By Mark Gutglueck
Not quite six years after Upland city officials and Upland’s franchised trash hauler promised that city’s residents they would “lock in” the rates homeowners and businesses would pay for refuse service for 12 years, both entities have backtracked on that commitment and imposed on the city’s residents and entrepreneurs a 20 percent rate hike.
According to one of the four members of the council who supported providing trash hauler Burrtec with a so-called “extraordinary solid waste rate adjustment” Monday night, neither he nor any of his three colleagues who have joined the city council in the years since 2014 were informed by either the city manager or the city’s consultant about the agreement the city had entered into to stabilize rates for 12 years in exchange for not putting the city’s garbage handling franchise out for bid. He suggested the vote likely would have gone differently if the full range of information relating to the contract had been available prior to the council vote.
In 2000, when the City of Upland last put its refuse hauling franchise out for bid, Burrtec was selected to replace its previous franchised trash handler, Waste Management, Inc., effective in 2001. In what was a relatively quiet move that took place under the mayoralty of John Pomierski, in 2004 the city provided Burrtec with a “seven-year rolling evergreen” enhancement to the franchise contract. That provision committed the city to keeping Burrtec as its garbage pick-up provider at a minimum for seven years from that date, and it also meant that unless the city gave the company notice that it was initiating the seven-year wind-down of the contract by June 30, the contract was extended by one more year every July 1. Thus, at any given time, Burrtec had a guarantee that it would remain as the city’s franchisee for seven years. The justification for conferring this advantage on the company was that it allowed Burrtec a seven-year period to amortize any debt it might have accrued as a consequence of buying equipment needed to provide Upland with assorted trash-handling services.
In 2013, public discussion in Upland turned to, among other things, the consideration that the city at that point had gone 13 years without conducting an open bid on its trash franchise arrangement. Over the succeeding months discontent within a segment of the community grew, arising out of the perception that the lack of a competitive bidding process was allowing Burrtec to impose higher rates on Upland’s customers than would be the case if the city had the option of providing the franchise to any of a host of other companies that would be willing to underbid Burrtec. That resident discomfiture was exacerbated by the revelation that came about, because of the public discussion, of the 7-year evergreen clause in the contract. By the spring of 2014, residents – and a significant number of them – were demanding that the city initiate the 7-year wind-down of the franchise with Burrtec and undertake, sooner or later, an open bidding process.
At that point, then-Upland Assistant Public Works Director Acquanetta Warren inserted herself into the process. Huddling with then-City Manager Stephen Dunn and Public Works Director/City Engineer Rosemary Hoerning, she structured an arrangement whereby the city avoided the possible termination of its relationship with Burrtec. That arrangement called for foregoing the open franchise bidding process, and suspending for five years the city’s right to initiate the wind-down, such that it would need to wait at least until 2019 to give Burrtec notice of wishing to start the seven-year process of ending the franchise contract. This, in essence, guaranteed that Burrtec would remain as the city’s trash hauling franchisee at least until June 2026. This meant that there would be no bidding on the trash franchise in Upland for a quarter of a century. Nevertheless, Warren, Dunn, Hoerning and eventually three members of the city council – then-Mayor Ray Musser, then-Councilman Gino Filippi and then-Councilwoman Debbie Stone – asserted the deal would prove to be a win-win-win for the city, its residents and Burrtec. For the city extending the franchise at least into 2026, Burrtec committed to “locking in” the 2014 rates it was charging Upland customers for the next 12 years, subject only to an annual adjustment tied to the consumer price index and capped at four percent. In addition, Burrtec agreed to throw in street sweeping service and to pay the city a truck impact fee to offset the city’s cost of repairing the streets as a consequence of damage by the company’s trucks.
To those city residents who yet considered the city foregoing the open bidding process on the franchise to be a bad deal, city officials provided Burrtec Vice President Mike Arrequin with the opportunity to inform the public assemblage at one of the city’s council meetings of how Burrtec was partnering with Upland’s city fathers to look after the best interests of the City of Gracious Living’s residents. Burrtec was making a tremendous gamble in signing onto the deal, Arreguin said, explaining that the trash hauling business is an unpredictable enterprise, one that is fraught with financial pitfalls that can render what is normally a profitable undertaking into one that barely breaks even or loses money. Refuse handlers, Arreguen said, are subject to escalating tipping fees, legislative mandates and unforeseen fluctuations in the recycling market. In this way Arreguin said, Burrtec was taking a huge risk, and that if all of those kinds of factors lined up in the wrong way, Burrtec would have to bear the costs and Upland residents would be getting the benefit of the wager the company was making.
With then-Councilman Brendan Brandt abstaining and then-Councilman Glenn Bozar in opposition, the city council used the assertions provided by Warren and Arreguin as a justification to approve the arrangement with Burrtec, and the city forwent the bidding process.
Into that mix, some residents took stock of the fuller circumstance surrounding Warren. In addition to her position as an assistant department head in Upland, Warren had also been, from 2002 until 2010, a city councilwoman in Fontana, and from 2010 onward until the present time, Fontana mayor. As it is in Upland, Burrtec is also has the trash service franchisee in Fontana. Over the years, Burrtec, as a corporate entity and through its ownership and senior employees, has proven to be one of Warren’s major campaign contributors. Under California law and the California Political Reform Act, elected government officials are, when acting in their elected capacity, permitted to vote on matters impacting their political donors. Nevertheless, it is a peculiarity of the California Political Reform Act that it prohibits appointed government officials from voting or participating in any part of the official decision-making process that benefits one of his or her campaign donors. Thus, Warren was in the clear when she made votes as both a Fontana city councilwoman and as Fontana mayor that impacted Burrtec in its franchise relationship with Fontana. In Upland, however, she did not possess elected status. In this way, her recommendation, while she was serving in the capacity of Upland assistant public works director, that the city council waive the opportunity to carry out a competitive bid for the contract to provide trash service in the city and instead confer on Burrtec the franchise extension until 2026, was a violation of the law. Violations of Government Code sections 1090, 87100, 87103 (e) and 84308, all of which applied to Warren’s circumstance, can be and in other similar circumstances have been prosecuted as felonies. As a consequence of her action, as well as her participation in votes as Fontana mayor in approving and ratifying that city’s labor agreements with the San Bernardino Public Employees Association, of which Warren was herself a member as an Upland City employee, the San Bernardino County District Attorney’s Office’s Public Integrity Unit initiated an investigation into multiple allegations of public officer conflict of interest against Warren. It was while this investigation was ongoing that on January 8, 2015, without any pre-announcement, Warren abruptly resigned as Upland’s deputy public works director. Just prior to taking her leave, Warren had arranged for the hard drive on the computer at her work station within the Upland public works division to be “wiped clean,” that is, purged, such that no data pertaining to her activity as assistant public works director over the last several years of her tenure with Upland remained on it. That action, the destruction of public records, was itself a violation of the law.
