Here’s Why Fountain Valley Rejected Competitive Trash Bidding

All four Council Members voting Aye take money from Rainbow Disposal

Last weekend, we wrote that the Fountain Valley City Council had an opportunity to put the city trash disposal and recycling contract out to bid.  All 34 Orange County cities contract out their refuse and recycling services, and per a city staff report, FV would rank 12th highest in per household monthly rate.

Rainbow Environmental Services (aka Rainbow Disposal, based in Huntington Beach) services nine other OC cities, sharing the market with five other companies per the OC Register.  Last November, the Reg’s OC Watchdog reported:

Orange County governments have awarded more than 40 exclusive contracts worth some $4.5 billion to private trash haulers – most without ever opening the process to competitive bidding – even though local experience and scholarly studies show that competition can dramatically slash rates. The overwhelming majority of that trash business – some $3 billion worth – is tied up in what’s poetically termed “evergreen” agreements. These agreements never really expire and can renew into perpetuity, guaranteeing haulers a constant flow of dollars and millions in profits, virtually worry-free. There are exceptions, but generally speaking, the highest residential trash rates in Orange County are paid by folks in cities with those long-term evergreen contracts that have never been put to bid, including Placentia ($22.66 per month), Stanton ($21.09), Anaheim ($19.90), Yorba Linda ($19.56) and Huntington Beach ($19.39).

With the increase approved by four fifths of the FV Council Tuesday last, city households will now pay $18.84/month.  This latest hike is up from a rate of $17.83 in 2011 that was increased by three of the four current council members, again without calling for a competitive bid.  Last year, Councilwoman Brothers was quoted in the Register:  ““It takes a tremendous amount of staff time” to determine if Fountain Valley is getting a good deal compared to other cities”.  Apparently she believes its just too much trouble to burden the 9/80 city staff (which is allowed every other Friday off) and her idea of a good deal is using a favored vendor with great fringe benefits.  We did note that there were two procurements on Tuesday’s Agenda for new police cars and computer tablets — both were competitively bid by city staff.

Fountain Valley has apparently never bid the trash contract in its 57 years of incorporation.

Fountain Valley Mayor Michael Vo, Mrs. Vo, two Westminster Councilmen (far left) with Rainbow Disposal President Jeff Snow and wife Melissa (far right), and Rainbow VP Sue Gordon (center)

Council member Mark McCurdy voted No on both occasions to the rate increase, believing that competition for the city’s business was appropriate.  The Watchdog article cited examples where competitive bidding dramatically lowered rates in four large cities: “lower rates are paid by folks in cities where haulers recently duked it out, including Los Alamitos ($11.80), Orange ($12.30), Mission Viejo ($12.65) and Lake Forest ($14.18).”  Irvine’s rates are even lower due to “hardball” negotiation: “Irvine still has the lowest residential trash rates in Orange County: $10.79 for most folks, and $10.16 for low-waste generators with smaller carts.”

Fountain Valley went through the motions by notifying residents of the rate hike (added city fees were actually more than Rainbow’s requested increase) and allowing a “Protest”.  Less than 20 letters were received (far less than the 7k+ the Protest required — to John Collins’ amusement), and only three people spoke during the Public Comments portion of Tuesday’s regular meeting.  Despite public requests, an audit supposedly done of Rainbow never surfaced in the meeting or staff report, so residents could not learn how much revenue was being generated via Rainbow’s aggressive recycling program of residents’ free discards, and how any profit from it might have mitigated the rate increase.

Neither was the obvious asked — just how close is this city council to Rainbow?  It took less than 24 hours to determine what Rainbow’s campaign contributions since 2010 to the four Aye votes were:

• Cheryl Brothers, $500 on 09-13-2012
• John Collins, $500 on 08-26-2010
• Steve Nagel, $500 on 10-15-2012
• Michael Vo, $500 on 10-24-2011

Unsurprisingly, the No vote got stiffed.  Twice.

Despite term limits, Brothers and Collins have been on this Council since forever, so it’s unknown at this time if they had accepted any funds from Rainbow prior to 2010.  Like other trash haulers, per the Secretary of State, Rainbow is quite generous with many local politicians and lobbying groups.

Council watchers last Tuesday saw four very comfortable local pols that had absolutely NO interest in getting their residents a better deal, or allowing any competition for a seven-figure city service that’s been proven to cost FAR LESS in cities other than the “Nice Place to Live”.  Perhaps a less complacent, new Council would place its residents’ interests ahead of its own.