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Landfills’ Condition Is Key to Sale : Bankruptcy: County resumes assessment of garbage dumps’ safety, which will help determine their worth.

TIMES STAFF WRITER

Discussions about a possible sale of Orange County’s four operating landfills--a key element of its bankruptcy recovery plan--center on the liabilities surrounding the county’s 21 closed garbage dumps.

“That’s the most complicated dimension of any sale involving the landfills,” said Board of Supervisors Chairman Gaddi H. Vasquez. “That’s an issue that needs to be resolved before we can move ahead.”

A comprehensive review of the county’s landfills was launched last year but stalled earlier this year because of the bankruptcy. It is now back on track as the county tries to assess the landfills’ environmental safety, said Cymantha Atkinson, spokeswoman for the county’s Environmental Management Agency/Integrated Waste Management.

The outcome of this review could cut both ways, driving up the cost of the landfills if any liability is deemed low, or shaving dollars off the county’s asking price if leaks and other problems are found, said Blake Anderson, the assistant general manager of the Orange County Sanitation District.

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The district has made a tentative offer of $200 million and will be meeting with county officials Monday to go over details, officials said.

The sanitation district would have to issue bonds, backed by projected landfill income, to raise money for the purchase, which makes the security of the landfills all the more important, he said.

“We don’t want to be left holding the bag,” said Anderson, who said a landfill sale is not expected to raise dumping fees.

As the county races to meet a deadline to craft a viable bankruptcy plan, nearly every proposal involves selling off prime assets such as the landfills or John Wayne Airport.

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The Orange County branch of the California League of Cities is refining its bankruptcy recovery proposals, which call for selling the county’s landfills for at least $250 million--well above the sanitation district’s current offer.

The cities’ plan also seeks a $350-million loan from the Orange County Transportation Authority, diverting more than $100 million in property tax from county agencies such as the flood control district, and refinancing county debt for a one-time windfall of $95 million.

“The sale of the landfills is an important element,” said Janet M. Huston, executive director of the league. The cities’ plan is not expected to bail the county completely out of bankruptcy, but it is intended to complement other county plans, she said.

Some of the county’s landfills were retired as far back as the 1940s and as recently as a few years ago and under varying environmental standards. The air, water and soil surrounding landfills are tested at regular intervals, Atkinson said.

But landfills closed before public concerns ushered in stricter standards can cause problems. The retired landfills, however, do not contain toxic materials and the majority are in good shape, Atkinson said.

Maintaining closed landfills can be costly, and landfill operations are required to set aside reserve funds over the life of the garbage dump to do so. More than $50 million in reserve funds were set aside to care for retiring Bowerman Landfill in Irvine, said Supervisor William G. Steiner.

But Steiner said he is optimistic that the sanitation district and the county can reach an agreement.

“That price is in the range at which a deal can be done,” he said.

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