By Mark Gutglueck
After a substantial buildup, the Colton City Council this week took no action with regard to the city’s ongoing 30-year commitment to CR&R and whether to transform the company’s three decade hold on the city into a four decade one. The non-action gives CR&R another shot at trying to convince the council to simply roll the trash hauling franchise CR&R and its two corporate predecessor’s have had since 1996 over for a third time, meaning the exclusive franchise will be extended to 2036, a duration of four decades without any opportunity for a competitor to offer Colton’s residents or businesses enhanced service, lower rates or both.
CR&R and its two corporate predecessors, Taormina and Republic, have held the city’s exclusive trash hauling franchise since 1996, when the city council as it was then composed phased out the city’s sanitation division and privatized entirely refuse handling in the largely blue collar city.
Controversy attended the privatization transition and the means by which it was implemented, including a graft-tainted selection process for the service provider that ultimately settled upon Taormina, which in large measure prompted the recall of the city’s mayor at that time and resulted in an FBI investigation into under-the-table payments to city officials that ultimately sent three other council members and the succeeding mayor to prison.
A formal city investigative effort, jointly requested by then-Colton Police Chief and then-Colton City Attorney Julie Biggs and guided by the prosecutor who manned the Riverside County District Attorney’s Office’s white collar and political corruption unit, Mark McDonald, documented that after a relatively straightforward competition between multiple applicants for the franchise adjudicated by the city’s trash industry evaluating consultant, the R.W. Beck Company, Fontana-base Burrtec had prevailed. Rather than awarding the franchise to Burrtec as R.W. Beck had recommended, however, the trash hauling franchise had been steered to Taormina in exchange for inducements “tantamount to bribes,” according to McDonald. Contained in McDonald’s report was a statement by Taormina’s chairman of the board, Dave Ault that his company did not intend to fulfill the performance criteria it had committed to under its service contract with the city, spelling out that the company had engaged in gamesmanship to “get to the table” so it could outmaneuver the other companies competing for the franchise.
In the face of all of those revelations and Taormina/Republic’s failure to live up to the service levels it had promised, there was serious contemplation at City Hall with regard to rescinding the approval of the contract with Taormina.
The city did not do so, however. Rather, in a move to deflect the growing perception that the city had entered into a pact with a corporation with “mob ties,” brothers William and Vincent Taormina, the sons of Taormina founder Cosmo Taormina, agreed to a buyout of their company in which they received 6.5 million shares of Republic Industry stock then valued at $250 million and were each given a seat as corporate officers on Republic’s four-member executive board, from which perch they continued to oversee waste handling operations in the western United States. What had been Taormina’s operation – providing trash and recycling service to the cities of Anaheim, Brea, Colton, Garden Grove, Placentia, Villa Park and Yorba Linda coordinated from the company’s Anaheim separation facility where the refuse was run through human monitored machinery vectoring garbage, recyclable materials, and greenwaste into separate streams before being sent along to landfills, recyclers or composting operations, continued as before, including continuing to use David Ault, who had been the Chairman of Taormina Industries and Thomas Vogt, who was Taormina’s president and CEO in their managerial and administrative capacities, but under a different corporate name.
In 2005, at which point the mayor and five of the six members of the council who had been in office when the original Taormina contract had been approved and the follow-on mayor and three council members, including two who had voted to approve the Taormina contract, had gone to prison over issues unearthed by the FBI after it initiated an investigation of the city as a consequence of the findings in McDonald’s report, the city council as it was then composed was faced with a decision of whether to extend Republic’s franchise or carry out an open public bid process, referred to in government parlance as a request for proposals from competitors. With most of the members of the council at that point unfamiliar with the particulars of the shuttering of the city’s sanitation division, the original bidding process that had been tainted by graft or the conclusions of McDonald’s report, members of the council who were being courted by Republic’s representatives and provided with generous campaign donations by the company and its employees, elected to forego a competitive bid process and merely roll the franchise contract over for another ten years.
