Can San Diego Save Money At Miramar?

Transcript

TRASH IS BIG BUSINESS IN THE UNITED STATES, AND THE CITY OF SAN DIEGO WANTS TO SEE IF IT CAN CASH IN ON SOME OF THE TREND BY OUTSOURCING THE OPERATION OF THE MIRAMAR LANDFILL BUT THERE'S A TWIST. THE OUTSOURCING OF THE LANDFILL ALSO TIED TO A BIG MEASURE ON THE NOVEMBER BALLOT. PROP D, THE HALF CENT SALES TAX. METRO REPORTER KATIE JOINS ME NOW TO TALK ABOUT THE LANDFILL. HI, KATIE.

HI, GLORIA.

WHY DOES THE CITY WANT TO LOOK AT OUTSOURCING?

MIRAMAR IS A VALUABLE ASSET, CENTRALLY LOCATED WITH ABOUT 12 YEARS LEFT WORTH OF CAPACITY. BUT MOST IMPORTANTLY, IT'S ALREADY ENVIRONMENTALLY ENTITLED. IT HAS ALL ITS PERMITS, IT RUNS, THERE'S NO PROBLEMS. THESE DAYS, CREATING A LANDFILL IS A VERY LENGTHY PROCESS. IT TAKES A LOT OF ENVIRONMENTAL PERMITS. THERE ARE A LOT OF REGULATIONS. SO THE CITY KNOWS THIS AND JUST WANT TO SEE IF MAYBE THEY CAN LOOK INTO A BETTER DEAL.

ALL RIGHT, SO I MENTIONED THERE'S A LINK TO PROP D. HOW IS THIS TIED TO PROP D, THE HALF CENT SALES TAX INCREASE ON THE BALLOT?

LOOK INTO THE OUTSOURCING OF MIRAMAR'S MANAGEMENT IS ONE OF THE TEN FISCAL REFORMS THAT MUST BE MET BEFORE THE TAX CAN BE COLLECTED IF IT'S APPROVED BY VOTERS. NOW, ALL THE CITY HAS TO DO IS LOOK INTO OUTSOURCING MIRAMAR. THE REQUIREMENT IS NOT THAT THEY ACTUALLY GO THROUGH WITH IT. THEY HAVE TO EXAMINE IT.

SO THEY HAVE ALREADY LOOKED INTO IT SO IT LOOKS LIKE THAT CONDITION --

YEAH.

--RIGHT. HOW IS-MILE-AN-HOUR ARE OPERATING NOW?

MIRAMAR RUNS THROUGH AN ENTERPRISE FUND, MEANING IT DOESN'T GET MONEY FROM THE GENERAL FUND BUT FEES CITY AND THE PEOPLE PAY WHEN THEY USE THE LANDFILL. IT GENERATES $31 MILLION IN REVENUE A YEAR AND COST ABOUT $20 MILLION TO OPERATE JUST THE LANDFILL.

THERE'S $11 MILLION LEFT OVER.

IT GO TOWARDS CODE ENFORCEMENT OR DEAD ANIMALS ON THE ROAD. IT GO TOWARDS INDUSTRIAL RECYCLING PROGRAMS AND MAINTAINING CLOSED LANDFILL SITES AROUND THE CITY.

SO THE CONVENTIONAL WISDOM WOULD BE THAT THE ADVANTAGE OF OUTSOURCING WOULD BE TO SAVE THE CITY MONEY. HOW MUCH WILL THE CITY SAVE?

NOBODY KNOWS. AND THE CITY IS VERY CLEAR THEY'RE LOOKING INTO THIS. NOBODY FROM THE MAYOR'S OFFICE WOULD NOT REVEAL WHO THE BIDDERS ARE OR WHAT THE BIDS LOOK LIKE, JUST THEY'RE LOOK INTO THE DEALS TO SEE IF IT'S POSSIBLE THAT THEY CAN STRIKE A BETTER DEAL. RIGHT NOW THEY PAY TIPPING FEES.

MEANING?

WHEN THEY DUMP THE TRASH YOUNG TO PAY A FEE INCLUDING CITY. EVERYONE DOES. THE CITY PAYS $10 MILLION A YEAR. IF A PRIVATE COMPANY TOOK OVER, MAYBE THEY COULD NEGOTIATE TIPPING FEES BUT IT'S COMPLICATED BECAUSE THE CITY RECEIVES MONEY FROM THE FEES THAT THE LANDFILL GENERATES. SO IT MAY PAY LOWER FEES BUT THE REVENUE WOULD GO DOWN SO THE GENERAL FUND WOULD RECEIVE LESS MONEY.

IT'S ALMOST LIKE PAYING YOURSELF RENT AND EXPENSES OUT OF WHAT YOU PAID YOURSELF.

IT'S A VERY COMPLICATED SITUATION. MAYBE THAT'S WHY THEY'RE NOT COMMITTING YET.

THEY DON'T HAVE TO COMMIT BUT I AM HEARING CONCERNS ABOUT OUTSOURCING. MAYBE HANDING IT OVER?

YEAH, THERE ARE CONCERNS. THE LAND IS VERY VALUABLE SO DOES THE CITY WANT TO GIVE UP CONTROL OF THIS ASSET TO A PRIVATE COMPANY? THE CITY CAN SAY HOW MUCH THEY CAN CHARGE AND HOW MUCH TRASH IS PUT IN TO EXTEND ITS LIFE --MAYBE A PRIVATE COMPANY WOULDN'T DO THE SAME THING. WOULD A PRIVATE COMPANY BE REQUIRE TO SUPPORT ADDITIONAL SERVICE THAT THE LANDFILL SUPPORTS NOW? WHAT HAPPENS TO 70 JOBS?

I WOULD ASSUME THERE'S NO REQUIREMENT THAT THE PRIVATE COMPANY WOULD HAVE TO PAY THEIR WORKERS' HEALTH BENEFITS, WHICH IS WHAT THE CITY HAS TO DO.

YOU KNOW, I CAN'T SAY FOR SURE WHETHER THAT WOULD BE A REQUIREMENT BECAUSE THEY'RE NOT TALKING ABOUT THE DETHE DEAL BUT THE CITY HAS TO LOOK INTO IN THE LONG RUN TO SEE IF IT'S WORTH TO IT SAVE MONEY.

WHAT'S THE NEXT STEP?

THEY'RE LOOKING AT THE BIDS NOW AND THE CITY TOLD ME THEY WILL --THEY HOPE TO KNOW WHETHER THEY WILL GO THROUGH WITH THE DEAL IN NOVEMBER OR DECEMBER.

THANK YOU VERY MUCH.

THANK YOU, GLORIA.