Tuesday, July 13, 1999 | 11:06 a.m.
Unswayed by public protest and concerns over one company's monopoly, the Las Vegas City Council on Monday approved a 15-year extension on Republic Silver State Disposal Inc.'s garbage collection contract.
Critics objected not just to the contract -- which kills any potential competition in trash hauling until 2021 -- but to the council members who received campaign funding from Silver State.
But three council members argued they had a right to vote on the issue, and they did.
Councilmen Michael McDonald and Gary Reese and Councilwoman Lynette Boggs McDonald voted in favor of the contract. Mayor Oscar Goodman and Councilman Larry Brown both abstained, citing perceived conflicts of interest.
Rob Dorinson, president of Evergreen Corp. -- a Las Vegas-based construction waste management company -- told the council the extension would "have dire consequences to our representative companies."
The contract extension is worth at least $1 billion after the payment of franchise fees. The company refuses to attach a monetary figure to the contract extension, and city officials have not released information on the amount Republic pays in franchise fees.
Some estimates say the contract extension could be worth as much as $3 billion.
Dorinson questioned the urgency in pushing forward the extension two full years before the existing contract expires and argued that the council should put out for bid all contracts -- including trash hauling.
"It's the American way," Dorinson said. "It's a normal and natural way to shop for things we purchase."
But the council majority saw a better argument to support a contract extension -- a $5.5 million donation.
Under terms of the deal, Republic Silver State donates that amount to the city for use in parks. Although originally earmarked to fund a transfer station, the city said it would spend it on needed parks.
The deal offered by the trash giant also includes indemnification from any potential liability related to Silver State's leaking Sunrise Mountain Landfill.
The Environmental Protection Agency has ordered Silver State properly close and clean up the landfill that has been leaking methane gas into the air and dangerous chemicals into the Las Vegas Wash since heavy rains in September 1998.
The Clark County Commission approved a similar 15-year contract extension last month in exchange for indemnification from a lawsuit in which the county had already been named.
Under terms of that deal, Republic Silver State agreed to spend an estimated $36 million cleaning the landfill.
As proof that the city also could be held liable in the future, Republic Silver State came to Monday's meeting armed with a Washington D.C.-based attorney who specializes in municipal liability and hinted that Las Vegas could be sued.
"Absent some liability agreement, the possibility (for liability) exists," added Robert Groesbeck, Republic Silver State's general counsel.
Boggs McDonald agreed, saying the EPA could still come back and name the city in a lawsuit if the landfill were ever named a Superfund site.
But, she added, the most compelling reason for her to vote for the contract extension was that Republic Silver State's rates increases are tied to increases in the consumer price index for the duration of the contract.
"I happen to disagree that a monopoly, in this case, is bad," she said.
Groesbeck said Republic Silver State is proud of its rates -- which he called the lowest in the West at just under $10 per month for twice a week pick-up.
But a dozen residents, who spoke out against the contract extension, argued that environmental concerns and the company's required three-month advanced payments were reason to consider another company.
Michael McDonald said he felt he could vote on the issue because the $38,000 he received from Silver State and its related companies was only a small percentage of his overall $700,000 re-election campaign war chest.
"Campaigns cost money to run," he said.
Republic Silver State also gave campaign money to Reese and Goodman during the recent municipal elections and gave to Brown and Boggs McDonald in past campaigns.
Brown abstained because he works part-time for the Las Vegas Stars. Republic Silver State has a billboard at Cashman Field and sponsors fund-raisers there for the Make A Wish Foundation.
Goodman abstained because he is part owner of land across the street from Republic Silver State's Apex landfill, and his law partner, David Chesnoff, was considering representing the company in an unrelated matter.
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