Although it certainly won’t preclude complaints going forward, the epic saga of Los Altos Hills’ garbage collection contract seems to have concluded – officially, at least. City Manager Carl Cahill, at the Hills’ Feb. 18 city council meeting, announced the end of attempts to convince San Jose-based GreenWaste Recovery to provide adjustments lowering residents’ monthly rates.
“We’re not getting anywhere with GreenWaste,” Cahill said.
Yes, with prodding, GreenWaste did provide four alternative rate structures, but each made the town’s 15-year contract with the company even more expensive for residents, Cahill said.
With Los Altos Hills’ prior eight-year franchise agreement with GreenWaste set to expire in June 2016, the company approached the town in December 2014 about extending the contract for three more years. The city council voted to do so in February 2015. The extension expired in June 2019, so GreenWaste contacted the town again in May 2018 to work out a new contract. Based on past revenue deficits GreenWaste incurred and on various rising expenses in the garbage industry, company reps said they expected their revenue requirement to rise by 37.9% to $3.11 million in fiscal year 2019-2020.
The steep hike was a shock. Cahill reacted by forming a committee in July 2018 to identify other potential providers and to negotiate a contract with the one offering the most favorable terms. On Feb. 8, 2019, the town issued a request for proposal, or RFP. At least one respondent indicated the town waited too long.
“This RFP timeline only allows the incumbent to submit a proposal and qualify for the new contract,” Recology reps wrote to the town Feb. 18, 2019. “As a previous service provider in Los Altos Hills, we would be happy to submit a competitive proposal for the Town’s consideration, but the current tight timeline will not allow us to submit.”
Town officials ultimately withdrew the RFP and decided to negotiate with GreenWaste.
In June 2019, the city council approved a 15-year contract with the company. Unlike the town’s previous agreement, this one includes an a la carte menu of services; residents only pay for the services they use. Once the first year of the contract passed and it became known how many residents chose extras, however, it was clear GreenWaste would end up making much more net revenue than company reps originally said they required to make the contract profitable for GreenWaste – an estimated $57.3 million versus original projected revenue of $50.9 million by the end of the contract.
At the Feb. 18 council meeting, Emily Hanson, GreenWaste’s director of business development and communications, objected to allegations the company was uncooperative throughout negotiations. She reminded the council of ways GreenWaste tried to mitigate negative impacts on residents, including by offering rate adjustments and cart swap programs.
“What we feel is that even after we signed the contract, we’ve done a number of things, and we’re continuing, unfortunately, to feel like we’re being put into a bad light because of calculations that have been done that say we’re getting more revenue than was expected,” Hanson said.
‘We learned a lesson’
Last week, the Town Crier reached out to several people involved in the negotiations and others who observed them as they unfolded.
Allan Epstein, a member of the town’s Finance and Investment Committee, conducted an extensive personal analysis of the contract. He served on a committee Cahill formed in July 2020 to determine whether the town’s contract with GreenWaste is fair – a consultant says it is, based on neighboring communities’ garbage contracts – and to seek the potential rate adjustments Cahill mentioned during the Feb. 18 council meeting.
“Town management exhibited poor judgment and lack of due diligence in the 2019 renewal process,” Epstein wrote in an email to the Town Crier. “It started late, and unlike neighboring cities, failed to use expert advisers, squandered three-fourths of the little time it had available waiting for a proposal from its current provider before a belated, flawed and futile attempt to obtain competitive bids.”
Roger Spreen is a former council member who served on the negotiation committee during his council tenure. He said the committee worked on negotiations for months and months, but no other companies could compete with
“I don’t think any extra time added onto the beginning of what was already more than a yearlong process would have benefited us in any way,” he said. “I think that’s just a different (way) of trying to complain about the price.”
Linda Swan was among the council candidates who criticized the GreenWaste negotiation process while running for office last year. She’s a council member now, and she responded to a Town Crier request for comment by sharing her personal opinion of the matter.
“Many residents are angry and frustrated every time they pay their garbage bill,” Swan wrote in an email. “From my research, I feel that the Los Altos Hills City Manager mishandled the GreenWaste contract.”
Cahill was not available for a phone interview, but he emailed some brief comments to the Town Crier. He reiterated the consultant’s findings, that jurisdictions throughout California are experiencing garbage collection rate hikes due, in part, to the passage of Senate Bill 1383, which seeks to limit methane emissions by preventing the comingling of garbage with compostable material; it is more expensive to process organic waste than simply dump it in a landfill.
Cahill also shared documents comparing the GreenWaste rate structure for the Hills to the company’s rate structure for Portola Valley. In some categories, Hills rates are higher. Base services, for example, are between $7.68 and $15.58 higher in the Hills depending on garbage cart size. In other categories, Portola Valley’s rates are higher. Drive-on services, for example, are between $6.36 and $38.77 higher in Portola Valley, depending on distance.
Town management analyst Cody Einfalt served with Cahill and Epstein on the “fair deal” committee. When negotiating the 2019 contract, Einfalt said, staff members allotted even more time than they did negotiating the 2008 one, the one “everyone was happy” with.
In hindsight, however, he said, “I just think we learned a lesson, that we need to give even more time.”
The current contract expires in 2034. Einfalt said town staff plan to start circulating an RFP in July 2031.