While investigators and prosecutors within the public integrity unit had accumulated sufficient evidence to make a case against her that was characterized as “lead pipe cinch,” ultimately no charges against Warren were filed, as then-District Attorney Mike Ramos moved in to protect her. Ramos and Warren were firm political allies, having endorsed each other in their political campaigns over the years.
For close to five years, Burrtec consistently won the gamble it had made in 2014, as its costs remained relatively constant, with little escalation other than that of routine inflation. Thus, its operations in Upland, as elsewhere, remained profitable. But over the last year to 18 months, there were troubling issues visible on the horizon for Burrtec and other refuse handlers in California. In 2016, the California legislature passed Senate Bill 1383, which mandated that a threshold of organic waste reduction be achieved by 2020 and a higher threshold of organic waste reduction be achieved by 2025, one upshot of which was that it involved greater costs for trash haulers in dealing with food waste. In 2018, the People’s Republic of China, which hosts companies that were previously accepting and paying for a large measure of the plastic and cardboard waste generated by the United States, imposed a ban on receiving those materials, which created within the waste handling industry in general, including Burrtec, a major dilemma. Rather than being able to market a significant portion of the recyclables it was handling, the company was left with tens, then hundreds, then thousands and now tens of thousands and soon hundreds of thousands of tons of waste plastic that is turning into a liability as it cannot sell it and must now store it.
As it did with all of the governmental entities with which it has franchises for providing trash service, Burrtec requested that Upland give it permission to increase the rates it is charging the households and businesses in Upland by a percentage commensurate with its increased costs to comply with Senate Bill 1383 and to make up for its loss of revenue by not being able to sell its cardboard and plastic recyclables wholesale to Chinese companies, and any added costs it is sustaining by having to warehouse those plastics while it comes up with a strategy for getting rid of them.
By last year, the vast number of residents in Upland either never knew about the deal Burrtec had brokered with the city through Acquanetta Warren, Rosemary Hoerning and Stephen Dunn in 2014 or had forgotten about it. Thus, in making the request, Burrtec was banking on Upland’s collective and institutional memory of the commitment to lock in the 2014 rates having faded. Both Dunn and Warren were gone from the city, and of the city council’s five councilmembers in 2014, only Stone, who had advanced to the position of mayor in 2016, remained. Hoerning, was yet in place, remaining not only as the city’s public works director/city engineer but having been elevated to the post of acting city manager in May 2019.
The city brought in a consultant it had turned to previously in evaluating the dynamics relating to solid waste-related issues, R3, headed by its founder, Richard Tagore-Erwin. Tagore-Erwin had previously studied matters pertaining to a multitude of cities’ solid waste handling options while he was with the firm R.W. Beck in the 1990s and early 2000s. Indeed, in 2013, Upland upon Warren’s suggestion had hired Tagore-Erwin through R3 to look at whether Upland should at that point conduct a bidding process that would potentially bring in a new trash-handler by June 2021. R3 had recommended against doing so, and it was partially upon that recommendation the City of Upland put itself on track to draw up the contract with language that conferred the franchise on Burrtec for at least another 12 years, until June 30, 2026, which was passed by the council in 2014.
In addition to the recommendations favoring Burrtec which R3 or Tagore-Erwin has provided to Upland on three occasions, Tagore-Erwin or the companies he has been affiliated with have likewise made recommendations in Burrtec’s favor to the cities of San Bernardino, Colton and Rancho Cucamonga.
On November 22, 2019, R3 delivered its report, assembled in large measure by R3 associate Rose Radford, evaluating Burrtec’s request. Thereafter, at the Upland City Council’s December 9 meeting, Radford made an oral presentation of her report supported with visual aids and charts displayed on the council chambers’ monitors.
The report stated, “Burrtech requested a special rate review due to ‘uncontrollable circumstances’ including changes in law and tipping fee increases. Based on discussions with Burrtec’s vice president and chief financial officer, R3 concluded that those circumstances include:
* The effect of China’s “National Sword” policy significantly increasing costs and reducing commodity revenues at Burrtec’s West Valley Materials Recovery Facility, which is the facility used for tipping and processing city solid waste collected by Burrtec; and
* The effect of increased quantities of collected food scraps driven by state mandates requiring subscription to organics collection service at businesses in the city, which is in turn increasing the tipping fee costs for organic materials.
Based on the review of financial information provided by Burrtec during an on-site review, R3 is able to confirm that these factors are, in fact, increasing Burrtec’s operating costs.”
In the findings section of her report, Radford wrote, “With respect to Burrtec’s request for special rate review, R3 finds that Burrtec has sufficiently demonstrated that a special adjustment pursuant to Section10.06.b(1) of the agreement is warranted.”
Nowhere in the November 22, 2019 R3/Radford report/recommendation was any any reference made to Burrtec’s 2014 commitment to “lock-in” the rates it was charging in return for getting the franchise contract extension.
The November 22, 2019 R3/Radford report/recommendation was included in the packets for the city council meetings of December 9, 2019 and this week, on Monday January 27, when the matter was scheduled for a vote. On neither occasion was the report augmented with any reference to the 2014 rate lock-in, although the Sentinel did discuss the subject with Radford following her December 9 presentation to the council.
In presenting the matter to the council, Hoerning joined in recommending that the council provide Burrtec with what was termed an “extraordinary rate increase,” and she made no mention of the 2014 commitment to lock-in the rates.
Absent from the Monday, January 27, 2020 hearing was Radford or any representative from R3.
After hearing from members of the public, the balance of whom were opposed to the increase, the council took up a discussion of the matter.
Of the mayor and four councilmembers, the only one who demonstrated a recognition of the degree to which the extraordinary rate increase request was violating the spirit and terms of the 2014 deal to lock in rates in exchange for the contract extension appeared to be Councilman Rudy Zuniga. At no fewer than three turns in the discussion, he attempted to usher his colleagues toward either denying the requested increase outright or extracting from Burrtec some form of concession in return for granting the rate increase and rescinding the terms of the 2014 agreement.
Of note was that Mayor Stone, who was a party to the 2014 agreement and had voted to put it in place, never made reference to it during the discussion.
At one point, Zuniga, recognizing that the agreement contained a provision to allow for annual Consumer Price Index-based inflation rate increases capped at four percent, suggested placating Burrtec with that adjustment, but not going beyond that.
“We can give them their four percent like normal,” Zuniga suggested.
Hoerning, however, jumped in to take up, seemingly on Burrtec’s behalf, the suggestion that Burrtec should be given rate increases beyond that.
