TRASHING CONSUMERS - International Brotherhood of Teamsters

“The country's threelargest garbage haulershave been steadilyraising prices despite theslowing economy. And witha major buyout amongthem looming, pricesare likely to continuetheir climb.– Wall Street Journal, 9/18/2008”Mergers, Monopolies and StealthPricing in the Waste IndustryTRASHING CONSUMERSA report by:Consumer ActionNational Association ofConsumer AdvocatesInternational Brotherhood of TeamstersOffice of Consumer Affairs

“The country's three largestgarbage haulers have beensteadily raising prices despite theslowing economy. And with a majorbuyout among them looming, prices arelikely to continue their climb.– Wall Street Journal, 9/18/2008”

Executive SummaryAfter many rounds of mergers andbuyouts between solid waste companiesin the United States, a few colossalcompanies are now able to exert monopoly-likepower over the collection and disposal of solidwaste. Less competition has led to higher pricesfor a vital service that consumers cannot dowithout. In addition, hidden in many wastecontracts are stealth pricing practices such asevergreen clauses and “environmental” fees thatare difficult for customers to fight when there aremonopolies in place.There are 2,700 landfills in the United States,but the three largest solid waste companies—Waste Management Inc., Allied Waste IndustriesInc. and Republic Services Inc.—control justover 40 percent of the solid waste market and60 percent of the landfill space. (1) The largestsolid waste company in the United States,Waste Management, controls 21 percent of thetotal disposal market. (2)Companies that control landfills are also ableto control the collection market because theyset the tipping fee rates—the amount theycharge cities, counties and other companies todump trash in the landfills they own. When theyuse their power to increase tipping fees, it allowsthem to then underbid for collection contractsuntil other companies can no longer competeand are driven out of the market. Whencompanies control both landfills and collectioncontracts, this is called “vertical integration.”Vertical integration has been a key componentof large waste companies’ business plans overthe past decade. Forexample, in most of themarkets in which Waste Managementoperates it has now achieveda level of market control that allows it toimplement price increases and other controlsover customers’ contracts that would not havebeen previously possible. As a result, customerspay more for waste collection than they wouldin a competitive market, and several companieshave been penalized at the state and federal levelfor imposing anticompetitive conditions intheir contracts.Now the second- and third-largest wastecompanies in the country, Allied Waste andRepublic Services, are planning to merge,even though additional consolidationin the solid waste industry could lead to evenless competition, more vertical integration,and higher prices. (3) One example is Ohio,where this pattern is felt acutely: In 2007 themajority of the state waste collection anddisposal contracts were awarded to only threecompanies, (4) and only four companies controlabout 80 percent of trash disposal statewide. (5)The Wall Street Journal recently found that“the country's three largest garbage haulershave been steadily raising prices despite theslowing economy. And with a major buyoutamong them looming, prices are likely tocontinue their climb.” (6) The increasingmarket power of large waste companies exposescommunities, state entities and businessesto serious risks of being gouged by monopolisticpractices.

