Saying it had gotten the best deal it could, Broward’s Resource Recovery Board six months ago urged the county to approve its controversial 10-year, $1.5 billion no-bid trash disposal agreement with giant Waste Management. But Broward County commissioners balked, asking staff instead to negotiate a better deal.
The county’s skepticism has paid off: before adjourning for summer vacation this month, commissioners unanimously approved a less risky short-term deal worth hundreds of thousands of dollars in additional cost savings to Broward cities and millions in new lease income to the county.
The two-year, $107.3 million disposal agreement is already being felt among cities that participate in the county’s solid waste disposal agreement with Wheelabrator, the Waste Management subsidiary that owns and operates Broward’s two waste-to-energy plants in Pompano Beach and Fort Lauderdale.
Last week, Oakland Park commissioners voted on first reading to decrease residential trash service rates by 15 percent, or $3.75 a month – a reduction City Manager John Stunson attributed to the county’s new deal.
There’s been political fallout, too.
County Commissioner John Rodstrom, who led the charge for a better deal, told Broward Bulldog that the Resource Recovery Board – elected city and county officials who oversee the disposal of solid waste for 26 Broward cities and unincorporated Broward – must go.
“What they were offering us was just ridiculous,” Rodstrom said. “The board should be disbanded.”
He added that $40 million remaining from a reserve fund to cover recently paid off construction bonds be divided up between the county and the cities. Another $20 million from that pot went last week to encourage “single-stream” recycling that allows mixing bottles, cans and newspapers in a recycling bin, Rodstrom said.
‘Big changes have to occur’
Broward Commissioner Lois Wexler, who wants the next long term disposal agreement to be bid out, “would not resist” dissolution.
“I think big changes have to occur and big changes include trust, direction and leadership,” she said.
Wexler mentioned no names, but the RRB’s executive director is former state legislator Ron Greenstein. Its chair is County Commissioner Ilene Lieberman, sometimes referred to on the commission as the county’s “queen of trash.”
Oakland Park Mayor Suzanne Boisvenue, a member of the Resource Recovery Board, says the board has made itself irrelevant.
“I don’t see why the board is needed,” said Boisvenue, one of nine board members. “We have a lot of politics and nonsense going on there we don’t need.”
While last December’s proposal by the Resource Recovery Board included significant rate cuts, it came under withering fire from municipal officials who said it didn’t go far enough and amounted to a huge giveaway to a multi-billion dollar corporation flush with years of excessive profits made at the expense of Broward customers.
The alternative agreement approved by the county commission on June 28 is an interim deal negotiated during the countdown to an Aug. 4 expiration of the decades-old service agreement with Wheelabrator’s south plant. The north plant agreement expires next March. Officials intend to negotiate a longer-term agreement with Wheelabrator by July 2, 2013 – the expiration of the existing interlocal disposal agreement among the municipalities that make up Broward’s Solid Waste District.
A memo to commissioners by Public Works Director Thomas Hutka said the options to be explored will include a further extension of Wheelabrator’s contract, a greater emphasis on recycling to reduce the demand on Wheelabrator’s plants, trucking a portion of the garbage to a disposal site in Palm Beach and finding service through other private providers.
How the next agreement is reached, and which cities participate in it, will mostly be determined by price. Last year, chafing at Waste Management’s long-standing monopoly and the Resource Recovery Board’s decision not to put the new disposal contract out for bids, a number of cities indicated they might cut their own deals.
Miramar recently took bids on its request for proposals for solid waste disposal. Bid prices remain sealed, but the two bidders – Wheelabrator and a joint venture by Bergeron Environmental and Recycling and Sun Recycling – met with city officials this week to describe their proposals. Other cities have indicated they might join with Miramar if a good enough deal can be found.
Bergeron looks to become a player
The bid by the Bergeron group signals a determination by wealthy Davie developer and land baron Ron Bergeron to become a player in Broward’s lucrative municipal solid waste disposal business. This spring, Bergeron sought a zoning change in Pembroke Pines that would have allowed him to recycle solid waste at his recycling facility on 57 acres of industrial property off U.S. 27 on the edge of the Everglades. He withdrew his application after unhappy neighbors began to mobilize.
Bergeron, a man of significant political influence in Broward, already has a contract with the county to dispose of hurricane debris. His partner in the Miramar bid is his longtime friend Anthony Lomangino, the chairman and founder of Sun’s parent, Lantana-based Southern Waste Systems.
The county’s new disposal agreement sets the base tipping fee at $57 per ton starting next month at the Fort Lauderdale plant and next March at the Pompano Beach plant. The current rate at the north plant is $72.57 per ton.
Prior contract provisions that allowed Waste Management to hike the tab for inflation and other factors have been eliminated – including the so-called “put-or-pay” requirement that forced cities to kick in extra cash if they didn’t deliver a specified amount of waste within a given period.
“These projected rates…are very similar to what the December 2010 (Resource Recovery Board) proposal would have produced, but with significantly less risk to the county and a much shorter term,” says Hutka’s memo.
In all, the memo says, members of Broward’s solid waste district will save about $380,000 in fees to Wheelabrator compared to the Resource Recovery Board’s proposal.
A new lease also significantly ups the rent Wheelabrator must pay to the county every year to lease the Fort Lauderdale plant site [the north site is privately owned.] The current lease provides for an annual payment of $100,000. The annual lease that starts next month on the 162-acre site makes that payment $1.1 million for each of the next five years.
A perception that Waste Management has earned an exorbitant profit on the backs of its Broward customers caused Hutka to have his staff to examine Wheelabrator’s finances and conduct an analysis of the deal.
“The analysis showed that the proposed service agreement would provide what staff considers a reasonable (not excessive) level of income for Wheelabrator…considerably lower” than for any of the past five years, the memo says.
Still, the staff’s look-see will remain largely an exercise in faith for any who choose to believe it.
“Due to the confidentiality provisions of the existing agreements, staff cannot reveal any specifics of this analysis in a public document,” the memo says.