Oakland Flips and Returns $1-Billion Garbage Contract to Texas Company

Wednesday, September 24, 2014

Oakland’s high-fivin’ city council members took two months to review their 7-1 decision to award a billion-dollar trash hauling contract to a local recycler and ponder the lawsuit filed by the losing Texas incumbent before buckling to political pressure and flipping the vote.

The council accepted a new deal Monday, 6-0, put together last week by Mayor Jean Quan and the two competitors. Upon review, Houston-based Waste Management will retain the contract to haul waste in Oakland and California Waste Solutions (CWS) will go back to just handling the recycling, like it used to. Only now, it will reportedly get all that business instead of around half.

The unusual reversal capped a showdown between supporters of a small, local green company that promised to be attentive to community needs, and an out-of-state corporate giant with a reputation for acting like an outsider. Some fear that Waste Management will increase its outsourcing of jobs in billing, dispatch, call centers and customer service. 

Two members of the council did not vote. One was absent and the other, Desley Brooks, abstained. She told the San Francisco Chronicle, “We have set a precedent here tonight that when people don’t get their way and they have enough money, they just do whatever they want to, say whatever they want to and there are no ramifications for what they do.”

Critics of Waste Management, the nation’s largest hauler of trash, accused it of bullying the city and CWS before and after the vote. Some of the council members who voted yes Monday complained about being pushed around.

CWS, which reportedly has never held a municipal garbage-hauling contract, said it couldn’t get loans it needed to beef up for the job after the lawsuit was filed. CWS mostly does some food and green waste processing in the Bay Area, sorts recyclables and operates the Altamont Landfill in Livermore.

The need to build some essential infrastructure was one of the arguments the city council staff made in recommending CWS not get the contract. The staff expressed concern that CWS would not be able to obtain all the necessary permits and construct a transfer facility in a timely fashion. The company would also have to do some significant hiring. The new contract starts in July 2015.  

The Waste Management lawsuit alleged that the city illegally revealed “confidential and proprietary” information in its bid to CWS, enabling the recycler to retool its bid and bring in a third-party to help fill some gaps. Waste Management also started circulating petitions to have the issue placed before the voters as a ballot initiative.

The company quickly hired a political strategist and, by the beginning of September, he had started to collect the necessary 21,000 valid signatures. David Tucker, director of community and public relations for Waste Management, told East Bay Express that signature gatherers were telling residents that it was questionable CWS would be able to pick up the trash.

The deal ends the petition drive and Waste Management has agreed to pick up the city’s legal fees.

–Ken Broder


To Learn More:

Oakland Council Gives Garbage Contract to “Bully” Company (by Will Kane, San Francisco Chronicle)

Waste Management Wins Back Oakland Garbage Contract, Will Split Franchise with California Waste Solutions (by Sam Levin, East Bay Express)

Texas Company Sues Oakland over $1 Billion Trash Contract Given to Locals (by Ken Broder, AllGov California)

Waste Management v. City of Oakland (Alameda County Superior Court)

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