City, Trash Hauler Raise Stink Over Upstart : Garbage: Santa Ana and giant Waste Management, which holds exclusive city contract, go after small firm picking up 50 schools’ trash.

The city’s trash wars heated up again Thursday when Santa Ana teamed up with behemoth Waste Management Inc. and sought a court order to stop a family-run company from picking up the garbage at 50 schools.

The city and Great Western Reclamation, a subsidiary of Waste Management Inc., filed a complaint Wednesday against 5 Star Rubbish Service, claiming it is breaking a city law that grants all trash hauling rights within city boundaries to the city-contracted hauler.

By picking up trash from the Santa Ana Unified School District’s 50 campuses, Dolores Otting’s Newport Beach-based company also is making it “expensive and burdensome, if not impossible” for the city to meet state-mandated recycling goals, the complaint says.

Superior Court Judge Thomas N. Thrasher postponed a decision on the restraining order until Monday.

The courtroom confrontation climaxes a tense standoff between school officials and the city over whether the district could put its trash-hauling contract to bid. After months of haggling last year, the district ultimately decided to go with the advice of its attorneys and awarded Otting the $200,000 annual contract on Jan. 11, said Gaylen Freeman, the district’s assistant superintendent for business services.

“Any public agency has to go out to bid to get the lowest bid (on contracts of this size), so we went ahead and did that,” Freeman said.

Otting echoed that opinion.

“It’s an exclusive franchise--yeah, I’ll buy that--but not for school districts,” said Otting, whose company collects waste for several other school districts and state agencies in Orange County, despite exclusive franchise agreements in those cities. “An exclusive franchise doesn’t prevent a state agency from putting a contract to bid. In fact, they’re required by law to do so if it’s over $21,000.”

Otting said her attorney will submit documents to the court showing how the contract was awarded to her by the school district in an open bidding process.

The school district was not named in the complaint, although the city’s ordinance states that anyone who pays an alternate trash hauler to pick up garbage within city limits also is committing a misdemeanor.

“I didn’t get pregnant alone,” Otting said.

Under pressure to seek proposals for its trash hauling contract after nearly three decades, the city did so last year, once again awarding the $100-million contract to Great Western Reclamation. The city ordinance that states no other trash hauler can work within Santa Ana city limits was drafted about a month before that contract was awarded, according to Great Western’s attorneys.

Great Western Reclamation says Otting’s company intentionally interfered with its contract with the city, and poses unfair competition, according to the complaint.

“The law in California makes it illegal to compete by illegal means,” said John Murphy, an attorney for Great Western Reclamation. “We negotiated for the benefits of the contract that we were awarded, and we were deprived of those benefits.”

City Atty. Edward J. Cooper said the city sent district officials and Otting a letter the day before the contract was awarded, saying it was illegal. But the city opted to wait until Otting’s company started picking up trash from city schools before taking her to court.

“We probably didn’t have to wait, but in fact we did wait in order to see if they were going to proceed with this collection process,” Cooper said.

The city is the lead plaintiff in the matter, he added.

A tearful Otting chided the city and Great Western Reclamation for waiting this long before posing a legal challenge. Her company just spent $300,000 to purchase two trucks and 128 bins for the Santa Ana schools contract, she said.

Last weekend, Great Western Reclamation removed their bins from the school sites and Otting hauled hers in. She started picking up the school trash on Monday, she said.