August 25, 2006

Council turns down staff recommendation to keep Norcal Waste Systems

Votes to seek garbage contract with untested Garden City, CWS

By Carol Rosen
Staff Writer

It’s rare when the City Council turns down a staff recommendation, but that’s what happened at the August 22 council meeting when members did not vote to reinstate Norcal Waste Systems and instead voted unanimously to seek two separate sources to handle resident’s trash and recycling needs.

The contract they did approve is for garbage pickup from Garden City Sanitation and a contract for recycling from California Waste Systems for a six-year term beginning July 1 and running through June 30, 2013. CWS is Norcal’s current recycling contractor.

It’s even more surprising because there is some concern that Garden City may be unable to have enough trucks on hand to handle the city’s 156,000 homes, especially the two large districts, City Districts A and C, by their start date.

However, despite a thorough study by the city’s environmental services staff and their proposal that the city continue to use Norcal for two more years at higher prices, council members seemed loath to go with a company under indictment. They voted unanimously to send City Manager Les White to negotiate immediately with Garden City and CWS to provide a memorandum of understanding, which will provide general outlines that will serve as the basis for a final contract.

In addition, the council members asked White to develop a limited extension of the Norcal contract in the event that Garden City and CWS were unable to begin their contracts on July 1.

The unanimous vote did not include Mayor Ron Gonzales, who excused himself from the proceedings before the discussion began. Like Norcal, Gonzales was indicted in late June on bribery and conspiracy charges relating to the garbage contract that took affect in 2003.

The vote followed a lengthy session that began with three members of the staff presenting their studies on the subject. Immediately after they finished, District 6 City Councilmember Ken Yeager submitted his motion.

“I find it difficult to go with the staff recommendations,” he said, “and hard to deal with a company that’s under indictment. I think the public doesn’t support the contract with Norcal.”

He then moved to allow the combination of Garden City for solid waste pickup and CWS for recycling with Green Waste Recycling picking up yard and lawn wastes as well as doing street cleaning.

Yeager listed five requirements to be included in the final contracts:

- “Strict performance measures that will be monitored on an ongoing basis. Including minimizing contaminated recyclables and increasing the diversion rate.” His motion included a negotiated performance bond as well as customer satisfaction surveys to be presented to the council on “at least a biannual basis.”

- “Fair costs to ratepayers, guarding against any potential rate increases over the life of the contract.” He added that the staff presented the Council with rates for six years that will increase costs 29 percent or $5.84 per month for customers. (Norcal’s bid included a $5 increase.) Potential rate hikes will be considered only “if absolutely necessary, and even then they must be incremental and reasonable…” The proposal calls for an audit of the final agreement before Council approval. “The contract must be negotiated to ensure that our customers’ rates remain stable.”

- “Service enhancements over the life of the contract to include increased programs” for disposing of bulky goods and appliances, additional street sweeping and guarantees that recycling is not contaminated by waste.

- “Each contractor must be held to clear deadlines throughout the mobilization phase.” No one wants to see garbage piling up. “Staff shall include something analogous to a claw-back provision in the executed contracts requiring that any initial investment on the part of the city and the ratepayers to finance the mobilization phase will be refunded if the contractors are unable to meet the negotiated mobilization deadlines.” An additional clause allows cancellation of the contract and a new request for proposals with timelines reflecting benchmarks for successfully implementing similar contracts.

- “A city employee shall be on site, half-time, at the CWS facility, paid for by CWS, to monitor activities at the center and ensure compliance with the provisions of the executed contract.” Because there are concerns about improper or inadequate tracking and reporting of materials going into and leaving the CWS site, Yeager added this measure to guarantee the city collects appropriate enforcement fees and provides accurate reports of solid waste diversion.

During the ensuing discussion, District 4 City Councilmember Chuck Reed expressed concerns that Garden City would be able to buy the needed equipment. Among other suggestions, he said that the staff should review and develop initiatives related to solid waste management and work with the committee chair to increase discussion of pertinent items within an annual work plan.

District 10 Councilmember Nancy Pyle said her concerns centered around cost, transition and quality of work. She suggested increasing the interim phase-in period to include June.

And, District 9 Councilwoman Judy Chirco wanted to know who would bear the costs if there were problems during mobilization. She also questioned if there was a “retention of worker” clause in the Norcal contract.

Later, a staff member with a copy of the Norcal contract, noted that the company had agreed to a transition period. It stated that if Norcal did not receive a new contract, it pledged to cooperate with the city and its new contractor with software, routing maps, a list of workers and garbage and recycling containers.

Chirco and several other council members, as well as the city’s former Environmental Services Director and current consultant Lou Garcia and current Environmental Services Director John Stufflebean, noted that the past three garbage mobilizations have been fraught with problems. Given the recent problems regarding Norcal, no one on the council or the staff wants to see garbage piling up on the streets.

The public comment period followed with more than 40 people getting their two minutes to plug their own company or other companies. Three Norcal employees spoke as well as three from Garden City, including Louis Pelligrini, its president. About 18 people spoke for CWS, including several service organizations for Vietnamese Americans.

Among those speakers was Larry Daugherty, president of Teamsters 350, who pledged to make any changes “a smooth transition.” If CWS is awarded the contract, he said he would ask members to step up their work. In addition, if it takes 16 to 18 hours a day to do the job, he pledged his members would follow through. “We will do the best we can with what we have,” he later told the Times.

One of the final comments just prior to the vote came from District 2 Councilman Forrest Williams. He too expressed concerned that both Garden City and CWS might not be able to deliver on expectations. “There will be no excuses for me, if you say you will do it, you are going to have to deliver,” he concluded.