With the advent of July, Waste Management Inc. is coming in to establish itself as Chino Hills’ franchised trash hauler, displacing Republic Services, which was formerly known as Taormina Industries.
The changeover from Republic represents by some estimations a healthy realignment in the complicated dynamic and balancing of influence related to refuse handling in what is the largest county geographically in the United States, involving a business that traditionally throughout the United States is intertwined with the mob, gangsters and racketeers.
At the same time, there is concern that the city evinced favoritism in awarding the franchise, which went to a service provider with a demonstrated history of using questionable methods, including bribery and intimidation, to advance its standing in the industry.
San Bernardino County has for the most part managed to sidestep some of the worst elements of underworld culture that coexist with many of the companies that dispose of domestic, commercial and industrial trash, and tales of bodies ending up in the waste stream buried in the region’s landfills are relatively rare. There have been along the way, nevertheless, efforts at influencing politicians and government officials in illicit ways that reflect poorly on the trash hauling industry, certain companies, the politicians who are in their pockets and the politicians who are not taking bribes but tolerate their colleagues who do.In January, Republic Industries, the nation’s third largest trash hauler, suffered what in the overall scheme of things was a minor setback for it when the city elected to terminate the franchise arrangement with the company as of June 30. Had it kept the contract with Chino Hills, San Bernardino County’s ninth largest city population-wise, Republic would have been able to continue its claim as a major player in the county’s garbage industry. When 2022 began, Republic had franchises with two of the county’s 22 cities – Chino Hills and Colton, and two unincorporated communities in the eastern Mojave Desert. The loss of the Chino Hills contract erodes Republic’s standing and influence in San Bernardino County, perhaps compromising its ability to expand its presence therein. At present its trash hauling services in San Bernardino County extend only to the aforementioned Colton and along the Colorado River and Vidal Junction.
Capturing the Chino Hills franchise represented a coup for Waste Management, Inc, which is the largest and by some accounts the most politically connected of all trash companies in the United States.
At one point, some three decades ago, Waste Management had a larger presence and a far more significant position in San Bernardino County than it does at present. To some degree, it lost that vaunted advantage because of its use of heavy-handed tactics and efforts toward political influence that fell flat or were so patently obvious that the politicians company officials were seeking to influence could not comply with granting the company’s requests because doing so would poison those officials’ reputations.
Waste Management has been the City of Chino’s franchised hauler for more than four decades. Until 2001 it had the trash handling franchise in Upland, but lost that in a bidding competition with Burrtec Waste Industries. In the early to mid-1990s, Waste Management, in conjunction with the Santa Fe Railroad, was on a trajectory to land an exclusive right to excavate what was touted as the world’s largest landfill at a location in the Mojave Desert between Amboy and Cadiz in San Bernardino County’s vast desert outback, to which trash from Orange, Los Angeles, Ventura and western San Bernardino County would be hauled. That plan, known as Rail-Cycle, foundered however, and Waste Management failed in other endeavors in San Bernardino County, such as capturing the contract to manage the county’s multiple landfills and obtaining the trash hauling franchises in the cities of Colton and San Bernardino when those municipalities dissolved their sanitation divisions in 1996 and 2015. Waste Management yet has the trash disposal franchise in Chino and the unincorporated communities of Trona, Kramer Junction, Red Mountain, Boron, Windy Acres and Four Corners in San Bernardino County. With the addition of the Chino Hills contract, Waste Management has now reestablished a firm toehold in San Bernardino County, concentrated at its extreme southeast corner. Having now gone from the county’s fourth-largest to third-largest refuse handler, it is anticipated it will attempt to make further inroads in obtaining some of the franchises held by the two most active trash companies in the county, Burrtec Industries and Athens Services.