In 2014, during the run-up to that year’s election, then-acting City Manager Amer Jakher prevailed upon the city council to accept a $40,000 endowment from Republic which committed the city to negotiations with the company before it could undertake discussions with rival trash hauling companies. City management and the city council entered into those discussions despite indications that Republic was at that point looking to sell its rights to the Colton trash hauling franchise to another entity. Curiously, Colton officials pressed forward with those negotiations and neither sought from Republic a clause in the contract that would obviate the franchise arrangement if the franchise were to be sold nor sought to layer into the terms of the contract extension transfer fee from Republic if the franchise were to be sold. Just as curiously, the city in those negotiations refused to use as a bargaining chip the consideration that if the city did not extend Republic’s franchise the company would have nothing to sell to any potential purchaser. Ultimately, in July 2015, eight months after the 2014 election, the sharply split city council in a 4-to-3 vote elected not to engage in a public bidding process and extended Republic’s franchise from 2016 until 2026. One of the rationalizations given for staying with Republic was that it was a known entity to the city and the city was a known entity to the company, such that by simply extending the contract the city would avoid for any residential, commercial or industrial customers any disruptions or diminutions in service that might result if the franchise were to be handed over to company unfamiliar with the community.
In a very compressed time after the new franchise contract went into effect, Republic finalized its agreement with CR&R, which purchased Republic’s trash hauling operations in Colton and Loma Linda, such that CR&R by March 2017 had fully taken over refuse handling in Colton.
In short order, a wide cross section of Colton residents noted what they believed to be a diminution in the quality of their trash service. Residents, commercial business and industrial operations in the city were making repeated note and complaints to both CR&R and the city about inadequate service, including skipping pick-up of trash on normally-scheduled days, weekly disposal of bins and dumpsters running to two weeks, mischanneling both recyclable material and greenwaste into garbage trucks, failure to maintain the cleanliness of receptacles and dumpsters, including twice-yearly steam cleaning. More recently, with the advent of the state’s Senate Bill 1383, which mandates organic/food waste recycling, customers would complain of pickup delays that resulted in rotting, bacteria-laden and maggot-infested dreck and detritus accumulating in their recycling bins and the health hazard that represented. Further complaints mounted that the city’s businesses, both merchants and industrial operations, were being gouged on the rates they are paying. Substantial numbers of residents and businesses, who had previously been blissfully unaware or apathetic about the city’s trash franchise and its terms became conscious of the circumstance that had led to the city allowing the franchise contract to be perpetuated for three decades without a competitive bid process, leading many to believe it was incumbent on the council to cure the matter by putting the matter out to bid through what in governmental parlance is known as a request for proposals, also known as an RFP.
With 2026 approaching, among many residents there is concern that just as it had in 2015 when it bypassed the opportunity to carry out a bid process in in a very competitive market, the city council is on track to repeat that mistake.
In an effort to induce the council to allow it to retain the contract without any competition from other waste haulers, CR&R has been offering some one-time bonuses to the city and its customers designed to have the council simply roll the contract over.
One of those consisted of an offer to waive for one year in 2024, the annual rate increase for trash service tied to the consumer price index. After CR&R’s corporate representatives approached city officials about the franchise extension, they postponed the addition of this year’s 8.69 percent increase that was to take place as of July 1. Colton residents since July have continued to pay $32.44 per months for their trash service, as CR&R has for those four months foregone the $2.82 per month the company is entitled to tack onto those bills to bring them to $35.26 per month. They continued to hold off on that increase as the discussions about the franchise rollover have proceeded.
For those familiar with the situation, the city appears misfocused on the unilateral offerings from CR&R, when the opportunity presented to the city consists of the city’s ability, should it elect to do so, of playing two other entities off against one another in a way that would represent substantial savings to the city’s residents and businesses while enhancing not only service but the amount of money to be realized by the city in franchise fees.
Despite the setback that Burrtec had sustained when the franchise contract it had seemingly won fair-and-square in 1996 was corruptly diverted to Taormina, over time Burrtec had built itself into San Bernardino County’s refuse handling powerhouse. At present, it has grown to the point where it hauls more trash and recyclables by the ton than all other trash companies in San Bernardino County combined. Burrtec at present 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, Redlands, 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 2001, the San Bernardino County Board of Supervisors approved an eleven-year contract with Burrtec for it to manage the county’s landfills. Prior to the June 30, 2012 expiration of that contract, the board of supervisors extended it for one year to allow a bidding process for a ten-year contract for the landfill management assignment to take place. Burrtec applied to be considered for that contract as did Waste Management, Inc. and Athens Services, also known as Arakelian Enterprises, Inc. Based upon the evaluation of the three proposals by the county public works division and the recommendation of then-Public Works Director Gerry Newcome, the county board of supervisors in April 2013 voted to enter into a contract with Athens Services running from July 1, 2013 through June 30, 2023, at an initial base annual cost of $16,686,700 to be adjusted pursuant to the contract for additional services. In February 2020, the board of supervisors voted to extend the landfill management contract with Athens until 2031.