Control of Landfill Space –The Key to Market Pricing PowerThe market power of less than ahandful of large, vertically integratedcompanies has made it possible forthem to exert monopoly-like control over pricing.In the 1970s, government policies helpedturn a fragmented, competitive solid wastemarket into a highly consolidated industry.In 1976, Congress passed the ResourceConservation and Recovery Act (RCRA),which implemented new environmental andfinancial standards. This included landfillsiting restrictions, environmental monitoring,care of landfills for 30 years after closure, andfinancial assurance requirements, all of whichrequire significant capital. (7)Hundreds of publicly owned landfills and smallprivately owned landfills closed or were soldbecause the owners could not afford to complywith RCRA. (8) Landfills are now fewer innumber but larger in size, and many are ownedby a handful of publicly traded and vertically integratedcompanies that now dominate the solidwaste industry. In 1989, there were about 7,900open landfills in the United States. (9) By 2004 thatnumber had dropped to about 2,100: (10)“Sweeping changes in environmental andregulatory policies proved a catalyst for adramatic shift in the overall industry from ahighly fragmented and competitive structureto the oligopoly we see today. As stringentrequirements for operating disposal facilities wereenacted, barriers to entry increased substantially,effectively allowing only those with access tosignificant capital resources the ability toconstruct, own, and operate landfill sites.” (11)The industry isnow highly consolidated.In 2004, publiclytraded companies made up less than0.1 percent of the total number of wasteorganizations (including municipalities andpublicly and privately held companies), butcontrolled 63 percent of the $46.5 billion solidwaste market. (12)In the late 1980s, municipalities owned83 percent of U.S. landfills and the remaining17 percent were privately owned. Now, privatecompanies control the majority of landfillspace. (13) Waste Management, for example,owns 277 active landfills (14) out of the approximately515 owned by publicly traded companies,and controls almost 30 percent of dailylandfill tonnage. (15)Landfill control allows the largest companiesto drive smaller collection competitors outof the market through increased tipping feesat landfills, which account for 35 percent ofcollection companies’ operating costs. (16)Then, without competition on the collectionside of the business, the largest companies areable to increase collection and disposal pricesfor their customers:“The greatest source of sustained pricinggains for the major industry players will belandfills, as landfill ownership—andaccordingly, control over the costs of disposalin a geographic area—allows for power overall aspects of the local marketplace.” (17) 1

Monopolistic Practicesin the Waste IndustryPrice-Gouging: Largest WasteCompanies Pursue Higher PricesThe stated business plans of the country’s threelargest solid waste companies are focused onraising prices. These companies have boastedof revenue enhancement through price increasesand fuel and environmental surcharges in recentshareholder calls and investor presentations.(18, 19, 20)A recent Wall Street analyst reportdescribes how “price remains the focus for theprivate [waste] sector,” and that companies“have been leveraging the escalation in fuelcosts earlier in 2008 as partial justification forrequested price hikes, which may create anearnings tailwind assuming that fuel pricescontinue to decelerate.” (21)Practices Found tobe Anti-CompetitiveThere is a long history in this industry of theUnited States Department of Justice and stateattorneys general taking action to remedy wastecompanies’ anti-competitive practices. Theseactions include:• In 2007, the attorney general of Minnesotasuccessfully settled with Waste Managementover its anti-competitive practices, includingcontracts that were almost impossible toterminate. (22)• In 2004, Republic Services paid a $1.5 millioncivil penalty after the United States Departmentof Justice found they had violated a2000 consent decree by using contracts morerestrictive than allowed by the decree. (23)• A 1996 agreement between the AntitrustDivision of the United States Departmentof Justice and Waste Management andBrowning-Ferris Industries(now Allied Waste), thetwo largest solid waste companiesat the time, due to their allegeduse of restrictive contracts to stifle competitionand enhance their market power. (24)Case Study: Waste Management’sAnti-Competitive