Trash contract touches off legal disputes in Montebello

Even for a city used to political upheaval, there’s a lot of trash talk lately in Montebello.

A divided City Council in this Eastside suburb touched things off last summer when it voted to award exclusive trash rights to one company, Athens Services, beginning in 2015. The action would force out 12 independent haulers who have served the community for decades. As part of its agreement, Athens would grant the city a one-time payment of $500,000, and a 7.5% share of its monthly revenues.

Then-Mayor Bill Molinari and Councilwoman Mary Anne Saucedo-Rodriguez voted against the deal, saying that it was unfair to residents who could end up paying more for trash collection because of a lack of competition.

“It’s the right of choice to get the best price for goods and services,” Molinari said. “When they take away your choice, the consumer is always the victim and has to pay more.”

Since then, residents and haulers have repeatedly turned out at City Hall to protest the agreement. Union leaders pulled their endorsements of Councilman Robert Urteaga, one of three council members to support the deal. And now there is talk of a recall campaign -- the second in less than two years.

Three council members were voted out in 2007 over whether the county should provide police and fire services to the city and whether that issue should be placed before voters.

All this in a city where the fight over trash rights has turned simmering political rivalries into red-hot feuds.

“We’re upset because it didn’t go up to bid,” said Aron Petrosian, president of Commercial Waste Services, an independent trash hauling company that also serves Montebello. “Athens might be qualified, but they’re not the only ones that can do it.”

Montebello, a suburb of 62,000, is predominantly Latino but has a significant Asian and Armenian population. Armenian American families have been entrenched in the hauling industry here for generations, and the squabbling over trash rights has a personal dimension for some who have family members working for competing haulers.

After the council’s vote, opponents began gathering signatures for a referendum on the Athens’ contract.

Within days, haulers had collected nearly twice the 2,530 signatures needed to qualify a referendum for the ballot.

But two lawsuits have been filed against the city, one challenging the validity of the referendum. The first, filed Oct. 6 by Montebello resident Irene Villapania, alleges that petitioners left out key information to collect signatures. It seeks to block the city from putting the referendum before voters. Athens is paying the legal fees.

The second lawsuit, filed Oct. 14 by Montebello residents Mike and Rosemary Torres, demands that the city make a decision on the referendum. Both suits are pending in Los Angeles County Superior Court, with hearings scheduled for this month.

In October, the same majority on the council who approved the contract voted to keep the referendum off the March ballot, sending it to the courts for a judge to decide.

The council’s vote also rankled powerful labor interests. Maria Elena Durazo, executive secretary-treasurer of the Los Angeles County Federation of Labor -- which helped elect Urteaga in November 2007 -- pulled the union’s endorsement of the councilman.

“Your recent actions in your capacity as council member on the Montebello City Council has caused great harm to the men and women that work and live in the city of Montebello,” Durazo wrote in an Aug. 20 letter. “Further, your actions have caused your previous supporters to question your commitment to support working people.”

The day after the council voted to send the referendum to the courts, a group opposed to the contract posted details of Urteaga’s criminal record on a website, including a 1999 no-contest plea for grand theft of personal property totaling $30,000, according to court documents.

Urteaga admitted the felony conviction, saying that he got tangled up in sports gambling during college and stole money from a friend to get himself out of debt. He pleaded no contest. “I got in over my head, took money that didn’t belong to me, thought I could pay it back and I couldn’t,” he said. “I owned up to my mistakes, paid full restitution and did community service. I regret that it happened every day of my life, but it’s made me a much more honest person because I don’t want to be caught up in that type of situation again.”

Urteaga said he voted for the contract because it would generate revenue for the city by granting a one-time payment and a percentage of subsequent revenue.

“I look out for the residents’ best interest,” he said. “My job isn’t to protect the haulers, it’s to protect the residents.”

All commercial haulers pay 13% of their revenue to Montebello. If the contract with Athens goes through, Athens would pay the city a franchise fee of 20.5% of revenue on all commercial accounts.

Athens has hauled residential trash, which includes pickup for single-family homes and apartments with fewer than four units, in Montebello since 1962. The company, along with 12 other haulers, also collects commercial waste.

Urteaga said the city didn’t open the contract for bidding because any bid made now would be null and void by 2015, and companies would have to rebid at that time anyway, he said. The Athens deal was presented only after the company approached the city administrator with a proposal for an exclusive contract, he said.

Some Montebello residents stood behind the decision to sign the contract, saying Athens is the best hauler to get the city to comply with environmental standards. Others said their elected officials were looking out for themselves.

“I’m not happy because the City Council is supposed to represent us, not sell us out to whoever will give them the highest kickback,” Montebello resident Raul Yanez said.

From 2005 to 2008, Athens made contributions totaling $21,100 to the three council members who supported the contract, according to city records.

Dennis Chiappetta, executive vice president of Athens, said the referendum was “fatally flawed” because petitioners lied to residents to get their signatures. He said Athens is the best suited to serve Montebello because it has a material recovery facility that converts waste into recyclable materials.

But Petrosian said he and other haulers just want a fair chance at keeping their business in Montebello.

“How can they not put it out to bid not just to me, but to other big conglomerates?” he said. “What are they afraid of?”

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catherine.ho@latimes.com