“The agreement we negotiated in 2014 set the [annual rate increase] cap at four percent,” Hoening said. “However, in the agreement we have with Burrtec, if there’s uncontrollable expenses that they’re experiencing, they can request that [extraordinary rate increase], and that’s what they did. They came back and said, ‘This is not something we can absorb and pass through in a subsequent year. This is something that we need to have addressed. So, that’s why we proceeded forth to validate the expenses, which we have done. Now we have created a rate schedule which reflects those validated expenses.”
Zuniga, detecting momentum moving toward approving the rate request Burrtec was seeking, sought to negotiate better term for the city in granting the request.
“So, if I give you your 20 percent now, would you allow me out of this evergreen contract in a year?” Zuniga asked from the council dais, addressing Arreguin, who was seated in the council chambers’ gallery. “Would you be open to that?” Zuniga asked. “I’m not saying I’m going to do that, but give me the option to [go out to bid] in maybe two years, then.”
Arreguin eluded the question.
Gamely, Zuniga pressed on, reminding the other council members that “They really changed the contract from four percent to now it’s 20 percent…”
“That’s a onetime [increase],” Hoerning interrupted him.
Zuniga, while immediately acknowledging that the increase was indeed going to be imposed “one-time,” asserted that if the city was to make such a concession to Burrtec, it should seek something in return.
“So, can’t we open the door?” Zuniga said. “If we say, ‘We’ll give you that, but we want to open the door to change the evergreen contract down to maybe two years,’ we have the leverage right now. I don’t want to do a deal right now that’s going to not allow us to do what’s beneficial to our city and our residents.”
Councilman Bill Velto at that point diverted the discussion away from using the opportunity the circumstance provided to obtain concessions from Burrtec.
“What are the consequences if we don’t give this increase?” he asked. He inquired of Arrequin what would happen if the city did not agree to the 20 percent increase, asking, essentially, if the company would then take it upon itself to cease dealing with the city’s recyclables.
“Councilman Velto, you’re asking me to state something that I’m really not authorized to give an opinion to one of my municipalities,” Arreguin responded. “That’s something that’s an owner decision. I couldn’t say what the company would do from that standpoint. We have costs. We’re behind a year in costs.”
Thereupon, Velto seemed to take up Burrtec’s position, rather than that of the city.
“That is extremely important for the residents to know, because if we say, ‘No,’ what is the consequences of that action, because we know what the consequences of voting yes are. We’re going to have a lot of upset people, a few upset people, I should say. But what about the consequences if we deny it – the 20 percent? What is the ramification, the impact on the community as a whole? And that’s really important for the residents to know.”
“It may come to a point where we can’t absorb those costs any longer,” Arreguin said.
“So how does that impact our contract’s specific performance?” Velto asked.
“It [the contract] allows for the uncontrollable costs to be passed through,” Arreguin said. “I’m not an attorney.”
The question was referred to City Attorney Steven Flower. Flower said, “I don’t have the full franchise agreement in front of me, but there is an excerpt in the packet from the study from R3, so, just to quote from that, in the procedure that’s outlined for these extraordinary rate increases it does specify that the city does have the sole judgment as to whether or not to approve it in full, part or not at all, but in the instance that the city does not approve it or approves it in part, Burrtec would have two remedies. One, they could seek a writ of mandate, which is basically a court order, and I’m not prepare to comment on what that might look like at this point. And their other option is to terminate the agreement. If, basically, Burrtec finds that without the rate increase they can’t make it work, they would have the option to terminate the agreement.”
Velto then offered a question phrased in the form of a statement. “But we don’t have the right to terminate because of a pass-through increase?” he said.
Flower responded, “I’m not prepared to comment on that because I don’t have the full agreement in front of me.”
Velto seemed to be on the verge of pursuing having his colleagues table the matter until a future meeting. “I think we need to know those answers, Mike, when we’re talking about 20 percent,” he said, almost apologetically to Arreguin.
At that juncture, however, Mayor Stone diverted the discussion to how the city had previously sought to pass its costs through to its customers when it formerly handled billing for trash service.
Councilman Ricky Felix further diverted the council’s focus from ascertaining what rights, precisely, the city possessed under the franchise contract. Felix latched onto the R3 report, saying it would be unwise to ignore the consultant’s recommendation. He then asked Hoerning what she recommended.
“Well, I think it would be appropriate to move ahead with the rate adjustment,” Hoerning said. “I think the cost associated with this is the disposal component, which is not something that lines Burrtec’s pockets.”
Stone made a motion to accept the rate adjustment, which was seconded by Velto. It passed 4-to-1, with Zuniga in opposition.
Following the meeting, Mayor Stone quickly exited City Hall, using an exit not accessible to the public, and could not be encountered for comment.
The Sentinel managed to reach Radford this morning, four days after the meeting. She said her absence from Monday night’s meeting was a consequence of her having caught a virus.
In explaining R3’s recommendation to give Burrtec what it had requested, Radford reiterated what was in her report, stating that the company was encountering unanticipated operational cost increases and that R3 had examined Burrtec’s books, toured its facilities and verified the increased costs as ones the company was actually experiencing.
“Burrtec did request those, which we recommended be approved as extraordinary rate increases,” she said. “The costs associated with the worldwide impact on recyclable materials and the cost of handling organics have gone up far beyond anyone’s expectations.”
Those developments taken together with the provision in the city’s contract with Burrtec allowing the city to agree to the extraordinary rate increase if it deemed doing so to be appropriate and justified, she said, was the basis of the recommendation.
When pressed, Radford acknowledged that the R3 report did not provide the current city council with the full range of background for the 2014 agreement, including the verbal commitment that the 2014 rates were to be locked in in exchange for the franchise extension at least until 2026.
She also said that in drafting the report, she had relied upon an incomplete record of the City of Upland’s proceedings with regard to the 2014 franchise contract extension.
Asked why the report had made no inclusion of any information pertaining to the commitment to stabilize the trash hauling rates paid by Upland’s residents and businesses through June 2026, Radford said, “As you know, I personally was not there in 2014. I was not able to review the video. The paper [i.e., documentation] for the meetings in 2014 was not available. To be as direct as I can possibly be, what the contract says is what the parties have agreed upon, so the extraordinary rate increase provision remained in the franchise agreement. We would not be able to consider it if it wasn’t allowed in the contract.”
Radford said for the city to have been able to insist on Burrtec living up to the commitment to keep the 2014 rates in place until 2026 irrespective of any extraordinary costs the company encountered, the city would have needed to convert Burrtec’s verbal assurances into writing. “In terms of what was committed to or was discussed during the public meeting, that would have needed to be included in the contract language,” she said.
