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Sanitation Districts May Bid on Landfills

Revenue: Sale of the system, estimated at $200 million to $300 million, would provide the county with much-needed cash.

February 06, 1996|SHELBY GRAD | SPECIAL TO THE TIMES

FOUNTAIN VALLEY — The Orange County Sanitation Districts is poised next week to submit a formal bid to purchase the county's lucrative landfill system, which is estimated to be worth $200 million to $300 million, agency officials said Monday.

The sale could provide a significant boost to the county by supplying cash needed for bankruptcy recovery efforts. It would also mark by far the largest sale of county assets since the Dec. 6, 1994, bankruptcy.

The sanitation districts' Board of Directors is scheduled to vote on a bid proposal next Monday, more than two months after it entered into exclusive negotiations with the county, said Blake Anderson, the sanitation agency's chief operations officer.

If a bid is made, the Board of Supervisors would likely vote on the matter in late February or early March.

The system, which consists of five operating landfills and about 20 closed sites, is considered one of the county's most valuable assets because of the revenue it generates.

Details of the districts' proposal are still being worked out, but the purchase price will likely be in the range of $300 million, Anderson said.

In documents filed in U.S. Bankruptcy Court, the county estimated that the landfill system could generate $15 million a year over 20 years for bankruptcy recovery, or $300 million, Anderson said.

Last year, a League of California Cities report estimated the value of the landfills at about $250 million.

If the deal goes through, Anderson said, the sanitation districts will streamline operations by combining the county's Integrated Waste Management Department with the districts' own staff.

Money saved by merging the two entities could result in a reduction in landfill dumping fees, Anderson added.

"We think we can render some important operational efficiencies," he said.

The sanitation agency, which handles sewer operations, would finance the deal by either borrowing against future landfill revenue or paying the county in installments.

Some county supervisors raised concerns in November when the county entered into exclusive talks with the sanitation districts, saying they would prefer for the private sector to submit bids as well.

But most supervisors said they doubted that a private company would be willing to buy both the profitable operating landfills as well as the closed ones, which require costly maintenance. They also said it makes sense for one government entity to handle both solid and liquid waste.

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