Coastside Scavenger Morphs into Recology: Higher Rates Built on Fraud

OPINION/ANALYSIS BY LIONEL EMDE, RIPTIDE CORRESPONDENT

Pacifica ratepayers will be abandoned once more by the proposed new garbage collection contract approved by Pacifica City Council on February 8. Pacificans already pay the highest rates for garbage collection in San Mateo County, yet instead of using the business failure of former Pacifica trash hauler Coastside Scavenger as an opportunity for better service and lower rates, council is opting for different service and the same rates—soon to go higher.
 
The contract is to be awarded to Recology (formerly Norcal Waste), which is paying the bad debts of Louis Picardo, owner of Coastside Scavenger, to the City of Pacifica, in exchange for a fat eight-year contract that opens at current rates but allows for even higher rates as soon as August 2010. Check the city Web site for updates: CITY OF PACIFICA
 
The already-highest rates in San Mateo County will increase by another 5 percent in August 2010, according to the secretly worked-out agreement. More rate increases are already included in the hitherto secret agreement, in which rates will increase another 4 percent to 8 percent by March 2011. Where were the public’s advocates at this negotiating table? Evidently nowhere, in this time of pay cuts, job losses, and people losing their homes outright.
 
Coastside Scavenger sought to conceal its financial state, as evidenced by its refusal to open its books and those of its sister company Seacoast Disposal to auditors. The City of Pacifica never fought the issue fully in court to compel the full audit necessary to ascertain the state of these quasi-public agencies’ books and to determine where all the ratepayers’ money was going.
 
Here’s a question that’s never been answered: Why are Pacificans charged so much more than the same company’s customers south of Devil’s Slide? CLICK HERE FOR SOME IDEAS

Here’s another set of questions about where the money’s been going all these years that we have been gouged: CLICK HERE TO FOLLOW THE MONEY
 
If these articles don’t raise questions in your mind, then consider the timing of the Friday-to-Monday slam-dunk by which this rich contract was awarded to Recology: The emailed council agenda packet was sent and arrived at 1:18 Friday afternoon, February 5. Coincidentally, city hall closed at 1:30 on Friday afternoon. The council meeting was on the following Monday, so there really was no time to react, and certainly the unwashed public wouldn’t know what hit ’em. This is the same process by which the last rate increase was maneuvered in 2008: public notice at the last minute and then a 9 percent rate increase.
 
And the real reason for the council’s evident eagerness for high rates can be seen in the new contract, which, like the old contract, calls for 11 percent of gross receipts going to the city, plus a "contingency fee" of $100,000 per year, plus a "Frontierland Park Remediation Fee" of $75,000 per year. (Frontierland Park is a former trash dump site.) There is also an option for a "Vehicle Impact Fee" being established in the future. What that might be is not detailed. So it’s very much in the city’s interest not only to keep rates at an all-time high but to increase them as soon as possible. It amounts to a backdoor tax.
 
The council should feel shame for such an underhanded fraud being foisted on ratepayers. The correct way to protect ratepayers is a request for proposal (RFP) process. At least two (2) other waste haulers are interested in this contract. The winning bidder usually pays costs associated with the RFP process, so there is no risk for ratepayers. Local business complains regularly about exorbitant rates charged for Dumpsters and debris boxes. Are we interested in helping people or in gouging them? Only time will tell if the people have any advocates on this City Council.
 

Comments

[Frank R]

So I have an issue. I generate 10 to 20 pounds of waste per week max. My garbage fits in an 8 gallon trash bag. Every thing else is recycled. I realize I have to pay a minimum rate, which is total discrimination of my actual waste output. So why can't those trucks weigh my garbage when they pick it up? Furthermore, why aren't all customers being compensated for the CRV values of their recyclables? I never throw anything worth a nickel into my recycle bin. While the whole contract is an obvious end run by the city council, I would like to point out to the citizenry that they can opt for the least expensive pickup and recycle their CRV values at Safeway, thus voting with their dollars

[Diogenes]

If you can't answer the questions, then it is you who is deceiving. You are also making false accusations.

[Lionel Emde]

"Who has been deceived?"

You.

[Diogenes]

Who is deceiving?
What is the deception?
Who has been deceived?

[Lionel Emde]

"Well, Steve, I am not explaining a decision because it has not yet been made, but thanks for the support. Let's ask more questions tonight.
Mary Ann"

"Oh what a tangled web we weave,
When first we practise to deceive!"
Sir Walter Scott, Marmion, Canto vi. Stanza 17.

[Kathy Jana]

Recycling more actually benefits the waste companies, which make more money when they get all kinds of recyclables. Those old clothes, metals, andother items are saleable on the international market. It's a very good business!