City Manager Rosemary Hoerning did not return phone calls seeking from her an explanation as to why she had withheld from the council information about the commitment to keep the 2014 rates intact until 2026.
Councilman Bill Velto said he believed “the council as a whole utilized” the R3 recommendation as the basis for its decision. He said he had not critically analyzed the consultant’s report or recommendation and essentially accepted it at face value. He said to strike out on his own and do for himself an independent evaluation would be “to micromanage” city operations, which he said as a policy director rather than a manager with the city he was not entitled to do.
“They’re the experts,” Velto said, with regard to R3, and he said he had put his faith in the company. “We hire the experts to come in and advise us,” he said.
Velto said he recognized that Burrtec was entitled to a four percent increase under the contract and that it had the right to ask for an additional passthrough fee under certain circumstances.
Asked directly about the 2014 commitment to lock in what were then the current customer rates until June 2026, Velto said he had not been informed of that.
“This is the first time I’m hearing about his,” Velto said. “If I would have known about that, I would have asked them the right questions. That was not presented to me by anyone. I didn’t think to challenge the integrity of the consultants. We hired the consultants because we trust their judgment. This throws me.”
Velto expressed dismay over Hoerning not having mentioned the 2014 commitment at any point, particularly since there was no reference to it in the R3 report. He said Hoerning had been the major driver toward the council taking up Burrtec’s request for the increase.
“The only reason we considered this was because the city manager brought that to the city council,” he said.
He reiterated that no reference to the 2014 commitment had been provided to the council during its consideration of the request from Burrtec going back to last fall. Velto further said that no reference to Arreguin’s 2014 likening of the deal to exchange the extension of the franchise to 2026 for the rate lock-in to a gamble that Burrtec could lose and the city’s residents and businesses could win was ever made in his presence.
“That was not provided to us by staff,” Velto said. “I based my decision on what was put in front of me. I was not given that information.”
Velto strongly suggested he would have voted differently had he been provided with that information so he could have made a fuller reckoning of the facts. He then used the term “fraud” in describing what had occurred.
“I don’t think we can undo that vote,” Velto lamented. Nevertheless, he said, “If that was fraudulent and that can be proven, then there should be recourse for the city.”
Velto said he understood that from a certain context his questions and statements Monday night might be seen as ones advocating on behalf of Burrtec, but that his intention was to inquire after what liability the city might run if it denied Burrtec something it was entitled to under the franchise contract.
“I wanted to know what the consequences were if we denied them that rate increase,” Velto said. “My concern was involving the city in litigation it would be better to avoid. If we took action, or failed to take action, as the case might be, and they filed a lawsuit, then we would have to respond, and before you know it we would have $250,000 or $350,000 or $450,000 in legal fees. That’s how it is in government. You might not do anything improper, but you still get sued, and it can be very expensive.”
At one point on Monday night, Velto said, things “felt wrong,” and he was looking to delay the decision until the city attorney could make a more complete and detailed analysis of the city’s position under the franchise contract. But when he made an effort to move in that direction, Velto said, Councilwoman Janice Elliott, who would have needed to provide a key vote to join with his and Zuniga’s votes to postpone the decision, did not respond to the idea he was attempting to float or make eye contact with him when he looked over at her. For that reason, he said, the effort to table the matter fell by the wayside.
When the mayor’s motion was made, Velto said, he went along with it, on the basis that it was backed by R3’s and Hoerning’s recommendations.
Velto dismissed any suggestions that there were venal elements in the council’s decision to support the rate increase for Burrtec, which will provide the company with an estimated influx of $2 million in the coming year alone. He said the company’s propensity to make campaign donations were not a factor in the vote. Nor did he anticipate receiving any money from Burrtec, he said.
“I don’t care about their contributions,” he said. “I obviously after this can’t take contributions from them now.”
When queried about the rationale for her vote in support of giving the extraordinary rate hike to Burrtec, Councilwoman Janice Elliott said, “I do not wish to respond,” asserting such questions “lack journalistic integrity,” since, she said, they involved “conjectures about graft.”
She insisted she had not received any money from Burrtec.
Burrtec as a corporation, since May 29, 2018, has made 928 political donations to politicians or political causes within California, primarily to local or state politicians in Southern California, totaling $1,268,620.40, according to the California Secretary of State’s Office. That does not included money separately provided to politicians by Burrtec’s ownership, management and employees.
In San Bernardino County, it is de rigueur for trash hauling companies that have obtained or which are competing for municipal trash hauling franchises to make substantial political contributions to the elected officials in those cities, either to solidify their holds on those franchises or in an effort to obtain them. Scores of the county’s politicians count trash hauling companies or their ownership and senior management among their major campaign donors.
In March 1992, then-San Diego County District Attorney Edwin Miller issued the so-called Miller Report linking Waste Management, Inc., which at that time had the franchise for refuse handling in Upland, with organized crime, antitrust activity and illegal hazardous-waste dumping. In 1997, former Riverside County Deputy District Attorney Mark McDonald, at the behest of then-Colton Police Chief Bernie Lunsford and then-Colton City Attorney Julie Biggs, compiled the McDonald Report, in which he cataloged a host of irregularities in Colton’s bidding process for the city’s trash hauling franchise contract after it shuttered its municipal sanitation department. That report detailed the provision of inducements McDonald characterized as “tantamount to bribery” made to then-Colton Mayor George Fulp and then-councilmen Donald Sanders and Abe Beltran to dissuade the Colton City Council from extending the franchise to Burrtec, which had been identified by Tagore-Erwin of R.W. Beck as most deserving of the contract, and instead vote to award the franchise to Taormina Industries, now known as Republic Industries. In 1999, former San Bernardino County Chief Administrative Officer James Hlawek, his predecessor as chief county administrator, Harry Mays, and Norcal vice president James Walsh were named in a federal indictment. The indictment cataloged a bribery scheme in which Norcal was awarded the contract for managing San Bernardino County’s landfills, an assignment by which it received more than $20 million before the indictment resulted in the termination of the contract. According to the indictment, Walsh had secured Mays’s services as a consultant, paying him $4.2 million, while Hlawek, Mays’s protégé serving in the role of the county’s top administrator, had been provided with 28 payments from Norcal in amounts ranging from $650 to $5,400. In return, Mays and Hlawek engineered the awarding of the landfill management contract to Norcal. Mays, Hlawek and Walsh were convicted.
In 2019, the Upland City Council did not trigger the 7-year wind-down on the Burrtec franchise contract, such that Burrtec’s franchise in Upland is scheduled to last at least until June 30, 2027. If the city council does not signal its intent to begin the wind-down by June of this year, Burrtec’s franchise will be extended until June 30, 2028.