PracticesWaste Management, now the largest solid wastecompany in the country, formed in 1998 throughthe merger of the “old” Waste Management andUSA Waste Services. The merger was followedin 1999 by the acquisition of Eastern Environmental.The merger and acquisition made WasteManagement, which now earns $13.3 billionannually, (25) more than twice as large as itsnearest competitor, Allied Waste.In late 2004, Waste Management began implementingwhat it calls its “pricing excellence”program in several markets and then throughoutthe country in 2005. The program has severalpieces: increasing prices on existing customers,charging higher prices for new customers,manufacturing new fees and inserting “stealthpricing” features into contracts.Price IncreasesSignificant price increases can be traced asfar back as 1999, when Waste Managementraised tipping fees at landfills anywhere from40 percent to 138 percent. (26) Rates wereincreased across the country—from Virginia toOhio to Pennsylvania to Massachusetts. Oneindependent hauler noted, “They priced us outof every one of their landfills.” (27) 32

““Another big mergeramong the waste giants could spurever higher contract prices, sayindustry observers.”–Wall Street Journal, 9/18/2008With collection customers, Waste Managementbegan the fourth quarter of 2004 with an averageprice increase of 2.8 percent, increasing to 3.2percent in the first and second quarters of2005. (28) Price increases averaged between 3 and 4percent each quarter from 2005 through 2007. (29)Price increases for collection customers contributedto 1.2 percent of internal revenue growthin the fourth quarter of 2004. This increased to2.1 percent of internal revenue growth in the firstquarter of 2005; 3.9 percent of internal revenuegrowth in the fourth quarter of 2005; and 5.1percent of internal revenue growth in the secondquarter of 2006. (30)The consolidation of the solidwaste industry in the hands ofonly a few vertically integrated companieshas made it possible for the largestcompanies to exert monopoly-likecontrol over pricing in markets.”During this time, Waste Management continuedto increase landfill prices for disposal customers.Average landfill tipping fee increases in 2005were between 6 percent and 9 percent per ton. (31)These price increases continue to this day. (32)Waste Management states on their web site:“We will continue to promote the EnvironmentalCharge as our charge to cover costs associatedwith operating in a safe and environmentallyresponsible manner and to achieve an acceptableoperating margin…The amount or percentageof the environmental charge is not tied to anyspecific, direct or indirect, costs to service youraccount, but to Waste Management's overallcosts on a company-wide basis.” (36)In late 2005, Waste Management also beganimplementing what it referred to as “revenueenhancement ideas,” including charges forcontainers, late payment fees, and serviceactivation and setup fees. (37) At a 2006 investorconference, Waste Management’s CEO reported:“We went into our pricing excellence program.And pricing excellence can best be shown by oneof my favorite examples, which is two hotels. Yougo to two hotels that you think are pretty muchidentical. You ask one hotel how much is yourroom? They say $110. You say thank you. Youcall the next hotel you say how much is yourhotel room? They say its $100. You say bookme the room.Never thinking that your total cost of stay atthat $100 hotel room might actually be morethan it was at the $110 hotel room because younever asked how much is it to park? How much isdoes it cost to make a long distance phone call?How much does it cost to have my shirt pressed?How much does it cost to buy a candy bar at theconcession stand downstairs? You never askedthose questions.So your total cost of staying at that $100 hotelmight actually be higher, but you didn't pay anyattention to it because all you paid attention towas the base pricing.”–David Steiner, CEO, Waste Management (38)Environmental, Fuel andOther Pricing SchemesIn the first quarter of 2005, Waste Managementimplemented a 1 percent environmentalsurcharge (on the total bill including the fuelsurcharge) on customers whose contracts allowedit. Through this fee Waste Management generated$2.5 million per month in additional revenueduring its first quarter of implementation. (33)Waste Management increased the environmentalsurcharge to 2 percent in 2006, and again to3 percent in 2007. (34) In January 2008, the environmentalsurcharge increased to 4.2 percent. (35) 54