[Kathy Jana]

I heard that the City gets around a million dollars upfront for this contract, and since they are so broke, they had to shove it through.

THERE WAS NO PUBLIC COMMENT permitted on the rates, which double or more those of any in San Mateo County.

Apparently every member of the council including Mayor Digre were party to this rate scam on Pacifica residents.

[todd bray]

Here's a question on tonight's item. Vreeland wants to talk in private about a land deal with Recology for a future drop-off/corporation yard. Why not say during the meeting what property he wants Recology to purchase?

[Mary Ann Nihart]

Well, Steve, I am not explaining a decision because it has not yet been made, but thanks for the support. Let's ask more questions tonight.
Mary Ann

[Steve Sinai]

What the hell is going on here? We actually have someone from City Council explaining their decisions to the public? I see pigs flying outside my window.

Thanks for the information, Mary Ann. Too bad the other council members remain so secretive.

[Mary Ann Nihart]

All cans are not the same. In the new contract, the expanded services requested by the community will increase the amount that can be recycled, including compost collection and comingling with increased items for recycle. All of the services, such as the recycle yard, add to the cost. In the beginning, a 20-gallon can will be $19.28 and the 30- to 32-gallon can would be $30.19 per month. This incentive for more adherence to recycling has been found to work if the public is educated. The 20-gallon rate is similar to that of most other communities. Concord, for example, just renegotiated its rate and has only a $2 or $3 difference between the larger can and the smaller one. Concord's 20-gallon-can rate is only pennies lower than ours. So I had to get smarter when comparing rates to be sure that I looked at the can size. These are all things we have to consider in meeting our state requirements for AB 939. Lots to learn in the management of solid waste, and I still have questions to ask.

Incidentally and unfortunately for all, I have learned that this year a significant number of cities are jumping 6, 9, and even 11 percent in their rates. Dumping fees are increased. Regulation fees are increased. It all weighs heavily on the final cost.

Please join us tonight for more questions and answers.

Mary Ann

[Lance Fernork]

Lots of families generate more garbage than their can will take. They end up with a 45-gallon can at a higher cost. Bill, why don't you look around the neighborhood and work out a deal with a neighbor who may need more capacity. Charge 'em by the trash bag. That could lower their rate and, in turn, yours. A little capitalism!

[bill collins]

Lionel: Thanks for being a public advocate again. You'd be even more of an asset as a member of City Council.

I don't have a lot of stuff for garbage day. I need pickup only once every three or four weeks, but we lesser junk producers pay the same as those with several overflowing bins, which makes a fee increase annoying.

Too bad they don't charge on actual use, as with utility rates.

[Kris Krow]

I agree with Todd. Let Recology have the remainder of the contract term and then go to RFP (request for proposals). It is best for the ratepayers, also known as citizens and voters.

[Mary Ann Nihart]

Lionel mentioned many fees that are embedded in the potential contract with Recology. Some of those fees are required to protect you, the ratepayer, from damage; some protect the City of Pacifica, which is also you; and others are required by state regulation. An interesting Web site to check out is
http://www.calrecycle.ca.gov/Laws/Legislation/CalHist/1985to1989.htm
where the history of regulations, especially those related to fees and AB 939, are summarized. Like most issues in government, there are many players in the mix, including requirements to provide education and incentives to meet recycling standards.

The complexity of the law is why the City of Pacifica used a special independent consultant who has handled more than half of the contracts in California. Recology and Coastside Scavenger began these negotiations since Recology is buying Coastside, but staff, including the city manager, have been working for months with input from past meetings with the public and City Council to come up with the best possible contract, given those inputs. The contract on the City Council agenda tonight is the outcome of those negotiations.

All are welcome to attend and ask their own questions about the contract tonight. This contract is the first item under consideration. See you there.

Mary Ann

(Editor's Note: We thank City Councilmember Mary Ann Nihart for sharing her views and expertise with Riptide readers.)

[Dan B. Underhill]

First, I want to thank John Maybury and Lionel Emde for this continuing public service in keeping us informed here.

I am wondering if we are perhaps unable to see the forest for the trees. "Back door" ways of raising revenue for Pacifica are not the best idea. The "front door" ways that have been proposed have met with serious opposition. City Council critics (and the rest of us) continually note that the city has too little revenue. Mary Ann's petition to stop the state and feds from continually robbing the cities and counties can only help.

I am ready to pay my share of any reasonable tax that Pacifica can come up with to help my city thrive. The city is quite limited by law as to how it is allowed to raise revenues. I am also willing to pay the higher recycling rate if no other means are available.

