This hybrid vehicle has Al Gore's seal of approval
We are coming down to the wire as it relates to the pending 10 year exclusive contract for rubbish removal in Mission Viejo. As I prepare this final bidder report it is worth noting that two members of our council, Trish Kelley and Dave Leckness, will be running for re-election in less than five months. As such their vote on Monday has major political ramifications that could become the first “information” mailer in Oct.
I am blown away by the city consultant recommending the highest qualified bidder for this contract. Other OC cities have faced the same contract renewal challenge. As I research this service contract I discover that W/M refused to participate in the 10 year trash removal service in the city of Tustin. With Waste Management’s 2008 vs. 2009 10-K reporting a 10 percent decline in their “Income from operations” why aren’t they looking for new accounts? Someone might ask why they passed on that opportunity?
Further review of this industry reveals that the firm of HF&H also provides solid waste consulting services in our state. According to their web site they list 250 municipal agency clients including 20 in Orange County. Those local agencies include the cities of Anaheim, Fullerton, Irvine, Orange, Santa Ana, Tustin and the SMWD.
HF&H, who has been in the business for over two decades, consulted in the cities of
Orange, Tustin and RSM. As I look at their client testimonials I get the impression that their services were stellar. Although W/M was the existing vendor in Orange, they were the highest bidder and were not recommended losing that city contract to CR&R.
Before reporting on CR&R’s response to question I must remind everyone of the May 17th presentation comments by Joe Sloan, the MV consultant. In his opening comments Joe Sloan stated that “they are four good companies that give you four good proposals.”
A sticking point used against CR&R is the number of vehicles they plan to utilize to service our city. According to their proposal CR&R’s lighter LNG trucks have a street legal 12.5 ton capacity which is larger than the other bidders fleet. Being accused of underestimating the number of trucks to pick up our trash, recycle and green waste material, CR&R management has been pro-active and sent a confidential vehicle routing matrix documenting how they will be able to service our entire city with the number of trucks as reported in their proposal. According to City Manager Dennis Wilberg, every member of the council was given that package.
One of the nine bullet points contained in their June 4th letter to the city, as to why they should be awarded the contract, CR&R states that they have sufficient excess equipment and spare trucks to insure consistent service and price in the event any anomalies that may occur.” That’s good enough for me.
CR&R provides the same service to neighboring south County cities of Aliso Viejo, Dana Point, Laguna Hills, Laguna Niguel, RSM, San Juan Capistrano and San Clemente. In addition to personally contacting a member of the Orange City Council I have also spoken to staff and council member in the city of RSM and did not receive any negative feedback.
Other than Cathy Schlicht has any member of the council engaged in any due diligence? Simply pick up the phone and call your south county peers before Monday’s vote. Ask them if they are happy with CR&R’s safety, price and performance.
I am disappointed that in responding to a question from councilman Ledesma, Joe Sloan said that CR&R requested a rate increase after getting the contract from RSM.
Not to rely on a single source I contacted a RSM staff member and a councilman who were each involved in that contract awarded in the 2005 time frame. RSM had made a request for the potential cost increase relating to possibly changing multi family trash removal. After hearing the cost RSM dropped the request. It was not the case of CR&R low balling after getting the contract. The only other increase is the annual COLA that is in every agreement. To confirm the truth of the allegation I would suggest making a simple Public Record request to RSM’s City clerk Maria.
Let’s look at another confusing number. CR&R’s proposal includes 15 hours of overtime at time and a half. When added to the basic 40 hour week it reads 62.5 which might confuse someone not understanding their calculation. The drivers will only be working 55 hours per week not 62.5.
Another area challenged by Mr. Sloan is the valuation of recycled material. CR&R’s matrix reflects 5,000 tons per year of transformed roll off. This begs the question. Is this revenue source being intentionally overlooked or under reported rather than pointing a finger at CR&R? CR&R and Ware each include this recycling tonnage in the charts.
Awarding this bid to any of the vendors whose pricing is lower than Waste Management is less of a risk than crossing the street. CR&R has offered to provide a performance bond and an increased letter of credit if that is needed to give us peace of mind.
