Businesses and some apartment buildings in Glendale started this month with service by waste haulers that have franchise agreements with the city.
Approved by the Glendale City Council in July, the franchise system is meant to reflect Glendale’s support of state regulatory compliance to recycle materials and reduce greenhouse gas emissions by diverting organic waste from landfills. Four waste hauling companies will collect trash, recycling, organics and bulky items from businesses and multi-family properties of five or more units, according to a release from the city.
The four companies, each covering a quadrant of the city, are Athens Services, serving the northeast part of Glendale; Southland Disposal Co. serving the northwest; Waste Resources serving the southwest; and NASA Services Inc. serving the southeast.
When it began to negotiate with the four waste haulers, Glendale took some lessons from the experience of Los Angeles, which rolled out its franchise system called RecycLA in 2017.
The roll out was nothing short of a disaster.
Business Journal articles at the time noted skyrocketing fees for trash, poor service and even lawsuits over the system.
Daniel Yukelson, executive director of the Apartment Association of Greater Los Angeles, said that Los Angeles city officials really showed that they did not know what they were doing.
“They acted surprised when people got increases of 200 to 400 percent,” Yukelson said. “We know this because we surveyed property owners about it back then. It showed a real lack of business judgment by the city of L.A.”
Judee Kendall, chief executive of the Glendale Chamber of Commerce, said that based on what happened in Los Angeles, member businesses knew their trash bills would increase.
The chamber has a lot of members who also own businesses in Los Angeles.
“It will take a while to shake out, I think, and see if there are really benefits,” Kendall said of Glendale’s franchise system.
Glendale Director of Public Works Yazdan Emrani said the city tried to benefit from studying the Los Angeles experience.
“We knew what to do and what not to do, from both an implementation perspective and from a contract perspective,” Emrani added.
The main thing about the negotiations with the haulers, he continued, was to not nickel and dime the customers on every single thing.
That was something that came out of studying Los Angeles’ roll out and the city wanted to make sure the prices the haulers would charge would be all exclusive.
So, the city accounted for the base charge and all the miscellaneous charges it could think of, Emrani continued.
“The nice thing about the contract with the haulers is that if there is an item that is not part of the contract and not spelled out specifically, they have to provide that free to the customers,” Emrani said. “There is no coming back and saying, ‘We missed this item, and we need to add that.’”
Stuart Waldman, president of the Valley Industry & Commerce Association, the Van Nuys business advocacy group, said that Glendale was fortunate to have been able to learn from L.A.’s mistakes.
“The one thing that this guarantees is that it will increase costs,” Waldman said. “We saw in L.A. costs tripling in some cases.”
The Los Angeles program is still going on. But in 2019, the city amended the contracts with the waste haulers that resulted in delaying certain rate increases, removing barriers to recycling and decreasing that year’s rate increase from 6.4 percent to the consumer price index of 3.4 percent, among other changes.
The rates will go up but will be uniform throughout the city. Emrani couldn’t say how much the rates would increase because the city had been served by 33 different waste haulers prior to implementation of the franchise system.
The rate increase is happening for at least two reasons, he added. One is that the city has not increased it waste hauling rates since 2010 and they were artificially low. The second is that the waste haulers must comply with new regulations.
It costs money to have properly equipped trucks required to be fueled by renewable energy, train staff and doing the diversions to facilities that charge for taking recyclables and organics, he said.
The city did a study that showed that even with the new rate structure it wasn’t the highest, and it wasn’t the lowest.
“We’re in the mid-range and our rates are cheaper than some of the other cities in this area,” Emrani said. “It’s not a good situation when the rates go up, but in this particular case we did our homework, we did our study and we feel that the rates that we came up with are fair.”
The city tried to address the issue of giving the four waste haulers a monopoly on their services by negotiating up front with them on a 10-year contract. The prices they charge cannot go up during that time except for cost-of-living adjustments tied to the Consumer Price Index, Emrani said.
“They cannot come back a year from now, two years from now and say because of the whatever situation we are going to raise our prices 20 percent,” he added.
But the lack of competition was pointed out by VICA’s Waldman.
“You are no longer going to have discounts,” he explained. “The rates will only go up. You won’t have competition and that ends up costing people a lot more money.”
Yukelson, of the apartment association, said that during the roll out in Los Angeles, on top of the huge price increases, there was terrible service – trash was not getting picked up, cans were being left all over the place, people were given damaged cans to use.
“The city of Glendale was very sensitive to that, and it seems like they are taking a real careful approach,” he added.
Emrani with Glendale’s Public Works Department said the journey to the franchise system began back in July 2013 when the city sent a letter to the 30-plus waste haulers then servicing the city’s businesses and large apartment buildings that it intended to switch to franchise haulers.
Then in March 2016, the City Council signed an agreement with a consulting firm to study the commercial waste hauling system and to come up with options for a franchise system. Public Works staff, in the meantime, started to talk to stakeholders, Emrani said.
“We did outreach to building owners, property management associations, the chamber of commerce and direct engagement with all of Glendale’s existing solid waste haulers,” he added.
In August 2019, the city put out a request for proposals, or RFP, on what a franchise agreement should look like and the expectations from the waste haulers that were picked.
Incorporated into the RFP was language from California Senate Bill 1383, which lays out the responsibilities of municipalities and school districts when it comes to organic waste – food scraps, garden and landscape waste, organic textiles and carpet and wood waste.
Because such waste creates methane, a greenhouse gas that contributes to climate change, it will be diverted away from landfills and instead be taken to facilities to turn them into compost or biofuels of some kind.
The bill was signed into law by then-Gov. Jerry Brown in 2016 and took effect Jan. 1 of this year.
“We wrote the RFP very tight with very strict requirements on the reporting and what the responsibilities of the haulers were to the city,” Emrani said.
There were nine waste hauling companies that submitted RFPs and from that number four were eventually chosen to service the businesses and multi-family residences.
“It was the council’s desire to divide
the city into four zones and then have an exclusive franchise operate in each zone,” Emrani said.