Stealth Pricing and Other StrategiesWaste Management uses several types of pricingpractices that make it very easy for them to raiseprices at any time for any reason, and that makeit very difficult for customers to ever cancel theircontracts or switch vendors. Examples of thesepractices, along with actual contract language,include:Making Changes tothe Cost of the ContractCompany may increase charges to account for:any increase in disposal, fuel or transportationcosts; any change in the composition of theWaste Materials or increases in the average weightper container of Waste Materials; increased costsdue to uncontrollable circumstances, including,without limitation, changes in local, state or federallaws or regulations, imposition of taxes, feesor surcharges and act of God such as floods, fires,etc. Company may also increase the charges toreflect increases in the Consumer Price Indexfor the municipal or regional area in which theService Address is located. (39)Late FeesCustomer shall pay for the services and/orequipment furnished by Company in accordancewith the charges on the reverse side, as adjustedhereunder, with ten (10) days of the date ofthe Company’s invoice. (40)Customer shall pay a service charge on allpast due amounts accruing from the date ofthe invoice at a rate of eighteen percent (18%)per annum or, if less, the maximum rate allowedby law. (41)Evergreen ClausesThis Agreement shall automatically renew thereafterfor additional terms of twelve (12) monthseach (“Renewal Term”) unless either party givesto the other party written notice of terminationat least ninety (90) days, but not more thanone hundred eighty (180) days, prior to thetermination of the then-existing term. (42)Excusing Waste Management fromPerforming Work Under the ContractExcept for the obligation to make paymentshereunder, neither party shall be in default for itsfailure to perform or delay in performance causedby events beyond its reasonable control, including,but not limited to, strikes, riots, impositionof laws or governmental orders, fires, acts ofGod, and inability to obtain equipment, and theaffected party shall be excused from performanceduring the occurrence of such events. (43)Liquidated Damages for Waste Managementif Customer Wants to Cancel ServiceIn the event Customer terminates this Agreementprior to the expiration of any term for any reasonother than a default by Company, or in the eventCompany terminates this Agreement for Customer’sdefault, Customer shall pay the followingliquidated damages in addition to the Company’slegal fees: 1) if the remaining Initial Term underthis Agreement is six or more months, Customershall pay its most recent monthly charges multipliedby six; 2) if the remaining Initial Termunder this Agreement is less than six months,Customer shall pay its most recent monthlycharges multiplied by the number of monthsremaining in the Term; 3) if the remainingRenewal Term under this Agreement is three ormore months, Customer shall pay its most recentmonthly charges multiplied by three; or 4) if theremaining Renewal Term under this Agreementis less than three months, Customer shall payits most recent monthly charges multiplied bythe number of months remaining in theRenewal Term. (44)If Customer defaults or attempts to cancelContractor’s services or this Agreement,Customer agrees that the Contractor’s actualdamages would be difficult, if not impossible,to calculate. Therefore, Customer agrees that insuch event it shall pay all past due sums and, inaddition, shall pay as liquidated damages andnot as a penalty an amount equal to 30% ofthe product of the last monthly charge at the“Waste Management’s ‘pricingexcellence’ program has several pieces:increasing prices on existing customers,charging higher prices for new customers,and inserting ‘stealth pricing’features into contracts.”time of default orcancellation multiplied bythe number of months thenremaining in the current term of theAgreement plus all Attorney’s fees Contractorneeds to enforce its rights against Customer forcancellation of said contract. (45)Right of First Refusal for Waste ManagementWhen Customer Re-Bids the ContractCustomer grants to Company a right of firstrefusal to match any offer relating to servicessimilar to those provided hereunder whichCustomer receives (or intends to make) upontermination of this Agreement for any reasonand Customer shall give Company promptwritten notice of any such offer and a reasonableopportunity to respond to it. (46)The Big Three Waste Companies All Raise PricesBy Charging Fuel Surcharges and Environmental FeesWaste ManagementAllied WasteRepublic ServicesFuel Surcharges✔✔✔Environmental Fees✔✔✔67

