(October 11) A controversy has developed involving Upland Assistant Public Works Director Acquanetta Warren and her participation in recommending an extension and revision of Upland’s trash hauling franchise contract.
At issue is that in addition to being Upland’s assistant public works director, Warren is also the mayor of Fontana. Fontana, like Upland, has a longstanding franchise arrangement with Burrtec Waste Industries for the provision of refuse service. Burrtec and its principals and employees collectively are one of Warren’s major political supporters in terms of donations to her various campaign funds, including those relating to her city council, mayoral and Assembly runs. And while under California law Warren is free to vote and support Burrtec with regard to the city of Fontana’s franchising of the company, provisions of the California Political Reform Act which are now part of the state’s government code prohibit her from engaging in any governmental decision making process involving the waste handling company outside of her elected capacity in Fontana.
Thus, in making statements to the Upland Finance Committee on September 30 in her capacity as assistant public works director that were generally interpreted as a recommendation that the city extend Burrtec’s contract for at least another 15 years and in so doing confer upon that company a contract with a total value in the neighborhood of $150 million, Warren appears to have run afoul of Government Code Section 87100, pertaining to conflicts of interest involving public officials.
Since 2000, Burrtec has had a franchise within the city of Upland for the hauling of trash. In 2001, Burrtec obtained a $17 million per year contract with the county of San Bernardino to run its landfill system. Shortly thereafter, the company had landed trash hauling franchises in 16 of the county’s 24 incorporated cities and 35 of its unincorporated communities, putting Burrtec literally and figuratively at the top of the trash hauling heap in the county.
In 2004, Burrtec, after extensive dialogue with then-Upland mayor John Pomierski, altered its franchise contract with Upland to put in place a so-called “evergreen” clause, which renewed the franchise contract for seven years every year unless Upland gave notice it wanted to rebid the contract, in which case the franchise would then have six years to run. In 2007, Pomierski again huddled with Burrtec executives and and then-Upland city manager Robb Quincey, and altered the franchise contract to provide for revenue sharing on recyclable conversion and retrofit Burrtec’s Upland operation with newer vehicles and trash bins.
In April of this year, the county board of supervisors, upon the recommendation of county public works director Gerry Newcombe, elected against renewing the landfill management contract with Burrtec, instead going with Los Angeles County-based Athens Services. While Burrtec remains a major player in the San Bernardino County waste industry, the loss of the landfill contract was a significant one. At the corporate level, Burrtec began casting about for a strategy to maintain its profitability into the coming decades.
Part of that strategy is to consolidate and extend for as long as possible its existing franchises. An early major test of that strategy is now playing out in the city of Upland. In May, Burrtec executive vice president Michael Arreguin wrote a letter to Upland Public Works Director Rosemary Hoerning, proposing a franchise contract revision that called for the company taking on the additional responsibility for recycling, paying the city a vehicle weight fee to offset the cost of repairs to the city’s streets necessitated by the weight of Burrtec’s trucks, providing street sweeping throughout the city, and offering household hazardous disposal as well as medical waste disposal to its Upland customers. As part of the revision, Burrtec asked that the city allow it to increase the rate it charges Upland’s customers by 7.2 percent for the remainder of 2013-14; another 2.1 percent in July 2014; 2.1 percent in July 2015; 2.3 percent in July 2016; and 2.4 percent in 2017. Increases beyond that would be tied to the Consumer Price Index. Perhaps the most significant change the company requested was the extension of the evergreen term by eight years from seven to fifteen years, thus ensuring that Burrtec will remain as Upland’s trash hauler at least until 2028.
As public works director, Hoerning was ultimately responsible for analyzing the Burrtec proposal and making a recommendation on it to city manager Stephen Dunn. Because of her heavy workload, however, Hoerning begged off on that assignment. Logically, responsibility for the analysis would have next fallen to Warren, as Hoerning’s top assistant. Warren, however, possibly because of her relationship with Burrtec as mayor in Fontana and a recipient of at least $11,578 in campaign contributions from that company or its principals over the years, was not given the assignment either. Instead, Dunn, using his authority to spend up to $50,000 per vendor without prior city council approval, hired Northern California-based R3 Consulting Services to evaluate the Burrtec proposal.
R3 returned a report that highlighted the benefits of Burrtec’s revised franchise contract proposal, and Hoerning, without seeking outside bids or any further input, then cited R3’s endorsement of the concept in making a staff recommendation that the city council approve the revision and extension. As one of the final parts of the vetting procedure, the revision was scheduled to come before the city council’s finance committee, consisting of councilmen Glenn Bozar and Brendan Brandt. Brandt, however, has indicated he will abstain from voting on the matter because his law firm has done work for Athens Services, one of Burrtec’s competitors, resulting in a conflict of interest. Thus, when the committee considered the revision on September 30, councilwoman Debbie Stone, as the alternate member of the finance committee, substituted for Brandt.
Present at the September 30 committee meeting was Arreguin, who laid out and touted his company’s revision proposal. City staff present included Dunn, Hoerning and Warren, as well as elected city treasurer Dan Morgan. Stone found Arrequin’s presentation, the R3 report and the recommendations by Dunn and Hoerning persuasive, indicating she was amenable to voting as a member of the committee to recommend that the entire council approve the franchise contract revision as Burrtec has presented it. She said Burrtec’s past performance and the familiarity of its personnel with Upland and its routes convinced her that keeping Burrtec in place was in the city’s interest.
Bozar, however, proved to be a much harder sell and said he was not in favor of the 15-year evergreen clause, which he said would have the immediate practical effect of conferring upon Burrtec a franchise contract that would have a total contract value approaching $150 million over the next 15 years, while creating a situation in which the franchise would remain in effect for at least 28 years unchecked by any competitive bidding process for that entire length of time. He indicated he wanted to explore revising the franchise contract to remove the evergreen clause altogether.
