Jump in Commercial-Garbage Hauling Fees to Jolt Businesses

Thousands of San Fernando Valley businesses are facing unusually high increases of up to 30% for trash removal this year because of a sharp rise in dumping fees at a landfill used by many garbage haulers in the area.

It is the largest single jolt so far in a trend that could double commercial-garbage hauling costs in the Valley by 1990, ending an era in which local hauling prices lagged far behind those in most other metropolitan areas.

The price increases are expected because of a 28.6% price increase that the Bradley Avenue Landfill-West in Sun Valley will impose on garbage haulers starting June 1. That, in turn, already has led some haulers depending on Bradley-West to raise their annual increase this year from the usual 10% to 20% to 30%, industry sources said.

Haulers Face Hard Choices

Waste Management Inc., largest hauler in the Valley with 5,000 customers, increased its fees by 10% in January and expects to raise them another 10% to 15% in July. Other companies are expected to follow suit this summer.

Bradley-West’s proposed price increase is forcing hard choices on haulers about how much they can charge without losing customers, and throwing the survival of some smaller haulers into question, according to officials of several hauling companies.

A hauler’s dumping fee can range from 10% to 20% of its operating cost.

Bradley-West is raising the fee to pay for pollution safeguards required by the California Regional Water Quality Control Board for a 30-acre addition planned at the 41-acre landfill. The landfill, the closest for most haulers working in the Valley, is in a former gravel pit whose proximity to ground water requires special precautions, said Hank Yacoub, chief engineer with the water quality board.

‘Make it Difficult for Us’

The landfill notified its customers of the increase in an April letter, but some haulers knew of it as far back as January. Residential garbage collection, handled by Los Angeles County, the City of Los Angeles or local municipalities at publicly owned dumps, is generally not affected.

Garbage hauling costs $35 to $55 for each pickup of the standard three-cubic-yard metal bin. The cost to businesses varies greatly. For example, Le Cafe restaurant in Sherman Oaks pays $300 monthly for garbage removal. The Encino-based Gelson’s Markets pays $2,000 a month for each of its seven stores, three of which are in the Valley.

“We work on a very small margin of profit,” said Dale Jaffe, general manager at Le Cafe. “So, while it might not seem like it, situations like garbage hauling rates add on to other expenses and make it difficult for us.”

“It’s not as critical as rent, but it is important,” a Gelson’s executive who asked not to be named said about the effect of increased collection costs.

Increase a Wild Card

The Bradley-West landfill increase from $7 to $9 to dump a ton of garbage may be the most vivid local example so far of the cost to Valley businessmen caused by dwindling space for local landfills and tightening environmental regulations. In addition, the increase is a wild card in the intense competition among 20 to 30 local garbage haulers.

Bob Coyle, manager of Waste Management, said that the nationwide firm depends on Bradley-West for disposal of 90% of its Valley trash. He said the January increase and planned July rise mark the first time in five years that there have been two increases in one year.

Two other large haulers in the Valley, Topax Refuse Removal and Crown Disposal--with another 5,500 clients between them--said they will probably increase prices in line with Waste Management. They take 60% of their garbage to Bradley-West.

‘Shocked’ by Letter

“I was surprised and shocked by the letter,” said Richard Paxman, president of Topax, which he said has 2,500 customers. “It’s a tremendous jump. We’re going to have to do some adjusting and there’s nothing we can do about it. We’re looking at a 15% to 20% increase.”

According to large haulers, there may be as many as eight Valley trash haulers with only one or two trucks--and the increase could put some of them out of business.

“We haven’t given our customers an increase in three years because we’re scared to lose the business,” said George Surenian, a manager with Diamond Disposal Co. in Sun Valley, which operates one truck. “Now, we don’t have a choice. It’s going to hurt.”

‘Hard to Survive’

Surenian said Diamond dumps 10 to 15 tons of garbage a day. “At an increase of $2 a ton, that’s a $30 increase a day,” Surenian said. “That’s $900 a month and almost $10,000 more a year. It makes it really hard to survive.”

“What happens when these small guys have trouble is that Waste Management or one of the other big guys buy the smaller ones up,” said one city official who is familiar with the garbage industry.

