The Redondo Beach City Council on Tuesday night hired a new trash hauler who will offer slightly reduced rates for local residents and businesses while drastically decreasing the amount of waste from Redondo Beach that ends up in landfills.
Athens Services was awarded an exclusive eight year solid waste handling contract valued at $50.5 million. The contract, which includes the handling of roughly 60,000 tons of trash annually, will reduce rates by six percent annually while increasing the city’s waste diversion rate from 55 percent to 75 percent. The waste handling contract, the city’s largest, was held for the last eight years by Consolidated Waste Services.
Redondo Public Works Director Mike Witzansky said he was unusually excited by the outcome of the nearly two-year bidding process, which produced a carefully crafted request for proposals aimed at both saving residents money and reducing the city’s environmental impact.
“It’s been a successful process,” Witzansky said. “It’s done everything we could hope it would do – we will benefit from some of the lowest rates in the region and some of the most environmentally friendly trash hauling in the industry.”
The process was not without controversy. The council chambers were unusually crowded Tuesday night, as more than a dozen current CDS drivers and several other critics of Athens from other cities arrived to voice their protests. Athens, a non-union company, was accused variously of being intensely litigious, engaging in union-busting activities, and operating unsafely.
Athens Chief Operating Officer Gary Clifford said that such protest was not unusual due to frequent union opposition to the company.
“This is not atypical…when you are the largest non-union [waste management] company in Southern California,” Clifford said, noting that the company’s employment record includes higher wages than much of the industry and an average tenure of 15 years for each driver.
CDS officials estimated that 22 drivers will lose their jobs. Athens has committed to holding a job fair at which all the drivers can interview to stay on with the company when it begins servicing Redondo Beach later this year.
The runner up in the bidding process, Crown Disposal, questioned why Athens was able, in a sense, to submit two bids. Crown’s bid of $51.3 million was $800,000 above the eventual winning bid, but the company’s diversion rate of 75 percent was far above Athen’s first submitted bid rate of 59 percent. Athens’ first bid, however, was drastically lower – at $45.6 million – and so city staff directed the company to submit another bid with additional recycling and diversion services.
Witzansky said noted that Athen’s submitted the second set of numbers without knowledge of any of the other bids and said the intention was to give the council an “apples to apples” comparison. The request for proposals required only a 55 percent diversion rate, but state legislators have recently considered requiring up to 75 percent diversion for cities.
“Being able to bring a better ‘apples to apples’ comparison was a legitimate thing for staff to ask, I think,” said Councilman Matt Kilroy.
Redondo Beach Councilman Pat Aust said the comparison may have been legitimate but still gave the appearance of not passing “the smell test.” He suggested Crown be given another opportunity to submit revised numbers.
“I am just saying they all should have been on the same page,” Aust said.
The problem, according to Assistant City Attorney Brian Hickey, was that such an action could require that the other three losing bidders also be allowed to resubmit, essentially starting the whole bidding process over again.
Chuck Jelloian, a spokesman for Crown, said that the company did not spend two years tailoring its bid to Redondo Beach in order to simply make Athens’ proposal better. He noted that Crown was a union company that would pledge to immediately absorb all CDS drivers who sought to remain in Redondo in addition to hiring at least four Redondo residents as Crown employees. He asked that Crown be given the same opportunity as Athens to resubmit.
“Crown was not invited, even though we were neck-and-neck with our competitor, even though our competitor, Athens, was,” he said.
Several people gave testimony on behalf of Crown. A former L.A. city official said the company had been an industry leader going back to the Northridge earthquake, when Crown was hired to recycle much of the debris and achieved remarkable success. An official from Von’s Grocery stores said that the company had a 15-year relationship with Crown that has enabled it to become an industry leader in environmental practices, with its recycled materials being converted into compost used for 30 percent of all the produce grown in the San Joaquin Valley.
Several people also gave testimony against Athens.
Christina Cortez, a councilperson from Montebello, said that Athens became politically involved in her city, spending $1.5 million in 2009 to support a slate of council candidates after winning a 15-year non-competitive contract from the city. She also accused the company of sponsoring a lawsuit in Monterey Park aimed at preventing competitive bidding.
“Athens on paper may look good, but I can assure you are dealing with a company in the long run you will come to regret,” she said.
Greg Good, a campaign director from the labor-backed Los Angeles Alliance for a New Economy, called Athens a “rogue element” in the trash hauling industry that has been fined for environmental lapses and has frequently litigated with cities.
“If they don’t like how you operate, you can rest assured they will sue you,” Good said. “They have an appetite for litigation.”
CDS driver Hector Ramirez said he formerly worked for Athens for six years but quit due to safety concerns.
“They instructed employees to cut corners when it comes to safety in order to save money and get the work done faster, even when it put the safety of the public at risk,” Ramirez said.
Witzansky said he was fully aware of the “Stop Athens” labor-backed campaign that has emerged but that none of the issues raised were germane to city evaluation criteria, which consisted of five elements – cost, quality of performance, environmental impacts, municipal experience, and fiscal and infrastructure strength. He noted that the company has contracts with 19 cities – 13 of who responded extremely positively when the city sought references – and all of who have renewed their contracts when given the opportunity.
“As I understand it, of the 19 existing contracting agencies, they have never lost a city,” Witzansky said. “So somebody is happy with them.”
Kilroy dismissed most of the charges against the company as lacking substance and deriving from self-interest.
“Obviously they all have some kind of ax to grind or skin in the game,” Kilroy said.
Councilman Steve Diels said the accusations against Athens rang a familiar chord and took particular aim at LAANE’s accusations against the company.
“We have lawsuits and accusations,” he said. “Based on your criteria, your accusations against Athens, Redondo Beach would be a terrible place.”
Witzansky called both Athens and Crown excellent companies who each could serve the city well. But he said that two attributes set Athens apart – its experience and its facilities. Crown, he noted, is an emerging company in the industry but at present has only three municipal contracts and has far less capacity at its trash processing facilities.
“Athens has made investments over the last few years that we feel have poised them for acquiring additional franchise agreements such as our own….We think they are better prepared to take on our agreement,” he said.
Councilman Bill Brand, after voicing some initial concerns, said he was satisfied that the process had been fair and that the city had emerged with a significantly improved contract.
“It may not have been the perfect process, but it’s good enough, as far as I can tell,” Brand said.
Councilman Steve Aspel said he called six cities that had contracted Athens, including Palos Verdes Estates, and didn’t find a single complaint.
“There was not one complaint from anybody…and the people in Palos Verdes Estates will complain about a sunny day if given the opportunity,” he said.
The council approved the contract in a 4-1 vote, with Aust voting in opposition. Athens will begin July 1. ER
