WeHo Council Will Consider Final Approval of 15-Year Contract for Athens Services

The West Hollywood City Council is likely to make a final decision tonight on whether to extend for 15 years its contract with Athens Services to pick up and dispose of trash.

At a meeting in June, the Council gave tentative approval to extending the contract without putting it out to bid to see if other trash pickup services would offer a better rate. Athens stands to realize revenue of approximately $150 million over the 15-year term of the contract. That money will come largely from fees paid by apartment and business owners and local homeowners, who must accept the fees the city negotiates with Athens. Athens currently pays the $560,000 a year for the right to serve as its trash collector.

Among city vendors, Athens, based in City of Industry, is the largest donor to the election campaigns of City Council incumbents. The biggest beneficiary of its largess is Councilmember John Duran, who has received $44,000 from Athens and members of the Arakelian family, who own the company. Of that amount, $10,500 went to Duran’s 2013 City Council re-election campaign ($10,000 was to an independent committee supporting his candidacy) and $33,500 to his unsuccessful bid this summer for the 3rd District seat on the L.A. County Board of Supervisors. Athens also has donated $10,000 to an independent committee promoting Councilmember Jeffrey Prang’s campaign for L.A. County Assessor and $1,500 to Prang for that campaign. It has donated $500 each to Prang, Abbe Land and Lindsey Horvath’s most recent Council re-election campaigns.

The proposed contract would require Athens to meet certain requirements for diverting a percentage of the city’s trash from landfills by recycling it or composting it in each of three five-year periods. The city would have the option of not continuing the contract if Athens did not meet those and other requirements.

That provision won the support in June of several Council members who previously had expressed concern about not putting the contract out to bid, with the proviso that city staff members work with Athens to improve the terms.

Councilmembers Land and John Heilman had argued in May 2013 that the contract should be put out to bid to see if the city could get a better deal for the businesses, home owners and apartment building owners who will be required to pay Athens to pick up their trash. But Land said at the June Council meeting that she supported the proposal because of its requirement that Athens meet specific conditions during each five-year period of the agreement.

Councilmember Jeffrey Prang also has said he prefers to put such contracts out to bid but that he supports the Athens proposal because transitioning to a new trash vendor is difficult, the proposed contract is financially attractive, and it puts a burden on Athens to perform.

Mayor John D’Amico said he would like to see the final contract give the city more discretion in deciding whether to continue it at the end of each five-year period. “We can’t just simply say if they meet diversion rates we have to accept them,” D’Amico said at the Council’s June meeting.

Councilmember John Duran said he liked Athens’s proposal to collect and separate for recycling the trash that it picks up at apartment and condo buildings, many of whose residents don’t recycle themselves. Athens currently does that for business clients.

Athens originally had presented the city with four options. Two of them would have extended the contract, set to expire in June 2016, for a fixed period of either eight or 15 years, at which point it would have to be renegotiated or put out to bid. They included rate increases of eight to 20 percent for apartment and condo building owners and 1.4 percent to 2.8 percent for owners of single-family residences, which the city defines as those with one to four-units.

Two other options proposed “rolling” eight- or 15-year contracts, which would automatically renew at the end of the contract period unless the city gave notice a year in advance of its intention to not renew. Even with that notice, the contracts would not have expired until the end of the eight or 15-year term.

In negotiations with city’s Department of Public Works and R3 Consulting, a city contractor, Athens agreed to a revised contract that would require it to meet goals for diverting trash from landfills. State law currently requires that 50 percent of the trash collected in a city not be placed in a landfill. That requirement will increase to 75 percent by 2020. State law also requires that all commercial customers and apartment and condo buildings in a city have access to recycling options.

The city now meets the state requirement that 50 percent of its waste not be placed in landfills. But it meets that requirement in part because vendors other than Athens, who handle demolition and construction waste, are included in the calculation. The city requires those vendors to put no more than 20 percent of the waste they collect in landfills.

The proposal presented to the Council in June required that Athens alone divert at least half of the waste it collects from landfills in the first five years of the contract. It will have to divert 60 percent in the second five years and 70 percent in the final five years. If Athens does not meet those diversion goals and other standards set by the city, West Hollywood would have the right to terminate the contract.

The proposal also allows Athens to increase the fees it charges by a rate tied to the Consumer Price Index, as does its current contract. But the new proposal would not permit them if Athens doesn’t meet performance standards set by the city.

The proposed Athens contract has been opposed by the National Resources Defense Council (NRDC), which has argued that the mixed waste processing that Athens now provides for commercial trash and would provide for residential waste will harm the environment.

That reprocessing involves Athens collecting trash at businesses and residences and then transporting them to its own facility where the recyclable materials are separated on a conveyer belt from those that can’t be recyled and must be put in a landfill. That process, called “MRFing” for its use of such “mixed recyling facilities” is ineffective, the NRDC said. It noted that other cities, including Chicago, Los Angeles, New York City and San Francisco, ban what it called “dirty MRFing” and instead insist that those disposing of trash separate recyclable materials themselves for pickup.

The L.A. County Federation of Labor also has opposed the proposed contract. It also cited the “MRFing” process in its objection. “Charged with separating recycling from conveyor belts of trash, workers are exposed to hazardous materials such as medical waste including needles and upsetting sights like dead animals and even people,” said a letter to the city from Maria Elena Durazo, the federation’s executive secretary. “The contamination not only impacts works but also the environment, as much less recycling can be captured.”

LAANE, a coalition of environmental and labor organizations, also submitted a letter objecting to the contract extension.

“We recently celebrated the passage of a new exclusive franchise commercial waste and recycling system for the City of Los Angeles,” said Jackie Cornejo, director of LAANE’s “Don’t Waste LA” project, in the letter. “This system… is built on a highly competitive Request for Proposals (bidding) process and a three-bin system that guarantees recyling for all customers.”

The proposal also drew opposition from Hillary Gordon, chair of the Zero Waste Committee of the Sierra Club of Los Angeles. Gordon said it isn’t possible to properly sort food waste from other trash deposited in the same bin, as Athens proposes to do.