Jefferson Parish Council evaluates assessments of the deal that are tens of millions of dollars apart
Two firms that reached opposite conclusions about the financial merits of Jefferson Parish's $160 million deal with the River Birch landfill refused to give an inch Wednesday during a public discussion seeking to reconcile their findings.
Two consultants who conducted studies on Jefferson Parish's $160 million contract with River Birch landfill still could not agree after a public hearing Wednesday whether shuttering the parish landfill would save the parish money.The accounting and consulting firms remained tens of millions of dollars apart in their assessments of the deal, which is under federal investigation and has yet to take effect 20-months after it was signed.
Baton Rouge economic consultant Loren Scott, whose study for River Birch concluded the deal would save the parish at least $42 million over 25 years, disputed several assumptions underlying a parish-commissioned study that found the parish would save at least $9 million by continuing to use its own dump.
Scott said the parish study by the Baton Rouge accounting firm Postlethwaite & Netterville underestimated the savings from the River Birch contract by more than $30 million.
For instance, Scott said the annual cost for professional service contracts to keep the parish dump open are estimated at $360,000 in the parish study, even though the actual costs for such contracts have averaged $860,000 over the past eight years. He said the difference between the two figures is more than enough to eliminate the projected savings linked to keeping the parish dump open.
Scott also said an $11.2 million estimate for maintaining the parish dump after it was closed was too high and vowed that River Birch would sign a contract to handle the job for $4 million less.
Joey Richard, a managing partner for Postlethwaite & Netterville in Metairie, said he stands behind his firm's numbers and countered that River Birch's analysis fails to account for more than $30 million in revenue generated by the parish dump, primarily by taking trash from larger parish businesses and out-of-parish sources.
Scott emphasized that the parish's stated intent in inking the River Birch contract was to save capacity in the parish dump for future generations.
"Why would you allow this valuable asset to be sold to people who don't even live in the parish?" he said.
Noting that the contract would force the parish to close its dump for a quarter century, Richard said there is no guarantee the parish could get a permit to reopen the dump.
"There is no landfill that's been permitted to go into mothballing and then reopen," Richard said, adding that the parish dump has enough capacity to operate for 25 years under current permits and expansion space for another 24 years if permits were obtained.
"As a Jefferson Parish taxpayer who paid money to build the landfill, I'd be interested in getting the value of what I paid for now rather than later," Richard said.
Parish Council members did not comment during the hourlong hearing after council's regular meeting.
"We'll look at both sides of the argument and do what's in the best interests of taxpayers," Council Chairman Tom Capella said afterwards.
Parish President John Young has directed parish attorneys to review options for canceling the River Birch contract, which can't take effect until Waste Management's contract to operate the parish dump ends when current cells are filled, likely in late 2012 or early 2013.
The Parish Council unanimously approved the River Birch deal in June 2009 after former Parish President Aaron Broussard's administration estimated the parish would save about $20 million.
A federal grand jury subpoenaed documents relating to the River Birch deal more than a year ago after it was revealed the landfill had a health insurance contract with the wife of Broussard's top aide Tim Whitmer, who played a key role in the River Birch contract.
Whitmer and Broussard resigned in January 2010 amid a broad federal criminal investigation of Broussard's administration and Whitmer's private insurance agency, which did business with at least six parish contractors. Former Parish Attorney Tom Wilkinson, who negotiated the River Birch contract, resigned last March.
Kenner resident Al Morella said the questions swirling around the River Birch deal are enough to warrant its cancellation, regardless of which study is correct.
"We don't have landfill expertise, but we have the ability to see through greed and corruption," Morella said during the public comment segment of Wednesday's hearing.
Meanwhile, River Birch raised its own questions about the integrity of the parish-commissioned study.
Scott noted that Postlethwaite & Netterville presented a preliminary report in December to parish administrators, including Environmental Affairs Director Marnie Winter, who has said changes were made based on feedback from the administrators.
"There were factors that we felt they had either entered wrong numbers, wrong calculations or excluded altogether, so they're going back and finessing," Winter said in a sworn deposition as part of the parish's suit to terminate Waste Management's contract.
Seizing on the word "finessing," Scott suggested the preliminary report was favorable to the River Birch contract but was later altered to reflect poorly on the deal.
"What we would like to know is what did the first draft show?" he said.
Richard did not directly respond to the question, but he denied that the numbers were massaged.
"Our purpose in this was not in any way to adjust the numbers but to seek validation of some assumptions we made," Richard said.
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Paul Rioux can be reached at prioux@timespicayune.com or 504.826.3785.