Not quite six years after Upland city officials and Upland’s franchised trash hauler promised that city’s residents they would “lock in” the rates homeowners and businesses would pay for refuse service for 12 years, both entities have backtracked on that commitment and imposed on the city’s residents and entrepreneurs a 20 percent rate hike.
According to one of the four members of the council who supported providing trash hauler Burrtec with a so-called “extraordinary solid waste rate adjustment” Monday night, neither he nor any of his three colleagues who have joined the city council in the years since 2014 were informed by either the city manager or the city’s consultant about the agreement the city had entered into to stabilize rates for 12 years in exchange for not putting the city’s garbage handling franchise out for bid. He suggested the vote likely would have gone differently if the full range of information relating to the contract had been available prior to the council vote.
In 2000, when the City of Upland last put its refuse hauling franchise out for bid, Burrtec was selected to replace its previous franchised trash handler, Waste Management, Inc., effective in 2001. In what was a relatively quiet move that took place under the mayoralty of John Pomierski, in 2004 the city provided Burrtec with a “seven-year rolling evergreen” enhancement to the franchise contract. That provision committed the city to keeping Burrtec as its garbage pick-up provider at a minimum for seven years from that date, and it also meant that unless the city gave the company notice that it was initiating the seven-year wind-down of the contract by June 30, the contract was extended by one more year every July 1. Thus, at any given time, Burrtec had a guarantee that it would remain as the city’s franchisee for seven years. The justification for conferring this advantage on the company was that it allowed Burrtec a seven-year period to amortize any debt it might have accrued as a consequence of buying equipment needed to provide Upland with assorted trash-handling services.
In 2013, public discussion in Upland turned to, among other things, the consideration that the city at that point had gone 13 years without conducting an open bid on its trash franchise arrangement. Over the succeeding months discontent within a segment of the community grew, arising out of the perception that the lack of a competitive bidding process was allowing Burrtec to impose higher rates on Upland’s customers than would be the case if the city had the option of providing the franchise to any of a host of other companies that would be willing to underbid Burrtec. That resident discomfiture was exacerbated by the revelation that came about, because of the public discussion, of the 7-year evergreen clause in the contract. By the spring of 2014, residents – and a significant number of them – were demanding that the city initiate the 7-year wind-down of the franchise with Burrtec and undertake, sooner or later, an open bidding process.
At that point, then-Upland Assistant Public Works Director Acquanetta Warren inserted herself into the process. Huddling with then-City Manager Stephen Dunn and Public Works Director/City Engineer Rosemary Hoerning, she structured an arrangement whereby the city avoided the possible termination of its relationship with Burrtec. That arrangement called for foregoing the open franchise bidding process, and suspending for five years the city’s right to initiate the wind-down, such that it would need to wait at least until 2019 to give Burrtec notice of wishing to start the seven-year process of ending the franchise contract. This, in essence, guaranteed that Burrtec would remain as the city’s trash hauling franchisee at least until June 2026. This meant that there would be no bidding on the trash franchise in Upland for a quarter of a century. Nevertheless, Warren, Dunn, Hoerning and eventually three members of the city council – then-Mayor Ray Musser, then-Councilman Gino Filippi and then-Councilwoman Debbie Stone – asserted the deal would prove to be a win-win-win for the city, its residents and Burrtec. For the city extending the franchise at least into 2026, Burrtec committed to “locking in” the 2014 rates it was charging Upland customers for the next 12 years, subject only to an annual adjustment tied to the consumer price index and capped at four percent. In addition, Burrtec agreed to throw in street sweeping service and to pay the city a truck impact fee to offset the city’s cost of repairing the streets as a consequence of damage by the company’s trucks.
To those city residents who yet considered the city foregoing the open bidding process on the franchise to be a bad deal, city officials provided Burrtec Vice President Mike Arrequin with the opportunity to inform the public assemblage at one of the city’s council meetings of how Burrtec was partnering with Upland’s city fathers to look after the best interests of the City of Gracious Living’s residents. Burrtec was making a tremendous gamble in signing onto the deal, Arreguin said, explaining that the trash hauling business is an unpredictable enterprise, one that is fraught with financial pitfalls that can render what is normally a profitable undertaking into one that barely breaks even or loses money. Refuse handlers, Arreguen said, are subject to escalating tipping fees, legislative mandates and unforeseen fluctuations in the recycling market. In this way Arreguin said, Burrtec was taking a huge risk, and that if all of those kinds of factors lined up in the wrong way, Burrtec would have to bear the costs and Upland residents would be getting the benefit of the wager the company was making.
With then-Councilman Brendan Brandt abstaining and then-Councilman Glenn Bozar in opposition, the city council used the assertions provided by Warren and Arreguin as a justification to approve the arrangement with Burrtec, and the city forwent the bidding process.
Into that mix, some residents took stock of the fuller circumstance surrounding Warren. In addition to her position as an assistant department head in Upland, Warren had also been, from 2002 until 2010, a city councilwoman in Fontana, and from 2010 onward until the present time, Fontana mayor. As it is in Upland, Burrtec is also has the trash service franchisee in Fontana. Over the years, Burrtec, as a corporate entity and through its ownership and senior employees, has proven to be one of Warren’s major campaign contributors. Under California law and the California Political Reform Act, elected government officials are, when acting in their elected capacity, permitted to vote on matters impacting their political donors. Nevertheless, it is a peculiarity of the California Political Reform Act that it prohibits appointed government officials from voting or participating in any part of the official decision-making process that benefits one of his or her campaign donors. Thus, Warren was in the clear when she made votes as both a Fontana city councilwoman and as Fontana mayor that impacted Burrtec in its franchise relationship with Fontana. In Upland, however, she did not possess elected status. In this way, her recommendation, while she was serving in the capacity of Upland assistant public works director, that the city council waive the opportunity to carry out a competitive bid for the contract to provide trash service in the city and instead confer on Burrtec the franchise extension until 2026, was a violation of the law. Violations of Government Code sections 1090, 87100, 87103 (e) and 84308, all of which applied to Warren’s circumstance, can be and in other similar circumstances have been prosecuted as felonies. As a consequence of her action, as well as her participation in votes as Fontana mayor in approving and ratifying that city’s labor agreements with the San Bernardino Public Employees Association, of which Warren was herself a member as an Upland City employee, the San Bernardino County District Attorney’s Office’s Public Integrity Unit initiated an investigation into multiple allegations of public officer conflict of interest against Warren. It was while this investigation was ongoing that on January 8, 2015, without any pre-announcement, Warren abruptly resigned as Upland’s deputy public works director. Just prior to taking her leave, Warren had arranged for the hard drive on the computer at her work station within the Upland public works division to be “wiped clean,” that is, purged, such that no data pertaining to her activity as assistant public works director over the last several years of her tenure with Upland remained on it. That action, the destruction of public records, was itself a violation of the law.
