PLANS TO BUY DESERT LANDFILLS OK'D.

Byline: Laurence Darmiento Staff Writer

WHITTIER - The Los Angeles County Sanitation Districts approved historic agreements Wednesday to purchase two desert landfills for $82 million, an action officials say will guarantee the region disposal capacity for a century while saving residents billions of dollars.

The districts' governing board ratified two separate purchase agreements each worth $41 million for the Eagle Mountain Landfill and Recycling Center in Riverside County, near Joshua Tree National Park, and the Mesquite Regional Landfill in Imperial County.

The landfills have yet to be constructed and still face legal challenges from environmentalists - indeed the closing of the sales are dependent on clearing those challenges - but each facility is permitted over its life to accept hundreds of millions of tons of trash.

Los Angeles County Supervisor Michael D. Antonovich issued a statement praising the deal as making new urban landfills unnecessary, but he stopped short of calling for the Puente Hills facility to close after 2003.

``These acquisitions are welcome news to the residents of the Santa Clarita and San Gabriel valleys who have long opposed landfills in their communities,'' he said. ``This is a win-win move for residents, the environment and the economy.''

Sanitation officials said the action transfers the privately owned facilities to public hands during a time when there is no immediate, but only a long-term, need for the disposal space.

The result was a relatively low purchase price that otherwise could have been in the hundreds of millions of dollars. Moreover, profits have been taken out of long-term operating costs, lowering the potentially sky-high rates for hauling trash out to the remote facilities by rail.

``I think it's an excellent deal for the cities,'' said Don Nellor, assistant head for solid waste management for the districts, a joint powers agency that serves 78 cities and the county's unincorporated communities.

``We are not a private firm looking at the profit figures next quarter. We are a public agency looking out for the long-term security of the taxpayer.''

The districts predict the facilities will not be needed for at least six and as many as 13 years, if the permit of the Puente Hills Landfill in Hacienda Heights is extended by the Board of Supervisors.

The permit for the landfill, the country's second largest, runs out in 2003 but the agency can seek a 10-year extension. If it not extended, the landfills could be needed much sooner.

That would trigger a provision in the agreement discounting each landfill's price by $2 million given the higher cost of rail haul.

Mesquite is next to a working gold mine about 35 miles east of Brawley and would store trash by piling it on the desert floor. Eagle Mountain would bury it in a mountainside at the site of a now-closed iron ore mine.

The districts action was immediately lauded by local officials who say it should eliminate the need for new urban landfills. But it was attacked by an environmental group that compared it to nothing less than Los Angeles' move to import water from the Owens Valley early in the 1900s.

Under the terms of the agreement, the districts will place the purchase prices in two separate escrow accounts over the next 90 days while the agency ensures that the landfills' permits are up to date and there are no unexpected problems at the sites.

If that review goes smoothly, those funds would then be placed in another escrow account and not be released until the districts are satisfied that all legal challenges have been cleared, Nellor said.

``We feel it's remote (the challenges will be successful) but we felt the risk should stay with the seller,'' he said.

Funds for the purchase are being drawn from a districts capital fund set up specifically to acquire new landfill space.

Mountain Reclamation Corp., owners of Eagle Mountain, and Arid Operations, owners of Mesquite, will be responsible for continuing to fund and handle the legal defenses under the agreement.

Rick Daniels, president of MRC, said he doubted the litigation would be successful and called the sale a good deal for both parties.

``All I can say is that we felt this was a fair price and comfortable to the point we signed the agreement,'' he said.

Kaiser Ventures, the successor organization of the defunct Kaiser Steel, holds a majority stake in MRC, a partnership that was formed in 1982 to find a use for the abandoned mine.

Bob Filler, general manager of Arid Operations, wholly owned by Gold Fields Mining Corp., which developed the gold mine adjacent to the Mesquite landfill, conceded the price was a good deal for the districts.

He cited unexpectedly soft market conditions caused by the bankruptcy several years ago of Orange County, which then opened its landfills to Los Angeles to raise cash.

He also noted the recent decision by Los Angeles city to reopen the Sunshine Canyon Landfill in Granada Hills. Still, he said, Arid Operations got its investment back and more.

``We had about $30 million invested in the project over nine years and we got $41 million,'' he said. ``We think it's a fair price.''

Mike Miller, a West Covina-based trash consultant, said it appeared that the districts got a very good deal.

``The crisis in landfill space that was anticipated (when these were first developed) did not materialize,'' he said.

However, he predicted that the move will now create tremendous pressures to close Puente Hills once its operating permit expires.

In purchasing the landfills, the districts did not get turn-key operations that are immediately ready to accept trash.

A rail spur has to be built to Mesquite while an existing one has to be upgraded at Eagle Mountain. In addition, both sites still need to be prepared to accept trash, including being excavated.

Nellor said those costs could total up to $40 million at each facility, although it was unlikely that both would be needed right away. Rather, only one will be opened at first, although no decision has been made on which pending further study.

Sanitation officials estimate it will cost $55 a ton to haul trash out to the sites, about three times the cost of dumping it at the Puente Hills Landfill.

But their studies predict it will raise residents' trash fees by no more than $5 a month since disposal charges are just one part of sanitation costs. Other costs include pickup charges by haulers.

It would be cheaper, perhaps just $1 a month more, if the Puente Hills Landfill's permit is extended. That would allow the districts to pursue a ``rate levelization'' plan that would raise rates at Puente Hills to subsidize rail haul's higher costs.

Either way, officials with the districts say the costs will be far lower than if the landfills remained in private hands, with savings in the billions over the course of the century.