Emotions ran high in Kensington Thursday night as the board that oversees the town’s garbage contract narrowly rejected a rate hike, while the town’s longtime trash-hauling company dropped a small bombshell by declaring its intent to leave.
“I don’t do business with a gun to my head from anybody,” declared Chuck Toombs, president of the board. The five-member board negotiates the contract with the garbage company, Bay View Refuse, which has served Kensington more than 65 years.
Toombs, who joined the majority in the 3-to-2 vote against Bay View’s requested rate increase, was referring to a late-arriving letter from the firm that brought the board meeting to a halt for a closed-session review of the document. The interruption came after a public hearing on the rate boost but before the board discussion and vote.
The hand-delivered, two-page letter, dated Thursday, invoked a clause in the garbage contract under which Bay View Refuse may request that the contract, which extends to 2015, be assigned to another firm. The board cannot reject the request solely at its own discretion but must “diligently investigate” the capabilities of the new firm and “shall not unreasonably withhold or delay its consent,” according to the contract.
Bay View Refuse said it will give the contract to Republic Services, which serves Richmond, Piedmont and other communities. The letter said Bay View is prepared to proceed as soon as possible “but in no event later than an effective date of January 1, 2012.” The letter is signed by company President Lewis Figone.
Citing increased labor costs and declining revenue, caused partly by a rise in recycling and a customer shift to smaller garbage cans with lower rates, Bay View Refuse had requested rate increases of 23 percent for small cans and 6 percent for large cans.
The board staff recommended against the increase, saying Bay View Refuse was granted a rate increase in 2010 and that the current request is not justified by the firm’s financial data and does not meet the extraordinary-circumstances criteria required for rate increases to be granted outside the normal cycle.
The 90-year-old Kensingon Improvement Club also opposed the boost, calling it “an attempt to circumvent the existing agreement” and saying it would undermine the state mandate to reduce waste sent to landfills.
"We're going to honor the terms of the contract," Toombs said. "If Mr. Figone wants to wait out the rest of the economic cycle like the rest of us have to, he may well find that the economic cycle booms back up and he gets back whatever lost revenues have occurred."
Retorting to Toombs’ gun-to-the-head analogy, board member Mari Metcalf said, “It’s being manipulative to use a phrase like, 'I don’t do business with people who hold a gun to my head.' The reality here is that people don’t want to pay more money for their garbage collection.” But, she added, instead of the “small increase” requested by Bay View, “Republic’s going to charge us a lot more.” Metcalf voted in favor of the rate boost.
Toombs said Metcalf made a “mistake” about what Republic could charge, saying, “Whoever takes the assignment is bound by the terms of the contract and the current rate structure until the contract expires in 2015.”
Metcalf responded, “And when the contract expires, we’ll have another company come in and charge a lot more more money.”
Toombs replied, “We’ll put it out to a competitive bid process.”
In response, board member Cathie Kosel, the other vote in favor of the boost, said Kensington is small and hilly and unattractive to garbage haulers. “Nobody wants our contract. Our rates are going to skyrocket.”
Earlier, Kosel defended Figone, praising the “excellent service” he provided to the community. “I’m not surprised by what he did tonight,” she said. “…We have treated him like dirt around here for a long time.”
One of the sharpest exchanges during the meeting came when Nicole Kaiser, one of the speakers from the audience of 33 people at the Kensington Community Center, said Kosel had taken “significant contributions” from Figone and then denied it. Kosel said Kaiser was “incorrect,” and as the two began to exchange heated words, Toombs issued a call to order.
Board member Linda Lipscomb, who voted against the hike, said the contract doesn’t allow rate increases for a fall-off in revenue. She reviewed the income that Figone receives and added, “I guess I’m saying he he’s making plenty of money. I can’t understand why he’s so upset.”
Also voting down the boost was board member Tony Lloyd, who said he saw no extraordinary event that would justify a rate increase under the terms of the contract.
There seemed to be no dispute that the company has provided good service. The issue revolved around whether rate increases were justified.
Most the speakers were against the hike.
“The proposed rate structure punishes those who generate less waste,” said Kathy Stein, a member of the Contra Costa County Solid Waste Coordinating Committee.
Barbara Dilts spoke supportively of Bay View, saying, “It seems to me that Kensington has some obligation to deal reasonably with Bay View, which it seems to me is providing us with excellent service.”
Lynn Welsh said Kensington shouldn’t have to pay the price for Bay View’s decision to pay high wages and benefits to employees in the current economic climate when many people are seeing their incomes fall. “That’s not real smart business,” he said. “I’m not sure Kensington should be rewarding that.”
The board did not take up the issue of what to do about Bay View’s request to transfer the contract to Republic Services. Toombs noted that it wasn’t on the agenda.
The staff recommendation against the rate increase, a Bay View letter arguing for the increase and the existing contract are attached to our on the Thursday meeting. The agenda for the Thursday night hearing and meeting can be downloaded here. The board's April agenda packet devotes well over 100 pages to all the relevant documents.
Correction: The original version of this article incorrectly reported that a letter from Lewis Figone, president of Bay View Refuse, said Republic Services is prepared to proceed as soon as possible but no later than Jan. 1, 2012, on taking over Kensington's trash-hauling contract. The letter was referring not to the readiness of Republic Services, but to that of Bay View Refuse to turn the contract over. The article has been corrected.