San Diego County Develops Trash Divestiture Plan
Fri, 22 Jan 1999 16:57:25 -0500

OK folks, please send me arguments concerning the privitization of San
Diego County's solid waste's officially on the market.

>From the San Diego Daily Transcript, 4/10/97:

County Develops Trash Divestiture Plan

Includes Sale Of North County Recycling Facility

Daily Transcript Staff Writer

April 9, 1997

County Solid Waste Services has, in conjunction with J.P. Morgan Securities
Inc., developed a trash divestiture plan that includes the planned sale of
the idle North County recycling facility adjacent to the closed San Marcos

Besides the North County Resource Recovery Associates recycling facility in
San Marcos. other assets to be sold include the Sycamore Landfill, the Otay
and the Otay Annex landfills, the Ramona Landfill, the Borrego Landfill,
all owned or leased solid waste bin sites and the lease of the Palomar
Transfer Station.

According to Scott Christopher, JP Morgan vice president, the value of the
trash system ranges between $96 million and $120 million. This figure was
computed before it was known the NCRRA system would be part of the package,

Just how much the recycling plant is worth is anybody's guess. Whoever
bought it would have the option of running the facility, which
theoretically could restart at any time, or dismantling the plant and
selling off its components. The county has about $20 million in debt
remaining on that facility.

Carol Conner, a chief administrative office staff officer, said the "jewel"
of the county's trash system is the Sycamore Landfill in the Santee area.
The footprint of this landfill will have enough capacity for 55 years if
fully built out. Some things would have to happen before that could happen,
For one thing, some San Diego Gas & Electric lines would likely have to be

Sycamore, which was opened back in 1962, has a 520-acre footprint.

The Otay and the Otay Annex landfills and Borrego Landfills are also deemed
to be very important assets. The Ramona Landfill is important too, but it,
like the San Marcos Landfill was before it was closed last March, has
become quite controversial. Last month the Regional Water Quality Control
Board ordered the county to clean up contaminated groundwater at the Ramona
Landfill. Whatever
cleanup was not done prior to the sale of the system would have to be
completed by the new owner.

The tentative time schedule calls for the letters of interest being due on
April 29. From May 7 though June 24, due diligence work would proceed. The
binding proposals would be due on the June 24 date. The negotiations and
execution of the purchase and sale agreement are expected to be
completed on Aug. 17 when the Board of Supervisors is slated to approve the

The board is also scheduled on Tuesday to consider a sales brochure for
prospective bidders.

Several firms that are well acquainted with the trash business have already
expressed an interest in buying the system. Each of these firms appears to
have deep pockets or ready access to monies to finance the purchase of the
solid waste system.

USA Waste is among the interested parties. That firm recently acquired Coast
Waste, which operates the Palomar Transfer Station. Joe Minner, county
Solid Waste Services director, said USA Waste is one of the largest
landfill operators in the country, with more than 100 to its credit.

Other firms said to be interested include the Allied waste disposal firm,
BFI, Norcal, which operated the San Marcos Landfill, a Herzog Corp. entity
and a French firm. Whoever bought the landfill system would be required to
handle all closure, postclosure and any outstanding environmental

Herzog was the firm that originally had hoped to build a trash-burning
facility at the San Marcos Landfill. Following a great deal of community
opposition, that idea was dropped, Herzog sold out its interest in the
facility to ThermoElectron and a trash-recycling facility was built
instead. Shortly after that facility began operating, it was shut down,
because it cost more to run than any revenues it could generate.

The county staff in conjunction with J.P. Morgan have deliberately kept
assets that would have a negative value out of the purchase. One of those
is the recently closed San Marcos Landfill. It cost about $40 million to
expand that landfill, and the expanded section operated for about three
years before court rulings spawned by litigation on behalf of the city of
Marcos and neighboring landowner San Elijo Ranch forced its closure. The
county had hoped to operate the landfill through the year 2000.

The county has placed $16 million in a closure account for the landfill, but
San Elijo Ranch, among others, has contended the money being budgeted won't
be sufficient. Time will tell.

While the county is selling off the usable assets of its system, it will
still have to deal with maintaining inactive landfills for at least the
next 30 years. That responsibility is projected to cost $70 million to
$90 million. So as you can see, the county will continue to pay for its
inactive landfills for quite some time to come.

Carolyn Chase, Editor, San Diego Earth Times,
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Tel: (619)272-7423 (SDET)
FAX: (619)272-2933
P.O. Box 9827 / San Diego CA 92169

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