Waste Management gets council approval for franchise monopoly in Simi Valley, CA
- The Simi Valley City Council voted unanimously Nov. 20 to approve the transfer of a franchise agreement to Waste Management, effectively giving the company control over all residential and commercial collections in the California city, as reported by the Ventura County Star.
- Waste Management subsidiary G.I. Industries recently announced plans to acquire Anderson Rubbish Disposal, the other franchisee. Prior to the deal, Anderson had serviced about 20% of the city. Anderson brought this proposal to the city Nov. 17.
- This decision was approved by the city's Department of Community Services in a memo prior to the meeting, on the condition that the deal and requisite franchise transfer be completed within six months. During that time, city staff will work with Waste Management to modify language about compliance with state environmental and reporting requirements, among other factors. The current franchise agreement expires at the end of 2023.
Waste Management is already a large player in Simi Valley, where it owns a landfill that handles an estimated 60% of Ventura County's waste. The council approved an expansion of that site by a tight vote in 2011 that came with a 51-year community benefits package worth up to $100 million. The company completed an initial 18-acre expansion earlier this year.
Because Simi is the host community for this large site serving the entire county, at least one legislator said that should also lead to lower rates in light of the recent franchise approval. Council Member Glen Becerra praised the teams at both Anderson and G.I. while also highlighting concerns with the new set-up.
"We are carrying the heaviest burden in the county with the landfill here, and then having G.I. manage it all I think it would be a terrific opportunity for us to do right by our businesses and our residents," said Becerra during the Nov. 20 meeting.
The Simi Valley Chamber of Commerce initially raised its own concerns about what this would mean for pricing, and Mayor Bob Huber considered postponing the vote for two weeks, but those issues were addressed during the council meeting.
Anderson is a family-owned business that has been operating for more than 40 years and was one of the original two franchisees when Simi approved initial contracts in 1993. The other was G.I. subsidiary Conejo Enterprises. G.I., once a publicly traded company that hoped to compete with top players in the '80s, was the subject of frequent news coverage in prior decades for a series of often contentious corporate maneuvers.
In a sign of the ongoing consolidation trend, G.I. was picked up by Western Waste Industries in 1996 just as that company was being acquired by USA Waste. A major 1998 merger with USA then brought G.I. into the Waste Management sphere.
In the years since, that consolidation trend has only accelerated and left a handful of publicly trade companies in charge of the majority of revenue generated by the estimated $70 billion waste industry. Along with the trend of franchise agreements, this has made it increasingly common to see large companies control all or most of the collection, processing and disposal operations for small and mid-size cities such as Simi Valley.
- Ventura County Star Simi approves transfer of one trash hauling franchise to the other, creating monopoly
- Simi Valley City Council Memorandum
Follow Cole Rosengren on Twitter