Customers feel waste industry's struggles

Friday, September 26, 2008

By Raheem Hosseini (editor@ledger-dispatch.com)

Pioneer resident William Morris asks county supervisors to reconsider granting a 10 percent fee increase for garbage collection Tuesday.
Photo by: Raheem Hosseini
County supervisors listen to public testimony on a proposed garbage rate increase on Tuesday.
Photo by: Raheem Hosseini
There's been a lot of trash talk going on at the board of supervisors meetings recently - literally.

In the past two weeks, the local waste hauling company ACES Waste Services Inc. managed to get a contract with another operator amended and raise rates for customers in one of its franchise areas, all as it struggles to remain solvent as rising gas and operational costs tighten their choke hold.

During a sparsely populated public hearing Tuesday morning, only one of the 4,500 affected residents showed up to protest a proposed 10-percent increase in garbage collection fees being considered by the board of supervisors. The county did receive 14 written protests, many of them blasting ACES for requesting such a sharp hike, the second one this year and fourth in 2 1/2 years. The rate increase means customers currently paying $23.30 a month for weekly pickups of 32-gallon bins will instead pay $25.65 a month effective Oct. 1. Those with 96-gallon bins would see their fees rise from $31.50 a month to $34.65.

Thousands of notice letters went out to customers in what's known as franchise area 3 on Aug. 4. A little more than a dozen came back, nowhere near the simple majority needed to override ACES' request. Pioneer resident William Morris told supervisors he "was an inch away from discarding that green letter" before discovering what it was. His implication was that other customers may have considered it junk mail as well.

"The cost of living is rising for everyone," he said. "Where do we see about our 10 percent raise?"

Even though oil prices have stabilized a bit in recent months, board chairman Richard Forster said the county was granting ACES relief for costs already borne. "We're six months behind," Forster explained, adding that the county has to do its own study to make sure the increase is justified, creating a problem of perception for those who hear ACES complaining about gas prices as they finally trend down.

Morris was sympathetic to the plight of a company trying to keep up with rising diesel costs. His fellow protesters were more concerned with their own survival.

Struggling to hold on

"Most residences in this area are also suffering from the extremely high inflation caused by the gas prices," wrote Pioneer resident Patricia Howard.

Jackson resident Harvey M. Stein called ACES' justification "vague" and questioned the scheduling of a public hearing for a time when most people would be at work. "The process seems unintentionally or intentionally designed to provide ACES no incentive to control costs or operate efficiently," he wrote.

Pioneer resident John L. Confer requested a more modest increase of 2 to 3 percent.

Multiple letters also came from residents claiming to be on fixed incomes unable to find their own relief from a tightening economy. Why, they wondered, should ACES be bailed out?

Morris said he has neighbors who have to choose between buying medication and food. "It's a sad thing, but it's a reality."

Put in the position of being their unofficial spokesman, retiree Morris tried to offer supervisors possible alternatives. Perhaps the franchise areas could be redrawn so those living upcountry and in parts of Jackson aren't lumped in with residents of Silver Lake. ACES president Paul Molinelli Sr. said it was traveling to these more remote homes that was driving up the costs for everyone else. "What would be the most fair to the people living in the denser areas would be to charge the people in the more remote areas more, but I don't know how popular that would be," he said.

"I'm being lumped with the group that lives in Silver Lake and I don't have the view they have," Morris said. "I chose to live in a populated area. (Other) people chose to live in Silver Lake."

District 5 Supervisor Brian Oneto remarked that local food banks were seeing an increase in older clients. "Kirkwood is kind of an expensive choice up there and it doesn't seem very fair to lump them in with everyone else," he added. "I would like to look at that if we could."

Supervisors agreed redrawing franchise areas might be something to consider, as was Morris' suggestion to make garbage collection service mandatory for all county residents, which would spread costs over a larger number of customers. But that idea was pounded at the ballot several years ago and prompted threats of recalling supervisors who supported it.

"If you take the lead, we'd be happy to follow you," Forster joked with Morris. "None of us wants to get recalled."

District 4 Supervisor Louis Boitano, the longest-tenured board member, was elected after the earlier ballot controversy. "Hindsight 20/20, we should have gone with it."

Supervisors voted 4-0 to approve ACES' rate increase request. No formal direction was given to consider mandatory collection or redrawing franchise are boundaries.

