(April 26) The county of San Bernardino this week moved to change the operator of its landfills, breaking the relationship it has had with Burrtec Waste Industries over the past 12 years in favor of a ten-year arrangement with Arakelian Enterprises, Inc., which will do business in San Bernardino County as Athens Services.
While Burrtec and its owner, Cole Burr, had developed a strong bond with county politicians over the years, becoming the fourth largest provider of political donations to elected officials throughout the county over the last decade, the cost differential on the combination of the bids and revenue the county will realize from tipping fees on refuse brought in from outside the county substantially favored Arakelian.
Gerry Newcome, the county’s director of public works, recommended that the county switch to Arakelian. On April 23, the board of supervisors voted to enter into a contract with Arakelian running from July 1, 2013 through June 30, 2023, at an initial base annual cost of $16,686,700 to be adjusted pursuant to the contract for additional services.
Three companies – Arakelian, Burrtec and Waste Management, Inc.  – made bids on the contract. At issue in those bids was more than the cost those companies would charge to operate, manage and maintain the county’s waste disposal system, consisting of five active landfills and nine transfer stations. Also considered under the county’s analysis was the amount of revenue each of those companies could generate into the county in the form of tipping fees at the landfills. All three are trash haulers and, as such, have a need to dispose of the refuse they collect.
Burrtec is San Bernardino County’s largest trash hauler, serving 16 of the county’s 24 incorporated cities – Adelanto, Apple Valley, Barstow, Fontana, Grand Terrace, Highland, Montclair, Ontario, Rancho Cucamonga, Rialto, San Bernardino, Twentynine Palms, Upland, Victorville, Yucca Valley and Yucaipa – as well as dozens of its unincorporated communities, including Amboy, Angeles Oaks, Baker, Barton Flats, Bloomington, Cima, Crestline, Daggett, Del Rosa, Devore, Dumont Dunes, East Highlands, El Rancho Verde, Forest Falls, Fort Irwin, Halloran, Helendale, Hinkley, Kelso, Lake Arrowhead, Landers, Lenwood, Lucerne Valley, Ludlow, Mentone, Mountain Pass, Mt. Baldy, Newberry Springs, Nipton, Oak Glen, Running Springs, San Antonio Heights, Silver Lakes and Yermo. For that reason, Burrtec appeared to be in a favorable position in terms of being able to renew its contract with the county to run its landfills.
Arakelian, however, operating as Athens Services, hauls trash in Los Angeles, Orange and Riverside counties, including the cities of Altadena, Azusa, Bell Gardens, Commerce, Covina, Glendora, Irwindale, La Canada-Flintridge, Lake Forest, Los Angeles, Monrovia,  Mission Viejo, Montebello, Monterey Park, Palos Verdes Estates, Pasadena, Placentia, Pomona, Redondo Beach, Riverside, Rosemead, San Fernando, San Gabriel, San  Marino, Santa Ana, Sierra Madre, South El Monte, South Pasadena, Temple City, Villa Park, West Covina, and West Hollywood.
According to Newcombe, by November Arakelian can make arrangements to deposit a significant portion of the trash it picks up in those three counties into San Bernardino County’s landfills, bringing with that trash tipping fees that will in large part offset the cost it will charge for running the landfills and transfer stations.
“Athens is proposing to import 800,000 tons of solid waste per year during the term of the contract, which will bring gross revenue to the county in the amount of approximately $14.8 million for Fiscal Year 13/14 and approximately $22.3 million per year thereafter,” Newcombe told the board of supervisors.
Arakelian, Burrtec and Waste Management submitted by the November 14, 2012 deadline set by the county their proposals to operate the county’s landfills. The county then formed an evaluation committee, consisting of representatives from the county’s solid waste management division, the county administrative office, the Riverside County Waste Management Department, and the city of Big Bear Lake to review and evaluate the proposals. Interviews with all three bidders were conducted on December 19, 2012. After those oral interviews, the evaluation committee requested additional information from all three, including tonnage importation volume commitments. “The evaluation committee completed their evaluation of the proposals, and ranked the three proposals considering overall best value to the county based on the evaluation criteria set forth in the request for proposals,” according to Newcombe. “After thoroughly and fully considering all information submitted by the proposers, the net annual cost to the county, including import tonnage commitments [is]  a net annual cost of $6 million for Athens the first year and $362,000 each year thereafter, a net annual cost of $9.5 million for Burrtec and a net annual cost of $12.7 million for Waste Management. Athens is proposing to import 800,000 tons of municipal solid waste and processed green material per year during the 10-year term of the contract, which will bring gross revenue to the county in the amount of approximately $22 million per year, making the net annual cost of their contract approximately $362,370.”