While investigators and prosecutors within the public integrity unit had accumulated sufficient evidence to make a case against her that was characterized as “lead pipe cinch,” ultimately no charges against Warren were filed, as then-District Attorney Mike Ramos moved in to protect her. Ramos and Warren were firm political allies, having endorsed each other in their political campaigns over the years.
For close to five years, Burrtec consistently won the gamble it had made in 2014, as its costs remained relatively constant, with little escalation other than that of routine inflation. Thus, its operations in Upland, as elsewhere, remained profitable. But over the last year to 18 months, there were troubling issues visible on the horizon for Burrtec and other refuse handlers in California. In 2016, the California legislature passed Senate Bill 1383, which mandated that a threshold of organic waste reduction be achieved by 2020 and a higher threshold of organic waste reduction be achieved by 2025, one upshot of which was that it involved greater costs for trash haulers in dealing with food waste. In 2018, the People’s Republic of China, which hosts companies that were previously accepting and paying for a large measure of the plastic and cardboard waste generated by the United States, imposed a ban on receiving those materials, which created within the waste handling industry in general, including Burrtec, a major dilemma. Rather than being able to market a significant portion of the recyclables it was handling, the company was left with tens, then hundreds, then thousands and now tens of thousands and soon hundreds of thousands of tons of waste plastic that is turning into a liability as it cannot sell it and must now store it.
As it did with all of the governmental entities with which it has franchises for providing trash service, Burrtec requested that Upland give it permission to increase the rates it is charging the households and businesses in Upland by a percentage commensurate with its increased costs to comply with Senate Bill 1383 and to make up for its loss of revenue by not being able to sell its cardboard and plastic recyclables wholesale to Chinese companies, and any added costs it is sustaining by having to warehouse those plastics while it comes up with a strategy for getting rid of them.
By last year, the vast number of residents in Upland either never knew about the deal Burrtec had brokered with the city through Acquanetta Warren, Rosemary Hoerning and Stephen Dunn in 2014 or had forgotten about it. Thus, in making the request, Burrtec was banking on Upland’s collective and institutional memory of the commitment to lock in the 2014 rates having faded. Both Dunn and Warren were gone from the city, and of the city council’s five councilmembers in 2014, only Stone, who had advanced to the position of mayor in 2016, remained. Hoerning, was yet in place, remaining not only as the city’s public works director/city engineer but having been elevated to the post of acting city manager in May 2019.
The city brought in a consultant it had turned to previously in evaluating the dynamics relating to solid waste-related issues, R3, headed by its founder, Richard Tagore-Erwin. Tagore-Erwin had previously studied matters pertaining to a multitude of cities’ solid waste handling options while he was with the firm R.W. Beck in the 1990s and early 2000s. Indeed, in 2013, Upland upon Warren’s suggestion had hired Tagore-Erwin through R3 to look at whether Upland should at that point conduct a bidding process that would potentially bring in a new trash-handler by June 2021. R3 had recommended against doing so, and it was partially upon that recommendation the City of Upland put itself on track to draw up the contract with language that conferred the franchise on Burrtec for at least another 12 years, until June 30, 2026, which was passed by the council in 2014.
In addition to the recommendations favoring Burrtec which R3 or Tagore-Erwin has provided to Upland on three occasions, Tagore-Erwin or the companies he has been affiliated with have likewise made recommendations in Burrtec’s favor to the cities of San Bernardino, Colton and Rancho Cucamonga.
On November 22, 2019, R3 delivered its report, assembled in large measure by R3 associate Rose Radford, evaluating Burrtec’s request. Thereafter, at the Upland City Council’s December 9 meeting, Radford made an oral presentation of her report supported with visual aids and charts displayed on the council chambers’ monitors.
The report stated, “Burrtech requested a special rate review due to ‘uncontrollable circumstances’ including changes in law and tipping fee increases. Based on discussions with Burrtec’s vice president and chief financial officer, R3 concluded that those circumstances include:
* The effect of China’s “National Sword” policy significantly increasing costs and reducing commodity revenues at Burrtec’s West Valley Materials Recovery Facility, which is the facility used for tipping and processing city solid waste collected by Burrtec; and
* The effect of increased quantities of collected food scraps driven by state mandates requiring subscription to organics collection service at businesses in the city, which is in turn increasing the tipping fee costs for organic materials.
Based on the review of financial information provided by Burrtec during an on-site review, R3 is able to confirm that these factors are, in fact, increasing Burrtec’s operating costs.”
In the findings section of her report, Radford wrote, “With respect to Burrtec’s request for special rate review, R3 finds that Burrtec has sufficiently demonstrated that a special adjustment pursuant to Section10.06.b(1) of the agreement is warranted.”
Nowhere in the November 22, 2019 R3/Radford report/recommendation was any any reference made to Burrtec’s 2014 commitment to “lock-in” the rates it was charging in return for getting the franchise contract extension.
The November 22, 2019 R3/Radford report/recommendation was included in the packets for the city council meetings of December 9, 2019 and this week, on Monday January 27, when the matter was scheduled for a vote. On neither occasion was the report augmented with any reference to the 2014 rate lock-in, although the Sentinel did discuss the subject with Radford following her December 9 presentation to the council.
In presenting the matter to the council, Hoerning joined in recommending that the council provide Burrtec with what was termed an “extraordinary rate increase,” and she made no mention of the 2014 commitment to lock-in the rates.
Absent from the Monday, January 27, 2020 hearing was Radford or any representative from R3.
After hearing from members of the public, the balance of whom were opposed to the increase, the council took up a discussion of the matter.
Of the mayor and four councilmembers, the only one who demonstrated a recognition of the degree to which the extraordinary rate increase request was violating the spirit and terms of the 2014 deal to lock in rates in exchange for the contract extension appeared to be Councilman Rudy Zuniga. At no fewer than three turns in the discussion, he attempted to usher his colleagues toward either denying the requested increase outright or extracting from Burrtec some form of concession in return for granting the rate increase and rescinding the terms of the 2014 agreement.
Of note was that Mayor Stone, who was a party to the 2014 agreement and had voted to put it in place, never made reference to it during the discussion.
At one point, Zuniga, recognizing that the agreement contained a provision to allow for annual Consumer Price Index-based inflation rate increases capped at four percent, suggested placating Burrtec with that adjustment, but not going beyond that.
“We can give them their four percent like normal,” Zuniga suggested.
Hoerning, however, jumped in to take up, seemingly on Burrtec’s behalf, the suggestion that Burrtec should be given rate increases beyond that.
