Mendocino County Grand Jury
• 2011-2012
A Report on the City of Ukiah Garbage Contract
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 46 findings
F1
On December 7, 2011, the Ukiah City Council approved by a 3 to 1 vote, a new 15- year contract for garbage collection and hauling.
No recommendations for this finding
F2
The new contract included a 7.2% increase in collection rates and a 6% increase in transfer station processing.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F3
These rate increases in the new contract followed a rate increase in August 2010, of 6% for collection, 27% to the transfer station by the ton, and 48% by the cubic yard.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F4
In August 2010, C&SWS cited increased costs for justifying the rate increases.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F5
The advisor to the City Council during the discussion and negotiation stage of the December 2011, contract, was a CPA. There were two invited members of the public and official members of the Council present for the meeting.
No recommendations for this finding
F6
The contracted CPA reviewed, but did not audit the rate requests and stated the increases were justified. 2
No recommendations for this finding
F7
The CPA disclosed a conflict of interest, before advising the City of Ukiah on its new contract. The CPA was also under contract with another waste hauler. The other waste hauler is an affiliate of the Ukiah hauler, a wholly owned subsidiary of C&SWS.
Related Recommendations (1)
R2
The City Council initiate an investigation into the related business transactions among the companies related to C&SWS as these transactions relate to costs passed on to the City. (Findings 7, 21, 35, 37-38) 5
F8
The disclosure of this conflict of interest was made known and discussed at a City Council meeting in February 2012.
No recommendations for this finding
F9
At that February meeting, the Council acknowledged the conflict and stated that the matter had been previously discussed between the City and the CPA. At the February meeting, the CPA explained that the CPA would be advising both the City and the other hauler. The CPA stated that the two contracts would be kept separate. That statement seemed to satisfy the City Council. The City decided to continue their consulting contract arrangement with the CPA.
No recommendations for this finding
F10
The City’s Ad Hoc Committee Staff held non-public negotiations with C&SWS for over a year and a half. Two individual members of the public were present at the request of the City. However, this was not an announced meeting and the Staff did not treat this as a Brown Act Meeting.
No recommendations for this finding
F11
In a following meeting, the City Council decided that the negotiations with C&SWS were to be exclusive of any other negotiations with any other hauler. The City decided that no other provider of collecting, hauling, or recycling services would be allowed to participate.
Related Recommendations (2)
R4
If it fits in the budget, the City Council engage an economics advisory firm to investigate the potential impact of C&SWS monopoly in the trash collection and hauling business in Ukiah. (Findings 11, 18-19)
R5
The City Council determine if other companies would have responded to a Request for Proposals (RFP) had the City issued an RFP for its trash collection and hauling contracts. (Findings 11, 18-19)
F12
The new 15-year contract signed in December 2011, replaced a contract that was not yet due to expire until 2016.
No recommendations for this finding
F13
The renegotiation of the contract was a public process. The contract was an agenized item in four separate City Council meetings before it was adopted in December 2011.
No recommendations for this finding
F14
Before 2011, the City’s garbage contract had historically been subject to a three- year review process.
No recommendations for this finding
F15
C&SWS submitted facts and information to the City supporting its request for a new contract. These included no new financial statements.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F16
The financial statements submitted by C&SWS were unaudited.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F17
The industry norm and best business practices suggest that only audited financials be accepted by a municipality for the purpose of negotiating contracts.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F18
The City did not issue a Request for Proposals (RFP) for the new garbage contract.
Related Recommendations (2)
R4
If it fits in the budget, the City Council engage an economics advisory firm to investigate the potential impact of C&SWS monopoly in the trash collection and hauling business in Ukiah. (Findings 11, 18-19)
R5
The City Council determine if other companies would have responded to a Request for Proposals (RFP) had the City issued an RFP for its trash collection and hauling contracts. (Findings 11, 18-19)
F19
In awarding the contract to C&SWS, the City conceded it gave C&SWS a “monopoly”, arguing that there were “…more efficiencies and cost-effectiveness with one provider.”
Related Recommendations (2)
R4
If it fits in the budget, the City Council engage an economics advisory firm to investigate the potential impact of C&SWS monopoly in the trash collection and hauling business in Ukiah. (Findings 11, 18-19)
R5
The City Council determine if other companies would have responded to a Request for Proposals (RFP) had the City issued an RFP for its trash collection and hauling contracts. (Findings 11, 18-19)
F20
The C&SWS majority owner has a family relationship with the prior contractor.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F21
Related parties under common ownership should be identified and their mutual dealings regulated by the contract.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F22
Although the rate adjustments depend on cost and revenue, C&SWS does not provide financial reports to the City, and the City has no right to audit per the contract, unless C&SWS requests an “extraordinary increase”.
Related Recommendations (2)
R1
The City Council initiate an inquiry at the California League of Cities to determine whether audited financials are required or recommended before a municipality signs a garbage contract and determine the actual costs. (Findings 22, 36, 38)
R3
The City Council conduct an investigation into any possible violations of the contract by C&SWS. (Findings 22, 26-27, 29-30, 42)
F23
Under the new contract, the City lacks unrestricted flow control over the destination of wood waste, green waste and food waste.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F24
The City gave up, without compensation, its contractual protection from the 2007 contract from landfill disposal cost increases. 3
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F25
The construction cost component of the transfer station gate fee is kept by C&SWS and the City. When the financing is amortized and paid off in 2016, instead of being rescinded, this fee will remain.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F26
The transfer station gate fee calculation underestimates savings from the redirection of garbage from Potrero Hills landfill to Eastlake landfill.