At present, Burrtec has plum franchises in the six largest of San Bernardino County’s 24 cities – San Bernardino, Fontana, Ontario, Rancho Cucamonga, Victorville and Rialto. The company also has franchises in ten of the county’s other municipalities – Apple Valley, Twentynine Palms, Yucca Valley, Yucaipa, Adelanto, Upland, Grand Terrace, Highland, Montclair and Barstow. Additionally, it is the franchised garbage handler in the unincorporated San Bernardino County communities of Amboy, Angeles Oaks, Yermo, Victorville, Valley of Enchantment, Twin Peaks, Arrowbear, Baker, Barton Flats, Bloomington, Blue Jay, Skyforest, Silver Lakes, Cedar Glen, Cedarpines Park, Cima, Crestline, Daggett, Del Rosa, Devore, Dumont Dunes, El Rancho Verde, Forest Falls, Fort Irwin, San Antonio Heights, Running Springs, Nipton, Oak Glen, Newberry Springs, Mount Baldy, Mountain Pass, Halloran, Helendale, Hinkley, Kelso, Lake Arrowhead, Lenwood, Landers, Lucerne Valley, Ludlow and Mentone.
In addition, Burrtec was, from 2001, when it took over from Norcal, until 2013 when it lost the contract with the county, the operator/manager of the county’s landfill system.
Burrtec had obtained that contract in some degree on the basis of county officials’ assumption that, as the county’s most prolific garbage hauler, the company would divert much or all of that trash into the county’s landfills, generating money for the county in the form of tipping fees. By 2010, however, the county was concerned that Burrtec, which owns and operates two landfills in Riverside County, was diverting the lion’s share of the trash it picked up locally to Riverside County, thereby depriving San Bernardino County of revenue.
The county in 2013, after seeking to cajole and wheedle Burrtec into channeling significantly more of the trash picked up in the county into the county’s dumps and failing, opted against extending Burrtec’s contract to run its landfills and put the contract out to bid.
Burrtec joined with two companies – Athens and Waste Management – in bidding on the contract. At issue in those bids was more than the cost those companies would charge to operate, manage and maintain the county’s waste disposal system, consisting of five active landfills and nine transfer stations. Also considered under the county’s analysis was the amount of revenue each of those companies could generate into the county in the form of tipping fees at the landfills. Athens is the largest trash hauler in Los Angeles County and has trash hauling franchises in Riverside and Orange counties as well.
Burrtec provided the lowest bid – $15.8 million – for the task of operating the landfills. Athens and Waste Management bid $16.687 million and $17.2 million, respectively. The county gave the nod to Athens because that company was able to guarantee that it would import into the county’s landfills 800,000 tons of municipal solid waste and processed green material per year during the 10-year term of the contract, which will bring gross revenue to the county in the amount of approximately $22 million per year. Burrtec was able to guarantee solid waste importation that would provide the county with annual tipping fees at its landfills that were substantially less than that offered by Athens, at $6.3 million.
Despite its primacy as a trash hauler in Los Angeles County, Athens has no municipal franchise in San Bernardino County.
Questions emerged over the latest competition and bidding process for the Chino Hills trash hauling franchise.
Vying for the contract, which pertained to supplying service to Chino Hill’s 85,081 population, its roughly 22,000 households and its businesses were Republic, Athens Services, Waste Management, Burrtec Waste Industries, Valley Vista Services, Ware Disposal, and a joint venture involving Urbaser and American Reclamation. In the first round of the competition, Valley Vista Services, Ware Disposal, and Urbaser/American Reclamation all underbid Republic, Athens, Waste Management and Burrtec. Urbaser/American Reclamation was, essentially, the low bidder for the franchise contract, having agreed to deliver comprehensive trash service to the city’s customer base for $8.075 million annually. Ware was the second lowest bidder at $10.084 million, and Valley Vista had the third lowest bid at $10.257 million. Nevertheless, the city’s trash hauling advising consultant, HF&H, told the council it should only consider the bids from Waste Management at $10.582 million, Athens at $11.242 million, Republic at $12.885 million and Burrtec at $13.483 million. This was because, HF&H said, Waste Management, Athens, Republic and Burrtec had proven track records in the Southern California Market.