Having met with all three finalists I would agree with Mr. Sloan that they are all professional firms reaching out for the brass ring. In this case, potentially spending $17 million more over the life of the agreement with the highest bidder becomes more of a gold ring that is simply not warranted nor justified.
Final thought. As we have term limits in this city, the decision that our council is about to make will impact our current and future residents for years after these council members depart.
Larry, wm bid the city of orange as the were the incumbent but as this bid is much higher than all the other bidders who just happen to be the same bidders for m.v. Just so you know all the haulers have to provide a performance bond or they cannot get the contract. all the haulers did provide it. I agree with a lower price but you don’t want bad service. The city politicians are going to say good things about CRR cause they donate money to them. Ask the residences and businesses and see what they say. I’ve seen there trucks and they actually look smaller than everyone else’s. plus if they are that heavy who’s to say they wont crack the roads. th truck alone probably weighs 3 to 4 tons. Sloan is lame for his recommendation but Athens would be a horrible choice. go to http://www.athens.org. they should make crr bid it according to the cost or figure out the number according to what they bid with the 3 more trucks like everyone else. any ways glad your on it.
Paulie.
One of several points that I did not include due to length of my post was a comment from Joe Sloan regarding CR&R in which he said that they are working on a thin margin. Paraphrased. How can he say they will make a profit and, at the same time, say they will be losing money on this contract?
Unless he is a stockholder in that private company Joe Sloan is not in a position to tell them what profit level they choose to have. Picking up the City of MV may be a feather in their cap for chasing other city contracts. Servicing every other south county city may result in some economies of scale that are not obvious to those of us not in the business.
As to performance bonds my only point is that they offer to increase their financial exposure to give us that added comfort in the event they fail to perform to the agreement.
Perhaps they should give us the keys to these new trucks if that makes the council happy.
Paulie Shore.
Are you serious? Yes, it is true that city council members do receive campaign contributions from all trash haulers. However, if they want a reference call the city manager. As confirmed by our True North Research survey picking up our trash is the third highest priority for our residents. As such if CR&R trucks were unsafe or were dumping trash on the streets, don’t think for a minute that the phones in city hall of those neighboring cities would not be ringing off the hook. Our peers would be wise to be extremely truthful if contacted for actual experience with any common vendor.
PS: Cathy Schlicht has not requested nor accepted any contributions for city vendors. Want proof? Check her 460’s on the city of Mission Viejo web site.
Paulie Shore–
I have sisters and brothers in both San Clemente and Rancho–they both say CR&R has fine service. CR&R is a long time trash hauler in south county–remember So. Lag–they are the foundation of CR&R. So the proof is in the pudding–good service and low costs, and around a long time.
Also, I could care less if any of them use a donkey and cart to pick up the trash–if it is done on time and in an acceptable fashion–so the truck issue is nothing but a diversion–by you; and others.
Hey–put a hat and sun glasses on that donkey and call it–Trish!!!
Paulie,
It is good that you read things and pay attention. The vast majority don’t. I just want you to realize and consider that these municipal contracts are like corporate welfare for the upper class. Once you get the contract, you have a monopoly and it is just like mining gold. When you realize this, that is why there are not service problems. Why would you want to screw up a monopoly? Waste Mangement doesn’t mess up anywhere. CR&R makes no mistakes anywhere. It is all a matter of getting the muncipality to give you the monopoly. That is what all the fuss is about.
In this case, Waste Management is confident they have the votes on the city council, so as the incumbant, they bid high. CR&R is the odd man out, so they bid it to win. Put yourself in the Waste postition. You have been making X from Mission Vijeo for ten years. Do you suddenly drop your price and admit you have been ripping off the public? No. You bid high and work the politics very, very hard.
It isn’t that complicated.
Larry,
As an outsider, the details of the relationship between CRR and the MV City Council are of less importance than the prospect that CRR will serve MV from its facility on Ortega Highway. The traffic at the La Pata / Antonio intersection will be made worse — if such a thing is possible — by all the trash haulers added to the morning and afternoon mix of commuters and high school traffic.
