By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
By Deirdra Funcheon
By Kyle Swenson
So cities encouraged entrepreneurs to launch companies that could haul trash. To make that venture more profitable, businesses were offered cheap land on which to dump the trash. In most cases, those companies enjoyed what amounted to a monopoly if only because a rival company would need a great deal of land, a fleet of expensive trucks, and a big payroll to compete with the original hauler.
Like any monopoly, this one posed the risk of fostering a too-cozy relationship between the garbage industry and politicians.
In Broward County, the growing landfills competed for space with expanding western communities until, in the 1980s, it became clear that some other solution would be needed.
In 1986, 23 cities in Broward joined with the county to create a solid waste district, the effect of which was that the majority of the cities awarded an exclusive trash franchise to a single company. That company then was required to dump the city's waste at one of two enormous incinerators, one built in the north end of Broward next to the landfill in Pompano Beach, the other in the south end, near Fort Lauderdale's border with Davie. Roughly $1 billion in construction costs was to be paid by issuing bonds. Those revenue bonds were to be paid back through the collection of tipping fees — the price paid by the hauler to "tip" its loads of trash into the incinerator.
Of course, the hauler passes that cost to the consumer, who pays it along with his trash bill. The higher the tipping fee the hauler pays, the more residents and businesses have to pay. One reliable way to keep the tipping fee down is to make sure that the incinerators are well-supplied. After all, the more loads of waste, the more collected in tipping fees.
The franchise cities who form the district negotiate with the waste haulers through the Resource Recovery Board, which enforces penalties. Because the district shares the costs of paying back the bonds on the incinerators, they have reason, collectively, to penalize any city that fails to do its part. The city that doesn't dump as much waste as was budgeted would not generate enough in tipping fees, causing costs to rise for the other cities in the district. In those instances, the Resource Recovery Board has a doctrine called "put or pay" in which it demands that the city pay the shortfall, usually with money from its general fund. Doing so means that those city officials have less money for city services, a prospect that might make them unpopular among voters.
It seems complicated, but the crucial point is that under this system, city officials have every reason to keep generating more waste, if only to keep down costs for their residents and businesses.
Worse yet, since recycling reduces the amount that is dumped, the city has reason to discourage it. "The waste stream is mortgaged to pay off those bonds [for the incinerator]," says Fort Lauderdale Mayor Jim Naugle, who sits on the board. "The more you recycle, the less [money] you have with which to pay off those bonds. "
For all that, the cities are not even saving money: The franchise cities pay a tipping fee of $93 for each ton of waste dumped at the incinerator, because that cost includes the payment on the construction bonds. The communities who opted out of the deal pay about $45. Multiply that difference over millions of tons and a couple of decades, and it adds up. "It's been a really bad deal for us," admits Naugle, whose term limits may allow him to be a bit more candid than other mayors. "We've lost hundreds of millions of dollars by being part of this."
Conversely, the haulers — industry giant Waste Management and Sunrise-based Republic Industries — have made millions. It's a simple matter of volume: Because it's allowed to calculate the operating expenses, then build into that formula a profit margin, the hauler makes more money the more loads of trash it takes. And with so many Broward communities locked in, that's loads of profit. What's more, it comes without the threat of competition, and the cash flow is guaranteed by city governments.
Just in case those city officials should be tempted to think critically about this arrangement, the waste haulers shower them with campaign contributions.
From candidates' campaign disclosure statements, it is hard to know which of the bundles of donations are attributable to the trash hauler, but an industry source lists the usual suspects: "The waste hauler, his parent company, their employees and attorneys, the landfill, the transfer station, the incinerator company, and the lobbyists." In addition, subcontractors who fix garbage trucks or clean them give the max. Add up these interests, multiply it by $500 (the maximum allowed for an individual donor), and it's clear that in the relatively inexpensive business of running for city office, siding with the trash haulers can give candidates a decisive fund-raising advantage. Conversely, by blowing the whistle on trash haulers' political influence, a candidate cuts his own throat.
Just before noon, Carlos Coleman has a full load of trash, and he heads to the South Broward incinerator, the end of the line for Broward trash.