Case Study
San Bernardino, CA
As solid waste systems lose flow control powers, they are looking at privatization as means to become more cost competitive. In 1995 PFM assisted the County of San Bernadino, CA in negotiations with a private contractor to privatize the County's solid waste operations. PFM helped establish financial criteria, outlined business positions and developed negotiating strategies. PFM supported the County throughout the negotiations, including evaluating offers from the privatizer, preparing counterproposals and reviewing legal documentation. PFM also prepared presentations to the decision-making bodies such as the County Board of Supervisors. The County received several benefits from the privatization, such as annual savings of $8.6 million, strong County control over operations, and a cost based contract which enabled the County to ensure that costs are fair and reasonable.
PFM staff were involved in working with San Bernardino County, California and its private sector landfill operator (Norcal Waste Systems) in the development of a comprehensive public/private partnership for all functions related to the management of the San Bernardino County solid waste system, including recycling education, long-term system planning, construction management and landfill and transfer station operations. PFM staff (while at another consulting firm) assisted Norcal in developing its formal proposal to privatize the solid waste system, working with Norcal to develop an integrated multi-year planning tool which analyzed the effects of landfill closures and system consolidation on system tipping fees as well as company profitability. These staff also represented the private sector in public meetings before a number of constituencies including the County Supervisors , municipalities which delivered waste to the County system, and private waste haulers in the County.
After the County provisionally selected Norcal, PFM represented the County and current PFM staff worked with Norcal in the negotiation of the service agreement for Norcal's management of the solid waste system. This negotiation process, which culminated in an eight-day series of meetings, resulted in the development of a long-term agreement which has helped to stabilize and reduce tipping fees in an extremely competitive environment, while ensuring the maintenance of environmental protection and ensuring the provision of long-term disposal capacity in the region.