PERSPECTIVE--Much has been written and said about the City of Los Angeles’ implementation of the ill-conceived exclusive trash franchise arrangement.
The news has focused on the unreliable service, excessive customer bills and lack of response by the haulers who have been granted monopolies. Most certainly, more will be said.
But there has also been criticism of the mayor and city council for not owning up to their part in this costly fiasco.
Just not enough, and also missing a major point.
Yes, the trash monopolies are costly, but only to the residents. The haulers are making money … and so is the city; about $35 million per year in franchise fees.
As I mentioned in a previous CityWatch article, at a recent meeting of the Valley Village Homeowners Association, the RecycLA representative told us that the fees were needed to administer the program. I found that extremely difficult to believe and followed up with the City Controller’s office.
You can count on getting a straight answer from Ron Galperin and his staff, and I learned that the fees were going to the general fund, where there are no restrictions.
It really amounts to a virtual windfall to the city as the management of the solid waste program is already funded from the Citywide Recycling Fund, the revenue for which is provided under AB 939, the California Integrated Waste Management Act of 1989. It was the first recycling legislation in the country to mandate recycling diversion goals.
Basically, then, this makes the franchise fee a windfall for the city, if not a backdoor tax. Even though it is paid by the haulers, common sense dictates it is baked into their pricing structures. $35 million is too much for them not to recoup from their captive audience. It is an incentive to bill the customers for anything related to trash, maybe even the rodents who most certainly dine on accumulated uncollected waste. So the city is skimming off the top at the expense of the already beleaguered commercial property occupants.
At last week’s hearings at City Hall, only Councilman Mike Bonin dared to suggest that the fees be returned to those complexes and businesses hard hit by the price gouging.
To add insult to injury, the haulers reap the cash from the sale of recycled materials, while customers face the prospect of having to pay fines for over-filling blue bins because of missed pickups. Talk about double-dipping.
Unfortunately, the brunt of the effort to push back falls on the customers. They are the ones who must document the unacceptable level of service, along with erroneous and inaccurate billings, not the city. They do not get paid for their efforts, unlike our council members for doing little more than threatening the haulers.
Contract law will make undoing the damage a potentially costly affair in itself, especially considering the 10-year duration of the deal. All the more reason for reserving the windfall and returning it to those who have suffered because of it.
(Paul Hatfield is a CPA and serves as President of the Valley Village Homeowners Association. He blogs at Village to Village and contributes to CityWatch. The views presented are those of Mr. Hatfield and his alone and do not represent the opinions of Valley Village Homeowners Association or CityWatch. He can be reached at: firstname.lastname@example.org.)