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Daily Pilot

Commentary: Trash contract is not in the best interest of ratepayers

By Jim Fitzpatrick

5:21 PM PST, November 27, 2013

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Why has the Costa Mesa Sanitary District (CMSD) not had a competitive trash contract bid since World War II?

Newport Beach just completed a competitive trash contract bid with our same trash hauler, who offered Newport (about $11) a lower rate than Costa Mesa ($18).

The direct value of the CMSD trash contract is about $4.5 million a year, which would be $45 million over the life of the original contract with a 10-year term.

We are now committed to 14 years with no end in sight. In fact, the board has promised not to review the contract for a minimum of six years. That is not in Costa Mesa's best interest.

CMSD's trash containers retained recycled scrap value worth an additional $2 million to the trash hauler. Bottles and cans add about $1 million more. So this zero-competition contract has yielded $7.5 million a year!

Good business, if you can get it.

The CMSD board has known about this scrap value contract omission for a long time, but refuses to amend the language that would benefit the ratepayer. Why?

A recent study found that closing a recycling center on 19th street did two things. First, it reduced scavenging, and second, it increased overall tonnage with these valuable recycling contents.

Since there is no contractual obligation to have that recycling value lower the rate, the trash hauler's bottom line was the overwhelming beneficiary, not the ratepayer.

What is the CMSD board afraid of? It certainly isn't afraid of amending the contract.

The CMSD board has been willing to favorably amend the contract to the benefit of the trash hauler. The CMSD board recently voted to remove the contract clause that mandated the trash hauler give ratepayers the best available rate. That is why such a competitive trash rate in Newport Beach now has no impact on lowering the Costa Mesa trash rate.

As if all this was not egregious enough from a board elected to protect the ratepayer, CMSD's board is now considering amending the trash contract again to allow for a no-bid trash contract worth an additional $500,000. Math says $8 million a year in no-bid contracts.

The no-bid contract will add a container, force residents to separate waste and put another truck in our alley and on our streets.

Can anyone tell me how these actions benefit the ratepayer?

JIM FITZPATRICK is chairman of the Costa Mesa planning commissioner and a former Costa Mesa Sanitary District board member.