Somewhat paradoxically, according to HF&H, the consideration that Urbaser/American Reclamation, Valley Vista and Ware were going to charge less than the other four companies indicated they were not as suited and less qualified for the franchise. HF&H and city staff, focusing on the consideration that the Chino Hills franchise would represent a far larger percentage of Urbaser/American’s, Valley Vista’s and Ware’s revenue in Southern California than it would for Waste Management, Athens, Republic and Burrtec, implied that the Urbaser/American Reclamation, Valley Vista and Ware bids were unrealistic ones. While Councilman Ray Marquez did not buy that reasoning in November 2021, city council members Art Bennett, Cynthia Moran and Peter Rogers did, and Urbaser/American Reclamation, Valley Vista and Ware were eliminated from the running. Then-Mayor Brian Johsz, who is employed by Athens Services, did not participate in the discussion or vote relating to the trash franchise contract.
Thereafter, in the second round of competition, Athens Services said it was prepared to offer the city’s residents and businesses trash hauling services in the first year for a total rate revenue of $10,508,000. Waste Management projected a total rate revenue higher than what it had previously at $10,676,000. Burrtec’s and Republic Services’ costs were well off that mark at $12,452,000 and $12,725,000 respectively. Athens Services also proposed the lowest basic per household rate for the city’s residents, at $25.80 per month. Waste Management came in at $26.25. Republic Services, which was at that time charging Chino Hills residents $25.02 per month for the service being provided, proposed increasing the monthly rate to $26.45. Burrtec’s proposed monthly charge to residents was nearly off the chart, at $31.44 per month.
Ultimately, the city council bypassed Athens as the low bidder and went with Waste Management by a vote of 3-to-1, with Rogers dissenting.
The rejection of the four lowest bidders for the Chino Hills franchise was only the latest intimation of impropriety and influence peddling relating to which trash hauling companies are going to profit and by how much throughout San Bernardino County.
Refuse handling companies and their employees are historically among the most reliable and some of the largest donors to the political war chests of the county’s politicians. While denials are made that those donations are intended to purchase influence, circumstances suggest otherwise. It is noteworthy that trash hauling companies and their employees generally do not make donations to politicians who are not in a position to engage in the decision-making process relating to trash handling franchises and their donations almost universally are provided to politicians who have supported the awarding of franchises to them or the company they work for.
The atmospherics surrounding the decision-making process relating to trash hauling contracts in San Bernardino County has historically ranged from the merely unethical to the outright criminal.
In the early 1990s Norcal Waste Systems, Inc. had a contract with San Bernardino County relating to trash and refuse handling at the county’s landfills. Kenneth James Walsh, a vice-president of Norcal, in 1994 began negotiations with the county relating to Norcal assuming control over and full management of the county’s landfills, representing an up-rating of the company’s contract from roughly $18 million per year to more than $40 million. In 1994, Norcal hired San Bernardino County’s former chief executive officer, Harry Mays, under whom the county had entered into the original contract with Norcal, as a consultant. Mays thereafter arranged for the provision of bribes to his successor at the county, James Hlawek, and then pressured him to induce the county to provide Norcal with a more comprehensive landfill management contract. Thereafter, Mays and Hlawek devised for themselves further personal financial gain from the new Norcal contract. Mays negotiated a more lucrative consulting agreement with Norcal in January 1995. The revised contract provided that Mays and his company, Bio-Reclamation Technologies, Inc., were to receive a $1 million fee when the county approved the Norcal contract, plus additional payments if Norcal’s revenue increased through the issuance of bonds to finance landfill closures. Mays agreed to split Bio-Reclamation Technologies’ fees 60 percent to 40 percent with Walsh. Hlawek’s share of the payoffs was quantified by prosecutors as $227,000.
During 1995, Hlawek used his authority and influence as county administrative officer and chairperson of the county’s negotiating committee to obtain county approval of the Norcal contract. Among other things, Hlawek convinced the county board of supervisors to award the contract without competitive bidding. The county board of supervisors, led by then Supervisor Jerry Eaves, approved the Norcal contract on September 12, 1995.