In the go-round that ensued, city staff restated the case for the city retaining Burrtec and approving its franchise contract revisal as presented, including input by Warren, in which she commended Burrtec for the efforts it has made in improving the level of trash service in Upland and responding to her own requests and those of other city officials in taking care of problems and difficulties that have cropped up during its tenure as the city’s trash hauler.
It was this advocacy by Warren on behalf of Burrtec that has created the current controversy.
According to California Government Code Section 87100, “No public official at any level of state or local government shall make, participate in making or in any way attempt to use his/her official position to influence a governmental decision in which (s)he knows or has reason to know (s)he has a financial interest.”
Gov. Code Section 87103 (e) states “A public official has a financial interest in a decision within the meaning of Section 87100 if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on the official, a member of his or her immediate family, or… any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating two hundred fifty dollars ($250) or more in value provided to, received by, or promised to the public official within 12 months prior to the time when the decision is made.”
According to the California Fair Political Practices Commission’s website, “If a public official has a conflict of interest, the official may be required to disqualify himself or herself from making or participating in a governmental decision, or using his or her official position to influence or attempt to influence a governmental decision.”
The California Fair Political Practices Commission (FPPC) makes further reference to California Government Code Section 84308 in pointing out that governmental officials serving in an appointed governmental position are subject to greater restrictions than are elected officials with regard to influencing or voting upon issues impacting a campaign donor.
“In most cases, the receipt of campaign contributions is not the basis for disqualification by a public official,” the FPPC website states. “However, certain public officials who make decisions in proceedings involving licenses, permits, or other entitlements for use (e.g., planning commissioners, board members of joint powers authorities and other regional governing or planning agencies, and members of other state and local boards and commissions) are subject to the restrictions of Gov. Code Section 84308. Section 84308 prohibits solicitation or receipt of campaign contributions from parties, participants, or their agents, in proceedings involving licenses, permits, or other entitlements for use. The law also requires an official’s disqualification in those proceedings if the official has received campaign contributions of more than $250 from a party or participant within the 12 months preceding the decision. Finally, Section 84308 requires disclosure of such campaign contributions.”
The website further states, “Elected state officers, judges, and members of local government agencies who are directly elected by the voters (e.g., board of supervisors, city council, school board) are exempt from Section 84308 when they are acting as members of the agency to which they are elected. However, if one of these individuals is also a voting member of another nonexempt body, such as a joint powers agency or regional planning agency, he or she is covered by the law with respect to license, permit or other entitlement for use proceedings before the nonexempt body. For example, if three city councilmembers and two county supervisors sit on a city-county joint powers authority, Section 84308 applies to the license, permit or other entitlement for use proceedings before the joint powers authority because the officials were not elected directly to the authority. It does not apply to the officials when they are voting on matters before the city council or board of supervisors.”
While Warren is not a voting member of the Upland Finance and Economic Development Committee, as an appointed (i.e., hired) member of city staff, she does and has supplied information to the committee and city council to inform their decision making process and thus has served “to influence a governmental decision” as is prohibited in Government Code Section 87100.
Warren may also have failed to meet the reporting burden in Government Code Section 84308. In her statement of economic interest, known as a California Form 700, on file with the Upland city clerk’s office, she made no disclosure of the campaign donations she has received from Burrtec.
When contacted by the Sentinel, Warren said she would not respond to questions relating to the Burrtec contract extension proposal or her role in making recommendations related to it. Nor would she discuss her understanding of the restrictions Government Code Section 87100 places upon her in her professional capacity in Upland as a consequence of the political contributions she has received as an elected official.
“I’m not making any comment, sorry,” she said. “You’ll have to speak to Rosemary [Hoerning] about that.”
Hoerning told the Sentinel that the ultimate decision with regard to Burrtec’s franchise contract revision proposal will be made not at the staff level but by the city council.
“That is a policy question that is being placed before the city for their final decision,” she said.
Hoerning acknowledged there were elements of the proposal that were advantageous to Burrtec, in particular the 15-year evergreen clause, but that this was offset by benefits to the city and its ratepayers.
“That is a long period of time but Burrtec’s proposal has provisions that have merit and are of value to the residents of Upland,” she said. “The contract involves limitations on the rate structure and it imposes a maximum increase cap that will protect the ratepayers.”
Hoerning said she could not speak to whether Warren had violated any parts of the government code.
“I am not familiar at all with the restrictions placed on her as a consequence of her political leadership role with any other agencies,” Hoerning said. “She works on our staff with responsibilities related to the city of Upland’s public works function. I did not rely upon her in making my recommendation. I am relying primarily upon what the city’s consultant, R3, determined, which is that the city should extend the contract. That is what I am recommending to the city council independent of her, along with the city manager. [Burrtec] provides service rates that are below or comparable to what the costs are in other cities, by my review.”
The Sentinel has learned that less than a week after the September 30 Upland Finance and Economic Development Committee meeting, on October 5 Warren hosted a fundraiser for the Fontana Boys and Girls Club, billed as the “Mayor’s Ball.” Burrtec was a major sponsor of that event.
Upland Mayor Ray Musser was non-committal in his response to questions about his city’s assistant public works director’s involvement in a decision making process that has allegedly been tainted by her receipt of money from the company seeking a lucrative contract extension from the city. Nor would he offer his personal assessment of whether Warren’s recommendation at the September 30 meeting was a violation of Government Code Section 871000.
“The city attorney is looking into that,” he said.