Revamped Upland Refuse Handling Franchise Extension Lacks Bid Provision

(February 6)  Four months after the Upland City Council balked at locking in Burrtec Waste Industries’ trash hauling franchise contract for 15 more years, the concept has been resurrected for the city council’s reconsideration, as early as next week.
In October, the city council deadlocked 2-2 on granting the franchise extension, which would have lengthened Burrtec’s trash hauling franchise with the city of Upland from its current seven-year rollover term to 15 years.
Currently, under the so-called evergreen clause instilled into the contract by former Upland Mayor John Pomierski, the city is committed to keep Burrtec as its trash hauler at least until 2020. If it does not give notice to Burrtec that it wishes to rebid the contract by March of each successive year, the franchise is renewed again, i.e., kept green, for at least seven more years.
In May, in a letter to Upland Public Works Director Rosemary Horning, Burrtec proposed the city and Burrtec make adjustments to the  franchise contract. Those changes would have included rate increases to be borne by the city’s residents and businesses, allowing the city to lay claim to a larger portion of the trash hauling revenue, Burrtec paying the city a $200,000-per-year street impact fee to offset the damage the company’s trucks do to the city’s roads and alleyways, incorporating household hazardous waste and medical waste disposal as services rendered to customers, and extending the evergreen clause by another eight years, such that the earliest Upland could have gotten out of the contract with Burrtec would have been 2028.
Councilman Brendan Brandt abstained from voting on the matter because the law firm in which he is a partner has done work for another trash hauling firm that would potentially be in competition with Burrtec for the contract if bidding on the franchise were to take place.
While council members Gino Filippi and Debra Stone supported the extension of the Burrtec franchise contract, councilman Glen Bozar proclaimed opposition to the extension without an accompanying bidding process. He pointed out that Burrtec has held the city trash hauling franchise since 2001, subsequent to the last open bidding on the franchise in 2000. He reasoned that the city should give notice to Burrtec at once so that bidding on the franchise contract can be conducted at the earliest possible date, i.e., in 2020. His adamant opposition to extending Burrtec’s hold on the franchise until 2028, which would be more than a quarter of a century after the last bid competition, persuaded Mayor Ray Musser to reject the extension as proposed by Burrtec.
Subsequently, the city formed a ten-member committee to look at ways the city could redress its deteriorating financial condition. At city manager Stephen Dunn’s suggestion, the committee considered as a revenue enhancement strategy having the city council once again consider an adjustment of Burrtec’s trash hauling franchise. Among the options the committee recommended was that the city council take that matter up as part of a multi-pronged approach in generating new revenue and reducing operational expenses.
Accordingly, the council directed city staff to prepare an item relating to the Burrtec franchise contract adjustment/extension. On January 27 Dunn indicated the item would be ready for council consideration and a vote by the February 10 council meeting. At press time, the agenda for the February 10 meeting was not publicly available, however. Indications were that the newest franchise extension proposal will be substantially the same as that considered in October, with some unspecified revisions.
Unchanged in the proposal is that Burrtec would not need to subject itself to a competitive bid process to obtain the extension.
Burrtec fared rather poorly in one of the last major bid competitions it had engaged in.  Since 2001, Burrtec had held a $17 million-per-year contract for operating the county of San Bernardino’s landfill system. Last April, following a bidding competition, Burrtec lost that contract to Los Angeles County-based Athens Services.
The loss of that contract chastened Burrtec, which currently holds trash hauling franchises with 16 of San Bernardino County’s 24 incorporated cities and 34 of its unincorporated communities.  With Athens and other trash haulers nipping at its heels, Burrtec is militating to maintain its position at the top of the trash hauling heap in the county by solidifying its hold on those 58 trash hauling franchises.  In this way, the effort Burrtec initiated in Upland in May, which proposed adding street sweeping and household hazardous waste and medical waste disposal to the services it already offered the city as an inducement to the council for its consent  to lengthen the “evergreen” clause, has been seen as a test case.
Meanwhile, other refuse handlers appear ready to compete for the Upland franchise contract, if given a chance.  A spokesman with Waste Management, Inc. which held the Upland franchise prior to Burrtec, said his company would participate in the bid process if Upland makes a request for proposals. Similarly, Athens Services, which has a heavy presence in neighboring Los Angeles County and recently established a toehold in San Bernardino County when it outbid Burrtec and Waste Management for the county landfill system operation contract, would be a potential applicant for the franchise.
Free market advocates assert that the city and its ratepayers will benefit by a bidding competition, which would force Burrtec and its rivals to submit proposals that would offer lower consumer rates, enhanced services and more generous give-back arrangements with the city than are likely to be derived from the continuation of the terms in the existing contract.

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