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Republic Services struggles to gain trust as it deals with landfill headache

Republic Services struggles to gain trust as it deals with landfill headache

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Buying Allied Waste in 2008 brought Republic Services to the St. Louis area. The acquisition also made it the owner of an infamous landfill.

The $6 billion deal to dramatically expand its territory with new municipal contracts and commercial customers also included a piece of real estate that would become a major headache for both the company and one of the many metropolitan areas it serves.

That property was the Bridgeton Landfill, an already-closed dump where a smoldering mass of underground waste was detected in December 2010, not long after the Republic name started appearing locally.

What the company calls a “smoldering event” triggered by a chemical reaction has produced noxious odors that blanketed nearby communities and raised the ire of residents for more than two years. That anger has gotten the attention of state and federal regulators, politicians, lawyers and national environmental figures.

Grass-roots citizens groups have formed as the landfill burned, and it has become a cause célèbre for environmental groups worried the smoldering could reach nuclear waste illegally dumped 40 years ago in the adjacent West Lake Landfill. Some residents have filed lawsuits, others want buyouts, and federal regulators have reconsidered a plan to cap the radioactive waste.

Even the International Brotherhood of Teamsters, which represents about 9,000 of Republic’s workers and has had a contentious relationship with the company over the years, joined the chorus calling for buyouts and removal of the waste.

Republic Services says dealing with the landfills has cost $125 million thus far, one of the most expensive environmental problems it faces. The hit to its reputation can’t be measured.

In Bridgeton, where Republic Services has a contract to collect municipal waste, elected officials have resisted pressure from some constituents to dump the company.

“We’ve had them six years and we’ve never had a problem with them,” said Bridgeton Councilwoman Barbara Abram. “Why should we get rid of a company like that, that’s doing a wonderful job for our city? The haulers we had before Republic, we had problems with them all time.”

At community meetings organized by Bridgeton residents to keep tabs on the landfill and the West Lake radioactive waste, much of the group’s ire is directed at the Environmental Protection Agency, the federal authority in charge of remediating West Lake’s radioactive waste. That doesn’t mean the residents have forgiven Republic Services for not acting more quickly to handle odors, nor have they forgotten it campaigned against removal of the West Lake waste.

“They’ve actually fought against this community, so there’s this huge distrust,” said Dawn Chapman, of Maryland Heights, one of the most vocal community activists near the landfill.

Republic Services would like its brand to again be associated only with garbage trucks and not a burning landfill. While it doesn’t agree that removing the West Lake waste is necessary, Republic Services points to the millions it has spent to try and fix the burning Bridgeton Landfill. It has offered to build a barrier between West Lake and the Bridgeton Landfill, a project it says it will undertake as soon as the EPA approves a final design.

On a recent tour of the landfill, Republic representatives said they plan to be more open with neighbors and communities in northwest St. Louis County. The company paid $6.8 million to settle a class-action lawsuit this month that neighbors filed over the landfill’s odors.

“Now that we have that settled, we can communicate with them more,” said Jim Teter, one of the managers of the landfill remediation project for Republic.

Missouri is one of Republic’s largest “business units,” Teter said. He hopes the work the company has done to reduce odors and treat waste from the smoldering landfill keeps its reputation in good stead with local governments and businesses in the area.

“We want to stay in business in Missouri for a long time,” he said.

NEW TERRITORY

The company has a huge footprint in the region, serving close to half of St. Louis-area municipalities — 46 on the Missouri side of the river, and Alton, Collinsville and Edwardsville in the Metro East. Some of the region’s most iconic employers and institutions — Barnes-Jewish Hospital, Express Scripts and the St. Louis Zoo — contract with Republic.

In 2008, Phoenix-based Allied Waste was the second-largest waste hauler in the country, and Fort Lauderdale, Fla.-based Republic was No. 3. The combination of the two companies created a competitor closer in size to industry giant Waste Management, which was and still is the largest waste hauler in the country.

Republic moved its headquarters from Fort Lauderdale to Allied’s Phoenix offices and became the No. 2 waste hauler in the country — a very profitable one at that.

It reported $589 million in net income last year, a 19 percent increase from 2009. Republic paid a 99-cent dividend in 2013, an amount that has increased every year for more than five years. Its largest shareholder is a company controlled by none other than Microsoft founder and former CEO Bill Gates.

As a reminder Republic is still relatively new here, the Allied logo still adorns trucks, Dumpsters and roll carts throughout the region.

The St. Louis area was a small piece of the company’s $8.4 billion in revenue last year; Republic’s 570 employees here represented only 2 percent of the company’s total workforce. But the situation in Bridgeton has nonetheless had an effect on the company’s balance sheet.

BETTER BUT NOT FIXED

The smell at the landfill during a recent tour was not overpowering, as many residents described it early last year. Those who live nearby agree the odors have improved.

