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Why is Republic Being Criticized in Clark County, Nev.?

Are competitors fed up with Republic's exclusive franchise agreements and pricing power at the Apex landfill?

Late last week, Las Vegas-based attorneys James Adams and Puoy Premsrirut filed a class action lawsuit against Republic Services claiming the company is overcharging Clark County owners by placing multiple $60 liens on homes for overdue trash bills.

That suit came less than a month after four business owners filed complaints with the cities of Henderson, Las Vegas and North Las Vegas as well as Clark County about the firm, saying it is abusing its franchise agreements with the cities and the county to block out competitors.

It’s unclear if the lawsuit and other complaints are linked.

All of this has emerged in the wake of October negotiations with city staff members about possibly implementing single stream recycling in exchange for a 15-year contract extension. (The current agreement expires in 2021.) Surrounding areas like Henderson County and Clark County have already made the switch to single stream recycling, leaving Las Vegas as the last municipality in the area to have recycling sorting bins, twice-a-week trash pickup and every-other-week recycling pickup.

And the efforts come six months after a report in the Las Vegas Review-Journal described a “glitch” in Republic’s contract with Clark County that “allows Republic Services to compete with companies in the private construction and demolition market while simultaneously allowing it to set its own rates for competitors at its Apex landfill.”

The issue is that Apex is the only landfill in the county and the agreement also allows Republic the “sole right to set and collect tipping fees” for its potential competitors.

For its part, Republic maintains that it is doing nothing wrong.

“We believe our billing practices are consistent with the franchise agreement and our commitment to a community we are fortunate to serve,” Russ Knocke, vice president, communications & public affairs for Republic Services, said in an emailed statement.

In terms of the lawsuit, Adams told the Review-Journal “We want to protect the people of Clark County against an abusive practice by a company that is a virtual monopoly.”

Republic Services (or companies it has acquired) have held exclusive franchise agreements giving it sole rights to servicing municipal solid waste in the region going back more than 40 years. It’s had a franchise agreement with Las Vegas since 1985, with Clark County since 1993, with North Las Vegas since 1978 and with Henderson since 1973.

Haulers are allowed to compete with Republic in the construction & demolition waste market. That’s been the case since 2005. But because Republic sets the tipping fees at the Apex landfill and with the next closest facility located hours away, haulers are alleging its using its pricing leverage to give itself an advantage.

The posted gate rate for other companies in July was $37.54 per ton. Republic charges itself an internal rate, but it’s not reported.

Republic “took full advantage of their landfill franchise agreement to manipulate hauling and landfill pricing in an effort to force small competitors out of business,” Vince Collet, owner of Secured Fibres and Wolf Drop Box, wrote to the Review-Journal in November.

Par 3, a landscaping company, also alleged they were pushed out of the construction and recycling business by too high tipping fees at the landfill.

According to a July report, some waste collection and hauling companies in the area are choosing to drive two and half hours to a landfill in Lincoln County because the tipping fee at Apex is too high.

In terms of its franchise agreements, rival hauler Western Elite has said it wants a chance to get the Las Vegas contract that expires in five years.

An attorney representing Western Elite sent a letter to Mayor Carolyn Goodman and all City Council members in November asking the city to put the contract out for bid.

“We are writing this letter to make it clear to the City of Las Vegas that there are choices other than Republic to be considered,” the letter reads. “There is no need to adhere to the same practices and no justification for the competitive exception that have allowed Republic to enjoy, in essence, a never-ending monopoly for waste hauling and landfill services.”

But one city councilman, at least, said the current set up is working just fine.

“Residents in Clark County pay amongst the lowest for garbage service in our half of the United States, and we don’t have garbage piled up in our streets, generally,” City Councilman Bob Beers told the Review-Journal in November.

In addition to a contract extension, Republic is also reportedly asking the city to update an ordinance to change the definition of construction or demolition waste to mean material that is generated at a site with the required building or demolition permits, among other definition changes. That would reclassify material from individuals doing minor work or repairs as MSW waste.

That would have big implications in the market since it would mean the waste would fall under Republic’s franchise agreement rather than be able to be picked up by other haulers.

In November 2015, Republic opened the 110,000-sq.-ft. Southern Nevada Recycling Center in Clark County. The $35 million residential MRF is capable of processing two million pounds of recyclable material per day, or 70 tons per hour, and is expected to double recycling capacity in the area. Overall, the facility will have the capacity to process 265,000 tons on an annual basis. The previous facility, in contrast, had about 130,000 tons of material come through in 2014, of which 90,000 was processed.

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