What’s that smell? Unkept promises from garbage firm

By Tony Cook (contact)

Sunday, Aug. 6, 2006 | 7:38 a.m.

The deals looked questionable when signed years ago.

Now, contract extensions that Clark County gave to the local trash company, Republic Services, look - and smell - even worse.

When county commissioners took the extraordinary step of extending Republic's exclusive contract until 2035, the deal came with two requirements.

First, in the original 1996 contract, the county required the company to set up seven rural "convenience" centers - garbage drop-off facilities - in exchange for a 10-year contract extension.

Second, in 1999, the county required the company to close and maintain the leaking Sunrise Landfill, an environmental nightmare that county officials were eager to get off their hands. In exchange for the projected $36 million cleanup and closure, the county agreed to extend the contract another 15 years.

But more than a decade after the first extension and seven years after the second, there are only four convenience centers, Republic has spent only $24 million and the Sunrise Landfill is not closed. What's worse, the cost of the landfill closure is expected to far exceed the original estimate, which means the county might have to pick up some of the tab.

From this perspective, the proposed new recycling program recently dangled in front of county commissioners in exchange for fewer trash pickups by Republic - a plan that the county has scuttled for the time being - can be seen as simply the latest chapter in an old story.

In 1996 the county signed a contract that gave Republic exclusive control of solid-waste collection in unincorporated Clark County until 2010.

However, the company agreed to set up seven solid-waste disposal convenience centers in rural communities in exchange for a 10-year contract extension. As part of the deal, the company agreed to operate the centers four hours a day, at least three days each week, and was allowed to set its own charges. The charge now is $16.50 per cubic yard.

Today, however, there are only four convenience centers, in Mt. Charleston, Overton/Logandale, Searchlight and Sandy Valley. Of the other three communities originally listed as part of the deal, Bunkerville is now being serviced by Virgin Valley Disposal, a different company that serves the city of Mesquite; Indian Springs community members decided they did not want a convenience center; and Moapa/Glendale opted for a free once-a-month drop-off day at a temporary location.

Sandy Valley is now experimenting with a system like Moapa/Glendale and might get rid of its convenience center.

In other words, Republic Services got a 10-year extension worth $116 million in revenue last year for operating four - soon maybe only three - convenience centers 20 hours a week.

But county officials say Republic is not in violation of its contract. The 1996 agreement allowed commissioners to decline setting up the centers and a 2005 amendment passed by commissioners last August allowed Republic to set other hours of operation - with the county manager's permission - in exchange for waiving all fees to residents.

The county had closed several landfills in the early 1990s rather than bring them up to federal standards. The idea, county officials say, was to provide rural communities a place to dump in absence of the landfills.

County Administrative Services Director Don Burnette said he did not know why the county gave a 10-year contract extension in exchange for the rural convenience centers when some communities didn't want one.

"You're asking what was on the minds of people in 1996," said Burnette, who oversees the county's franchise agreements. "I'm trying to think and I've got better things to do with my time."

In 1998, exactly three years before the terrorist attacks on the World Trade Center, a Sept. 11 rainstorm over Sunrise Landfill eroded part of the trash heap's cap, strewing trash four miles down the mountain and into the Las Vegas Wash.

The U.S. Environmental Protection Agency ordered Republic and the county to clean up and permanently close the landfill.

In 1999, Republic agreed to handle the closure - expected to cost about $36 million - in exchange for a 15-year contract extension.

"It's a great opportunity to address the issue without the county having to foot the bill for it," then-Commissioner Dario Herrera was quoted as saying in a newspaper story at the time.

However, things have changed.

For one, Herrera and three other former commissioners have been convicted of taking bribes in unrelated federal corruption trials.

Also, the price of closing the landfill has continued to rise, which means the county might have to foot part of the bill after all.

The original estimate of $36 million included $16 million for closure and $20 million for 20 years of maintenance, county officials said.

So far, Republic has spent about $26.4 million on closure alone, county officials said, and still the landfill is not closed.

Squabbling between the EPA and Republic is part of the problem.

In response to the EPA orders, Republic submitted a closure plan that the EPA deemed inadequate.

