1997 was an active year for solid waste and recycling privatization.

In July 1997 the San Diego County Board of Supervisors sold its landfills and other solid-waste assets to Allied Waste Industries, the fourth-largest U.S. solid-waste-management firm, completing California's largest-ever privatization effort and one of the largest U.S. municipal-asset privatizations. The $184 million sale will allow the county to stabilize its financial position, pay off a $100 million debt from its failed San Marcos recycling plant, establish an environmental trust fund to continue managing the county's solid-waste needs, create management reserves, and fund infrastructure investments. Benefits to county residents include the transfer of environmental liability from the county to the new owner and a more competitive and cost-effective trash disposal system. The San Diego privatization may spur other indebted, cash-strapped counties to consider the same for themselves.

In New York City, a waste-hauling privatization will be one of the largest ever. In June the city solicited requests for proposals from companies interested in hauling waste from its eight marine transfer stations. Bids were due in mid-October 1997, a decision is expected by August 1998.

Collection

Events in 1997 also demonstrated that competition need not harm public employees. In 1995 the city of Charlotte, North Carolina, contracted out one-quarter of its solid-waste collection, saving $70,000 per year. When another quarter was put out for bids in January 1997, the city's Solid Waste Service Department bid for the contract and undercut its next-lowest competitor by $1.33 million.

Recycling

Privatization may also help develop recycling markets: Kay Martin, director of solid-waste management for Ventura County, California, proposes in her book, Strategic Recycling: Necessary Revolutions in Local Government Policy (1996), that waste managers embrace competition, noting that "centralized and hierarchical" systems built on a foundation of monopoly-based services and facilities "significantly narrow the scope of participants and opportunities for development of both materials recovery and materials utilization markets." Martin suggests that local governments need to become strategic managers and buyers of services, not direct service providers.

Figure 1. Solid Waste Services Local Governments are Considering Privatizing

Source: R.W. Beck, 1996.

Figure 2. Public and Private Shares of Solid Waste Services

Source: Deustche Morgan Grenfell, 1997.

Figure 3. Growth of Private-Sector Share of Solid Waste Market

Source: Deustche Morgan Grenfell, 1997.