To the applause of the audience, the City Council this week killed further study of a proposal to award an exclusive franchise for commercial and multifamily residential trash hauling without competitive bidding.
Saying that there is “no movement” in the business community for such a franchise and that the city is not in need of the money a franchise would provide, Mayor Jim Armstrong cast the swing vote in the 4-3 decision Tuesday. The action ended a controversy that began in July when Councilman Dan Walker asked the city staff to study the idea.
Walker said he had received numerous complaints of health hazards and equipment failures about the 14 companies that haul trash for the city’s more than 7,000 businesses and multifamily complexes. He said an exclusive franchise would provide the city with revenue and businesses with better, cheaper service because of economies of scale.
The franchise would have brought the winning contractor nearly $6 million in business and the city nearly $300,000 if it adopted a 5% franchise fee, the staff estimated. But the staff recommended against awarding such a contract, saying the city would lose control over haulers and businesses might pay higher rates.
Former Mayor Complained
The issue had become so heated that former Mayor Albert Isen made a rare appearance before the council in late July and implored it not to take the action. Tuesday night, Isen asked the council to “bury the damn thing that has been bothering me 60 feet deep.”
Walker’s proposal appeared in trouble from the moment he introduced it. As word of the proposal spread in the business community, the opposition grew. The focus shifted from the environmental and safety issues to questions about political contributions, indirect taxation and a challenge to free enterprise.
Robert M. Abrams, president of the Major Paint Division of Standard Brands Paint Co. in Torrance, wrote an angry letter to the mayor: “I only hope that if this disturbing state of affairs becomes law, we have a chance to . . . pay off in the proper areas and become the only paint that is approved for use by anyone in the city of Torrance.”
After the council vote, Torrance Area Chamber of Commerce Executive Director Robert Seitz said he was pleased with the council decision, adding that he had received calls almost daily from the business community opposing the idea.
Opposed to Monopoly
“The concept of a monopoly frankly frightens many of our members,” said chamber President William Beverly during the meeting. “We are not comfortable substituting the judgment of the city for that of the customer with regard to the selection of a supplier or the negotiation of rates.”
Some of the city’s small trash haulers, who said they would have been put out of business by the proposal, said they are relieved.
“My kids are 12 and 13. What would I have done?” asked Jon Sogoian of Two J’s, a two-truck hauling operation based in Gardena. Sogoian said his Torrance contracts amount to half of his business.
“The only ones that would have benefitted from this are the big companies,” said Haig Papaian Jr. of Haig’s Disposal, a 10-truck hauler.
Leslie Bittenson, a vice president of Browning-Ferris Industries of California Inc., a national refuse collector and the largest commercial hauler in Torrance, blamed Walker’s approach for the proposal’s defeat.
“The key thing we objected to was that Dan Walker did not want the bid process, he wanted it to be a political appointment,” Bittenson said Wednesday. “We didn’t feel that would benefit us or the city.
But Bill Goedike, a vice president of Western Waste Industries, another major hauler with exclusive contracts in Inglewood and Hermosa Beach, disagreed. He said exclusive franchises are the trend, and going with the lowest bidder may not produce the best hauler.
Exclusive franchises “provide control and uniformity of service,” he said. “Money is not the issue. Health and welfare is the issue.”
Unqualified May Bid
Goedike said by opening the franchise to all companies, some unqualified companies would submit low bids simply to get the contract. Under Walker’s proposal, he said, interested companies would be asked to submit their qualifications. Three or four of the best qualified would then be asked to submit bids, with the contract going to the best bidder.
Walker said he still believes an exclusive franchise is in the best interest of the city. “Merely because you lose a 4-3 vote doesn’t mean the process was incorrect,” he said. Councilmen Mark Wirth and Tim Mock voted against killing the proposal, saying they wanted more information.
Walker told the audience that about $6,000 in campaign contributions he received from Western Waste were given when he was considering running for the Los Angeles County Board of Supervisors. He said he donated more than $6,000 from his campaign fund to charitable organizations to offset that contribution.