“The smell has gotten better,” said Chuck Bell, a resident of the adjacent Spanish Village subdivision. “It hasn’t been fixed.”

The improvement has come after millions of dollars and months of frenetic work. Compelled by a 2013 lawsuit brought by Missouri Attorney General Chris Koster, Republic Services has capped the site and expanded a flare system to burn off noxious gases. In just eight months, it has built its own wastewater treatment plant to handle increased levels of hazardous leachate — the contaminated liquid that seeps from the landfill due to high temperatures from the smoldering waste.

Every day, the landfill shrinks, losing mass due to the smoldering in its base that is spewing off gases and as much as 240,000 gallons of liquid a day. Portions of the landfill have sunk some 30 feet over the last couple of years.

The southern portion of the landfill, where the smoldering garbage is, looks as busy as any major construction site. Dump trucks, backhoes and workers use dirt to fill portions of the sinking landfill in order to keep it level and avoid damage to the liner and gas and leachate collection systems.

Republic officials expect to continue similar maintenance for years.

Maintaining the Bridgeton Landfill has been expensive enough that Republic Services has reported the expected costs to its investors since 2012. The company says it has already spent more than $125 million to contain the landfill’s odors and treat the leachate. As of June 30, Republic still expected to spend another $95 million over the years, mostly for operating the leachate treatment plant. At the most, Republic reports there’s a chance it could end up spending as much as $335 million more to manage problems at the landfill, according to its most recent quarterly financial disclosure.

Big environmental remediation payments at waste hauling and management companies are not unusual, said Barbara Noverini, a financial analyst who follows the sector for investment research firm Morningstar.

“This is a normal course of doing business,” she said. “When you’re running a landfill, you have to account for things like — not this specific instance, but things like it will occur.”

At its Countywide landfill 35 miles south of Akron, Ohio, Republic faced another landfill fire. The Countywide landfill started smoldering eight years ago, cause by a chemical reaction sparked by aluminum waste. Republic is still paying to manage the Ohio landfill fire’s effects, which it says could cost an additional $67 million at most.

That hasn’t approached the scale of the project to contain odors and environmental risks at Bridgeton. Teter, the project manager who has spent 50 years in the industry, was summoned out of semi-retirement to take on the project.

“Bridgeton has probably been the most challenging project I’ve ever had in my career,” he said.

ANOTHER SHOE?

The costs of managing Bridgeton don’t include the company’s liability for a potential West Lake cleanup. Capping the West Lake radioactive waste is expected to run only about $43 million, split between Republic and two other responsible parties. Removing it — which Republic says is unnecessary — could cost upward of $400 million.

Anything short of removal will not satisfy those most concerned about the long-term risks of the radioactive waste. They have been urging removal of the West Lake waste even before Bridgeton started burning. Now that it is, many say the EPA needs to completely rethink its 2008 proposal, which called for simply capping the waste.

“Republic Services is still promoting the 2008 decision, which is reckless considering there was no consideration of the significant impact of the burning waste,” said Ed Smith of the Missouri Coalition for the Environment.

Republic Services, though, says the underground smoldering is under control, and the risk of it ever coming into contact with the West Lake waste is an “insignificant probability,” according to company spokesman Russ Knocke.

“We’re still very confident that the reaction is not going to get to West Lake,” he said.

Abram, the Bridgeton council member, said she isn’t worried about the reaction spreading. But she knows the local groups advocating for removal of the West Lake material won’t be satisfied until it’s gone.

“I think they’ve done a good job for what they had to work with,” Abram said of Republic. “Now that it came to light, they’re doing what they can to fix it. But even if they get it fixed, it’s not going to make those people happy.”

The smoldering landfill has drawn in more than local groups. National media have covered it, and environmental activists Erin Brockovich and Lois Gibbs have addressed it. The Teamsters, who represent about 300 workers at area businesses, have even gotten involved, accusing Republic of downplaying environmental issues that put workers and the community at risk.

“We see them behaving badly toward workers, and we see them behaving them badly toward communities,” said Matteo Colombi, a strategic coordinator with the Teamsters Union. “We don’t want to see pretend fixes, which is what we’re concerned we’re going toward.”

Teter, at Republic, said he thinks it’s a relatively small group of people who believe more needs to be done at West Lake.

“A few minority people are driving all of this,” he said. “Everyone’s working really hard to solve this problem.”

The smell has gotten better, said Tara Routt, a 25-year resident of Spanish Village subdivision in Bridgeton. She mostly talked about how she gets mad at the EPA. But she thinks the landfill will be another black mark against her house’s value that Republic can’t ever fully remediate.

“We’ve been screwed by the airport, we’ve been screwed by Fred Weber dynamite blasting (at a nearby quarry), and now we’re getting screwed by the landfill,” Routt said.

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