Garbage gamble

The controversial proposal to let Waste Management take over a key city garbage contract was kicked down the road like the proverbial (trash) can at last Tuesday’s Sacramento City Council meeting.

Council members asked city staff to seek assurances from the waste giant that the city’s garbage would be disposed of in-region, rather than at Waste Management’s landfill in Nevada, and that the company wouldn’t come back with hat in hand seeking exorbitant rate hikes in the near future. The current contract for trash disposal with BLT Enterprises already ranks as one of the region’s costliest.

“The city council acted in a very prudent way in delaying any action on this matter,” said Craig Powell, president of Eye on Sacramento, a watchdog group that opposes Waste Management’s attempt to buy the Sacramento Recycling and Transfer Station from BLT.

Powell said his group is prepping a report to be released before the October 11 council meeting, when this matter is tentatively scheduled to come back for discussion.

Council members also want to hear more about discussions between Waste Management officials and BLT representatives that were held before the city extended BLT’s contract—the same contract that Waste Management now wants to take over.

The city’s desire to dump waste in-region and reduce the carbon output from trucking it all the way to Nevada was the driving force behind a contract extension with BLT Enterprises in November 2010.

Unbeknownst to city officials, Waste Management approached BLT about purchasing its transfer station before the latter company’s contract extension had even been inked.

Less than six months later, Waste Management came knocking on the city’s door looking to take over the contract.

Councilman Steve Cohn prodded company officials about those previously unknown negotiations.

“What I would like to know from Waste Management is whether there were discussions with BLT regarding the possible purchase of the transfer station even while the city was negotiating the extension with BLT.”

No one from Waste Management answered that question, but BLT’s chief legal officer, Robert Sulliman, said the subject arose almost accidentally, when his company asked about terminating an agreement to ship waste to Waste Management’s landfill in Lockwood, Nevada.

“That’s when the discussion started with Waste Management about wanting to buy the facility,” Sulliman said, adding that the discussion occurred before November 2010.

“Was anyone at the city notified that there were discussions about a possible sale?” Cohn asked.

“I never had that conversation,” Sulliman replied.

That information was new to Powell, whose group has criticized the proposed deal as gifting a regional trash disposal monopoly to a company that pulls in $13 billion annually. Critics worry that Waste Management’s potential dual role as both a waste hauler and owner of the transfer station would allow it to undercut competitors’ bids on future contracts.

Steve Harriman, the city’s integrated waste general manager, didn’t rule out that possibility when he recommended the city council approve the agreement last week. He also said midcontract rate increase requests were a possibility.

“We did identify instances in which Waste Management Inc. and other waste haulers, in addition, have gone back in the middle of contracts and asked for rate increases that were extraordinary, that were above and beyond that which was provided for in the agreement,” Harriman told council members, adding that Waste Management’s subsidiary, USA Waste of California, declined to provide additional financial information showing its ability to maintain an adequate return on investment under the proposed agreement.

But Waste Management officials assured council members they were “committed” to bringing the city’s waste to in-region facilities immediately and that the city would be free to reject future requests for rate increases.