Plans for a new commercial waste franchise system are still on track in Los Angeles, despite a recent lawsuit filed by the Apartment Owners Association of California (AOA) seeking an injunction to stop it.
The July 1 start date for the city's "RecycLA" program was confirmed by Elena Stern, senior public information officer for LA's Department of Public Works, who offered no further comment on the lawsuit.
The suit, filed earlier this month by AOA and an apartment owner co-plaintiff, contends that the city's plan will have unequal affects on various businesses and constitutes a tax that requires voter approval. California's Proposition 218, which details requirements of certain tax increases, is cited as its main basis. Proponents of the plan disagree that the system will necessarily result in cost increases for customers, including apartment owners, though some say it has already started happening.
AOA President Daniel Faller told Waste Dive that multiple members from his group had experienced price surges within the past month. Calling the system "pathetic," "unethical," "criminal almost," and "a monopoly," he attributed this to haulers trying to establish higher baselines before rate caps kick in under the franchise system next month. Faller said this ends up affecting apartment owners the most because they can't pass on costs to tenants due to existing rent control guidelines.
When asked whether he thought the RecycLA concept — increased diversion rates, cleaner vehicles, higher wages — had merit, Faller was somewhat skeptical.
"If it’s necessary in a free market, it'll happen. It'll just happen," he said, going on to describe how that scenario might play out for apartment owners. "The cost may increase for the trash collectors, but it’s not going to double."
Rob Nothoff, director of waste and recycling for LAANE and a key organizer in the "Don't Waste LA" campaign that led to this system's approval, said he had heard a few examples of haulers that didn't win franchise contracts attempting to raise rates during the current transition period. Though he characterized those as exceptions and said it was too soon to know whether price increases would be universal.
"It just further underscores the point of why we need to actually have rate caps and have the system in place," Nothoff said of the recent price hike reports. "This is a way to equalize, create a transparent rate across the board for all businesses that’s fair, and also to build in rate caps to prevent any future gouging."
Nothoff said the timing of AOA's lawsuit was confusing as they had many opportunities to engage during the dozens of workshops and hearings that were held leading up to the implementation. While the city has been publicly quiet on their reaction to the lawsuit, Nothoff expressed certainty in the lengthy contracting process based on his involvement.
"At the end of the day this was the most historically vetted RFP in the history of the city," he said. "So we’re confident in the city’s process that they’ve been able to address any potential legalities."
Faller recognized that it would have been in AOA's interest to file the lawsuit sooner and that the odds may be against their efforts to derail the massive franchise plan.
"We're just the little guys compared to the millions and millions of dollars that the trash haulers and the unions represent ... If they're going to screw us, they've got to have the vote of the people to do it."
President, Apartment Owners Association of California
“We’re just the little guys compared to the millions and millions of dollars that the trash haulers and the unions represent and the influence that they have with the City Council," said Faller, going on to promise AOA would stay involved past July 1 if necessary and making one last argument for their position. "In other words if they’re going to screw us they’ve got to have the vote of the people to do it."
The recently renamed RecycLA franchise system will be the largest of its kind in the country, involving 11 zones serviced by seven haulers and multiple subcontractors. In an effort to achieve the city's goal of 90% diversion by 2025, these companies are investing an estimated $200 million in local infrastructure. The initial 10-year contracts begin on July 1, with the official transition required by January 2018, and could run as long as 20 years with renewals.