LA WATCHDOG - It appears that Jose Huizar and Richard Alarcon did not get the message that the City of Los Angeles is a business friendly environment, where employers and their jobs are welcomed additions to the community.
On August 29, both the Energy and Environment Committee (chaired by Huizar) and the Ad Hoc Committee on Waste and Recycling (chaired by Alarcon) recommended that the City Council pursue the establishment of an Exclusive Trash Franchise system for the collection of garbage from City’s commercial establishments and apartment buildings with five or more units.
Under this proposed system recommended by the politically appointed, highly compensated Board of Public Works and its Bureau of Sanitation, the City would establish eleven collection areas to be served by one primary hauler selected pursuant the City’s cumbersome and expensive Requests for Proposals process.
Under this exclusive system, the City would establish a new, yet to be defined bureaucracy to oversee the yet to be drafted implementation plan; administer the obtuse contract requirements demanded by the City; and establish the pricing policies of the haulers.
Of course, the City’s involvement in the management of trash collection is a source of great concern to all participants - businesses, apartment owners, and haulers - since our City has demonstrated that it has a hard time managing a parking lot, to say nothing of an industry that has over $225 million in revenues.
But this politically motivated scheme - a payback to the notoriously corrupt Teamsters Union for its $500,000 of campaign contributions to the Mayor’s pet causes – is opposed by both the commercial establishments and the apartment owners because they are going to get nailed by a 67%, $150 million increase in hauling fees over time.
And at the same time, the service levels will most likely decline.
Small waste haulers who employ thousands of union and non union employees are also opposed to the Exclusive Trash Franchise system. They will be forced out of business because they do not have the managerial, financial, legal, and political resources that are necessary to compete in the very complicated and burdensome bidding process required by the City’s bureaucracy.
And if a small company were to win an exclusive franchise, it would not have the many millions of capital necessary to finance an operation that would serve 9% (one-eleventh) of the City’s commercial establishments and apartment buildings.
The Los Angeles Times also opposes the establishment of an Exclusive Trash Franchise because it “would probably require a new City bureaucracy,” “eliminate market incentives that keep prices low and service levels high,” and “consolidate power in a particular union that then can pull strings at City Hall.”
The Times also pointed out this proposed exclusive system favors large haulers with labor contracts that all expire at the same time, implying that the City could be the subject of a foul smelling City wide work stoppage.
Even the City Administrative Officer opposes the establishment of an Exclusive Trash Franchise.
Rather, the CAO recommends a Non Exclusive arrangement which would allow the City to meet its environmental goals and generate immediate revenues of $20 million to $30 million for the cash strapped General Fund.
The CAO also pointed out that a Non Exclusive Trash Franchise system would give the City more flexibility to control performance standards and the introduction of new technologies than if it were opposed by well financed national firms (and their squadrons of lawyers and spinmeisters) operating under an exclusive arrangement.
While the Exclusive Trash Franchise proposal was railroaded through the two committees with the help of Councilmembers Zine, Koretz, and Krekorian, we have yet to see the Committees’ recommendations to the City Council. Underlying this four week delay is the very real concern that this $150 million payback to the Teamsters Union in return for its $500,000 “investment” in the Mayor’s pet causes would reflect poorly on the efforts of the public labor unions to defeat the Proposition 32 (otherwise known as “Paycheck Protection” or “Stop Special Interest Money Now”).
Rather than pursuing this Exclusive Trash Franchise system that is opposed by all industry participants (including, but not limited to, small haulers; apartment owners; and businesses that serve the entertainment, medical, tourist, real estate, and construction industries) as well as The Los Angeles Times and the City Administrative Officer, the City Council should flush the Exclusive Trash Franchise proposal down the low flow toilet.
The City Council should endorse the Non Exclusive Trash Franchise alternative favored by trash haulers and their customers, where businesses have the ability to select their haulers based on price and service levels without interference from the City, and where haulers can service businesses throughout the City.
This is very similar to the current open permit system that has resulted in LA having by far the highest rate of diversion of any major city in the nation.
Haulers would also be required to obtain a franchise from the City that would require adherence to predetermined environmental standards such as low emission vehicles and increasing levels of diversion and recycling.
And under this system, the City’s General Fund would receive $20 million to $30 million a year in franchise fees and at the same time, retain control over the franchisees and have the ability to introduce new technologies as they become available.
The establishment of a Non Exclusive Trash Franchise system will be a small, but meaningful signal that LA is not hostile to its existing business community and prospective investors. However, the City still has a long way to go to prove that it is trustworthy, business friendly and open for business.
(Jack Humphreville writes LA Watchdog for CityWatch He is the President of the DWP Advocacy Committee and the Ratepayer Advocate for the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler -- www.recycler.com. He can be reached at: [email protected]) –cw
CityWatch
Vol 10 Issue 77
Pub: Sept 25, 2012
