albanyweblog.com
Updated
October 28, 2006
Trash deal raises stink
Agreement to lower hauler's dumping fees criticized as Rapp Road facility nears capacity
By BRIAN NEARING, Staff writer
First published: Sunday, October 22, 2006ALBANY -- With a crisis looming over the city's rapidly filling Rapp Road dump, Mayor Jerry Jennings quietly made a deal with the biggest customer to truck in more trash and pay less.
Then, as garbage flooded in from Allied Waste Services, Jennings pushed for additional space at the landfill by expanding it into the Pine Bush Preserve.
In a lesson on the perils of garbage economics, the city -- which has staked its fiscal well-being on millions of dollars earned from the dump -- made a double-edged bargain in May 2005: More trash for cash today while hastening the judgment day when there is no room left at Rapp Road. That day is projected to arrive in 2009.
As the clock ticks, Albany's decade-old plan for a new regional dump in Coeymans is stymied amid opposition from town officials and residents. Chances that the 363-acre site city taxpayers purchased there for $5.2 million will be ready in time appear increasingly remote.
It's not just a city problem. Eleven other municipalities that form a trash-collecting consortium called ANSWERS -- with nearly 125,000 residents -- rely on the Rapp Road dump and are paying full freight. They will find themselves in a trash dilemma if Albany can't add landfill space.
Last week, the mayor defended his agreement to cut Allied's tipping fee from $46 a ton to $38, a 17 percent reduction. The two-year pact came after the company -- the nation's second-largest hauler -- threatened to load its garbage onto trains bound for an Allied-owned megadump in South Carolina.
"Those guys held us hostage," the mayor said. "If we don't have the $6 million a year that we get from Allied, I have to lay off workers. It would impact the city's budget dramatically. This was a short-term step to maintain liquidity."
Jennings does not need Common Council approval to set dumping fees, or for any other city contract.
Allied dumping shot up after the price break, from 85,000 tons in 2004 to 140,000 tons last year, the equivalent of 11,000 garbage trucks.
The Times Union conducted a computerized analysis of a quarter-million dump bills dating to 2001.
With headquarters in Scottsdale, Ariz., and annual revenues of $14 billion, Allied operates dumps and transfer stations in 37 states. Garbage hauled to Albany by the company now accounts for almost half of the $13 million in fees earned annually by the city.
This year, Allied is on pace to dump 175,000 tons, which would account for more than half of all incoming garbage.
"It is like we are running the landfill for the benefit of Allied," said 2nd Ward Common Council member Dominick Calsolaro. "I am amazed this kind of deal was done more than a year ago, when they were out there yelling that we were running out of landfill space and it was an emergency, and we had to expand into the Pine Bush.
"Instead, we should be extending the life of the landfill by taking less garbage. That would be a benefit to the citizens of Albany, who wouldn't have to pay for a new landfill so soon."
Jennings' proposed budget includes $9 million to expand the landfill in 2008.
Neither Calsolaro nor 12th Ward Council member Michael O'Brien, chairman of the General Services Committee that oversees the dump, knew about the Allied deal before being informed of it by the Times Union.
In response to a question from O'Brien during a budget presentation to the council on Monday, General Services Commissioner Bill Bruce said the city was charging commercial haulers "in the $60s."
In a subsequent interview with the Times Union, Bruce said he included a line on the Allied rate in a spreadsheet about Rapp Road finances that he had provided to city lawmakers in June.
On Wednesday, the mayor backed his commissioner. "It's not my fault that they didn't read it after they asked for it," Jennings said with a shrug.
Environmentalists, who last year fended off Jennings' first two Pine Bush expansion plans and are battling a third, see double-dealing and a squandered chance for the city to wean itself from trash cash.
"We have been betrayed," said Lynne Jackson, secretary of Save the Pine Bush, which has fought for years to limit development in the unique ecology of sand dunes and scrub pines left behind after the last Ice Age.
"All the time the city officials have been pleading poverty, saying that they have to have the beautiful Pine Bush because they are running out of space, and behind our backs they make this deal to sell the landfill for half the price," Jackson said.
The deal also caught Rensselaer Mayor Daniel Dwyer by surprise. His city and 10 other communities -- Altamont, Berne, Bethlehem, Guilderland, Green Island, Knox, New Scotland, Rensselaerville, Watervliet and Westerlo in Albany County -- pay $52 a ton to dump, or about 27 percent more than Allied.
"It's the first that I've heard of this," said Dwyer, when told of it by the Times Union. "I'd have to look into it before I have a reaction." Last month, the mayor blamed Albany dump fees when he backed a hike in garbage pickup bills for city property owners.
Bruce said Albany gave Allied a discount after the dump's second-largest customer -- Houston, Texas-based Waste Management -- discontinued most of its Rapp Road deliveries in early 2005. It was a $2 million-a-year hit for Albany.
Waste Management now takes nearly all the garbage it collects locally to the second-largest dump in the state, the High Acres landfill, near Rochester. The company still dumps a minimal amount at Rapp Road.
Albany looked to its largest customer to fill the gap. "When we approached Allied Waste about providing us with additional waste, they said they were interested, just not at the price they were paying," said Bruce.
A local Allied official said the company made a good business decision and actually did the city a favor by staying.
"We were literally days away from opening up our rail transfer station in Schenectady when the city approached us about more garbage," said Allied's local manager, Robert Griffin. "We had invested more than a million dollars."
Griffin said the vast majority of the garbage comes from the four-county Capital Region.
Allied could again threaten to leave. The company still has large cranes in place at its transfer station on Weaver Street in Schenectady that can hoist garbage-filled tractor-trailers onto flatbed rail cars.
Griffin said Allied "had no idea" rival Waste Management was pulling its trash out of Albany last year, which gave Allied its leverage over Jennings.
Less than a month after signing the Allied deal, the Jennings administration raised the rate for all other commercial haulers -- including Waste Management -- to $70 a ton. City Solid Waste Manager Joe Giebelhaus sent a June 13 letter to dump customers blaming the increase on "restrictive" tonnage limits imposed by the state, along with increased demand.
However, the state-imposed daily limit of 1,050 tons at Rapp Road has not changed since 2000.
Bruce defended Allied's $38 rate as "market driven." But a national company that tracks dump rates contradicts that. In New York, the median dumping fee is $75 a ton, according to Jay Busbee, a managing director of Chartwell Information Publishers in San Diego.
That rate can be about $20 less for large customers, but it's been "many, many years since it has been ($38) in New York state," said Busbee. The Allied rate, however, nearly matches the $39 median rate charged by South Carolina landfills, according to Chartwell research.
And despite Giebelhaus' claim that demand is up, there is actually a glut of dump space in the state. In New York, eight privately owned dumps had capacity for 39 million tons in 2004, up from 27.5 million in 2000, according to the Department of Environmental Conservation. Part of this increase occurred when Waste Management expanded its High Acres dump. During that same period, 22 municipal landfills saw capacity rise from 40 million tons to 54 million tons.
That extra space could boost competition for trash even more in coming years as both private and public dump owners drop prices to attract a reliable flow of garbage.
At the Capital Region's other large municipal landfill, in Colonie, the lowest rate for large commercial haulers like Allied is $57 a ton, said Joe Stockbridge, town environmental services director.
"I couldn't afford to do it for $38 a ton," said Stockbridge. "I'd be losing money or wasting value. Our landfill is a limited resource. You don't want to sell capacity when there is a glut."
Nearing can be reached at 454-5094 or by e-mail at bnearing@timesunion.com.
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