“The largest waste companies continuedto demonstrate pricing discipline. . .[surcharges]in some cases are approaching 20 percentof monthly customer bills.”–Merrill Lynch Industry Overview 8/5/2008Stealth Pricing:An Industry-Wide StrategyWaste Management is not the only companypursuing “pricing excellence,” as the followingchart reproduced from a Republic Services presentationin 2008 shows. Fuel surcharges and “environmental”fees are becoming an increasinglylarger proportion of their price increases. (47)In another example, Allied Waste saw earningsrise 22 percent on higher prices in the secondquarter of 2008, much of it from fuel recoveryfees. (48) Allied Waste charges environmentalfees as well. (49) And as recent Wall Street analystreports have noted:“The largest waste companies continued todemonstrate pricing discipline…as WasteManagement proposed rate hikes of 24-68%in some contracts while successfully implementingfuel surcharges of as much as 16%, whichsuggests minimal customer resistance torecovery fees.Allied Waste raisedprices by as much as 23% andalso introduced fuel recovery provisions…Our field checks suggest that thewaste companies have generally faced minimalresistance in seeking to be compensated for fuelcost pressures through the use of surcharges, whichin some cases are approaching 20% of monthlycustomer bills.” (July 2008) (50)“The largest waste companies continued toachieve price increases on contract renewals overthe past month as Republic Services led the waywith an 82% hike on one contract and 30-40%gains on another agreement. Allied Waste wasthe most active…as the company successfullyachieved price increases of 6-36% in eightdifferent communities over the past month.Waste Management [was] also granted higherrates that represented as much as a 23% increaseover prior levels.” (August 2008) (51) 98

Case Study: Ohio –Ground Zero for Waste MonopoliesOhio’s Choices Limited;Statewide Waste ContractsAwarded to Few CompaniesIn the summer of 2007, the Ohio Departmentof Administrative Services put out to bid a newcontract for solid waste collection and disposalthat covers all state agencies throughout the state,as well as state co-op purchasing members whochoose to use the contract. Members includecity, township and county governments. Stateuniversities and colleges can also use the contracts.By September 2007, contracts for 77 out of 88counties had been awarded.The results highlight the effect of consolidationon the waste industry in Ohio: (55)* 70 out of 77 county contracts were awardedto only three companies: Waste Management,Rumpke, and Allied Waste.* Waste Management was awarded 13counties. In five of those counties there wasno competitive bidder. In the other eightcounties, Allied Waste was the only otherbidder.* Rumpke, a private company based in thesouthwest corner of Ohio, was awarded34 counties. In 15 counties there was nocompetitive bidder. In 18 counties, Rumpkewon the contract over Waste Managementand/or Allied Waste.Fewer Landfills; Most are Privately Owned in Ohio“In Ohio, 70 out 77 countycontracts were awarded toonly three companies:Waste Management, Rumpke,and Allied Waste.”In 1971, approximately 360 landfills and incinerators operated in Ohio. (52) In2007, that number had dropped to 42 landfills, of which 28 are owned and operatedby private entities. (53) Twelve landfills are publicly owned and operated, while two landfillsare publicly owned and privately operated.Landfill Owner Percent of Total Tons Per Day Tons per DayAllied Waste 33% 19,671Waste Management 18% 10,772Rumpke 16% 9,607Republic Services 11% 6,662Other private 9% 5,091Publicly owned 12% 7,243Ohio total 100% 59,046Tipping Fees Usually Higher at Private Landfills in OhioThe average tipping fee varies by landfill owner but tends to be higher at privately ownedLandfill Owner Average Tip Fee Tip Fee RangeAllied Waste $40.49 $28.50-$60.00Waste Management $43.72 $30.00-$57.51Rumpke $33.52 $25.50-$40.25Republic Services $25.38 $22.00-$28.75landfills, based on data collected by the Waste Business Journal: (54) 11Other private $28.96 $20.00-$39.00Publicly owned $31.98 $18.00-$48.00Ohio average $35.20 $18.00-$60.0010