“The agreement we negotiated in 2014 set the [annual rate increase] cap at four percent,” Hoening said. “However, in the agreement we have with Burrtec, if there’s uncontrollable expenses that they’re experiencing, they can request that [extraordinary rate increase], and that’s what they did. They came back and said, ‘This is not something we can absorb and pass through in a subsequent year. This is something that we need to have addressed. So, that’s why we proceeded forth to validate the expenses, which we have done. Now we have created a rate schedule which reflects those validated expenses.”
Zuniga, detecting momentum moving toward approving the rate request Burrtec was seeking, sought to negotiate better term for the city in granting the request.
“So, if I give you your 20 percent now, would you allow me out of this evergreen contract in a year?” Zuniga asked from the council dais, addressing Arreguin, who was seated in the council chambers’ gallery. “Would you be open to that?” Zuniga asked. “I’m not saying I’m going to do that, but give me the option to [go out to bid] in maybe two years, then.”
Arreguin eluded the question.
Gamely, Zuniga pressed on, reminding the other council members that “They really changed the contract from four percent to now it’s 20 percent…”
“That’s a onetime [increase],” Hoerning interrupted him.
Zuniga, while immediately acknowledging that the increase was indeed going to be imposed “one-time,” asserted that if the city was to make such a concession to Burrtec, it should seek something in return.
“So, can’t we open the door?” Zuniga said. “If we say, ‘We’ll give you that, but we want to open the door to change the evergreen contract down to maybe two years,’ we have the leverage right now. I don’t want to do a deal right now that’s going to not allow us to do what’s beneficial to our city and our residents.”
Councilman Bill Velto at that point diverted the discussion away from using the opportunity the circumstance provided to obtain concessions from Burrtec.
“What are the consequences if we don’t give this increase?” he asked. He inquired of Arrequin what would happen if the city did not agree to the 20 percent increase, asking, essentially, if the company would then take it upon itself to cease dealing with the city’s recyclables.
“Councilman Velto, you’re asking me to state something that I’m really not authorized to give an opinion to one of my municipalities,” Arreguin responded. “That’s something that’s an owner decision. I couldn’t say what the company would do from that standpoint. We have costs. We’re behind a year in costs.”
Thereupon, Velto seemed to take up Burrtec’s position, rather than that of the city.
“That is extremely important for the residents to know, because if we say, ‘No,’ what is the consequences of that action, because we know what the consequences of voting yes are. We’re going to have a lot of upset people, a few upset people, I should say. But what about the consequences if we deny it – the 20 percent? What is the ramification, the impact on the community as a whole? And that’s really important for the residents to know.”
“It may come to a point where we can’t absorb those costs any longer,” Arreguin said.
“So how does that impact our contract’s specific performance?” Velto asked.
“It [the contract] allows for the uncontrollable costs to be passed through,” Arreguin said. “I’m not an attorney.”
The question was referred to City Attorney Steven Flower. Flower said, “I don’t have the full franchise agreement in front of me, but there is an excerpt in the packet from the study from R3, so, just to quote from that, in the procedure that’s outlined for these extraordinary rate increases it does specify that the city does have the sole judgment as to whether or not to approve it in full, part or not at all, but in the instance that the city does not approve it or approves it in part, Burrtec would have two remedies. One, they could seek a writ of mandate, which is basically a court order, and I’m not prepare to comment on what that might look like at this point. And their other option is to terminate the agreement. If, basically, Burrtec finds that without the rate increase they can’t make it work, they would have the option to terminate the agreement.”
Velto then offered a question phrased in the form of a statement. “But we don’t have the right to terminate because of a pass-through increase?” he said.
Flower responded, “I’m not prepared to comment on that because I don’t have the full agreement in front of me.”
Velto seemed to be on the verge of pursuing having his colleagues table the matter until a future meeting. “I think we need to know those answers, Mike, when we’re talking about 20 percent,” he said, almost apologetically to Arreguin.
At that juncture, however, Mayor Stone diverted the discussion to how the city had previously sought to pass its costs through to its customers when it formerly handled billing for trash service.
Councilman Ricky Felix further diverted the council’s focus from ascertaining what rights, precisely, the city possessed under the franchise contract. Felix latched onto the R3 report, saying it would be unwise to ignore the consultant’s recommendation. He then asked Hoerning what she recommended.
“Well, I think it would be appropriate to move ahead with the rate adjustment,” Hoerning said. “I think the cost associated with this is the disposal component, which is not something that lines Burrtec’s pockets.”
Stone made a motion to accept the rate adjustment, which was seconded by Velto. It passed 4-to-1, with Zuniga in opposition.
Following the meeting, Mayor Stone quickly exited City Hall, using an exit not accessible to the public, and could not be encountered for comment.
The Sentinel managed to reach Radford this morning, four days after the meeting. She said her absence from Monday night’s meeting was a consequence of her having caught a virus.
In explaining R3’s recommendation to give Burrtec what it had requested, Radford reiterated what was in her report, stating that the company was encountering unanticipated operational cost increases and that R3 had examined Burrtec’s books, toured its facilities and verified the increased costs as ones the company was actually experiencing.
“Burrtec did request those, which we recommended be approved as extraordinary rate increases,” she said. “The costs associated with the worldwide impact on recyclable materials and the cost of handling organics have gone up far beyond anyone’s expectations.”
Those developments taken together with the provision in the city’s contract with Burrtec allowing the city to agree to the extraordinary rate increase if it deemed doing so to be appropriate and justified, she said, was the basis of the recommendation.
When pressed, Radford acknowledged that the R3 report did not provide the current city council with the full range of background for the 2014 agreement, including the verbal commitment that the 2014 rates were to be locked in in exchange for the franchise extension at least until 2026.
She also said that in drafting the report, she had relied upon an incomplete record of the City of Upland’s proceedings with regard to the 2014 franchise contract extension.
Asked why the report had made no inclusion of any information pertaining to the commitment to stabilize the trash hauling rates paid by Upland’s residents and businesses through June 2026, Radford said, “As you know, I personally was not there in 2014. I was not able to review the video. The paper [i.e., documentation] for the meetings in 2014 was not available. To be as direct as I can possibly be, what the contract says is what the parties have agreed upon, so the extraordinary rate increase provision remained in the franchise agreement. We would not be able to consider it if it wasn’t allowed in the contract.”
Radford said for the city to have been able to insist on Burrtec living up to the commitment to keep the 2014 rates in place until 2026 irrespective of any extraordinary costs the company encountered, the city would have needed to convert Burrtec’s verbal assurances into writing. “In terms of what was committed to or was discussed during the public meeting, that would have needed to be included in the contract language,” she said.
