Obstacles Remain for Landfill Sale Proposal

To supporters, the Orange County Sanitation Districts’ bold, $300-million bid to purchase the county landfill system fulfills two of the public’s most insistent post-bankruptcy demands: that government become leaner and that it become more efficient.

They insist that the sale would benefit everyone: The county would receive money to help dig out of bankruptcy, cities would gain more control over landfill operations and the public would see landfill dumping fees drop by 20% or more.

Bolstered by this promising scenario, the plan won overwhelming approval earlier this month from the sewer board. It will go before county supervisors for consideration next month.

But the transaction--which would be by far the largest sale of county assets since the Dec. 6, 1994 bankruptcy filing--still faces a host of questions and is far from a done deal.

Some cities are scoffing at a key element of the package--a requirement that municipalities pledge to send their garbage to local landfills for the next 20 years.

City officials also question whether the sanitation districts can significantly reduce landfill fees through more efficient operations.

Other elected officials and activists have criticized the county for entering into exclusive negotiations with the agency before first seeking bids from the private sector.

“Instead of shrinking government and downsizing it, we are reshuffling government,” said Anaheim Councilman Bob Zemel. “This subject shows no one learned anything from bankruptcy. . . . I think they went too fast and precluded participation from private enterprise.”

Though a sewer agency acquisition of the landfills has long been considered, formal talks only began in December, and officials acknowledged that the transaction is proceeding at a rapid pace.

The landfills are considered among the county’s most valuable assets because of the revenue they generate. The county has already turned to the system to generate money for bankruptcy recovery, agreeing to accept garbage from Los Angeles and San Diego counties in return for fees.

Under the sale proposal, the districts would pay the county $300 million to take control of the entire system. The county’s landfill department would be merged into the districts’ staff, allowing for a reduction in the overall work force through attrition.

The sanitation agency said it can also save money by privatizing some operations, reducing administrative overhead and refinancing some of the system’s debt--something the county would have trouble doing because it is in bankruptcy.

The savings would be used to reduce landfill dumping fees, which the county recently raised from $22.50 to $35 per ton. The increase was quickly passed along to consumers in the form of higher trash bills.

Officials of the sewer agency said they expect to reduce the fees to $30.

“This goes right down to the doorstep,” said John J. Collins, a Fountain Valley councilman and sewer board member. “It means lower costs for trash pickup.”

*

A final decision has not been made on how to finance the purchase, but the districts might borrow against future landfill revenue. If the sale goes through, a new, 33-member board dominated by city officials would be formed to govern the system.

“Cities do the billing for trash, so when the bill goes up, we get the flack,” Collins said. “This way, the cities control the enterprise, not the county. We have to face the music.”

Some county officials, including Supervisors Roger R. Stanton and William G. Steiner, have voiced strong support for the sale.

Both expressed doubt that a private firm would be willing to buy both the profitable operating landfills and the closed ones, which require costly maintenance and environmental cleanup. The county is reluctant to sell off only the active dumps and be left paying for mitigations on the old facilities.

But some cities have been slow to embrace one critical element of the plan: that they send all their garbage to local landfills for the next 20 years.

If county supervisors back the sale, city councils will be asked to approve garbage “flow control” agreements. Sewer agency officials hope to receive assurances that the landfills will receive 90% of all trash generated in Orange County.

“It’s a huge commitment,” said Zemel, echoing the views of other city officials. “It would have been nice to open the bidding process [to the private sector] so we would have something to compare it to.”

Even Collins, who voted for the plan at the sewer board, predicted that many city officials will have difficulty committing their trash flow for such a long period.

*

Others point to what they consider more fundamental flaws with the sale.

“It’s born totally from the bankruptcy instead of from an overall strategy to improve the landfills,” said Huntington Beach Councilman Victor Leipzig. “That makes me skeptical about the results.”

Leipzig and others said they object to the idea of one agency purchasing a public asset from another branch of government. “The public is paying twice for the same facility,” he said.

Critics also complain that the sale is proceeding so quickly that many parties have yet to gain a full understanding of key issues, such as the long-term costs and liabilities of maintaining the closed landfills.

“At this point, it just seems like there are too many things that have not been answered,” said Newport Beach Councilwoman Janice A. Debay.