The inroad that Athens, which has a substantial presence in Los Angeles County, made into San Bernardino County in 2013 registered as a threat to the primacy that Burrtec has in San Bernardino County. Since that time, Athens has endeavored to make further advances into San Bernardino County. Other than the 2020 extension of its landfill management assignment, however, it has been thwarted in that effort. Ideally, Athens would like to build upon the basis of running the county’s five landfills, nine transfer stations and a single composting facility within the county’s confines. So far, it has been unable to obtain a trash hauling franchise contract with any of San Bernardino County’s municipalities, although that has not been for lack of trying. Athens was in the thick of the competitive public bidding process for the Chino Hills franchise in late 2021 and early 2022 and the competition to obtain the trash franchise for the City of San Bernardino when the county seat dissolved its sanitation department in 2015. In the case of Chino Hills, Republic, which at that time held the Chino Hills franchise, lost it as the result of a highly competitive effort by six other companies to take it away. Athens Services, Waste Management, Burrtec, Valley Vista Services, Ware Disposal, and a joint venture involving Urbaser and American Reclamation made service and rate proposals, which were analyzed by the city’s trash hauling advising consultant, HF&H. In the initial round of competition, Urbaser/American Reclamation proved to be the low bidder in terms of costs, i.e., rates to residential and business customers, as it promised to deliver comprehensive trash service to the city’s customer base for $8.075 million annually, followed by Ware at $10.084 million and Valley Vista, which bid at $10.257 million.
HF&H, in looking at promised service levels, existing resources of the varying companies and their sustainability, made the determination that Urbaser/American Reclamation, Valley Vista and Ware simply were not big enough to belly up to the bar. The consideration that Urbaser/American Reclamation, Valley Vista and Ware were going to charge less than the other four companies indicated, HF&H somewhat paradoxically concluded, that they were not as suited and less qualified for the franchise. HF&H and Chino Hills 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 in that if any challenges to one of those companies or the waste handling industry in general occurred during the life of the franchise, the city might be left in the lurch with uncollected trash piling up and overflowing garbage in bins, dumpsters, garages, driveways, backyards, out onto streets and alleyways, upon which rats would forage while bubonic plague-infested fleas would be feasting upon the rats.
Consequently, Urbaser/American, Valley Vista and Ware were out and Waste Management, which had bid the annual job at $10.582 million in total cost to the city’s residential and business customers; Athens, which offered to maintain the city’s sanitation for $11.242 million per year; Republic, which offered to continue as it was already doing for $12.885 million the first 12 months of the upcoming contract period; and Burrtec, which was the high bidder at $13.483 million, were granted entrée into the second round of competition.
This was because, HF&H said, Waste Management, Athens, Republic and Burrtec had proven track records in the Southern California Market.
In the second round, 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.
In some cases, timing can mean everything. 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. 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. Councilman Johsz was employed by Athens as its director of government affairs. Consequently, he had recused himself from the discussion with regard to the trash franchise and any vote upon it. Still, 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, which held the franchise for trash pick-up in neighboring Chino, was given the franchise.
In 2015, San Bernardino, the county’s oldest city and one in the middle of bankruptcy, swallowed its municipal pride and gave up on being a full service city, resolving to and then stripping itself of both its fire department and its sanitation department. The latter move mirrored what Colton had done 20 years previously. Three main competitors emerged in the effort to capture the city’s trash franchise: Waste Management, Burrtec and Athens. Relatively early in the going, Waste Management came to recognized that Burrtec, which two years previously had lost out to Athens in its bid to retain the county landfill managing contract, was in a grudge match against its rival, and was not set to go to tremendous lengths to obtain the trash hauling franchise in the City of San Bernardino, which is the county’s most populous city and at 62.45 square miles, the fourth largest city land-wise in the county. Athens, which is pining to obtain trash hauling contracts in San Bernardino County to match its landfill managing contract and fulfill its corporate goal of further expansion in Southern California, was equally determined to obtain the contract. Accordingly, Waste Management realized that whosoever managed to underbid the competition in such a fiercely fought contest for contract, would need to function on a painfully thin profit margin. It dropped out of the bidding war, leaving the filed to Burrtec and Athens. That competition came down to the wire, with Burrtec ultimately prevailing.
