Solid waste lawsuit halts VC contract

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Valencia County commissioners once again pushed off the start of a contract for countywide trash pickup.

A 3-2 decision last month to amend the solid waste contract with Waste Management for the second time is due to a continuing protest over the procurement, said County Purchasing Agent Mike Vinyard.

Waste Management was awarded the exclusive contract for residential trash in the unincorporated county in December. New Mexico Disposal, the only other responsive company that answered the county's request for proposal, filed a protest, which the county denied.

The company, owned by Ernie Byers, then appealed that decision to district court where it now awaits a judge's decision.

The contract was slated to start April 1 but, after the protest, commissioners pushed it back to July 1. Now that the matter is in district court, they decided to delay the start until Jan. 1, 2014.

The most recent amendment to the contract passed with commissioners Lawrence Romero, Donald Holliday and Mary Andersen voting in favor, and commissioners Alicia Aguilar and Charles Eaton voting against.

While the protest is underway, the county has decided the most prudent legal course of action is to simply wait. County Attorney Dave Pato said the county is hesitant to go ahead with the Waste Management contract because if the procurement is overturned by a judge, the company could sue the county for the costs it incurred expanding its service.

The county does have some protection, thanks to an agreement Pato negotiated with Waste Management. The company agreed to be bound by the court's determination on the appeal.

In a letter to Pato, dated May 16, the law firm that represents the company, Sutin, Thayer and Browne, writes that Waste Management of New Mexico will be bound by a determination of the district court in the matters of the validity and enforceability of the contract and the legality of the procurement process.

While the Waste Management contract is sorted out, trash services in the unincorporated parts of the county continue as usual.

Currently a handful of solid waste haulers operate in the unincorporated county under non-exclusive franchise agreements, letting residents pick their hauler.

The Waste Management contract, when it comes into effect, is exclusive and restricts the other haulers to serving local municipalities. The contract is for residential trash pickup only.

That was something county resident Darla Gleason wanted clarified in May. After renting large commercial roll-offs from the company for 35 years, Gleason said the cost of the containers increased by nearly $60 each recently.

"Whenever I questioned them, they said it was your fault because of what you made them comply with in contract," Gleason told the commissioners. "I thought the contract was for residential trash in the unincorporated areas. So I want to know, do you have a complete contract? Is it legal for them to do that? I don't like them lying to me."

The county attorney said the contract between the county and Waste Management had no impact on commercial services.

Gleason said she talked with different people with the company and everyone had a "different tale. Some said it was for insurance or fuel, environmental charges because of what you required them to do."

In an email exchange with the News-Bulletin, Janette Coates, the Arizona and New Mexico senior communications specialist for Waste Management, said the pending residential contract with Valencia County does not cover any commercial services, including roll-offs. Those services are priced individually and not impacted by the pending contract, Coates wrote.

"Waste Management determines its pricing based on current market conditions and efficiencies of routes," Coates said in the email.

That methodology is in alignment with how service rates can be set in the newest franchise agreements sent out by the county. The agreements say the fees shall be set by the haulers and adjusted in accordance with their best management practices.

According to the previous franchise agreement, fees could not exceed those set forth in the county's solid waste ordinance. In turn, the ordinance says the county commission may establish fees, via resolution.

However, when a request was made by the News-Bulletin, no such resolution could be found by county administration. The only fee schedule for solid waste passed via resolution was the one established in conjunction with the Waste Management contract.

Charles Montoya, owner and operator of AC Disposal, said when his company began hauling residential trash six years ago, and entered into a franchise agreement with the county, he wasn't told what he could charge. Instead, when the franchise agreements are renewed annually, his company submitted its prices to the county, along with the number of customers, trucks and employees.

Montoya says he has no plans to increase his monthly $15 fee.

"I don't see us raising our prices. If you take advantage of your customers, you lose them," Montoya said. "Our customers have been loyal to us; we'll be loyal to them."

Randy Sanchez has been in business 30 years as the owner of Valley Disposal. He says the lack of a fee schedule under the old franchise agreement is typical of Valencia County.

"What is expected is put on paper but there is no follow through," Sanchez said. "They put out these regulations and then never enforce them. Anything they ever do is a joke."

Sanchez said he also has no plans to increase his prices.

While the unincorporated areas will remain mostly the same, residents of the newly incorporated city of Rio Communities could be in for a little sticker shock. At least one customer saw an increase of nearly $12 from April's bill to the July bill.

The base rate for the trash container stayed the same at $53.88 for three months, or $17.96 per month. Now that Rio Communities is no longer under the county's franchise agreement which mandated gross receipts taxes be directed to the county, Waste Management is now applying the Albuquerque GRT rate, an increase of a little more than $1.

The biggest increase came in the fuel/environmental charge going from $10.49 for April, May/June, up to $17.25 for July, August/September.

The Rio Communities bill for July also shows a $4 administrative fee that was absent from the April bill. Waste Management bills on a quarterly basis.

In Coates' email, when asked about the increases to Rio Communities customers, she wrote that one of the benefits of having a franchise agreement in place is that costs are set for a fixed rate and time.

"In addition, franchise agreements allow for increased operational efficiency and the ability to plan for the cost of doing business," she wrote. "With no franchise agreement in place, costs can fluctuate as they are based on current market conditions."

The $4 administrative fee has been in place since 2009, Coates wrote, and is charged to customers who receive a paper invoice. That fee can be waived if customers enroll in automatic bill payments and paperless billing.


-- Email the author at jdendinger@news-bulletin.com.