Appendix AWaste Collection Regulation in Several States and CitiesConclusions and RecommendationsConsolidation in the solid waste industryhas led to a decrease in competition andan increase in prices and monopolisticpractices across the United States. Several statesand cities have created various laws and regulationsin order to protect customers from some ofthe most commonly used deceptive practices (seeAppendix A). State attorneys general and theUnited States Department of Justice have takenaction against large waste companies in the past inorder to curb antitrust abuses, but the marketshare and pricing power of these companies hasonly led to higher prices at landfills and higherprices for waste collection contracts.As of August 2008, Allied Waste and RepublicServices, the second- and third-largest solidwaste companies in the United States, areplanning to merge. This additional consolidationin the solid waste industry could lead to evenless competition, more vertical integration andhigher prices.The Wall Street Journal recently reported,“Another big merger among the waste giantscould spur ever higher contract prices, sayindustry observers.” (56)To protect the public, stealth pricing practicessuch as evergreen and right of first refusal clauses,and pricing schemes such as environmentalfees, should be monitored and tightly regulated.Lawmakers should require full disclosure ofsurcharges and fees and what exactly they areused for.Consumers also have the right to understandthe full consequences of mergers in the wasteindustry. As part of the merger process, companiesshould be required to provide full disclosureon how they price their services so that regulatorscan analyze the impact.Municipalities, public institutions, businessesand individual customers can be seriouslyadversely affected by monopolies and stealthpricing practices. The public good will be servedby closely monitoring and reviewing mergersand acquisitions in the waste industry.MaineIn 2002, the Maine attorney general’s officeissued a report on the state of competition inthe state’s solid waste industry. Attorney GeneralSteven Rowe was concerned about what effects a1989 ban on new landfill development wouldhave on competition in the industry. The reportfound that consolidation in the industry had ledto increases in the prices of municipal contracts attwice the rate of inflation and the implementationof contract practices such as evergreen clauses andliquidated damages. (57)The report recommends that the state passlegislation restricting evergreen clauses and rightof first refusal clauses, limiting liquidated damages,and increasing state control over disposalcosts. In September 2003, the Maine Legislaturepassed a bill that requires contractors to notifycustomers that an evergreen clause is about tocome into effect; limits the amount of liquidateddamages to three times the monthly charge; andprohibits right of first refusal clauses. (58)New York CityIn New York City, waste removal at commercialestablishments is done by private haulers. Theprivate haulers must obtain a license from theBusiness Integrity Commission (BIC). Inaddition, the BIC sets certain rules for thewaste haulers: (59)• The BIC sets maximum rates for uncompactedand compacted waste.• Haulers are only allowed to charge based onthe cubic yardage or weight of wasteremoved. It is up to the customer to decidethe method of payment and the methodof payment can be changed at any time.• Customers are entitled to a free wasteaudit from their hauler. The hauler musttell the customer when the survey is goingto begin, and record, for at least seven days,the amount of waste you leave out during a14-day survey period.• The hauler cannot charge for containerrentals or extra pulls.• The hauler cannot charge for gas surcharges.West VirginiaIn West Virginia, concern over competitionin the solid waste industry led to regulationof both collection and disposal. In 1989, theWest Virginia Public Service Commissionwas given authority to regulate rates at landfillsand transfer stations. Contracts betweenmunicipalities and commercial firms for curbsidecollection are also regulated by the PublicService Commission. The contract for collectionservices is negotiated between the collectioncompany and the customer. “However, if acustomer is dissatisfied with the offered rate,the customer may request that the PublicService Commission initiate a proceeding toset the rate.” (60)AlaskaIn Alaska, the Regulatory Commission setsand monitors collections fees. The RegulatoryCommission sets the fees for residential andcommercial curbside collection. “Firms providingcommercial containerized pick-up and roll-on,roll-off service must file their fees with theCommission. The same rate must be charged tocustomers receiving the same service in an areacovered by a filed rate.” (61)ConnecticutIn Connecticut, in