SUNSHINE OPERATOR DEMANDS EXTENSION REJECTION MAY MEAN HIKE IN DISPOSAL FEES.

Byline: Kerry Cavanaugh and Rick Orlov Staff Writers

Operators of Sunshine Canyon Landfill have issued an ultimatum to Mayor James Hahn: Negotiate a 10-year renewal contract to keep sending Los Angeles' trash to the Granada Hills dump or face immediate and significant increases in disposal fees.

In a letter to the Bureau of Sanitation sent late Wednesday, Browning Ferris Industries gave the city 30 days to officially give notice whether it will or will not renew the disposal contract, which expires in June 2006 - the deadline Hahn has set for ending city dumping at Sunshine Canyon, where almost all residential trash is sent.

BFI warned that if city officials decide not to renew the contract, the landfill operator will raise disposal rates up to 50 percent in July and could stop accepting city refuse earlier than the June 2006 date. Trash could still be accepted from other communities and private contractors in the Granada Hills area of the dump.

Sanitation officials sent the letter to the City Attorney's Office to review, but said they didn't believe that BFI could change the conditions of its current contract.

Landfill opponents called the letter a blatant threat meant to weaken the mayor's resolve in an election year when the city faces a major budget shortfall and already has raised dozens of fees and rates to the public.

``It's clearly like blackmail,'' said Kim Thompson, a longtime critic of the landfill and a member of the North Valley Coalition. ``I would hope the mayor doesn't allow them to threaten him.''

BFI District Manager Greg Loughnane said the company is simply offering the city a low-cost, 10-year trash contract and is reserving its right to cover costs and find new customers should the city decline.

``We can always do better deals for you as a city if you stay with us. If in fact they don't, then the deal isn't going to be as good,'' Loughnane said.

A spokeswoman for Hahn said the mayor would not be swayed by BFI's letter.

``Mayor Hahn stands by his pledge to work for a landfill-free city by 2006,'' Press Deputy Sahar Moridani said, adding that the mayor will abide by the current BFI contract through June 2006 and is very concerned by inferences that the company might try to wriggle out of that contract.

During secession, Hahn vowed to stop sending city trash to the controversial north San Fernando Valley landfill and later promised to dispose of trash outside the city limits in 2006.

However, the specter of higher trash rates is going to make Hahn's trash plan a harder sell. Some council members and city managers have begun questioning the wisdom of ending the BFI contract when the city is facing a budget shortfall.

Councilman Bernard Parks, who chairs the council's Budget and Finance Committee, said he was not familiar with the new letter from BFI, but has concerns about the overall cost of trash disposal.

``The question we have to address is whether we can afford going somewhere else. We can't look at closing Sunshine Canyon until we know what the full cost is,'' Parks said. City Administrative Officer Bill Fujioka said he has asked his staff to review the proposal and report back to him.

``We would be concerned about any increase in costs at this time with the financial problems the city is facing,'' Fujioka said. ``But I can't say if what BFI is proposing will be accepted.''

But Councilman Greig Smith, whose district includes the landfill, questioned BFI's estimate that the city could save $170 million over 10 years by continuing to dump at Sunshine Canyon.

``One-hundred and seventy million in savings? We don't know those numbers are real. We may find we're going to save a lot more money if we do something different.''

He added that BFI is locked into a contract through 2006 and will face legal action if it tries to hike rates or stop taking city trash.

``They're trying to scare some of the council members into taking an action they don't have to take.''

The BFI letter's authors say some opposition by city officials, such as Smith, and community groups caused delays and extra permit requirements that cost the company an extra $20 million in expenses - money the company wants to recoup with higher disposal rates.

Kerry Cavanaugh, [phone]

kerry.cavanaugh(at)dailynews.com