The upshot, to those paying attention, is that Athens is intent on capturing, if at all possible, a trash hauling franchise in San Bernardino County if and when one comes available. Burrtec, which is top dog in San Bernardino County when it comes to the trash industry, but which is still smarting from Athens undercutting it by taking away the county landfill management assignment, is bound and determined to prevent Athens from gaining any further toehold within the county by which it might further eroded Burrtec’s [primacy.] Any San Bernardino County city which can harness the opportunity that presents could use it to lower – and lower substantially – the amount of money its residents and businesses are paying for trash service and wring from the eventual franchise holder an agreement to enhance the level of service it provides and return to the city itself, in terms of a franchise and operational permitting and licensing fees, an infusion of cash.
Industry executives the Sentinel has conferred with say that based on the size of Colton – 16.06 square miles – along with its population of 54,911, location and the concentration of both industry and commercial businesses within its confines, measured against the terms of its current trash franchise, the city, its residents and business owners stand to see a combined annual savings on rates/annual infusion of fees to City Hall of $2 million at the low end to $3 million at the top end in 2023 dollars, equal to anywhere from $20 million to $30 million over the life of the franchise from 2026 until 2036 by putting the contract out to bid.
The City of Colton in 2014 and 2015, led by then-mayors Sarah Zamora and Richard DeLaRosa, failed to seize that advantage. Colton’s current mayor, Frank Navarro, is seeking to seize that opportunity as 2026 approaches, at which point the current franchise with CR&R will expire. As of the 2022 election, the Colton City Council dropped from the six council members elected by district and one mayor elected at large previously to four council members, each representing a district that is roughly one-third larger than the previous districts, and a mayor elected at large. In the council’s current configuration, Navarro has the solid support of a single council member, that of Luis González, in his resolve to go out for a bid on the 2026-to-2023 trash franchise. The remaining members of the council – David Toro, Kelly Chastain and John Echevarria – appear purposed to simply roll the franchise agreement over as was done in 2005 and 2015.
The council majority this week stopped short of doing that at a specially-held council workshop to go over the city’s options with regard to the trash franchise. Though Echevarria at one point seemed, if not outright disposed then grudgingly accommodating of seeking a request for proposals on the upcoming ten-year term of the trash franchise contract, the council nevertheless put itself on track to engage in further discussions with CR&R and move toward perpetuating that company’s continuing status as the trash franchise holder.
During the city council’s discussion with regard to how the city trash hauling franchise contract should be handled, Mayor Frank Navarro refrained from advocating his position on the issue. Rather, he allowed his council colleagues to express their views and sound out their ideas.
Chastain and Toro came across as those most adamantly in favor of keeping CR&R in place.
She said she wanted the council to make a decision that night, which hinted toward her belief that a council majority would likely decide in favor of keeping CR&R as the city’s refuse handler.
She noted that in 2020, CR&R had appeared amenable to providing the city with a host fee for the presence of the company’s sorting facility within Colton’s city limits. The city had not closed that deal and Chastain estimated that putting the host fee in place then would have brought in “over $800,000 in the intervening years. She said the city should sign on the dotted line with CR&R now to get that money rolling in.
Chastain, who was on the city council at the time McDonald generated his report about Taormina’s bribing of city officials, indicated she did not want to consider that history in considering whether to perpetuate the hold Taormina’s corporate successor still has on the city.
With regard to the McDonald Report or accounts relating to it, Chastain said, “I know that there’s been things out there. I didn’t even want to read them because they bring up the past. The past is the past.”
She advocated that the city council give go-ahead to the contract extension to put CR&R in a position to expand its Colton operation.
“Giving them the contract continuation would help them get loans I take that into consideration.”
Chastain said continuity was important.
“There’s consistency,” she said in promoting giving the company the contract extension so that there will be a 40-year continuum of the Taormina/Republic/CR&R service relationship with the city. “If we go out to bid all the time… you sometimes can end up with, every five years, if we’re going to five-year contract, have a new facility. I think there can be things with consistency. So, I’m looking at how are they performing now, what can we do better and if they can, do we continue on. I think a lot can be said that there’s consistency. I would prefer to move forward.”
