Proposal to Privatize Trash Already Drawing Criticism in Anchorage

With only three months left in office, Anchorage Mayor Dan Sullivan is considering privatizing part of the municipality’s trash collections service. But some members of the Anchorage Assembly are upset at not just the prospect, but the process.

Earlier this month, Sullivan dropped a resolution in front of the Assembly asking to investigate whether it makes financial sense for the city to sell its Solid Waste Services to a private company. That begins with hiring a contractor to crunch the numbers.

“The question is whether or not through a sale you could generate enough money that–invested in your trust-fund–would yield you more money than what you’re earning from the utility today,” Sullivan explained. “It’s just a business analysis that says: ‘what is the best return for the owners–which is the taxpayers.'”

Currently, the utility collects close to 40 tons of residential and commercial trash a year in the greater downtown area. In 2013, they brought in $8,807,000 in revenues, $158,000 above their total expenses. When the resolution came before the Assembly the mayor’s administration had spent $8,924 hiring a firm to “provide guidance and review services” ahead of the bigger financial evaluation. But the Assembly took what Sullivan said is an unusual step for contract of this size, postponing any decisions.

“There was indication they wanted a work-session and then a public hearing,” said Sullivan. “What good would it do to have a work session and a public hearing without any information whatsoever about whether or not it made good business sense?”

A day after the Assembly’s decision, Sullivan  authorized full payment for a financial evaluation, explaining “We’re not just going to spin our wheels in the meantime, we’re going to get the right information.”

The contract is with California-based consulting firm HF&H for $46,500. To some, the number seems high.

“I think that’s way too much to pay for an appraisal,” said Assembly member Jennifer Johnson. “We got one earlier for $6,000. This is a little more in depth, so many $10,000 to $15,000 would be more in the ballpark.”

That earlier appraisal assessed rate structure, and Sullivan said the higher cost in the current contract reflects a significantly more comprehensive analysis of how much the utility is worth.

The other Assembly criticism of the contract is that it was made out of that body’s oversight. Because the total amount is less than $50,000 it does not require approval from them. But Assembly member Paul Honeman felt blindsided by how the administration handled it.

“I have a real problem with being asked ‘can you support my resolution exploring this option,’ and yet at the same time, two weeks prior, you’re engaging in contracts with consultants to do the thing you’re asking us to support now,” Honeman said. “That seems like putting the cart before the horse. It’s very much being done in a vacuum. And it creates a lot of distrust between the executive branch and the legislative branch.”

A public hearing is scheduled during the Assembly’s April 28th meeting.