Related Recommendations (2)
R3
The City Council conduct an investigation into any possible violations of the contract by C&SWS. (Findings 22, 26-27, 29-30, 42)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F27
Additional reductions in the transfer station fee are appropriate due to the fact the transfer station realizes substantial income from the sale of scrap metal, buy-back containers, and other recyclables. This income apparently is not separately disclosed per the contract.
Related Recommendations (2)
R3
The City Council conduct an investigation into any possible violations of the contract by C&SWS. (Findings 22, 26-27, 29-30, 42)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F28
The collection contract overlooks the 2.56% rate increase that was supposed to be reversed in 2013.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F29
The recycling commodity credit applied against the collection contract operating costs appears to be underestimated according to testimony. The contractual price of $5 per ton for single stream (mixed recyclables) appears to be less than the amount C&SWS is paying others.
Related Recommendations (2)
R3
The City Council conduct an investigation into any possible violations of the contract by C&SWS. (Findings 22, 26-27, 29-30, 42)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F30
Granting an exclusive right to collect recyclables violates the City Code. The City Code also provides that contracts can be granted for only 15 years. However, the current contract provides that an additional 5-year option may be added to the contract term by the contractor only. This effectively grants a 20-year contract.
Related Recommendations (2)
R3
The City Council conduct an investigation into any possible violations of the contract by C&SWS. (Findings 22, 26-27, 29-30, 42)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F31
In the terms of the contract is a provision that allows the City to waive arbitration. This may limit the City’s remedies if the contract goes into default.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F32
The strategic plan section of the contract is vague and ambiguous, and does not commit C&SWS to any aspect of the strategic plan including the open-air composting of organics at an outdoor composting facility.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F33
Resolution 95-6 was unanimously passed and adopted by the Ukiah City Council on 7/20/94. The resolution urges all regulatory agencies and lending institutions to proceed with all possible speed to get a compost facility up and running.
No recommendations for this finding
F34
The composting facility became fully permitted and operational in February of 1995.
No recommendations for this finding
F35
Since the transfer station was created, the same corporate entity, has provided both the collection and transfer station operation for the City, although different corporate names were used.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F36
In negotiating these contracts, the City did no audit.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F37
These entities are two of at least thirteen related companies underneath an umbrella organization that includes C&SWS.
Related Recommendations (2)
R2
The City Council initiate an investigation into the related business transactions among the companies related to C&SWS as these transactions relate to costs passed on to the City. (Findings 7, 21, 35, 37-38) 5
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F38
In negotiating and signing the contracts, the City understood the fact that the two entities are related companies and that the pass through costs involved made the contracts essentially meaningless.
Related Recommendations (2)
R2
The City Council initiate an investigation into the related business transactions among the companies related to C&SWS as these transactions relate to costs passed on to the City. (Findings 7, 21, 35, 37-38) 5
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F39
The public was allowed less than 5 days to review and comment on the contracts developed by the City and the hauler over that one and a half year period. The contract was published as part of an agenda.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F40
The hauler’s compost facility is out of compliance, having: 1) more material than allowed on site; 2) exceeding the maximum daily intake; and, 3) because it expanded the facility from 2.76 acres to 4.5 acres without permits. The compost 4 facility has no pad or pond and is sited on a gravel bar adjacent to a year round creek, thus polluting the water.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F41
The City's food waste is not being composted at all. It is being dumped in a landfill at full expense. Much of the green waste is being trucked to Humboldt County and burned. While the State of California allows both composting and burning at a cogeneration plant to count toward the diversion mandate, it considers composting to be preferable. The State considers burning, in order to capture heat, as conversion. Burning is not recycling.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F42
The City makes differing statements about organic waste for compost. The City implies that all the material is going to a compost facility. While it may be true that the compost facility receives most of the city's curbside green waste, that material makes up but a fraction of the City's total green and wood waste stream. The City also insists that the hauler has to deliver to the compost facility an additional 200 tons/month at their own expense, implying that there is an expense involved, when in fact the contract obligates the compost facility to take those 200 tons and any additional material free. What remains unclear is by what authority a contract between the City and the hauler can dictate the tip fee or absence of one at the compost facility.
Related Recommendations (1)
R6
The City Council determine whether the City's contract with C&SWS can be voided, or any other any legal action taken, after the City's investigations noted above are completed and fully evaluated. (Findings 2-4, 15-17, 20-21, 23-32, 35-42, 44)
F43
AB 341 does not mandate 75% recycling; it only sets that figure as a goal. AB 341 mandates recycling by certain businesses and public entities, but the level of recycling mandated appears unclear. The new 75% goal and the 25% increase in diversion that is proposed, is based on mandatory "commercial recycling", because the commercial sector generates 75% of the waste going to landfills.
No recommendations for this finding
F44
Food waste materials are not considered “acceptable” for the hauler’s proposed facility. The hauler possesses neither the expertise required, nor has it proposed the necessary permitting, to recycle the range of materials that the current composting facility has been successfully dealing with for years.
No recommendations for this finding
F45
The City stated that there is more than one local company capable of recycling all of Ukiah's organic waste. The City also stated that they would welcome competition.
No recommendations for this finding
F46
Commercial food waste recycling requires more effort than residential food waste recycling. Some could be co-collected together with the green waste, but the sloppy nature of the material necessitates dedicated bins and special collection routes - something that the hauler has avoided for the past 17 years. RECOMENDATIONS
No recommendations for this finding
Agency Responses 3
Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.