to hire — the right to organize in a union.
The county also ordered additional work to reduce visual impacts for neighbors, some of whom have opposed the landfill's expansion.
The changes have not added to projected rates for garbage customers, said Susan Klassen, the county's transportation and public works director.
Given a county go-ahead and commitment by enough cities, Republic is set to begin construction of new waste cells within the 170-acre site this summer.
You can reach Staff Writer Brett Wilkison at 521-5295 or email@example.com.
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