County leaders assess impact of trash ruling
This article first appeared in the St. Louis Beacon, July 31, 2012 - The Missouri Supreme Court ruled that three haulers are entitled to damages because St. Louis County followed improper procedures when it established trash districts.
And while St. Louis County Executive Charlie Dooley argued the ruling could have been worse and the trash-district plan saved county residents money, others say the entire situation was completely avoidable.
The case stems from the county’s decision in 2008 to divide unincorporated St. Louis County into trash-collection districts that each went to the lowest trash-hauler bidder. Three haulers – American Eagle Waste Industries, Meridian Waste Services and Waste Management of Missouri – sued after they were ousted after failing to win the initial district contracts. The haulers argued that the changeover violated a state law requiring two years notice.
A St. Louis County judge awarded the haulers nearly $1.2 million, which was based on a 5 percent profit margin on $23 million in lost business. Both the county and the haulers appealed the ruling.
In a unanimous decision not attributed to any particular judge, the Supreme Court agreed that the county violated a state law requiring written notice to the haulers. The high court then remanded the case to a lower court, stating that the haulers were entitled to “their projected receipts from their contract price, minus any business and operational costs haulers would have incurred while providing waste collection services, considering all the circumstances.”
“On remand, both parties are allowed to discover, present evidence, and cross-examine regarding these subjects,” the decision stated. “The measure of damages is the net profit the haulers’ would have realized during the two-year period, considering all the circumstances. Because the parties must present further evidence regarding this issue, the able circuit court can rule on the other evidentiary issues as they arise.”
Jane Dueker, an attorney with Stinson Morrison Hecker who represented the haulers, said the outcome is effectively the worst-case scenario for county residents. People in unincorporated areas of the county, she said, will have to pay for trash service and the damages. And residents who pay for their trash service through their municipalities will also have to cover the costs.
The biggest question, Dueker said, is why the county didn’t wait to implement the program.
“What most people do when the legislature passes the law, they sue and say ‘Hey, does this apply to us? We’re a charter county,’” Dueker said. “And they didn’t do that. They just kept going. And they were going to implement this no matter what. And now taxpayers are going to have to foot the bill.”
“Which is not what the companies wanted,” she added. “It would have just been better to just leave us alone and follow the law. This is not good thing for anybody. This is the worst of all results.”
Dueker said it’s possible that the final damages will exceed the $1.2 million judgment. Both Dooley and St. Louis County Counselor Patricia Redington expressed doubts about whether the county would pay more. Redington also defended the county’s decision to proceed with the trash district plan.
“We were already a year into it by the time the legislation passed,” Redington said. “Normally, you don’t have legislation that goes back in time and then tells you do something a year ago. By that time, we couldn’t have given two years’ notice without starting over again and derailing all the progress that we had. We did think that it was important to go on, get people recycling, add to the recycling efforts, and save taxpayers’ money on their tax bills.”
She also pointed out the importance of the county’s reserve funds when asked how the damages would ultimately be paid for.
“That’s why it’s always important to have reserves, why we don’t have every penny spent,” Redington said. “So if we have unbudgeted expenses, we’ve got a way to cover it. … That’s why we keep reserves to have on hand in case there are judgments or in case we have a roof that gets struck by lightning or something. We have the money to account for it.”
Stenger, Dooley spar over lawsuit's costs
For his part, Dooley argued Tuesday that whatever costs come from the lawsuit are outpaced by the savings for customers for implementing the trash districts. He told the Beacon that the program saved taxpayers’ $16 million a year.
Waiting two years, Dooley argued, would have deprived county residents of savings. He also added that the program increased recycling, which resulted in less trash in landfills.
“If we waited two years, we would have cost the taxpayers in St. Louis County $32 million,” Dooley said. “That’s $16 million a year that we saved for our citizens. We kept that money in their pocket. Are you telling me $1 million versus $32 million? What do you think?”
“It was a good policy. It was a right thing to do. And I don’t apologize for it. Because it kept money in our citizens’ pocket, that’s my job,” he added later. “The process is still in place. It still goes on. We have the authority to do it. What they were talking about was the process, not the authority. So we did the right thing for the right reasons.”
Councilman Steve Stenger sees things differently. The Affton Democrat’s south St. Louis district is perhaps most affected by the trash districts because most of the areas he represents are unincorporated. The implementation of the trash districts was a major issue in his successful bid in 2008 against then-Councilman John Campisi.
“You can’t net this against the benefits of having a trash plan,” Stenger said. “These are expenses that never should have borne by both incorporated and unincorporated St. Louis County. And what’s most troubling about it is we seem to be living in a county where there’s no accountability and nobody takes responsibility for mistakes that are made. And that’s not what government is supposed to be. Government is supposed to be accountable.”
He said that if the county “would have waited two years, there wouldn’t be damages. And we wouldn’t be at risk for millions of dollars.” And he added that Dooley and others who supported the program aren’t taking responsibility for proceeding incorrectly.
“The county executive’s answer to this isn’t ‘I take full responsibility, it was a mistake,’” Stenger said. “He says I’m not apologizing for it and it’s a net benefit. Are you kidding me? That’s atrocious. That’s atrocious. That is atrocious. I’m sorry, but it’s atrocious. That’s not leadership. It just isn’t.”