glp, PT

glp, PT

Tupelo responds to waste appeal, denies wrongdoing

By Philip Moulden

Daily Journal

The city of Tupelo has formally denied claims by Browning-Ferris Industries that a new city ordinance governing commercial waste collection illegally stifles competition.

In a Circuit Court response to BFI’s appeal of City Council’s approval of the ordinance in December, the city contends the company is not entitled to “any relief whatsoever” on its claims and asked for dismissal of the appeal.

A hearing date has not been set.

BFI protested a $98,500 annual franchise fee required of commercial haulers to do business in Tupelo.

That was roughly the amount Waste Management Inc., the city’s only current commercial waste franchisee, has been paying to Tupelo since 1983 under the company’s residential waste disposal contract. The contract’s commercial clause set the high franchise fee, but labeled the franchise “non-exclusive.”

BFI contended the high fee effectively priced it and other haulers out of the commercial market, in effect creating a monopoly for Waste Management.

“(The) amounts specified are arbitrary and capricious, utterly unreasonable and extravagant,” BFI’s appeal claimed.

BFI also charged that the city’s imposition of a $10,000 franchise fee to haul industrial waste impairs pre-existing contracts between BFI and its industrial customers. Prior to passage of the new ordinance, the city had not officially established a franchise fee for commercial or industrial waste haulers.

Council’s action established an after-the-fact law making it a crime for BFI to pick up its industrial accounts under pre-existing contracts, the company charged.

Some council members had pushed for a $10,000 fee plus a percentage of a hauler’s annual revenues for both commercial and industrial franchises. Council voted to invoke that provision, but only after Waste Management’s current contract runs out in August 1999.

Backers of the lower startup fee also contended it would increase volume at the Three Rivers Regional Solid Waste Management Authority’s landfill in Pontotoc County, thereby reducing dumping rates there. Tupelo is a member of the authority, but Waste Management dumps most of the waste it collects at its own landfill in Chickasaw County.

BFI also claimed the ordinance violated state law because the franchise fee was used to subsidize the cost of the city’s residential waste contract, and also violated the equal protection clauses of the state and U.S. constitutions.

BFI also argued that the city contended the act was necessary for public health, safety and welfare, although no studies, evidence, or testimony supported that finding, the appeal said.

Click video to hear audio