The Fresno City Council approved an amendment to its contract with its commercial trash processor on Thursday, a move that drew significant controversy the night before the meeting leading one council member to fear that it will lead to higher rates for residential customers.
City staff, however, were firm during Thursday’s City Council meeting that rates will not increase because of the agreement.
The big picture: The city council voted 6-1 to amend its 2004 contract with Orange Avenue Disposal Company for a sixth time, with Councilman Miguel Arias casting the lone vote against it.
- The amendment extends the city’s contract with Orange Avenue Disposal by one year, through Fiscal Year 2035.
- City Manager Georgeanne White said during the meeting that the amendment is the result of a settlement that the city is agreeing to with Orange Avenue Disposal and owner Richard Caglia.
The backstory: While the city is not in active litigation against Orange Avenue Disposal, the city will avoid potential litigation, dating back to an issue between City Hall and Caglia last year.
- Caglia was accused of overbilling the city by more than $3.3 million from 2018 to 2022, following a 2018 amendment to Orange Avenue Disposal’s contract.
- In response, Caglia said at the time that his company followed all policies and procedures that the city set forth.
Go deeper: Arias said the settlement also includes a $1 million payment to Orange Avenue Disposal.
- City Attorney Andrew Janz said while Orange Avenue Disposal has not signed the settlement yet, the amendment is a condition of the settlement.
What they’re saying: Arias took issue with language in the amendment that allows Orange Avenue Disposal to request future rate increases in response to changes in the law, legal mandates or other legally required programs.
- He said Orange Avenue Disposal is “uniquely positioned” to increase rates and that it gets a contract extension whenever the city draws near to going out to bid for commercial trash services.
- “This change in provisions sets extremely bad precedents in the city, allowing vendors who have contracts in excess of 10 years to continuously avoid the competitive bid process by threatening litigation, or claiming litigation, or filing something and never having to air out publicly in a courtroom any actual damages that they’ve incurred,” Arias said. “So I think we as a city are in the precipice of creating a trash czar that will be fully empowered to continuously have a monopoly on the trash service of this city and avoid any competitive bid process, which ultimately is the market conditions telling us who is best fit to do the best service for the best cost to the city.”
- His colleagues on the dais disagreed, however.
- Councilman Tyler Maxwell, saying he wanted to provide a different context, said he has never received any complaints about Orange Avenue Disposal, adding that adding an additional year is the right move.
- Councilwoman Annalisa Perea asked White if rates will increase on Friday if the council approved the amendment. White answered, “No.”
- “Our job here is to make sure that we are providing the best quality service to the residents of Fresno for the least fiscal impact to their pocketbooks as possible, and so that’s a big reason why I am a supporter of the RFP (request for proposal) process,” Perea said. “And when the time is right, we will definitely take it back out to RFP. And that goes for many other contracts out there as well. We want to make sure that we remain competitive in this industry and that we are doing everything possible to keep rates as low as possible for the residents out there who are being squished to death in so many different ways.”
