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Closing BKK Would Be Costly, Study Says : Economy: The region would lose hundreds of millions of dollars if the landfill shuts down in 1995, according to research funded by the dump's operators.

August 22, 1993|ANDREW LePAGE | SPECIAL TO THE TIMES

WEST COVINA — If the BKK landfill is forced to close in 1995, 10 years earlier than the operator wants, it will cost San Gabriel Valley's economy hundreds of millions of dollars, according to a just-released study paid for by BKK.

The Rose Institute, part of Claremont McKenna College, began the study in April after it getting a $12,500 grant from BKK to analyze the economic effects of closing the dump. The report projects the impact on the city of West Covina and the entire San Gabriel Valley economy.

For several years, the Rose Institute has been studying an array of trash issues, including incineration garbage or transporting it by rail for disposal in the desert.

Using a formula that accounts for how each dollar earned by BKK affects the economy, the Rose Institute study found the following:

* By 2001, BKK's business activity could trigger the spending of $703.5 million in the overall San Gabriel Valley economy.

* By 2006, the effect of BKK's earnings would be about $1.4 billion.

West Covina officials have always agreed that closing the dump will cost the city millions of dollars, but have seen BKK as a long-term environmental issue rather than a financial one.

West Covina City Manager Jim Starbird said he had not had a chance to review the study in detail but questioned the level of sophistication that went into its projections on the economic impact BKK has in the city and region.

In calculating the overall effect on the economy, Starbird pointed out, the study assumed that all the money BKK and its employees earn is pumped back into the local economy.

The report's authors calculated their numbers by using an economic multiplier, which in theory accounts for the effect each dollar earned by BKK has on the surrounding economy. In other words, every dollar that BKK generates is counted several times.

For instance, the 170 BKK employees earn an average of almost $40,000 a year. The study counts the money they earn as money going into the economy; then it counts the money again when those employees spend it on rent, mortgages, cars and at local stores. It counts the money yet again when merchants in turn spend it on something else.

BKK's annual payroll is now about $10 million a year in wages, salaries and benefits.

The study also says West Covina will lose more than $30 million by 2001 if the dump closes in 1995.

The loss includes $28.8 million in lost business license tax revenue and $480,000 that BKK would have contributed to the city's recycling efforts.

By 2006, the total loss from a 1995 BKK shutdown would amount to about $70 million for the city, according to the study.

BKK officials said they are pleased with the outcome of the study.

However, BKK opponents argue that the study does not take into account the cost of environmental problems the dump might cause or the effects it might have on residents' health or property values.

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