the summer of 2006, 72federal racketeering and extortion indictmentswere handed down covering 25 waste haulersoperated by James Galante for price fixing in thetrash-hauling industry in western Connecticut.In response, Gov. Jodi Rell appointed a stateadvisory group to make recommendations onhow to regulate trash hauling. The state advisorygroup recommended establishing a state-levelSolid Waste Hauling Authority, conductingbackground checks on haulers, and requiringsolid-waste haulers be licensed by the stateDepartment of Environmental Protection.The recommendations were supported byGov. Rell. In the fall of 2006, Attorney GeneralRichard Blumenthal submitted legislation to requiresolid waste haulers to obtain licenses fromthe state Department of Environmental Protectionin order to enhance enforcement measures1213

Appendix A continuedEndnotes14against environmental and anti-trust abuses.The legislation did not move out of committeein 2007, but will be reintroduced in 2008.Attorney General Blumenthal’s proposal wouldregulate trash haulers in the following ways: (62)• Trash haulers could not impose a contractbeyond two years and must give customersthe right to terminate contracts duringautomatic renewal periods.• Trash haulers are barred from requiringcustomers to notify their hauler of competingbids or otherwise limit their ability to hireanother competitor.• Trash haulers must provide customers withwritten notice of rate changes with at least30 days notice, as well as provide writtennotice of any subcontract or assignmentof their pickup to another hauler at least60 days ahead of time.• Create an administrative panel that wouldreview criminal background checks on thehaulers and investigate any claims of wrongdoingor anti-competitive business practices.WashingtonThe state of Washington has regulated solidwaste collection since 1961. The WashingtonUtilities and Transportation Commission(WUTC) and local municipalities share responsibilityfor regulation. “Local municipalities maychoose to contract for services on behalf of theircitizens or to regulate collection services. TheUtilities and Transportation Commission hasauthority in rural, unorganized areas or inmunicipalities that decline to exercise theiroption to regulate.” (63)The WUTC’s duties include:• Fixing and altering rates, charges,classifications, rules and regulations;• Regulating the accounts, service andsafety of operations;• Requiring the filing of annual and otherreports and data;• Supervising and regulating such persons orcompanies in all other matters affecting therelationship between them and the publicwhich they serve;• Requiring compliance with local solid wastemanagement plans and related implementationordinances; and• Requiring the use of rate structures andbilling systems consistent with the solid wastemanagement priorities and the minimumlevels of solid waste collection and recyclingservices pursuant to local comprehensivesolid waste management plans.The WUTC may suspend, revoke, alter oramend a license based on the complaintfrom an aggrieved party or based on its owninvestigations. (64)PennsylvaniaThe Waste Transportation Safety Program(Act 90) was passed by the General Assembly andsigned into law on June 29, 2002 by RepublicanGov. Mark Schweiker.Under Act 90, vehicles weighing more than 17,000pounds that wish to haul municipal or residualwaste to the commonwealth’s landfills must receiveauthorization from the Pennsylvania Departmentof Environmental Protection. An application form,fee and compliance history are required before thedepartment will review the application.If approved, the haulers are issued stickers thatare affixed to the trash trucks. Vehicles without avalid Waste Hauler Authorization sticker may notuse Pennsylvania waste disposal and processingfacilities. Act 90 mandates a $2,000 penalty eachtime a landfill accepts a load from an unauthorizedhauler, or a truck without the appropriatesticker or interim written authorization.(1) Reid, Marshall. “Environmental Services,” Bank ofAmerica Equity Research, August 20, 2007.(2) Reid, Marshall. “Environmental Services,” Bank ofAmerica Equity Research, August 20, 2007.(3) Republic Services, Inc. and Allied Waste, Inc., “RepublicServices And Allied Waste To Merge To Form LeadingEnvironmental Services Company With Enterprise ValueOf Over $20 Billion,” June 23, 2008, http://www.republicallied.com/downloads/pressrelease_6-23-08.pdf.(4) Ohio State Procurement. “Department of AdministrativeServices Contract # RS902408,”http://procure.ohio.gov/OrigContract/RS902408_OC.pdf.