Solid Waste Collection and Disposal; Granting Franchise to Private Firms

Subject:

Requested By: Luther J. Britt, Jr. City Attorney Lumberton, North Carolina

Questions: (1)

When a municipality is operating a public enterprise, as defined in G.S. 160A-311, and provides solid waste collection and disposal services to its citizens, must the city grant a permit or franchise to a private, independent business for the business to furnish solid waste services to business establishments in the municipality?

(2)

Does the City have authority to grant a solid waste franchise to a private company?

Conclusions: (1)

No.

(2)

Yes.

The facts presented reveal that the City of Lumberton operates a solid waste collection and disposal service, a public enterprise, within the corporate limits. A franchise permits a dealer to lease or sell waste containers to business establishments, but the city picks up the waste materials from the containers, makes disposal, and charges each business for this service.

A private corporation has requested the city to grant it a permit to pick up solid waste from business establishments over and above the normal services rendered by the city.

G.S. 160A-192 authorizes a city by ordinance to regulate the disposal of solid waste and authorizes the city to impose charges for collection and disposal.

Garbage collection and disposal, including the operation of a landfill for the purpose of disposing of garbage and solid waste collected within the city, has generally been held by the North Carolina Supreme Court to be a governmental function. Koontz v. City of Winston Salem, 280

N.C. 513; McCombs v. City of Asheboro, 6 N.C. App. 234.

The General Assembly enacted Article 16, Chapter 160A of the General Statutes, which authorizes cities to operate certain public enterprises including solid waste collection and disposal systems and facilities. The city is authorized to finance a public enterprise, G.S. 160A-313, and to establish rates, fees, charges, etc. for these services.

G.S. 160A-319 states that except as otherwise provided by law, when a city operates a public enterprise, a city may by ordinance make it unlawful to operate the same type enterprise. This section authorizes a city to grant upon reasonable terms franchises for the operation within the city of any enterprise listed in G.S. 160A-311.

We conclude as to question No. 1 that since the city is engaged in the operation of a public enterprise, a governmental function, as authorized by the General Assembly, it is not required to grant a permit to the private corporation upon request.

As to question No. 2, we conclude that the city may, if it desires to do so, grant a franchise for the operation of the public enterprise as authorized in G.S. 160A-319, or the city may lease or sell the enterprise as authorized in G.S. 160A-321.

Rufus L. Edmisten Attorney General

James F. Bullock Senior Deputy Attorney General