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August 2, 2014

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Hauler insists it can boost rates

Republic Services says a ’93 deal lets it raise residents’ bills over county commission’s objections

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Steve Marcus

Nearly $36 million in work is yet to be done to clean up Sunrise Landfill. The project is over budget, as that is the total amount budgeted to complete the job in a 1999 deal between Republic Services and Clark County.

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Beyond the Sun

Republic Services is now saying it doesn’t need county commissioners’ approval to start charging valley residents more for garbage collection.

Republic has laid out a scenario under which the company would increase residential garbage bills by 6.47 percent.

Such a move would be bold even for Republic, a company that took in nearly $274 million in revenue last year from Southern Nevada and is accustomed to throwing its weight around.

The threat is the garbage company’s latest attempt to push the county into granting a rate increase to help pay for the closure of Sunrise Landfill.

In a June 16 letter to the county, Bob Coyle, Republic’s area president, argues that Republic has the right under two 1993 agreements with the county to increase “tipping fees” to help pay for the higher-than-expected cost of cleaning up and closing the landfill.

Tipping fees are the amounts Republic charges to dispose of waste at its landfills and transfer stations. Those fees make up a portion of the rates residents and business owners pay for curbside and commercial trash pickup.

“If the county refuses to negotiate in good faith with Republic, Republic will be forced to invoke the provision allowing it to unilaterally increase tipping fees to recoup cleanup costs,” Coyle wrote.

County officials plan to meet next week to analyze the issue, but some commissioners are disputing Republic’s claims.

“I don’t believe they have the authority to do that,” Commissioner Chris Giunchigliani said.

“I think they are stretching it.”

The letter is an attempt to bully commissioners into approving a smaller increase, she said.

If Republic does increase rates without permission from commissioners, “the county might not be their only issue,” County Counsel Mary-Ann Miller said. “They might be subject to lawsuits from ratepayers.”

The company has deep pockets. Its 2007 annual profit statement, provided to the county this week, shows that Republic made $34 million in profit on nearly $274 million in revenue last year in Southern Nevada, 30 percent more than the previous year.

“Don’t cry poor to me,” Giunchigliani said.

County attorneys said last year that Republic is solely responsible for cleaning up Sunrise Landfill under a 1999 agreement. In exchange for taking on the work, the company’s exclusive solid waste collection contract with the county was extended 15 years to 2035.

The deal included a $36 million cost estimate for the landfill work and said that if costs exceeded that amount, the company could ask the county for a rate increase. But the agreement said any such request would be at the sole discretion of county commissioners.

Republic has since spent nearly $30 million on the dump, but an estimated $36 million in work remains.

Last year, Republic proposed a 2.2 percent surcharge to fund the remaining work. That would amount to an increase of 81 cents on residents’ quarterly bills, but many residents opposed the move based on Republic’s commitment under the 1999 agreement. Most commissioners have shown little interest in the proposal.

Now it appears commissioners are being told that if they don’t agree to increase each residential garbage bill by 81 cents a quarter, Republic will increase each bill by $2.37.

Coyle said Tuesday that his letter is not a threat, but simply lays out the facts: The company disagrees with county attorneys and says two 1993 agreements incorporated into the 1999 deal give Republic the right to increase fees.

A surcharge earmarked for landfill work would save ratepayers money because the company would be required to pay taxes and franchise fees on tipping fees, Coyle said.

“We are willing to sit down and talk to the county about the surcharge, the letter or any other solution,” he said.

The issue could come to a head July 15, when commissioners are expected to discuss the matter at a public meeting at the request of Commissioner Chip Maxfield, who has publicly differed with county attorneys on the issue and has said a rate increase might be preferable to a potentially lengthy and costly legal fight. He was unavailable to comment for this story.

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