Arizona trash empire draws ire of Waste Management

ST. JOHNS — Lawyers for the state’s largest waste company are asking an Apache County judge to grant them access to public records that show the size and scope of the region’s highly successful, publicly funded trash-hauling consortium.

Waste Management’s lawyer, Brian Campbell, says the company wants more details about Blue Hills Environmental Association after receiving reports that Blue Hills workers were hauling out-of-county trash — including medical waste and contaminated soils — into local landfills.

Campbell says the company also wants more information on the history of Blue Hills’ employees, which include relatives of government officials who created the consortium.

He says Waste Management, a publicly traded company with trash-hauling contracts all over Arizona, wants to make sure everything at Blue Hills is on the up-and-up.

Apache County Manager Delwin Wengert, however, says the lawsuit seeking public records is nothing more than a fishing expedition by a powerful, deep-pocketed competitor.

"It’s all about money of course," Wengert says. "It’s all about territory. That’s the bottom line."

RURAL GROWTH CREATES NEW TRASH SERVICE

Apache County is one of Arizona’s most storied regions. Originally formed in 1879, it was one of the state’s four original counties. The county hosts Arizona’s first military outpost, Fort Defiance, and several other attractions including the Hubbell Trading Post, Window Rock, Sunrise Ski Resort and the White Mountains.

Today, Apache County covers an area 20 percent larger than Maricopa County. About two-thirds of the area is comprised of Native American lands.

Over the years, the Arizona Legislature designated all of Apache County as an "enterprise zone" to spur business across its rural expanse. State laws encouraged and protected startups here — private or otherwise. That’s where Blue Hills Environmental Association got its start, Campbell says.

In 1990, Apache County’s population had grown to about 62,000 residents. As state and federal environmental regulations got tougher, local officials banded together to form an entity that would take out the trash because private enterprise wasn’t filling the void.

When it came to commercial trash services, the rural job was a tough sell. It was difficult for large-scale companies to justify driving dozens of miles out of their way to empty that one lonesome trash can out on the prairie. Rural Arizona’s needs took the back seat to red-hot growth areas around Phoenix.

So local governments in northeastern Arizona formed Blue Hills Environmental Association in March 1991. Over the next 15 years, the coffers of this tiny nonprofit filled up as Apache County added almost 13,000 more residents and second homes popped up in the White Mountains.

TRASH GARNERS CASH

Arizona’s latest housing cycle was a boon for Blue Hills. In June 2004, the nonprofit made $1.3 million, of which $99,605 were government funds and the rest came from "tipping" fees and other trash-hauling charges. It finished that summer with a fund balance of $583,069, according to tax documents filed with the Internal Revenue Service.

By 2006, IRS records show its revenues had jumped to almost $2.1 million — even though government subsidies of Blue Hills had remained relatively unchanged.

Today, Blue Hills is quite healthy, says Wengert, who has been a member of its board of directors. The organization handles the majority of waste in Apache County and also accepts waste from some parts of Navajo County, which is handled largely by Waste Management.

BLUE HILLS A ‘UNIQUE CREATURE’

Growth in Phoenix may have helped Blue Hills too, Campbell says. He claims Waste Management has evidence that it was hauling trash — such as untreated medical waste from Phoenix and oil-contaminated soils from construction along Interstate 40 — to local landfills in Apache County.

"That’s when we got concerned," says Campbell, who represents Waste Management. "It’s one thing to have a circumstance where you are trying to provide waste services through the advantage of being a nonprofit and not paying taxes. But it’s another thing when you have such tremendous advantages that you can afford to haul waste hundreds of miles."

Its nonprofit status and government involvement make it kind of an "unusual creature," Campbell says. So he went fishing.

Starting in October 2007, Campbell sent the same public records request to the major stakeholders of Blue Hills: Eagar, Springerville, St. Johns and Apache County. It requested records on everything from financial statements and nonprofit status to director information and environmental compliance going back as far as 1991.

As their responses trickled in over the next nine months, Campbell noticed a strange thing: None of the officials he approached had the same records. Eagar officials sent him 64 pages, Springerville officials sent him four pages, Apache County officials sent him 90 pages and St. Johns sent Campbell eight pages. [When Campbell followed up, Springerville sent him 63 more pages; the others insisted that was everything they had on Blue Hills.]

Now Campbell is asking an Apache County judge to intervene.

"We’re familiar with these rural challenges," Campbell says, referring to Waste Management’s presence in Navajo and Mohave counties. "But by the same token, we think there needs to be a level playing field."

Blue Hills is now 100 percent self-sufficient on trash-hauling charges, Wengert says, and it has plenty of room to grow in a sprawling, rural county. A state audit from 2003 showed that the landfill was about 5 percent full, and that officials were saving up to cover the costs of closing it in 2040.

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