Waste Management retained as trash hauler
by Mark McDermott
The City Council Tuesday night unanimously voted to award a new seven-year trash hauling contract to Waste Management, the company which has provided the service in Manhattan Beach for over three decades.
The contract, worth a total of $42 million, is the largest in the city’s history, eclipsing the $27 million contract awarded to Waste Management in 2011. The 47 percent increase in cost will result in 25 to 86 percent increases to residential rates and a doubling of commercial rates. City staff and the three waste haulers who participated in the city’s 18-month Request for Proposal (RFP) process all attributed higher costs in the waste hauling industry to changes in the market — specifically, China’s reduced intake of recycled waste as a product, and statewide regulatory changes.
Recycling was at the center of Tuesday night’s discussion, which came after a dramatic last-minute offer by Waste Resources Technologies to drop its proposal from $48 million to $42 million and increase its landfill diversion rate — recycling, essentially — from 48 to 60 percent.
The problem, as most of the council saw it, is that the lower offer didn’t arrive until 4 p.m. and councilmembers didn’t see it until they were on the dais.
“I really don’t like getting this new proposal at the dais,” said Councilperson Amy Howorth, who along with Councilperson Richard Montgomery formed the subcommittee that handled the proposal process. “When we asked [for proposals] — we’ve been doing it a long time. We could have had that sooner, that highest and best [offer], and other people did not have the chance to submit that…You don’t want to negotiate at the dais.”
Montgomery was more open to reconsidering.
“We have seen and talked trash for a year and a half now and we are still not done,” he said.
Montgomery suggested pausing the process to better understand what the new offer would entail.
“I just think this a big step for us,” he said, noting the contract would not go in effect until July 2020. “I’m not advocating rebidding. I’m [for] taking a look, and see if we can get a lower cost for residents and business owners. Why wouldn’t I look at that?”
State law requires a 50 percent overall diversion rate for cities, and that all businesses achieve a 75 percent diversion rate by 2020 — hence the doubling of costs for businesses. In the final proposals submitted within the formal process, Athens Services offered the highest diversion rate, at 50 percent, while Waste Management offered the lowest, at 46 percent. Athens cost, $62 million, was by far the highest.
Athens executive vice president Gary Clifford said the company was responding more specifically to what the city had requested than the other haulers.
“If you look at the Athens proposal, nine times in your RFP it said, ‘We want the highest diversion, we want the most environmentally sound proposal,’ not the lowest price. That’s what Athens gave you. We are ranked the highest diverting. We can do more, but we guaranteed 50 percent. We’re 70 percent in the city right next to you. We can do it.”
Waste Resources COO Tommy Gendal said that environmentally his company was far ahead of not only its competitors in Manhattan Beach but the industry as a whole. The company uses electric trash trucks and doesn’t depend on China to buy recycled waste, he said, but has a new technology in which the company creates its own products from waste.
“We’re a waste company that doesn’t believe in landfills,” Gendal said. “They are a cost. We don’t think waste is the right environmental solution. We believe waste can be converted into a useable and valuable product.”
Waste Resources Founder Kosti Shirvanian, who has been in the business since the 1950s and was involved in the founding of the company that became Waste Management, Western Waste, said he came out of retirement in Hawaii to solve the problem of waste. He said the company’s new technology could achieve over a 90 percent diversion rate.
We want to do a great job for your city, not only for the money,” Shirvanian said. “We’re here to contribute something for the country. We’re trying to do something revolutionary.”
The offer came too late. Councilperson Nancy Hersman said that resident input was almost unanimously in favor of Waste Management, which under different names has served the city since the 1980s.
“All our emails were, ‘We love Waste Management,’” Hersman said. “They especially love Jason, whoever that is — Jason the driver.”
Councilperson David Lesser said that with rates going up throughout the industry, Waste Management’s proposals simply offered the best deal. He also questioned the other company’s suggestion that higher diversion rates could be achieved.
“The reason I am proposing to move forward with Waste Management is they are by far the lowest price,” Lesser said.
Waste Management director of operations Doug Corcoran upped the company’s promised diversion rate to 50 percent.
“We are just going to get after it,” he said, praising the local Waste Management employees. “Everybody who works here is just awesome. They take it so personally.”