From 1995 to 2000, the County paid Norcal more than $200 million. During the same period, Norcal paid $4.2 million to Mays and Bio-Reclamation Technologies under their consulting agreement and Bio-Reclamation Technologies, in turn, paid more than $1.1 million to companies owned by Walsh. Hlawek, in statements to the FBI, intimated bribes had been paid to Eaves, but was not able to quantify those.
Rail-Cycle, a proposed joint venture between Waste Management Inc. and the Santa Fe Railway to haul 21,000-tons of garbage per day produced in Southern California to a 4,900 acre landfill to be established at a location just off the Santa Fe line at Bolo Station east of Amboy in the Mojave Desert was abandoned after reports of bribes being conveyed to Eaves and another member of the San Bernardino County Board of Supervisors, Marsha Turoci, and the simultaneous release of the so-called Miller Report compiled by former San Diego County District Attorney Ed Miller. The Miller Report cataloged Waste Management’s history of unlawful activity in expanding its operations, including intimidation, extortion and bribery of public officials. The Rail-Cycle debacle and the Miller Report precipitated a contraction of Waste Management’s presence in San Bernardino County in the late 1990s and early 2000s.
In 1997, the so-called McDonald Report, written by former Riverside County Deputy District Attorney Mark McDonald, detailed the manner in which Burrtec had offered a superior franchise proposal to take on the trash hauling assignment in Colton when that city closed out its municipal sanitation department in 1996, only to be outmaneuvered by Taormina Industries, which was subsequently absorbed by Republic. According to McDonald, through “gifts,” donations and other gratuities “tantamount to bribery,” Toarmina induced then-Colton Mayor George Fulp and councilmen Don Sanders and Abe Beltran to award the contract to Taormina, despite an evaluation done by city consultant R.W. Beck and its principal, Richard Tagore-Erwin, which delineated how the Burrtec service proposal in the franchise bid was superior in all particulars to that provided by Taormina.
In 2015, when San Bernardino shuttered its sanitation division, Waste Management dropped out of the competition to obtain the county seat’s trash hauling franchise early in the process, leaving the field to Burrtec and Athens. Both companies made comprehensive proposals, which were subject to vetting and evaluation by then-City Manager Allen Parker, then-Community Development Director Bill Manis, and then-Public Works Division Supervisor Chris Alaniz. Before that evaluation was completed, evidence of Burrtec’s violation of the competition protocol emerged, as the company came into contact with a number of city officials and employees other than the three – Parker, Manis and Alaniz – and the city consultants – Andy Belknap and Richard Tagore-Erwin – designated as those with whom the competitors were permitted to communicate. In particular, then-City Councilman John Valdivia, who is now the city’s mayor, made pointed requests of both competitors for campaign money, going so far as to specify that he wanted $10,000 from each. Athens, adhering to the competition protocol and believing such a donation could be construed as a bribe, did not comply with Valdivia’s request. An evaluation of the franchise proposals carried out by Belknap and his company, Management Partners, using ten-year cost and revenue projections, demonstrated that in terms of revenues coming into the city, Athens offered the best proposal, and that based upon Athens’ salary and employee benefits and profit-sharing arrangement, the city’s sanitation division employees who were to be absorbed by the franchise holder would fare better as Athens employees than as Burrtec employees. The council, however, prompted in large measure by Valdivia and relying on a report attributed to then-Public Works Director Bill Manis which was in actuality written by Alaniz, defied the advice of then-City Manager Allen Parker, who recommended granting the franchise to Athens, and awarded the contract to Burrtec. Subsequently, Alaniz was hired by Burrtec into a senior management position.
At present, Burrtec remains as the primary trash hauler in San Bernardino County. Nevertheless, Athens holds the prestigious position of managing the county’s landfills and Waste Management, Inc has made a major stride in reasserting itself as a player within the county’s trash handling industry. Next year, when it is anticipated that all three will compete to see which gets the county landfill managing contract for the next decade, there will perhaps be some clarity as to which is best, at least for the time being, at wielding influence among the county’s governmental elite.
-Mark Gutglueck