City nixes garbage collection contract

OCEANSIDE — City Council did not take the million-dollar carrot to extend the Waste Management of North County contract for three years in return for a $1 million a year franchise fee and the lowest trash service rate in the county. The motion to extend the contract failed at the March 3 City Council meeting in which Mayor Jim Wood and Councilwoman Esther Sanchez voted no.
The $1 million franchise fee that was offered to the city is based on expected lower overall rates to provide trash services. The franchise fee would be paid for the two remaining years in the contract and three additional years. The city would receive $83,333 in monthly installments once the agreement was approved.
Waste Management said it was able to make the $1 million a year offer because of additional recycling monies and efficiencies it expects to gain by implementing “one container” recycling.
Currently Oceanside recyclables are picked up in a crate system that calls for residents to separate paper, plastic and metals. The proposed commingled containers would allow all recyclables to be stored in a one container. That would make pickup service more efficient and add convenience for customers.
It is not known if the commingled containers will be implemented now that the contract extension is denied. “In the weeks and months to come we will access business conditions and what our next course of action will be,” Ken Ryan, Waste Management of North County district manager, said.
A low trash service rate was also offered in the deal that was turned down. A benchmark study by HF&H Consultants verified that the rate Waste Management proposed to charge Oceanside is the lowest in San Diego County.
There were numerous questions on the rate. The breakdown of charges to the city was proprietary and not disclosed to the public or Integrated Waste Management commissioners.
Sloan Vasquez consultants completed an assessment on the contract with Waste Management and suggested the city might be able to get a better deal.
The city’s Integrated Waste Management Commission unanimously recommended that council extend the contract with Waste Management. Commission Chairman Joe Gallagher stood by the recommendation. “It’s a good deal for the city,” Gallagher said.
“It’s a no-brainer as a business decision,” Joshua Helmless, Integrated Waste Management commissioner, said. “We’re guaranteed top rate plus $1 million a year.”
Another commissioner voiced second thoughts about recommending the contract extension. “It’s the biggest contract the city has,” Commissioner Mimi Demijohn said. “It’s very important to ratepayers. Facts and figures have not been available to us as a commission. I don’t feel it’s a no-brainer.”
Many wanted a better deal then the negotiated rate that was offered. “Don’t just accept the first offer that comes your way,” Zack Beck, Oceanside resident, said. “It does not lower our rates.”
Sanchez pointed out that while the city contract is deemed to be the lowest service rate, Oceanside residents pay the highest rates in the county.
Sanchez proposed that the city continue negotiations and focus on a long-term contract with Waste Management to get better terms. That proposal was voted down in a 2-2 vote in which Councilmen Jerry Kern and Jack Feller voted no.
Waste Management presently has a waste hauling contract with Oceanside until July 2012.
The procurement process is already in motion to hire a consultant, call for requests for proposals, and award a contact to a waste hauler when the contract expires. There is no guarantee that the contact will be awarded to longtime provider Waste Management. “It will be open bidding,” City Manager Peter Weiss said.