Those living in San Juan Capistrano and San Clemente, and Ladera Ranch who must access the high school, as well as those living in Ladera Ranch, who are in the path between CRR’s site and MV, have no voice. But what’s new about this? It’s just another regional traffic issue placed into the hands of a myopic city council. This time, it just happens to be Mission Viejo.
The current desperate traffic reality was decided in a back room years ago between Ranch interests, CRR, and perpetuated by County and LAFCO lapdogs.
JR,
Trucks either come into Mission Viejo from the major interchanges or from the south via the back door. I would prefer to have the interchanges less impacted for my daily commute. I suppose it is a matter of choice.
Paulie,
I was just on the city website and found an interesting document that exposes that Waste Management must earn 16% profit as quoted from the Waste Mangement Annual report. Please see:
http://dms.cityofmissionviejo.org/sirepub/cache/2/txnzyi45sjnw45nc4gfyku45/223975306062010111044247.PDF
This is what I spoke of regarding mining gold out of Mission Viejo. My CD’s at the bank are paying nothing.
Athens is NOT a “professional” trash firm. They’re a bunch of hacks with a long list of convictions for price-fixing, union-busting and environmental violations. See all the facts and original documents here: http://www.StopAthens.org
Montebello, Monterey Park, and Temple City are all trying to find ways out of their Athens contracts. Why would any city consider getting in bed with these guys?
Follow the lead of LA County and Rancho Palos Verdes. Say Athens does not represent the kind of company you want in your town.
MV Truth Teller.
Once again I have more info on these companies than can be reasonably blogged.
One disadvantage of being a public compnay is that your financial data is out for anyone to see. On page 25 OF Waste Management’s Form 10-K and Proxy Statement it reads:
“We announced that we are committed to our pricing program and we do not intend to take volumes that do not cover our costs and that do not provide strong operating margins.”
W/M’s problem is that they are already proposing a lower rate for our residential pick up than we currently are being charged. Have they been ripping us off over the past few years?
Their managment now says they can negotiate further. Unless there are exceptions to be removed in negotiations, I would hope that their proposal was their best and final offer.
Based on that offer I would say our council should open their eyes. While some thought this was a slam dunk, and it might still turn out that they will be chosen, perhaps a council member might ask them to explain how they are able to lower the current pricing.
If you listen to W/M everyone else in the marching band is out of step. I am not buying that spin
JR.
Welcome to the world of nimby’s
We don’t want added traffic on Antonio. That’s the same argument we made when learning that the ranch will be adding 13,000 new homes plus one million square feet of commercial development on/off Ortega east of San Juan. Instead of widening Ortega to handle that massive increase in auto traffic to I-5 these drivers will access Interstate 5 north by driving up Antonio and hanging a left onto Crown Valley and/or Oso Parkways.
That is why those key arterials have been widened.
So what’ the big deal of 13 CR&R trucks making one or two trips on Mon-Friday on that road when you /we will have thousands or other vehicles on the same street seven days a week?
Frank Jones.
As a new participant on our blog please stay on topic and avoid personal attacks. While this is not personal you are hammering Athens whose name is nowhere to be found in this post.
I am well aware of the history of Athens.
Larry, one question. Is all this information you have freely available to all citizens? In the interest of transparency in government I should think it would be, but I have a feeling it’s not.
LBM.
Do you a telephone? Pick it up and make some calls. If it’s too heavy let your fingers do the walking and use my good friend Google who has more data than you can read in a lifetime.
The fact that I have been an investigative reporter for over a decade does help.
Perhaps you saw Phil Liberatore’s full page ads in today’s Register. In preparation to interview Lt. Col “Buzz” Patterson I had to check his background and read his book. The same is true for Major General Paul Vallely. Those programs are in the Cutting Edge-a talk show archives.
Back to MV. Perhaps you didn’t read or hear that I attended presentations by representatives of Athens, CR&R and Waste Management, each of whom handed us data that is now a Public Record.
Instead of appreciating my Juice posts you should be disappointed in hearing that the OC Register representative was not in attendance at any of these vendor briefings. If he were, he could confirm or challenge what I have been reporting.