City Manager Rosemary Hoerning did not return phone calls seeking from her an explanation as to why she had withheld from the council information about the commitment to keep the 2014 rates intact until 2026.
Councilman Bill Velto said he believed “the council as a whole utilized” the R3 recommendation as the basis for its decision. He said he had not critically analyzed the consultant’s report or recommendation and essentially accepted it at face value. He said to strike out on his own and do for himself an independent evaluation would be “to micromanage” city operations, which he said as a policy director rather than a manager with the city he was not entitled to do.
“They’re the experts,” Velto said, with regard to R3, and he said he had put his faith in the company. “We hire the experts to come in and advise us,” he said.
Velto said he recognized that Burrtec was entitled to a four percent increase under the contract and that it had the right to ask for an additional passthrough fee under certain circumstances.
Asked directly about the 2014 commitment to lock in what were then the current customer rates until June 2026, Velto said he had not been informed of that.
“This is the first time I’m hearing about his,” Velto said. “If I would have known about that, I would have asked them the right questions. That was not presented to me by anyone. I didn’t think to challenge the integrity of the consultants. We hired the consultants because we trust their judgment. This throws me.”
Velto expressed dismay over Hoerning not having mentioned the 2014 commitment at any point, particularly since there was no reference to it in the R3 report. He said Hoerning had been the major driver toward the council taking up Burrtec’s request for the increase.
“The only reason we considered this was because the city manager brought that to the city council,” he said.
He reiterated that no reference to the 2014 commitment had been provided to the council during its consideration of the request from Burrtec going back to last fall. Velto further said that no reference to Arreguin’s 2014 likening of the deal to exchange the extension of the franchise to 2026 for the rate lock-in to a gamble that Burrtec could lose and the city’s residents and businesses could win was ever made in his presence.
“That was not provided to us by staff,” Velto said. “I based my decision on what was put in front of me. I was not given that information.”
Velto strongly suggested he would have voted differently had he been provided with that information so he could have made a fuller reckoning of the facts. He then used the term “fraud” in describing what had occurred.
“I don’t think we can undo that vote,” Velto lamented. Nevertheless, he said, “If that was fraudulent and that can be proven, then there should be recourse for the city.”
Velto said he understood that from a certain context his questions and statements Monday night might be seen as ones advocating on behalf of Burrtec, but that his intention was to inquire after what liability the city might run if it denied Burrtec something it was entitled to under the franchise contract.
“I wanted to know what the consequences were if we denied them that rate increase,” Velto said. “My concern was involving the city in litigation it would be better to avoid. If we took action, or failed to take action, as the case might be, and they filed a lawsuit, then we would have to respond, and before you know it we would have $250,000 or $350,000 or $450,000 in legal fees. That’s how it is in government. You might not do anything improper, but you still get sued, and it can be very expensive.”
At one point on Monday night, Velto said, things “felt wrong,” and he was looking to delay the decision until the city attorney could make a more complete and detailed analysis of the city’s position under the franchise contract. But when he made an effort to move in that direction, Velto said, Councilwoman Janice Elliott, who would have needed to provide a key vote to join with his and Zuniga’s votes to postpone the decision, did not respond to the idea he was attempting to float or make eye contact with him when he looked over at her. For that reason, he said, the effort to table the matter fell by the wayside.
When the mayor’s motion was made, Velto said, he went along with it, on the basis that it was backed by R3’s and Hoerning’s recommendations.
Velto dismissed any suggestions that there were venal elements in the council’s decision to support the rate increase for Burrtec, which will provide the company with an estimated influx of $2 million in the coming year alone. He said the company’s propensity to make campaign donations were not a factor in the vote. Nor did he anticipate receiving any money from Burrtec, he said.
“I don’t care about their contributions,” he said. “I obviously after this can’t take contributions from them now.”
When queried about the rationale for her vote in support of giving the extraordinary rate hike to Burrtec, Councilwoman Janice Elliott said, “I do not wish to respond,” asserting such questions “lack journalistic integrity,” since, she said, they involved “conjectures about graft.”
She insisted she had not received any money from Burrtec.
Burrtec as a corporation, since May 29, 2018, has made 928 political donations to politicians or political causes within California, primarily to local or state politicians in Southern California, totaling $1,268,620.40, according to the California Secretary of State’s Office. That does not included money separately provided to politicians by Burrtec’s ownership, management and employees.
In San Bernardino County, it is de rigueur for trash hauling companies that have obtained or which are competing for municipal trash hauling franchises to make substantial political contributions to the elected officials in those cities, either to solidify their holds on those franchises or in an effort to obtain them. Scores of the county’s politicians count trash hauling companies or their ownership and senior management among their major campaign donors.
In March 1992, then-San Diego County District Attorney Edwin Miller issued the so-called Miller Report linking Waste Management, Inc., which at that time had the franchise for refuse handling in Upland, with organized crime, antitrust activity and illegal hazardous-waste dumping. In 1997, former Riverside County Deputy District Attorney Mark McDonald, at the behest of then-Colton Police Chief Bernie Lunsford and then-Colton City Attorney Julie Biggs, compiled the McDonald Report, in which he cataloged a host of irregularities in Colton’s bidding process for the city’s trash hauling franchise contract after it shuttered its municipal sanitation department. That report detailed the provision of inducements McDonald characterized as “tantamount to bribery” made to then-Colton Mayor George Fulp and then-councilmen Donald Sanders and Abe Beltran to dissuade the Colton City Council from extending the franchise to Burrtec, which had been identified by Tagore-Erwin of R.W. Beck as most deserving of the contract, and instead vote to award the franchise to Taormina Industries, now known as Republic Industries. In 1999, former San Bernardino County Chief Administrative Officer James Hlawek, his predecessor as chief county administrator, Harry Mays, and Norcal vice president James Walsh were named in a federal indictment. The indictment cataloged a bribery scheme in which Norcal was awarded the contract for managing San Bernardino County’s landfills, an assignment by which it received more than $20 million before the indictment resulted in the termination of the contract. According to the indictment, Walsh had secured Mays’s services as a consultant, paying him $4.2 million, while Hlawek, Mays’s protégé serving in the role of the county’s top administrator, had been provided with 28 payments from Norcal in amounts ranging from $650 to $5,400. In return, Mays and Hlawek engineered the awarding of the landfill management contract to Norcal. Mays, Hlawek and Walsh were convicted.
In 2019, the Upland City Council did not trigger the 7-year wind-down on the Burrtec franchise contract, such that Burrtec’s franchise in Upland is scheduled to last at least until June 30, 2027. If the city council does not signal its intent to begin the wind-down by June of this year, Burrtec’s franchise will be extended until June 30, 2028.
