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Trash talk: Borough may take over landfill

Posted: Tuesday, October 19, 2004

Every few years when the Kenai Peninsula Borough signs a contract hiring a private company to operate the Central Peninsula Landfill, Harold Hagedorn braces for bad news.

That contract could mean possible changes to his wages and benefits. Worse, he told the borough assembly last week, he could find himself out of a job.

"There are no guarantees in a contract bid that the contractor will keep the (current) employees," he said. "Even if they do, they'll most likely start all over again with pay. It's happened before."

The Soldotna resident, who has been a supervisor or operated at the Soldotna facility for eight years, was one of several landfill employees testifying at the Oct. 12 assembly meeting. Some have worked there longer than Hagedorn. They spoke in support of a resolution that would abandon the 30-year practice of contracting for landfill management services in favor of management by the borough itself.

Resolution 2004-106 would establish 11 positions in the borough's Solid Waste Department at an estimated cost of about $656,500 per year. The jobs to be created would include a landfill manager, three middle managers, four operators (grades I and II), one operator-general maintenance mechanic, one operator-mechanic, two scale attendants-clerks and two laborers.

Action on the resolution was postponed until Oct. 26.

Hagedorn told the assembly he understood that even with his training and experience he said he holds a landfill operator's certificate and an asbestos and hazardous waste certification, among other things there was no guarantee he would get one of the borough jobs. Nevertheless, he said he supports the borough takeover.

"I enjoy my job. I'd like to stay at the landfill," he said. "It is stable, long-term employment. But right now, every three to five years, I could lose wages and benefits and even my job.

"The way I see it, taxpayers are funding my job right now, but all the profits are going to Houston, Texas; the corporate offices are in Texas and final decisions are made there," he said.

Peninsula Sanitation currently operates the landfill, but the company is a subsidiary of Waste Management Inc. of Houston, which has 1,674 waste management subsidiaries in the United States and Canada, including companies serving Anchorage and Wasilla.

According to the borough, last year Peninsula Sanitation operated the Central Peninsula Landfill with an equivalent of 14 positions.

What is good for the company comes first, said Jack Maryott of Sterling, another employee who supports the borough assuming management of the landfill. He has worked for the borough directly at the Homer Baling Facility, as well as for the contract firms who have managed the Soldotna facility.

The solid waste department is engaged in a multiphased project to expand the landfill, including liners, leachate and gas collection and treatment systems, which will make the facility one of the most advanced in Alaska.

Over the course of a 20-year period (1991-2011), the borough expects to invest some $20 million in landfill planning, design, development and, eventually, closure. The borough is responsible for protecting that investment.

In a memo to the assembly, General Services Director Richard Campbell and Solid Waste Director Catherine Mayer said that while contracting has been a successful approach, it is no longer a practical option.

"During the past 10 years, the CPL has evolved from a simple 'dump and bury' operation to a regional landfill receiving waste from approximately 75 percent of the borough population," they said.

"With construction of the new landfill and in order to provide a reliable, flexible, efficient and cost-effective program that meets both current and future needs, it is time to consider borough operations and site management."

It has been hard to find contractors willing to bid on landfill construction contracts, the borough said, but interest in bidding on operational service contracts has been limited, typically averaging two bidders, occasionally just one, and sometimes none.

That can put the borough in a difficult position for several reasons.

The borough must look five to 10 years into the future, the borough officials said, while contractors, who don't face the capital costs, will work to minimize their operational expenses while attempting to comply with borough contract requirements, Campbell and Mayer said.

"Unfortunately, in order to save money in a profit-driven environment, corners can be cut or procedures followed that may not be in the borough's best interest," they said.

Another reason is that bid prices have been all over the map, and preparing budgets and estimates from one contract to the next has been difficult.

"Price increases due to staffing, higher tonnages, utilities and fuel costs are expected, but some costs differ so much from bid to bid, that it is difficult to substantiate costs," officials said.

For instance, in 1999 the only bidder for the job of managing the Seward Transfer Facility proposed a contract of $329,547. In 2004, two companies bid.

The lower bidder ($407,757) was rejected because of a bidding error. The second bid, at $657,385 nearly double the 1999 contract, exceeded the available funding and was rejected, according to the borough.

In 1999, the three bids for the CPL management job ranged from a low of $737,617 to a high of $2.27 million.

The Homer facility, which is borough operated, saw its 1999 cost of about $471,000 climb to $544,900 by 2003, a 15.7 percent change. That's compared with the 56.4-percent rise at CPL or the 93.6-percent rise at Seward.

Campbell and Mayer said taking over management could mean cost savings in many areas of the operation.

"Cost savings may not always be immediately measurable, but savings are expected five, 10, 15 years in the future," they said.

The current contract with Waste Management (Peninsula Sanitation) was signed Jan. 1, 2000. It expires Dec. 31. The borough has offered a six-month extension. The company has declined.

If approved, the takeover would start Jan. 1.

The assembly has scheduled a work session on the issue prior to the Oct. 26 regular meeting.

CORRECTION:

Due to a reporting error, a story in Tuesdays Clarion about the Kenai Peninsula Borough considering taking over management of the Central Peninsula Landfill contained incorrect information. The 11 positions that would be established to replace the existing contracted positions would include one middle manager.

The Clarion regrets the error.



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