“It’s a dog-eat-dog game, especially for the little guy,” said Hy Weitzman, executive vice president of the California Refuse Removal Council, Southern District, a trade organization with about 160 members.

Good Deal Locally

For the time being, Southern Californians are getting a good deal contrasted with customers of commercial haulers just about anywhere else in the nation, said Weitzman.

The average dumping cost at landfills in Southern California is $6 per ton, Weitzman said, because of a historical availability of space for landfills and sharp competition among haulers. In San Francisco, he said, it costs about $15 a ton to dump garbage and $45 to $65 for the collection of a three-cubic-yard bin. In some Eastern cities, where there is a particularly bad shortage of landfill space, the cost can go as high as four times that in Los Angeles, Weitzman said.

But Weitzman said that, in five years, the prices in the Los Angeles area will be at least as high as those in San Francisco.

‘A Garbage Crisis’

“In Los Angeles, we’re facing a garbage crisis,” Weitzman said. “We’re running out of sites. The whole cost for everybody is just going higher and higher.”

Besides Bradley-West, owned by Valley Reclamation Co. of Sun Valley, there are three other landfills Valley haulers use. One is the North Valley Landfill in Sylmar, owned by Browning Ferris Waste Systems Inc. The other two are the Calabasas and Scholl Canyon landfills, both owned by Los Angeles County.

North Valley Landfill now charges $4.60 per ton for garbage disposal. It probably will raise that price to about $7, according to site manager Dean Wise. “We expect to pick up some business as a result of the Bradley-West price increase,” Wise said.

2 Firms Preferred

The two county landfills in the area take commercial garbage and now charge $5 per ton. That will soon be going to $5.50. About a third of the garbage taken by the county landfills is commercial, a third is residential and the rest is demolition and construction debris.

Even though the two county landfills are priced lower, Bradley-West and North Valley are preferred by many local haulers, according to Coyle and others. Most of the local haulers are based in Sun Valley and nearer to private landfills than county-owned ones. Getting to both Scholl and Calabasas requires driving up steep hills that tend to cause expensive wear on trucks’ transmissions.

Besides, the county dumps tend to have longer lines than the private ones, according to haulers. That costs haulers time and money.

The competition is mostly between Bradley-West and North Valley.

Closures Another Factor

“It used to be that Bradley-West was the only place we went,” said Dave Malstan, a supervisor at Magic Disposal Inc. in Pacoima. “But we’re cutting way back on Bradley and we’re using North Valley more.”

An important factor accompanying the price increase at Bradley-West is the filling and closing earlier this year of Penrose Pit, another Sun Valley landfill. Besides, Calabasas is nearly full. Both of these factors allowed Bradley-West to raise prices without fearing the loss of too many customers.

Although local haulers expressed consternation over the Bradley-West increase, none suggested it was unfair; nor did Hank Yacoub, chief engineer with the California Regional Water Quality Control Board.

Other Precautions

Yacoub said that, because of new state regulations, the board can require new landfills in former gravel quarries to have 12-inch thick liners. He added that, in this case, the board found a liner especially important because ground water that eventually becomes drinking water rests 10 to 20 feet below the pit’s bottom.

“The whole project would run in the millions of dollars,” Yacoub said, listing other precautions that must be taken along with the liner, including a drainage system on the pit bottom. Yacoub said Bradley-West is the only remaining active gravel pit landfill in the Valley. Others are in naturally formed canyons.

“It is going to be very expensive for them,” said Yacoub. “No doubt about it. And I presume they have to pass it along to customers.”

J. C. Penney Affected

One Waste Management customer whom the price increase will affect is the J.C. Penney store in Northridge Fashion Center. Although he would not divulge the amount that the store pays for garbage hauling, Penney’s operations manager Joe Akrop said a seven-cubic-yard Dumpster is hauled once a week in off-peak sales periods and three times during the winter holiday shopping season.

“It’s part of the cost of doing business, but it is an important increase,” Akrop said. “We watch where every penny goes.”

He said that Penney’s has been trying to reduce the amount of hauled garbage by selling cardboard for recycling.

“An increase like this would make us challenge ourselves about whether we’re recycling as much as is possible,” Akrop said.