Will illegal dumping increase?

Meanwhile, a 20-month effort to amend a three-way contract between the county and two waste operators was approved last week, despite protests from one of the businesses involved.

The request originated from ACES in January 2007, when Molinelli sent Public Works director Larry Peterson a letter asking for relief from a contractual obligation to deliver 40 tons of solid waste per week from the Jackson area to a transfer station in Buena Vista.

The Jackson Rancheria's decision to drop ACES as its waste operator that February was going to put a severe pinch on the trash hauler's revenue stream, Molinelli's letter said. Without the casino's 4,718 annual tons of garbage and with steady increases in gas prices and operational costs, Molinelli wanted to amend a 25-year franchise agreement signed in 1999 that would grant ACES "the right but not the obligation" to continue delivering Jackson waste to the Buena Vista station, which is operated by Amador Disposal Service Inc., the local imprint of Waste Connections Inc.

"It is true that Waste Connections might be adversely affected if ACES were allowed to deliver the Jackson tonnage to another facility," Molinelli wrote in a follow-up letter this past March. "However what is also true is that residents and businesses in the City of Jackson have been subsidizing Waste Connections customers in El Dorado, Calaveras and Amador counties for the past 10 years."

An April 21 letter from Amador Disposal district manager Jason Craft argued that allowing ACES to forego what ADS calls its western Amador recovery facility, or WARF, could have adverse ripple effects for the company and its customers. Forty tons per week equates to 10 percent of Amador Disposal's local volume. Diverting that, Craft said, could mean higher tipping fees for residents wanting to dispose their trash. Those who didn't want to pay the 1 to 4 percent hike would either take their trash to other area collectors or engage in illegal dumping, Craft argued.

Illegal dumping was an issue raised again this week, during supervisors' consideration of ACES' rate increase. Morris said he's noticed discarded refuse piling up along Electra Road and in Tiger Creek, a problem he believed would grow worse with higher service rates. "Lots of people just opt not to get trash (service) and illegally dump off old county roads," he told supervisors on Tuesday. "There's a couch in a tree out on Tiger Creek."

Forster said he personally contacted the county's code enforcement department three times about illegal dumpers. The worst is when he sees parents tossing garbage with their children.

An Aug. 25 staff report from the Public Works Department said it was unclear what financial impact the contract amendment would have on Amador Disposal.

"Public Works has not seen a rigorous accounting projection of the rates as affected by a loss of this tonnage," the report said. "At the same time there will be a reduced cost to ACES for taking the Jackson tonnage elsewhere, and these cost savings may have an effect on their profitability which is a factor in their rates, just like ADS. In either case the haulers both still pay to the County the same fee for the tonnage regardless of where it is transferred or hauled if it is collected in Amador County."

Both companies pay the county $7.40 per ton.

Diverting traffic to Pine Grove

After hearing from both sides at its Sept. 11 meeting, the board of supervisors put off approving the contract amendment one week so that County Counsel Martha Shaver could discuss legal issues surrounding the amendment language in closed session. One week later, both Molinelli and Craft were back to make their cases.

Craft said the supervisors' suggestion to charge outside counties a surcharge for using the transfer station could drive them to other companies. "If we continue to remove the volume or the stream going through, we're going to be processing less material at the same cost and have increased tipping fees as well," he said.

"Probably a nominal fee," replied board chairman Forster, whose district covers Buena Vista. "We have to look across the board at options. There's a number of different things we can do."

"For us, it's a way to reduce our costs simply," Molinelli told supervisors. "We're just looking at ways to improve our cash flow simply and reduce our cost."

He added that Amador Disposal might not immediately feel the effect of the diversion since there will be times when delivering waste to the transfer station makes more sense.

In the meantime, ACES will be able to take Jackson's solid waste to its transfer station in Pine Grove, which raised concerns of increased Highway 88 traffic for resident Sherry Curtis. The company is working with the county and state Department of Transportation on improving access to the transfer station.

Asked by District 1 Supervisor Rich Escamilla whether the company has ever had any accidents, Molinelli searched his memory. "I think over the years there may have been one or two, but I can't recall any in the recent past," he said. "But it's a matter of money. If we had the money, we wouldn't do it."


Raheem Hosseini