Trash and Cash

Small, independent garbage haulers have always had to battle the big companies, but now they have a new foe: the City of Miami

"I loved it," recalls McWilliams, now 81 years old and slowed by the onset of Alzheimer's. "You were your own boss."

It also cost the haulers little to dispose of trash at the time. "Disposal was of minimal concern," David McWilliams recalls. "There were a lot of landfills and a lot of space." A twenty-cubic-yard box of construction debris, which in 1969 cost $1.25 to dump, now costs $130 to dispose of.

Those days are over. Environmental and space concerns now make it extremely expensive to operate a landfill. In the past ten years, the number of landfills nationwide has dropped from 8000 to 3000 as they've filled to capacity or been shut down, unable to meet stringent environmental standards. Many municipalities that were once in the landfill business are selling out to private companies that charge more for dumping, or tipping, as it's called in the industry. (Small haulers have long complained that when companies own landfills as well as haul garbage, they have an unfair advantage. And in recent months, the U.S. Justice Department's antitrust division has ordered Waste Management and Browning-Ferris to divest holdings in places where pending mergers would have allowed them to corner the market.)

Forty-two-year-old David McWilliams went to work part time in the trade at the age of fourteen. He and his brother were assigned the task of tamping the trash as it was loaded. The future seemed limited only by the degree of effort one put into it. "[Dad] left this business to me and my brother as an inheritance," he explains. "'You'll have to work for it,' he said, 'but you should do well.'"

And work they do. The McWilliamses often start their day at 5:45 in a storage yard in Liberty City, where they park their six trucks and many of their garbage containers. In the premorning darkness, using flashlights and the illumination that spills from the bay door of the garage where they refurbish old containers, they go over their aging fleet, checking the lights, oil, and tires. A few old hounds follow them forlornly, hoping for a pat or a handout. One of the most time-consuming and expensive aspects of their operation is keeping the equipment functioning. They save money by recycling old metal containers, which, when purchased new, can cost thousands of dollars. By 6:30 they've sent the trucks out. The brothers stay in contact with the drivers by cell phone throughout the day, directing them to different jobs. They rarely drive the trucks themselves anymore.

The McWilliamses compete against the majors by winning their customers' loyalty. Many of the same businesses have stayed with MacPac for decades. They've built a client base by offering rapid response and a flexible service that the larger companies cannot match. But the success the elder McWilliams dreamed his sons would experience has been more difficult to achieve than he could have ever imagined, and their days may be numbered. "My wife is begging me to get out," David says.

MacPac might be able to compete indefinitely, though, working with small accounts amid the giant haulers. (David McWilliams claims the company grosses between $85,000 and $120,000 per month.) If the brothers get tired, maybe they can sell to the majors for a gilded retirement -- the proverbial condo by the sea. (Some industry insiders estimate current buyouts can be as high as $20 million for every $1 million a company earns in revenue.) But instead of worrying about survival in an increasingly competitive environment, small haulers like the McWilliamses are gearing up to face a potentially deadlier foe: the City of Miami.

In the next few months, city officials expect to move forward with a plan that could eliminate even the ability to compete for commercial trash hauling. This past September Miami Commissioner Joe Sanchez surprised the haulers when he introduced an unannounced item into the commission's agenda: a call for a proposal to overhaul the commercial garbage business by initiating a "franchise" system "to provide more efficient and better service while creating economic benefits for the city and its citizens." As justification for the change, Sanchez claimed that "haulers do not have an incentive to clean up the city" and sometimes they don't pay their licensing fees.

The plan would carve Miami into districts, or franchises. Though the number of franchises has yet to be determined, each would be awarded to a single company, which would have exclusive rights to collect commercial trash there. In places like downtown and the Brickell corridor, the franchise could be worth millions.

Why transform the commercial garbage system? City officials say exclusive franchises would generate more revenue for the cash-strapped city, either by increasing licensing fees charged to the trash haulers or sparking a bidding war for the territories. (Miami already helps itself to a twenty percent cut of all revenue the haulers earn within city limits, but the total only amounted to $3.6 million in fiscal year 1998.) The new system would also be more efficient, city officials say, and it may include guarantees from the companies to improve city cleanliness, perhaps by helping to clean up after special events.

But the small haulers believe that only the majors will be able to compete for exclusive franchises because only they have the capital, infrastructure, and insurance to win the larger contracts. By using an exclusive franchise system, the city, they say, could essentially legislate the gypsies out of existence.

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