Councilman Luis González offered a countervailing perspective.
“The more information the better,” González said. “We need to take a really broad look and make sure we are making the best decision possible in order to protect ourselves. We need to look for the best deal. We can do better. It’s hard to choose better without something to compare it to.
“My position on the matter of trash service remains the same,” González went on. “Going out to a bid in my opinion is the best business decision. This is an important business decision. It is a major business decision. We need to shop for the best deal. The contract is worth multi-millions of dollars. That should raise a flag immediately. This decision involves a multi-year commitment. Last time we went to ten [years]. That was a rough ride. This decision affects every resident, every business and every industry in this city. We need to really vet it out and there’s only one way I know to vet it out and that is to have a comparative analysis of that. The only way to do that is to go out for bid.”
González continued. “There’s a lot of items that can be negotiated,” he said. “We can’t just rubberstamp them. We have to take a look at them. Many of these items don’t exist if we don’t go out for a bid. I’d like to highlight the word negotiate. I think that’s the key. Because if we have only one proposal, there’s nothing to negotiate. There’s nothing to compare because we don’t know if it’s the best deal or not. You have nothing to compare it to.”
González said there were a number of elements to the franchise agreement that needed to be considered, and the city should not merely reinstitute what already exists without an evaluation of their value. Among those issues, González said, were the length of the contract, the franchise fee, a host fee, street sweeping service, tree trimming service, pot hole repairs, tire collection service, bulk item pickup, electronic waste pickup, utilizing the franchise holder to clean the entrances to the city, conducting customer satisfaction surveys, hazardous waste service, having the city’s trash company participate in additional community clean up days, how to improve service to the company’s business accounts and industrial accounts, mitigation fees for damage the company’s operations and equipment might do to city infrastructure, single person and senior household rates, paper shredding service, Christmas tree disposal, financial compensation the city should be provided for handling the trash company’s billing, the charging of a fee to those companies seeking to compete for the trash franchise, having the winner in any franchise bid competition pay for the consultant hired by the city to carry out the analysis of those bids, determining what the city’s policy should be if the trash company fails to pick up binds or leaves trash on the ground and looking at what services the other trash haulers in the region provide their customers.
González responded to those on the council and in the community who suggested the city maintain the franchise contract with CR&R because of the relationship that has developed between the city and the company.
“Good relations could be built with other companies,” González said. “Any other company would want to build a good relationship with our city,” and that would extend to making donations to community organizations and charities, he said. He said some people were crediting CR&R with good will toward the community for merely complying with state regulations, which he said all companies in the trash hauling business have to do.
González noted the discussion with regard to the franchise was taking place three years before the franchise contract is to expire and that the discussion was taking place, essentially, at CR&R’s behest.
“I have no problem talking about the service,” González said. At the same time that CR&R is looking after itself, the city, too, should prioritize what is in its and its residents’ and businesses’ best interest. “They are a business and trying to make a business decision for themselves by jumping on this early,” González observed. “We are a business too and we need to do a business decision for ourselves. We need to do the same thing and that’s to make the best decision for our residents and our businesses. I support going out to bid so that we can negotiate competitively, so we can compare the best deal. Without it, how do we know we have the best deal? We don’t. So, I’m in favor of going out to bid.”
Toro, while acknowledging that the issues with regard to service levels to be provided by the city’s franchised trash hauler brought up by González were valid, nevertheless pushed toward having CR&R being the provider of those services, and he expressed an aversion to having the city engaging in a competitive bid process.
“When I made the motion to have this workshop, it wasn’t to discuss going out to an RFP,” Toro said. “It was, because staff doesn’t want to negotiate this, for this council to sit back and say, ‘This is what we want to tell CR&R is what we want’ and for them to come back to us and say, ‘Yes we can.’ or ‘No, we can’t.’ At that point, then we can decide which way we want to go.”
Toro provided a selective comparison of rates charged by CR&R in Colton and rates charged by other haulers in other cities. The rate he quoted appeared to be related to domestic or residential customers rather than commercial and/or industrial ones.
He said that customers in Barstow, Adelanto, Victorville, Chino Hills, San Bernardino and Grand Terrace have lower rates than those in Colton, but that in Highland, Rancho Cucamonga, Fontana, Montclair, Ontario, Chino and Redlands, customers, or at least residential customers, are currently paying higher trash rates than in Colton.