Since Larry overlooked Jimmy Crack Corn’s incredibly valuable post, I’ll just endorse what Larry said in his admonishment to Frank Jones about avoiding personal attacks.
Newbie.
No matter which vendor is selected, be it tonight or at a future council meeting, there is one point worth our discussion. Cost!
The management of incumbent Waste Management has offered an alternative to the bid in which we will enjoy a cost reduction if they are permitted to use the existing fleet of trucks that currently serve our city.
While I have no problem with any of the vendors using safe and reliable existing vehicles, the fact that they are offering a 7% discount from our current monthy fee raises a red flag.
Is Waste Managment admitting that, until being challenged by competitive bidding, we have been overcharged over the past few years? Do you feel good that they have pocked an extra million dollars over the past few years just from our residential accounts?
If they were not being challenged would we ever realize any such cost reduction? No!
And should the city entertain the use of existing vs new trucks there is no justification for a 10 year contract in that there will no longer be the issue of amortization of new trucks to cover.
Bear in mind that every hauler has the right to pass on their annual COLA. Therefore their internal costs surely have escalated over time. While CR&R is willing to work on a lower margin, Waste Managment’s 10-K for FYE Dec 31, 2009 is a document I suggest your reading. A focus on bonus’s for executives with performance criteria tied to “pricing improvement targets. “Pages 24-26.
While I do not fault any vendor for trying to maximinze their profit margins, we are currently in a competitive bid process. This is not the case of deciding which surgeon to retain to perform brain surgery in life and death cases where cost should not be a factor.
To repeat. Joe Sloan stated that they all four, including Ware Disposal, are qualified to remove our rubbish. Not a single person I have interfaced with on this pending Contract agrees that the cost for trash removal only be weighted at 20% of the overall evaluation.
Numbers. Not including our 5% franchise fee, our monthy bill is $13.30. With Waste Management’s alternate bid of $12.28 using existing trucks, which is still higher than CR&R’s new fleet pricing, represents an annual variance of $354,960 or $$one million dollars over the past three years.
They speak of giving our library $5,000 per year. However, that money is from our citizen’s dedication to recycling, the source of that gift.
PS: Section 1 and Section 2 of Mission Viejo Ordinance 2000-204, relating to our trash removal reads as follows: “Any such franchise granted by the City Council shall not exceed a maximum of ten (10) years”.
Sherri M. Butterfield, Mayor
Therefore while we set a ceiling we did not establish a floor. We can revise the RFP to address the use of existing trucks and reduce the contract to five years.
The RFP original criteria, calling for new vehicles, should not be altered.
I just saw my CR&R garbage truck picking up both my black trash bin and blue recycling bin at the same time! I’ve seen this done multiple times now, and I’m just wondering if I’m wasting my effort in sorting my recycling items, because CR&R is lazy and taking shortcuts, or if they are now sorting in-house? If they are sorting recycling items in-house, then they should just let all of us know, so we can just use a single trash bin. Personally I think they are cutting corners, and dumping recycling items in landfills.
Can you find out from THEM after the holiday? I doubt they are landfilling recyclables, as I believe the CA Recycling laws have carrot ($ from materials sold) and stick ($ penalty if mandatory recycling rates per city not met)incentives. I think it varies by City (size?) yours not mentioned. My guess would be single combined sort, perhaps a bean-counter found that cheaper (wages, fuel, maintanence) than running more trucks around? Probably figured that keeping extra barrels gives you more capacity?? I think I remember hearing CR&R Stanton (City next door) does single barrel recycling, Don’t know.
I am in City of Tustin. CR&R replied to my inquiry and said that is not supposed to have happened. Trash and recycling should be picked up by separate trucks. They are going to look into it.
Well, once again a single garbage truck picked up both the recycle bin and trash bin, even though CR&R indicated this is not supposed to happen. This is after the holidays. I’d imagine cost and expenses have something to do with this. Funny thing… after my complaint today, they sent out another truck to “fake collect” the recycle waste- basically going through the motion of dumping already emptied bins.