City setting up for battle with Waste Disposal over franchise fees and Sunland Park commercial dumping
by David Crowder
Posted on February 11, 2009
An El Paso City Council committee today recommended in favor of imposing a gross receipts franchise tax on the city's commercial trash haulers for using the city's streets and requiring that all trash from El Paso be taken to the city's two landfills.
Both recommendations will now go to the full City Council for further action and would, if eventually adopted, significantly impact Waste Disposal Inc., a conglomerate that owns the city's biggest commercial hauler, El Paso Disposal, and Sunland Park's Camino Real Landfill, the dump used by all of the city's commercial trash haulers.
The council’s Environmental Service Legislative Review Committee voted 4-0 in favor of looking further into imposing franchise taxes and restricting landfill use but against any further exploration of the city taking control of commercial trash hauling.
More than 60 people were on hand for this morning’s committee meeting, many of them representing El Paso Disposal, small commercial haulers and organizations, such as the Central Business Association, that oppose any move by the city to take over or tax the trash haulers.
"I don't think El Paso wants to be considered a city that drives businesses out of business," Mike Breitinger, executive director of the Central Business Association, said of the city taking control of commercial hauling. "This is not something the city needs to get in the middle of."
After hearing from all who wanted to speak, Byrd said a franchise tax would generate income that could be used to take care of streets and deserves further consideration.
"I don't think it makes sense fight now to take over the system," she said, referring to commercial trash hauling, which the city gradually relinquished over the years and stepped out of completely two years ago.
In defense of the proposal, Byrd contended that El Paso Disposal holds a virtual monopoly in El Paso and charges rates that, if the city matched, would generate $8 million a year over expenses that could be spent on improving service and streets.
But a string of small commercial haulers came forward to say they are successfully competing against El Paso Disposal, growing their businesses and raising families.
"We have very happy customers, said Bea Heist, who owns Heist Disposal, a 12-employee company, along with her husband, Chuck. "Stop and think about putting people out of business just because you can. That's a pretty bold move."
She also complained that the franchise tax the city is looking at would take 4 to 10 percent of companies' gross reciepts -- a huge bite that every hauler would pass on to their customers.
Committee member Emma Acosta, who ran the city's solid waste department until she retired from the city in 2005, said she is all in favor of looking at the issues but not of putting small businesses out of business.
The city paid the R.W. Beck consulting firm $80,000 to look at all three issues, each of which poses legal problems that would likely land the city in court if it tried to move on any of them.
In 2004, for instance, the city appeared to be facing a landfill crisis and signed a contract with Waste Management Inc., owner of Camino Real and El Paso Disposal, giving the city a 90-day price break at the Sunland Park landfill.
Although the city never needed to use the landfill, a provision of the contract imposed a 10-year moratorium on any effort by the city to impose franchise fees on the company.
City Rep. Susie Byrd, the committee chairwoman, said an outside law firm hired by the city has concluded that the contract may be invalid, but she conceded that Waste Management would still sue to enforce it if the city tried to impose a franchise tax.
Check back. More to come.
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