LA WATCHDOG--Mayor Garcetti and the City Council are in crisis mode because the botched rollout of the City’s monopolistic Commercial Waste Exclusive Franchise System is now front page news and generating unfavorable publicity.
The Bureau of Sanitation has received over 28,000 complaints about poor service according the Los Angeles Times and the Bureau of Sanitation.
Business, multifamily buildings and homeowner associations are “mad as hell” as they are experiencing sticker shock as rates “have doubled, tripled, and even quadrupled, with the inclusion of new fee assessments that did not exist under the previous private hauler agreements” according to Councilmember Mike Bonin.
The question is what will the Mayor and City Council do to remedy the situation. And the answer is, not much, especially when it involves rates.
Under the new franchise arrangement, the City entered into ten year contracts with seven private companies who serve eleven “waste sheds.” The cost to the victims of this monopolistic system is expected to exceed $350 million a year based on rates established by the outgunned City bureaucracy. This 56% increase over existing revenues of $225 million is hardly “modest” as was promised by the members of the City Council. And more than likely, this does not include future rate increases and pass through expenses and all the additional Mickey Mouse fees being imposed by the private contractors that are the subject of great controversy and potential litigation.
Unfortunately, the proponents of the Exclusive Trash Franchise (dubbed RecycLA by the City Hall spinmeisters), including Mayor Garcetti and Councilmembers Jose Huizar, Paul Koretz, and Paul Krekorian, summarily dismissed the 2012 proposal for a Non-Exclusive Trash Franchise by then City Administrative Officer, Miguel Santana. Under the Santana proposal, the City would be able to achieve the same environmental benefits as the Exclusive Trash Franchise arrangement, but at the same time, allow for competition. This would have resulted in better service and lower prices compared to the new monopolistic system where the City (and not the customer) determines the service levels and pricing.
But then again, the proponents were doing the bidding of a well-heeled coalition of “environmental, community, faith based, economic justice and labor groups,” including, among others, the Los Angeles Alliance for a New Economy, a labor sponsored organization favored by Garcetti and his wife, the Sierra Club, the Natural Resources Defense Council, and the Teamsters union.
On the other hand, the City may be able to “encourage” the private contractors to provide a more acceptable level of service.
Councilwoman Nury Martinez has called for the Bureau of Sanitation and the seven franchise services providers to report to her Energy, Climate Change, and Environmental Justice Committee on Tuesday, February 6, and outline the status of RecycLA, including issues related to the 28,000 service complaints.
Without doubt, there will be considerable posturing by the members of this committee, including Koretz and Krekorian who were major proponents of this new, pocket picking system. But the meeting is not about blame, but how to solve the problems relating to substandard service.
One of the outcomes may be that the City may need to devote the entire $35 million in franchise fees to the administration and enforcement of RecycLA instead of diverting $20 million to the General Fund to help pay for increased salaries and pension contributions.
There has also been talk about terminating the contracts with private contractors who have failed to meet their obligations under the RecycLA contracts. But that would be a very expensive endeavor as the private contractors, many of whom are publicly held companies with deep pockets, would engage the City is very expensive legal battles and allege that the City had not fulfilled its end of the deal. They would also demand liquidated damages that would cost the City hundreds of millions of dollars if the City was found to be at fault.
The RecycLA fiasco is just another example of a broken promise from our Elected Elite, especially when it comes to placing the interests of their cronies and campaign supporters ahead of our hard earned cash.
Over the next year, we will see numerous examples of financial chicanery, ranging from the budget, the pensions, and our deteriorating infrastructure. And come June and November when the City, the County, and/or the State place measures on the ballot that require our cash, we will have the opportunity to express our unhappiness with the City’s finances and its politicians and trash these propositions with our no votes.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council. He is a Neighborhood Council Budget Advocate. He can be reached at: firstname.lastname@example.org.)