By Mark Gutglueck
What goes around has come around as Waste Management, Inc., the unexpected sweepstakes winner last January in the competition for 78,665-population Chino Hills’ trash hauling franchise when the previous franchisee was beset with labor challenges, finds itself facing a potential walkout of the workers manning its trucks and employed at its Chino and Corona facilities.
The unrest among the company’s sanitation workers comes at a crucial juncture, just as Waste Management is moving to solidify its hold on the trash handling duties in the southwest corner of the county.
Waste Management, the largest garbage hauler in the United States, once had a stronger presence in San Bernardino County, but for two decades found itself outhustled and outmaneuvered by smaller and hungrier competitors. For more than 40 years, the company has had the refuse handling franchise in Chino. In the 1980s and 1990s, it also had the trash hauling franchise in Upland. When the City of Colton dissolved its sanitation department in 1996 and when the county’s largest city, the county seat San Bernardino, did likewise in 2015, Waste Management competed to obtain contracts in those cities where no franchise had previously existed and seemed to be on a trajectory to get those lucrative assignments.
But in Colton, Waste Management was cut off at the pass when three of the city’s seven council members, including the mayor, were bribed by the company, Toarmina Industries, that obtained the franchise contract. Similarly, in 2015, Waste Management ultimately lost out on the trash hauling franchise in San Bernardino when the eventual winner, Burrtec Industries, violated the ground rules for the competition that included prohibitions on lobbying city officials ahead of the awarding of the contract. In 2001, Burrtec beat out Waste Management when the contract for Upland’s franchise was rebid.
Also in 2001, after a multi-dimensional scandal involving two of the county’s former highest-ranking officials and the vice president of the Norcal Corporation who had bribed them, the county rebid Norcal’s contract for managing and operating the county’s landfills, a franchise then worth $30 million per year for which Waste Management would have been suited and was eminently qualified. Burrtec claimed the contract as a consequence of that competition. Again in 2013, Waste Management was unable to get the county’s landfill operating gig when it was again put up for bid.
As of last year, Waste Management was the county’s fourth most prolific trash handler, behind Burrtec; Republic Industries, which had subsumed Taormina in a corporate takeover more than two decades ago; and Athens Services, which is the current holder of the landfill operations contract. Waste Management’s presence in San Bernardino County consisted of its franchise with the City of Chino, a facility in Chino and the franchises in the six Western Mojave Desert communities of Trona, Kramer Junction, Red Mountain, Boron, Windy Acres and Four Corners.
Late last year and early this year, serendipity struck. Chino Hills was looking to rebid its trash franchise, which was held by Republic Industries. Republic seemed to have the inside track, but six other companies made their interest in the franchise known.
Vying to provide trash 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 bid came in at $12,452,000.
At that point, disaster struck for Republic. Its workforce was threatening to strike, creating a possibility that domestic and commercial trash bins in Chino Hills would not be picked up for a week or two. Residents and city officials were conjuring mental images of overflowing garbage in garages, driveways, backyards, onto streets and alleyways, upon which rats would feast, together with bubonic-infested fleas feasting upon the rats. Republic’s sanitation workers had its corporate officers over a trash barrel. The company had no choice but to increase its drivers’ salaries. In the end, Republic Services’ bid came in at $12,725,000.
In parsing out what the total rate revenue offers meant, it was shown that Athens Services was proposing to collect each household’s trash for $25.80 per month, the lowest per-customer cost. 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, though its commercial rates were lower.
As had already been demonstrated and would again be illustrated, customer cost was not the only consideration in conferring the franchise on one of the competitors. There were tangibles and intangibles in the calculation. Republic was in place in Chino Hills and had been functioning adequately for years. Transitioning to another hauler, no matter which one, would involve some bumps and hiccups here and there. Despite the 65 cents domestic household rate difference between Republic and low bidder Athens, the city council might have been able to countenance keeping Republic in place. But one of the intangibles was the fear factor that had been created with Republic’s drivers threatening to go out on strike.
Noteworthy is that the franchise in the end did not go to the lowest of the remaining bidders, Athens. Like Republic, Athens, too, was felled by one of the intangibles in the calculation. Controversy had been created when the three lowest bids, the ones from Urbaser/American, Valley Vista and Ware had been bypassed in the first round. Thereafter, in January, Athens had emerged as the low bidder among the remaining competitors, the ones which had not been eliminated because their rates were too low. After having discarded the lowest bid and low rates as the primary distinguishing characteristic in the competition, the council was on the brink of now using the lowest bid as the deciding criterion. But as it turned out, that lowest bidder among the four original highest bidders was the company that employed one the four deciding council members’ colleague, Brian Johsz. Suddenly, the largest looming intangible was that a member of the council was about to see the fortunes of his employer boosted by the city’s rebidding of one of its major franchises. A decision was made at that point to bypass Athens as the low bidder, just as Urbaser/American, Valley Vista and Ware had been bypassed previously, if for nothing other than the sake of appearances.
By a vote of 3-to-1, with Councilman Peter Rogers dissenting, Waste Management was given the franchise.
As a consequence of the changeover in Chino Hills from Republic to Waste Management, the ranking of the county’s most active trash haulers was to shift as of July 1, the first day of the municipal new year, when the new franchise goes into effect. Republic, which was the county’s third most active trash hauler, has now slipped into fourth place in terms of the amount of refuse it carts off. Waste Management, formerly ranked fourth among garbage companies in the county, is now third.
This week, as the trash bins that had been supplied to Chino Hills’ residences and businesses by Republic were being substituted out for new ones supplied by Waste Management, that company’s corporate officers found themselves confronted with demands by their garbage workers, including the ones who are employed at their Chino and Corona facilities who are represented by Teamsters Local 396, for higher wages, better benefits and fewer hours on the job.
Union officials say that the contract the drivers and sorters are working under expired in April and that Waste Management’s corporate division knew that the employment contract renewal was going to be an issue even before the decision by the Chino Hills City Council in January to award that city’s franchise contract to the company. Adequate opportunity existed to make adjustments and offers that would have been acceptable to the rank and file in January, February, March and April, they said. The drivers have been working without a contract for three months at this point, they said.
At issue is more than just pay. The workers want the company to hire more workers and reduce the size of routes. In 2010, the population of Chino was 77,983. Today it is 93,953. Chino Hills, which in 2010 had 74,799 residents, today boasts 78,655. Drivers spend ten hours on their routes and another hour-to-hour-and-a-half coming and going to and at the company’s facilities on a daily basis.
Waste Management corporate officers and the Chino Hills officials who participated in the franchise bidding process late last year and early this year are hopeful the labor dispute will be resolved without service disruptions and rats running rampant in the backyards, garages, driveways, alleyways, sewers and streets of Chino Valley, but have grudgingly acknowledged that the sanitation workers this time have them, rather than Republic’s corporate officials, over a trash barrel.
By Mark Gutglueck