Newcombe, alluding to the consideration that Burrtec is a proven entity in terms of operating the county’s landfills, expressed confidence that Arakelian/Athens will be able to handle the job once in place.
“Athens is a fourth generation family owned company that has been in business for more than fifty years providing recycling and waste collection services,” Newcombe said. “Athens presently operates several transfer station and material recycling facilities. While Athens does not presently operate any landfills, its management team has extensive experience in managing, permitting and operating landfills and transfer stations, possessing over 92 years of combined management experience with a history of responsibility for nine landfills in Los Angeles, Ventura, Riverside and Kings Counties as well as five large transfer stations in Los Angeles County. Athens has assembled a well-qualified team fully capable of meeting or exceeding the county’s standards. The solid waste management division assessed the effect on the county’s solid waste system of receiving additional waste from an out-of-county source and determined it would be beneficial to the county’s solid waste system to receive such additional waste given the significant decline in tonnage and resulting decrease in revenue experienced over the past several years. The division also reviewed the request in light of the county’s goal to carefully manage the waste stream and the acceptance of solid waste generated outside of the county in order to achieve optimum life of the disposal sites within the county’s solid waste disposal system. The division has determined that allowing the acceptance of solid waste imported by Athens will not adversely impact the solid waste management division’s ability to handle the county’s current and projected future solid waste stream. The Mid-Valley Landfill has a current excess capacity of approximately 55,000,000 cubic yards of airspace beyond the permit closure date of 2033. After accepting the import from Athens during the contract term, there will still be enough capacity to January 2084. Additionally, the revenue from this waste will help offset current losses that follow the reduction in tonnage being received at the county’s disposal sites.
The additional revenue will make the division’s enterprise fund solvent for the next 10 years, avoid closing desert landfills and transfer stations, avoid significant rate increases, make up for the loss of San Bernardino City waste, and allow funds to be set aside to address currently unfunded liabilities and corrective actions.”
Arakelian/Athens will charge $16,686,700 per year to operate the landfills and transfer stations. Newcombe told the Sentinel this week, “Burrtec proposed charging something less than that, $15.8 million, and Waste Management slightly more, $17.2 million. But neither Waste Management nor Burtec could offer as much imported waste. Athens will bring in 800,000 tons per year beginning in November. Burrtec would have brought in 380,000 tons. Waste Management estimated 200,000 tons. Athens will pay us $26.75 per ton to bury that waste at our landfills When you considered the revenue into the county, the overall net total to have Athens manage our system is significantly lower than the other proposers.”
Burrtec’s contract with San Bernardino County for landfill management was set to expire on June 30, 2012 and was extended for one year to allow the just-concluded bidding process to proceed. Burrtec on July 1, 2001, was given an 11-year county contract to manage the county’s trash-disposal sites in the aftermath of a far-reaching scandal involving high ranking county officials and the prior landfill operator, Norcal.
Norcal was given an $18 million per year contract in 1989 to manage some of the county’s landfills upon the recommendation of then county administrative officer Harry Mays. In 1995, after Mays had left the employ of the county and was working as a consultant for Norcal, the county entered into a $40 million per year contract with Norcal to manage all of its landfills.  Subsequently, Norcal Vice President Kenneth James Walsh, Mays and Mays’ successor as county administrative officer James Hlawek were indicted and convicted of engaging in a bribery and kickback conspiracy in which Mays, who was paid more than $4 million for his services to Norcal, provided Hlawek cash and in-kind payments between $4,500 and $5,400 on eight occasions and payments of $650 to $1,300 on at least 20 occasions. Hlawek, in turn, had steered the landfill management contract to Norcal.