The bickering continued until the EPA referred the case to the U.S. Department of Justice in 2002. To help make its case for a more stringent closure, the EPA created its own proposed closure plan in 2004.

Finally, in April, Republic submitted a plan much more in line with the EPA's criteria. The two sides are finally talking again and hope to hash out an agreement soon about exactly what will be required before closure is complete.

While the EPA blames Republic for the delay, county officials say the EPA's ever-evolving standards for the closure are the real problem. The EPA, however, says its criteria have been clear enough in other cases to prevent delays.

Regardless of who is to blame, said David Jones, associate director of waste management for the EPA's Southwest region, the EPA estimates another $15 million to $25 million is needed to properly close the landfill.

That cost could potentially increase garbage collection rates.

The agreement between the county and Republic about the landfill closure states:

"If (Republic's) total costs to comply with the orders exceed $36 million dollars, nothing herein shall preclude (Republic) from seeking additional sources of funding, including, without limitation, applying for collection rate increases or requesting extensions of the term of the franchise agreement."

Burnette says it is too early to talk about who will pay for the cost overruns.

Republic Area President Bob Coyle said it's "unclear" whether the county or his company will have to pick up the extra tab.

But eventually, the county is going to have to make some tough decisions, the EPA's Jones said.

Coyle, meanwhile, defends the company's overall performance. It would be an unfair interpretation of events - some beyond the company's control, he stresses - to view Republic's history over the past decade as being typified by the company promising more than it delivered.

"I think that's mischaracterizing it," Coyle said. "We did exactly what we've said we would do.

"We can't close it until EPA approves the final work plan. These are technical hang-ups more than anything else. It's technical hang-ups. We can't implement a plan of work that hasn't been approved. In terms of following through, I wouldn't think spending $26 million wasn't following through on a commitment."

The fewer-than-projected convenience centers, longer-than-expected landfill closure and greater-than-anticipated costs, however, are all likely to bolster an already strong feeling of distrust when it comes to local government's interaction with Republic.

That sentiment came out last week, when public opposition led commissioners to quash the Southern Nevada Recycling Advisory Committee's recommendation for a pilot program that would have cut back twice-weekly curbside garbage pickups to once a week in exchange for more frequent and convenient recycling pickups.

Commission Chairman Rory Reid spoke to perhaps the greatest concern among most residents about the plan.

"I think there's an impression that this is Republic's recommendation," he said.

Indeed, Republic had proposed the same plan last year.

"Based on what I've heard in my office, there's an impression that this is being done to create a windfall profit for Republic Services," Reid said. "We're reducing the amount of effort they need, we're reducing their expenses, so now they're going to profit from this."

Republic officials would not say what kind of profit they expected from the deal, but they did acknowledge that they would end up with an entire new fleet of residential trucks and reduced operational costs from the deal.

Windfall or no windfall, the impression remains, and Republic's record on the convenience centers and landfill cleanup is just more proof for many.

"To me, it's typical," said Logandale resident Ralph Starita. "They do not honor what they say they are going to do. I don't trust them. They are just out for the money."

Adding more fuel to public distrust is Republic's hand in the political process.

Since 1997, Republic and its subsidiaries have contributed more than $409,000 to county commissioner campaigns. Next to a handful of casino conglomerates and a few developers, Republic is one of Southern Nevada's biggest political players.

For example, in the 18 months leading up to the 1999 vote on Sunrise Landfill and the 15-year contract extension, Herrera received $33,800 from Republic, its subsidiaries and a pub owned by then-area president Steve Kalish. Herrera also vacationed at a California beach home that Kalish owned.

But the heavy campaign contributions have not ended with the exit of corrupt commissioners.

Last year - the most recent campaign finance data available - Commissioner Myrna Williams received $10,000, Reid got $15,000, Commissioner Tom Collins got $18,500 and Commissioner Lynette Boggs McDonald got $30,000 from Republic or its subsidiaries.

"It's part of the political process," Coyle said.

Despite the contributions, commissioners sent the Recycling Advisory Committee back to the drawing board.

The committee will continue looking at other ways to bolster recycling without cutting regular garbage service, which some fear would result in stinking garbage baking in hot garages during longer intervals between trash pickup days.