(5) Ohio Environmental Protection Agency, “LicensedMunicipal Solid Waste Landfill Facilities,”http://www.epa.state.oh.us/dsiwm/document/facility_lists/lic_msw.pdf (accessed October 17, 2008).(6) Brat, Ilan. “Garbage Haulers Hoist Prices: TruceAllows Waste Management, Allied and Republic to PushHigher,” Wall Street Journal, September 18, 2008, Economysection.(7) Ghuman, Jagdeep S. “Waste Works: InitiatingCoverage on the 3 Big Players,” Credit Suisse EquityResearch, June 5, 2007.(8) Young, Leone and Cellura, Alina, “Solid Waste ABCs,”Citigroup Smith Barney Equity Research, June 7, 2005.(9) Young, Leone and Cellura, Alina, “Solid Waste ABCs,”Citigroup Smith Barney Equity Research, June 7, 2005.(10) Young, Leone and Cellura, Alina, “Solid WasteABCs Part 2,” Citigroup Smith Barney Equity Research,June 23, 2005.(11) Ghuman, Jagdeep S. “Waste Works: InitiatingCoverage on the 3 Big Players,” Credit Suisse EquityResearch, June 5, 2007.(12) Young, Leone and Cellura, Alina, “Solid WasteABCs,” Citigroup Smith Barney Equity Research,June 7, 2005.(13) Reid, Marshall. “Environmental Services,”Bank of America Equity Research, August 20, 2007.(14) Securities And Exchange Commission,“Waste Management, Inc. Form 10-K,” 2007,http://www.sec.gov/edgar/searchedgar/companysearch.html.(15) Young, Leone and Cellura, Alina, “Solid WasteABCs Part 2,” Citigroup Smith Barney Equity Research,June 23, 2005.ence_08_new.pdf.(20) “Allied Waste Posts Stronger Than Expected SecondQuarter,” Waste Business Journal, August 2, 2007.(21) Ellis, Jonathan. “Pollution Control MonthlyPick-Up,” Merrill Lynch Industry Overview,September 17, 2008.(22) The Office of Attorney General Lori Swanson,“Attorney General Lori Swanson Settles MonopolizationCharges Against Waste Management of Minnesota, Inc.,”December 24, 2007, http://www.ag.state.mn.us/Consumer/PressRelease/071224WastManagement.asp.(23) United States Department of Justice, “JusticeDepartment Settles Civil Contempt Claim AgainstRepublic Services Inc.,” November 30, 2004,http://www.usdoj.gov/atr/public/press_releases/2004/206569.htm.(24) United States Department of Justice, “JusticeDepartment Puts An End To The Two Largest Solid WasteHauling And Disposal Companies' Monopolistic Practices,”February 15, 1996, http://www.usdoj.gov/atr/public/press_releases/1996/0527.htm.(25) Securities And Exchange Commission,“Waste Management, Inc. Form 10-K,” 2007,http://www.sec.gov/edgar/searchedgar/companysearch.html.(26) Brown, Bob. “WMI Raises Tip Fees,” WasteNews,March 1, 1999.(27) Brown, Bob. “WMI Raises Tip Fees,” WasteNews,March 1, 1999.(28) Waste Management, Inc., Q4 2004 Earnings ConferenceCall, February 10, 2005; Waste Management, Inc.,Q1 2005 Earnings Conference Call, April 28, 2005; andWaste Management, Inc., Q2 2005 Earnings ConferenceCall, July 28, 2005.(29) Waste Management, Inc. Investor Meetingspresentation, November 2007.(30) Waste Management, Inc., Q1 2005 Earnings ConferenceCall, April 28, 2005; Waste Management, Inc., Q32005 Earnings Conference Call, October 27, 2005; andWaste Management, Inc., Q2 2006 Earnings ConferenceCall, July 28, 2006.(31) Waste Management, Inc., Q2 2005 EarningsConference Call, July 28, 2005.(32) Waste Management, Inc., Q2 2008 EarningsConference Call, July 29, 2008.Haulers must comply with regulations covering(16) Ghuman, Jagdeep S. “Waste Works: Initiating (33) Waste Management, Inc., Q1 2005 EarningsCoverage on the 3 Big Players,” Credit Suisse Equity Conference Call, April 28, 2005.environmental and safety issues, have the appropriatedriver’s license, complete a daily vehicleResearch, June 5, 2007.(34) Waste Management, Inc., “WM Historical Fuel/(17) Ghuman, Jagdeep S. “Waste Works: Initiating Environmental Charge Percentages,”inspection report, and maintain records coveringCoverage on the 3 Big Players,” Credit Suisse Equity http://wm.com/WM/procurement/Fuelinfo/Historical.pdfwaste origin, transporter, transfer facility, finalResearch, June 5, 2007.(accessed September 23, 2008).waste destination, weight or volume of the types(18) Waste Management, Inc., Q2 2008 Earnings (35) Waste Management, Inc., “WM Historical Fuel/of waste, any handling problems and emergencyConference Call, July 29, 2008.Environmental Charge Percentages,”disposal activities. (65) (19) “Republic Services, Inc.,” at JP Morgan Basics http://wm.com/WM/procurement/Fuelinfo/Historical.pdf& Industrial Conference, June 2008, http://media.corpo-(accessed September 23, 2008).rate-ir.net/media_files/irol/82/82381/JPMorganConfer-15

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