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$45M
city contract awarded to interim solid waste hauler
Pacific
Coast Waste and Recycling granted five-year franchise agreement
By
Allison Jean Eaton
Bulletin
Editor
COMPTON—For
the first time since 2004, the city has an integrated waste management
contract in place.
The City Council last Tuesday, Jan. 26, approved 4-0 a resolution
calling for the city to grant a five-year, no-bid franchise agreement totaling
$45 million to its current interim solid waste hauler, Pacific Coast Waste
and Recycling LLC. Councilwoman Yvonne Arceneaux was absent.
Pacific Coast will be paid $9 million annually. Upon the contract’s
expiration, the City Council has the ability to extend the contract for
an additional two years. According to the staff report, the agreement will
contain costs and improve services.
The contract is back-dated to Jan. 1 because the waste hauler’s previous
contract expired on Dec. 31 of last year, officials said.
It also establishes rate ceilings for all customers and authorizes
annual consumer price index increases, meaning trash rates will likely
increase on a yearly basis throughout the duration of the agreement.
No taxpayer dollars will be used to pay for the contract because
the full cost is recouped through the fees customers pay, officials said.
The contract represents the first time since 2004 that the city is
contracting with what the California Integrated Waste Management Board
would consider a permanent trash hauler. The franchise was last held by
Michael Aloyan’s Hub City Solid Waste Services Inc.
That 15-year, no-bid agreement valued at $100 million was terminated
by the city in 2004 after cityofficials discovered that the company had
made hundreds of thousands of dollars in unreported political campaign
contributions to three of the city’s former elected officials who
voted to award the contract to Hub City. The move was also based on Aloyan’s
conviction for passing a $1.5 million bribe to an elected official in Carson.
The city hired Waste Management to take Hub City’s place on an interim
basis. When Waste Management in 2007 asked for $1 million more per year
for its services, the city refused, causing negotiations between Compton
and the company to break down, with Waste Management issuing what was effectively
a two-week notice that it would cease picking up the city’s trash.
Faced with the awesome task of identifying another waste hauler to
replace Waste Management in a short amount of time, the city considered
an interim agreement with Pacific Coast, which at that time was a start-up
company that had yet to ever provide solid waste hauling services.
However, it’s three principal owners, CEO Mel Howard, CFO Richard
Macias and COO Steve Tucker, are all former employees of Waste Management
who left the company to start their own.
Though rushed, the contract was approved, and the city has continued
to contract with Pacific Waste on an annual basis despite what almost two
years ago appeared to be the city’s dissatisfaction with its services.
Mayor Eric J. Perrodin said in July 2008 that Pacific Coast had misled
the city about its financial status (the Council approved its initial contract
without first reviewing the company’s financials) and that it was
imperative that the city paid the waste hauler as soon as possible each
month to guard against it lacking the funds necessary to operate.
Perrodin said during the same meeting that a request for proposals
for a permanent hauler was being prepared, with rates likely to increase.
That RFP never materialized, and roughly six months later, Howard,
Macias and Tucker each made the first of several campaign donations to
the mayor’s most recent re-election campaign.
Howard and Tucker each gave $6,000 in four separate donations made
on corresponding dates, while Macias gave $3,000 in two separate donations
made on dates corresponding to the first two dates his partners contributed.
Overall, Perrodin received $15,000 from the waste hauler’s ownership
and management team.
They also contributed $500 to Councilwoman Lillie Dobson’s campaign
coffers.
While it was not illegal for Perrodin and Dobson to vote on the contract
last week, several residents, including gadfly and city employee Lynn Boone,
said it raises ethics questions. Neither elected official stated for the
record that they had received money from the company’s principals
in the last 12 months (the contributions were, however, listed on each
official’s campaign contribution reports submitted to the state)
or abstained from voting on the contract.
Boone said she believes the contract was a “kickback” for the
financial support Perrodin received last spring, and several other residents
agree. Perrodin has said in the past that the Council has never granted
contracts to any company with ties to his campaign contributors as a form
of payback.
Changes in service, costs
The contract includes various service changes and several new services,
some of which will cost customers who use them.
Currently, residents who rent large trash bins temporarily, for example,
when they are cleaning out their garages, pay $110 for a 2- or 3-cubic-yard
bin. Those bins are being upgraded to 4-cubic-yard bins that will now cost
$130.
Residents currently can place two large items, like a couch or chair,
on the curb for pickup each week at no cost through the bulky item program.
That program is being switched to quarterly rather than weekly pickups,
with residents allowed to place up to six large items out at no charge
four times per year. Harvey said those who have more than six items can
pay $20 for an additional six (12 total) or $5 per each additional item.
Beginning in July, Pacific Coast will have in place a state-licensed
e-waste, or universal waste, recycling program. This will add a monthly
20-cent fee to residential users’ trash bills. Commercial and industrial
users will not be affected because they recycle such waste under separate
state regulations, Harvey said.
Pacific Waste is also adding a scout and push-out service for commercial
and industrial users that will also affect some multi-family dwelling customers.
Currently the waste hauler has two employees on foot who run ahead of the
trash truck and push large trash bins out to the street where the truck
can pick them up and dump their contents. This results in considerable
overtime and other costs, Harvey said. The scout and push-out service features
a small truck that drives ahead of the trash truck and pushes the bin out
similarly. It will cost commercial and industrial customers, as well as
multi-family customers whose bins are further than 30 feet away from the
street, $15 per month.
Commercial and industrial customers will also now be charged a $40.01
dump fee. However, they and all other customers with 40-gallon bins will
receive new, 96-gallon bins at no cost.
Seniors 55 and older and the disabled will receive free trash bin
walk-out service, and the Christmas tree recycling program will be extended
to multi-family dwellings. The city’s recycling program at City Hall
will be expanded to all city facilities where 15 or more people are stationed.
Finally, the trash company will offer an array of programs for the
community and targeted at youth to stress the importance of recycling and
placing various types of trash in the correct receptacles.
Yearly rate increases
Beginning in July, and each July thereafter, rates will increase
based on the annual consumer price index for the Los Angeles-Anaheim-Riverside
Metropolitan Statistical Area published by the U.S. Department of Labor,
Bureau of Labor Statistics.
Rate adjustments will be made by comparing various weighted averages
as of May 30 of each year, with rates to be adjusted just over a month
later on July 1 of each year. The set averages for residential and multi-family
are: Labor, 44 percent; fuel, 8 percent; equipment, 10 percent; insurance,
3 percent; and CPI, 35 percent. For commercial and industrial users, they
are: Labor, 36 percent; fuel, 8 percent; disposal, 46 percent; insurance,
5 percent; and CPI, 5 percent.
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