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4301 Connecticut Avenue, N.W., Suite 300Washington, D.C.

20008202244 4700Fax: 202364

September 19, 2011 Mayor Mike Rawlings Dallas City Hall 1500 Marilla Street Room 5EN Dallas, TX 75201

Dear Mayor Rawlings: It is the National Solid Wastes Management Associations (NSWMA) understanding that City staff will provide an additional flow control briefing to the Council in support of their proposed flow control ordinance. NSWMAs members continue to oppose this proposal and firmly believe that alternative proposals would better serve the Citys and its commercial sectors interest.

NSWMA believes it is in the best interests of the citizens and commercial businesses in Dallas, City leaders, and our members to work together and allow free enterprise to continue rather than have city government mandate where businesses must dispose of their waste and how much those businesses should pay. While NSWMA and our local members remain willing to work with the City on its revenue and resource recovery plans, we continue to oppose the Citys attempt to implement a flow control scheme that requires disposal of all commercial and industrial wet waste, dry waste, and other waste material at the McCommas Bluff Landfill. A vote by the City Council to adopt a flow control ordinance will not be simple, straightforward, or free of legal risk and liability as you have been led to believe. Instead, it invites legal challenges and consequences that will be needlessly detrimental for the City and will prohibit the City from realizing the increase in revenue that it seeks. The purpose of this letter is to make sure that you are fully informed before making a decision that will have severe and unwanted consequences.

1. The Legal Obstacles and Consequences of Adopting Flow Control First, the City Council does not have the authority to implement flow control. By adopting a flow control ordinance, the City would be illegally attempting to modify its Charter. A home rule city such as Dallas cannot modify or repeal any portion of its Charter without holding a public election. Chapter XIV of the Citys Charter is quite clear that the City Council shall have the power to confer upon a general public service provider a franchise to use the public streets to furnish to the public a general public service of benefit, including solid waste disposal. As noted below, the City has conferred such franchises with the resulting legal ramifications. If the City Council adopts a flow control ordinance, it would purport to strip the Council of its power to enter into a general public service franchise for the provision of solid waste disposal services. Texas law is clear that the only way to modify the Citys Charter is through a general election of the qualified voters. Indeed, the citizens of Dallas should be required to vote on an issue as significant as whether to destroy free enterprise and replace it with a government run waste disposal monopoly. Second, it is our understanding that the City currently has approximately 180 franchise agreements that grant companies the right to use the Citys streets to collect, transport, and dispose of waste, and in return these companies pay the City a franchise fee. It is important to know that the Citys ability to amend these franchise agreements has important limitations. If the City intends to claim that it is adopting flow control as part of its reasonable police powers (which NSWMA neither acknowledges or accepts), the City is required to give each franchisee notice and allow the franchisee an opportunity to be heard. To the extent that this language appears in each of our members franchise agreements, we can confidently state that each member will demand a public hearing on the Citys attempt to modify their franchise agreement. Third, we know that the City staff has relied upon the U.S. Supreme Courts decision in the OneidaHerkimer case to advise you that flow control is legal. United Haulers Assn v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 127 S. Ct. 1786 (2007). However, there is an important difference between the legality of flow control from a Commerce Clause perspective and the legality of flow control in all circumstances. While the Commerce Clause was apparently the only basis in which the flow control scheme was challenged in Oneida-Herkimer, that will not be the case here. As you know, NSWMAs members each have existing franchise agreements that confer upon our members the right to collect and dispose of waste. No such agreements existed in the OneidaHerkimer case. The existing franchise agreements, the United States and Texas Constitutions, and Texas statutes give rise to additional rights and claims that the litigants in Oneida-Herkimer simply did not have. Fourth, there is no dispute that the Citys current solid waste collection, transportation, and disposal system has worked well and has protected the health, safety, and welfare of the citizens of Dallas for many years. To move from a free enterprise system where solid waste providers have franchise agreements with the City and exclusive contracts with commercial customers, to a 2

government run monopoly that would destroy existing property rights, investment, and redirect truck emissions, noise, traffic, and waste to converge into a predominately minority and disadvantaged area, is not a reasonable exercise of the Citys police powers. Any flow control ordinance will be challenged on this basis as well. Fifth, the draft of the Citys flow control ordinance that was circulated by City staff at the June 2011 meeting is unconstitutional and invalid as written. It not only fails to comply with the Commerce Clause requirements, but it is also insufficiently clear to give one a reasonable opportunity to know exactly what material is encompassed within the flow control scheme and what material is not. There is also a serious issue about the degree to which the Citys flow control ordinance, when read in conjunction with other ordinances, is inconsistent with and contrary to state statutes.

While we have not yet completed our review of additional arguments, we believe the foregoing positions are sufficient to defeat the proposed flow control ordinance. 2. Conclusion All of these issues give rise to valid claims that our members will have no choice but to pursue should the City adopt flow control. Still, our members remain willing to partner with the City, and share with the City our expertise as industry leaders. However, please understand that we also have an obligation to our customers, our employees, and our stakeholders to protect our existing property rights and the contracts and assets in which we have invested. If the City chooses to pursue the adoption of flow control, we will have no choice but to take whatever lawful actions are available to protect our customer relationships, our contracts, our property, and our investments.


Bruce J. Parker President & CEO National Solid ............................................................. Wastes Management Association

cc: Dallas City Council City Manager Mary Suhm