The West Hollywood City Council gave its final approval Monday to a 15-year extension of a contract that gives Athens Services‘s the exclusive right to pick up and dispose of the city’s trash.
The contract, which city staffers estimate is worth $150 million to Athens, requires the company 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.
The contract allows Athens to increase the fees it charges by a rate tied to the Consumer Price Index, as does its current contract. However Athens may request a rate increase of as much as 10 percent in 2020 and 2025. Those rates are paid by local businesses and home and apartment building owners. Athens pays 10 percent of its revenue from the West Hollywood contract back to the city in what is, in effect, a franchise fee.
While he joined other Council members in voting for the contract, John Heilman said he continues to believe it should have been put out to bid to see if the city could have found a cheaper option. “This is going to be a $150 million contract,” he noted. “That’s why I believe we should always go out to bid to get the best deal for the city and consumers.”
Mayor John D’Amico said he believed the contract requirements negotiated with Athens by the city’s Public Works Department staff and R3 Consulting, which assisted in the process, made the contract a good one and that Athens deserved to make a lot of money for picking up and disposing of trash. “They should get paid. They should get paid a lot,” he said.
The contract requires that Athens 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.
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 contract extension proposal drew opposition at earlier Council meetings from groups such as the National Resources Defense Council (NRDC), the Sierra Club of Los Angeles and the L.A. County Federation of Labor, none of whom appeared at Monday’s Council meeting. They had argued that Athens’ practice of “MRFing,” using workers to separate recyclable materials from from conveyor belts of trash, was unhealthy and bad for the environment.
Among city vendors, Athens, based in City of Industry, is the largest donor to the election campaigns of City Council incumbents. Its biggest beneficiary is Councilmember John Duran, who has received $44,000 from Athens and members of the Arakelian family, who own the company, who donated to Duran’s 2013 City Council re-election campaign and his unsuccessful bid this summer for the 3rd District seat on the L.A. County Board of Supervisors. Duran, in an apparent response to a call from WEHOville to recuse himself from voting on the contract extension because of the large donation, said Monday that he had consulted with City Attorney Mike Jenkins and determined that he did not have a conflict of interest in voting on the contract.