Socialism. There, I said it. It finances our police, fire, schools, libraries, and other municipal services. Unless we pay for them, we don't get to have them. Mary Ann's approach of not being robbed by the bigger governments is essential, but I think that we may need to pay a little more taxes in some form or another if we want our town to remain functional.

This from an anxious plumber who had just 20 chargeable hours altogether this January. I think that a great many people have chosen to put a bucket under it rather than call their plumber. We are all a little reluctant to spend money. Police, fire, schools, libraries, and other municipal services (and I would add health care) can be financed sensibly only if we all chip in. The "NO Taxes' movement is backed by multinational corporations that hope to privatize and sell you all of those services in a way that is not answerable to the citizenry in any way. Ever since they have succeeded in privatizing many of the products and services necessary to wage war, our nation has been endlessly at war in several places at once.

Boy, do I digress!

We all need to work on finding ways to finance this town that don't involve selling off our environment or our firstborn children or anything like that.

[bill collins]

No need to rush a decision this Monday, is there?

[Lionel Emde]

Mary Ann:
Very glad you have a lot of questions about this proposed contract.
Why, when other communities already have these services at a 40-50 percent discount to Pacifica's rates, are we being asked to start at gold-plated recycle bin level and elevate to platinum level soon?
SOMEONE negotiated the contract, and the motives are clear. If you and your colleagues reject this contract, there's nothing that says that we can't get a carrier to pay Picardo's bad debts in addition to the RFP costs AND get lower rates in the bargain.
I think it's a mistake to think that this isn't one desirable contract to have, and that other carriers don't know it. They do and they want it.
Thanks for chiming in.

[Lionel Emde]

Thanks, all, for your comments.
To clarify: I do not mean to say that City Council is committing fraud in the possible approval of this bad contract. But the present rate structure, which has inflated over all the years when there was no oversight from the council is fraudulent in its bloated, unjustified level.
Steve's right on point: The city sees this as a way to collect revenue, pure and simple. It's a backdoor tax and totally unjustified. And from this side of the outhouse, it smells like a done deal.

[Mary Ann Nihart]

Lionel: Just a note. You actually saw the report before I did or most of the City Council did, since on Friday I was working during the day. Lots of time on Monday to ask questions, and I have a lot of them. Most of the services were requested at the public forum.

As for the RFP process, if Coastside had not been sold and the contract in some way assumed, the city would have lost more than $840,000, plus the costs of the RFP would have put the city's loss well over $1 million. We talked about all of this quite publicly when we chose to let the negotiations go forward. This contract still has to be approved. There will be public debate.

I hope to see you all Monday night when we wrestle with this. In the meantime, please be careful about interpreting motives that are just not there.

[John Maybury]

Despite the appearance of wrongdoing, I choose to believe that council may have screwed up the selection process because of its overeagerness to secure Pacifica's financial future. But I am not yet convinced that council deliberately misled us. Nonetheless, I am very proud of Lionel for his hard work on this important story, and I hope all Pacificans will communicate to council that this transition to a new garbage company should pass the sniff test. It would be a shame to begin this new service with the stink of corruption on it.

[Matthew Levie]

Thanks, Lionel. I'm glad *somebody* is looking out for the ratepayers!

John, I understand your argument that the state has stuck its hand in the municipal till, and state budgetary shenanigans make local budgetary shenanigans almost inevitable. But this looks really bad. If this is okay with you, what would City Council have to do to make you think that it had stepped over the line?

Three council seats are up for grabs this November. I sincerely hope people will ask the incumbents what exactly happened here.

[John Maybury]

I publish all kinds of viewpoints on this issue here on Riptide as a public service and in the interest of free speech. I personally believe that City Council is trying its best to save Pacifica from financial ruin. The council may not always do the right thing or make everyone happy, but I trust that it acts in good faith and for the greater good of the entire community.

[Steve Sinai]

I don't believe the city is interested in getting the best deal for Pacifica ratepayers, thus no RFP. Its objective seems to be to generate as much revenue as possible for City Hall with non-transparent fees: sewer fees, trash hauling fees, etc.

[Lance Fernork]

The "Frontierland Remediation Fund" is the biggest scam this city has foisted off on its citizens. Take a look at the lower park. It looks like an inner-city drug den. REMEDIATION! The top park was mostly built with donations and volunteer efforts. The "fund" has become a slush fund for pet projects. The money is specifically set aside for Frontierland Park. Almost a million dollars ($1,000,000) have been collected to date. Finance can't account for it. I challenge anyone to try to decipher the mumbo jumbo that comes out of the city finance department. You think we could at least get the lower park fixed? Or maybe some more amenities on top?