Toro said he had considered the service and rates offered by CR&R, Burrtec, Republic, Valley Vista, Athens and Waste Management in comparison with those offered by CR&R. He suggest, without saying so definitively, that CR&R was holding its own.
While sidestepping the consideration that Taormina/Republic/CR&R have already secured a 30-year franchise without again undertaking a competitive bidding process and that if the CR&R franchise contract is rolled over, Colton will go at least 40 years without competitively bidding the contract, Toro dismissed suggestions that the 10-year duration of the contract extension now being discussed is too long. He referenced multiple franchise contract durations locally that equal or exceed the ten-year period, including San Bernardino with 10 years, Bloomington with a 15-year franchise, Highland with a 20-year plus arrangment; Fullerton with 18 years and Cypress with a 10-year contract.
In expressing his rationale against putting the contract out to bid, he raised the specter of Burrtec, which already has an overwhelming number of trash hauling franchises among county cities, prevailing in the competition.
“For our surrounding cities, Burrtec has all the cities except Colton and Loma Linda,” Toro said. “In a sense, my opinion is Burrtec has a monopoly on this area. If they get Colton and maybe Loma Linda, they own this. And what happens when a company has a monopoly? They can do whatever they want.”
Toro explicated what is for him a pointedly idiosyncratic objection to the the practice of carrying out open public competitive bidding.
“I personally do not have confidence in the RFP process,” Toro said. “Why? Because I’ve been through an RFP process in my personal life and what happened.”
He explained further.
“I don’t know who said it – These guys [CR&R] are the home town people,” Toro said. “They know the city. They know what they’re getting into. Shouldn’t they be the lowest bidder? Well, the business that I was in, there were four or five bidders. We were the in-house vendor and we came in third place. I don’t know how that happened. Obviously, somebody underbid it, and, come long story short, it was underbidded, underbid by $6 million. That first year – and I was fortunately to get absorbed into this company that won the contract because they needed that experience – what happened? What I was doing, the workload became four or five times more. I had to take less pay. Within a year, it was scare tactics. ‘All hands on deck! We’re going to lose the contract.’ Why? Because they couldn’t meet the expectations of what was happening. So, they had to basically burn the bridges at both ends, trying to make things work. Seven years later, now that the contract is ready for renewal, they’re finally at the place they should have been seven years ago. But within that seven years, so many people lost their jobs, customer services really tanked during the first two or three years. That’s my expectations of what’s going to happen if we go out to RFP. That’s my personal opinion on RFPs.”
Councilman Echevarria decried that Mayor Navarro had constrained the format of the meeting to prevent CR&R from making a comprehensive presentation of its proposal for being permitted to retain the contract to provide Colton with sanitation service.
“We wanted some information,” Echevarria said. “Instead we got a staff report. Penultimately, Echevarria signaled his willingness to put off the decision relating to the trash hauling franchise until much further down the road, closer to the time the franchise is nearing its expiration. He endorsed an option put onto the agenda by city staff to table the matter until later.
Mayor Navarro made clear that the motion to accept the staff’s option was that the “council provide staff with no direction, allow the current contract to continue until subsequent action or direction until the contract’s expiration on June 30, 2026.” At that point, City Manager Bill Smith made clear that the option Echevarria was promoting with his motion meant that the city would not entertain any of CR&R’s options at this point, while allowing the current the contract to continue.
“When we get close to the expiration of the contract, obviously, we would initiate an RFP process,” Smith said. With that made clear, Navarro seconded Echevarria’s motion.
In a brief discussion that ensued, Chastain emphasized her preference to vote on extending CR&R’s franchise contract that night.
Toro then broke in to offer a substitute motion, which under Robert’s Rules of Order take precedence over a previously offered motion.
“I would like to see what CR&R out of all those things we asked for can deliver on,” Toro said.
Toro then enunciated that his motion was to have CR&R “take all our information and come back at a date to be determined to [let the city council] know what they can do and can’t do. If at that point they can’t give us an offer we can’t confuse, then we continue with option 2 [i.e., Echevarria’s proposed endorsement of staff’s option to eventually take the matter out to bid].”
Toro’s motion passed by a margin of 3-to-2, with Toro, Chastain and Echevarria prevailing and Navarro and González dissenting.
By Mark Gutglueck