Trash Talkin' Part 2 - The 3 Rs

Yesterday we discussed the big changes coming to the rates for trash hauling in the commercial and multi-family areas, and we identified a flawed RFP as the proximal cause of why the City received only 2 bids to provide services. Today I want to discuss why the City chose to go with the company that offered the highest rates.

WHY GET RID OF WM?

In the 2012 Resident satisfaction survey, when people were asked to rate “Providing garbage collection” 93% of the people were “very satisfied” or “somewhat satisfied”, only 1% were “somewhat dissatisfied” and 0% were “very dissatisfied” (6% had no opinion). Looking at the entire survey, more people in Lake Forest are very satisfied or somewhat satisfied with providing garbage collection than they are with –

• Street sweeping
• Maintaining trees
• Preventing storm water pollution
• Reducing traffic congestion
• Providing bike paths
• Maintaining public landscapes
• Providing after school recreation
• Providing pre school programs
• Providing  teen programs
• Providing  adult sports programs
• Providing  programs for seniors
• Providing  programs for families
• Providing  special needs programs
• Providing  summer specific programs
• Providing concerts in the park
• The 4th of July Parade
• Zoning code enforcement
• Issuing building permits
• Inspecting buildings
• Enforcing sign regulations
• The city’s efforts to communicate with the people
• Providing  neighborhood watch programs
• Providing  child safety programs
• Providing  crossing guards
• Providing  animal control services
• Investigating criminal activity
• Enforcing traffic laws
• Preparing for emergencies

Etc. etc.

There is almost nothing that the City does that earns higher grades than garbage collection. So what happened on Tuesday night when the City Council voted unanimously to end the decade old contract with Waste Management and replace them with CR&R.

Let's examine the 3 Rs - record, reputation, and rates.

Was it the record of service that CR&R has in other cities? If you google CR&R you’ll find several articles about the dis-satisfaction with CR&R in cities like Laguna Hills, Costa Mesa, and Tustin. So it can’t be CR&R’s service record.

Can it be the rates? Although no one could give us a straight answer, from what we heard at the City Council meeting, WM’s proposed new rate schedule was similar to CR&R in the residential area and much lower in the commercial area. According to WM, the total cost under CR&R is $7.4 million while under WM’s proposal it was $6.3 million, and under an alternative plan that the City refused to discuss, the proposed cost could have been as low as $5.9 million. So it couldn’t be the rates.

Can it be the reputation of the two companies? WM is the premier waste management company in the U.S. It is a public company, operates in North and South America, and is a world leader in recycling, green supply chain management, and bioenergy. CR&R is a privately held company, with revenues between $20 and $50 million. So it can’t be the reputation.

If neither rates, reputation, nor record of service were the reason CR&R was selected over WM, what then was the cause?

PUSHING THE PAPER

It was the unanimous opinion of the Council, the staff, and the consulting company that CR&R did a much better job in responding to the RFP. Over and over again, the point was made that WM did not do a good job complying with the demands of the RFP. On occasion, much was made of the fact that WM would not reveal their proprietary secrets, and on another occasion it was mentioned that CR&R made a .02 error on weight. Personally I don’t blame WM for protecting their proprietary information, and as far as the error in weight, it was a mere .02 and, if you recall, Mayor Robinson’s own company has been cited by the federal government (more than once) for under-estimating the weight on his trucks, so perhaps the unforgiving attitude toward WM’s mistake was out of proportion.

Apparently the bulk of the complaints for WM’s failure to respond adequately to the RFP revolved around several issues which WM wanted to negotiate with the City. But the City did not want to negotiate, they wanted WM to respond to the demands of the RFP. That might have been a reasonable demand on the part of the City, but with such a flawed RFP, I’m not surprised that WM had problems trying to respond to it. The fact that CR&R managed to respond adequately to the RFP is all to CR&R’s credit, but I can’t help but wonder if somewhere down the road, CR&R will not come back to the City and re-negotiate some aspects of the contract. They’ve done this elsewhere, and in fact, the same night that CR&R’s proposal was accepted, another company was busy re-negotiating a different contract with the City. IOW, CR&Rs higher rates may go even higher down the road when they try to satisfy the requirements of an RFP that is problematic.

So, the bottom line for the consultants, the city, and the council, was that CR&R’s superior ability to respond to the RFP made them a better choice than WM, whom everyone acknowledged had done an excellent job to date actually delivering the service. If we were selecting a company that was going to write RFPs, the rationale makes sense. But the City is selecting a company to provide waste management services, and we had a proven entity offering a lower rate.

NICK TO THE RESCUE?

Councilman Nick, after listening to several Lake Forest residents praise WM’s performance and their involvement in the life of the City, and to their concerns about the new much higher rates proposed by CR&R, asked his colleagues to delay the decision and invite more discussion between the Council and the residents. His excellent suggestion failed for lack of support for his motion from any of his colleagues. This Council, through their actions, has demonstrated on several occasions (e.g., the Traffic Committee, the nonprofit Foundation) that Citizen involvement is not a priority, so the thought of inviting more people to discuss the issues was anathema.

It isn’t all over yet. In our next installment we’ll discuss the next step.