After losing contract, garbage company hikes pay


The company that collects garbage for Menlo Park and Atherton granted its employees pay raises of 17 to 19 percent over the span of a five-year contract, signed in December 2008 -- shortly after the company learned that its own pact with those and 10 other jurisdictions would not be renewed.

When Recology Waste Zero (formerly called Norcal) takes over the reins from Allied Waste (now Republic Services) in 2011, it will likely be forced to honor that contract for nearly three more years, common practice when a new company takes over.

When Menlo Park Councilman Heyward Robinson looked into the issue, he found that there are no checks in the waste collector's contract with the regional waste agency to keep labor costs down. Those costs are simply passed through to the member jurisdictions, with the waste company's profit -- set at a percentage of total costs -- also rising.

"When I looked at it, I was just blown away," Mr. Robinson said. "The way it looks to me, there's no incentive to control these labor costs. ... Where are the levers of power here, where's the accountability?"

Kevin McCarthy, director of the regional agency that oversees garbage collection and processing (the South Bayside Waste Management Authority), acknowledged that Mr. Robinson "raises a good point," but noted that various market pressures keep labor costs down.

He added that the lack of a check on labor costs is "an artifact of a type of contract that's no longer common in industry," noting that wages will be adjusted to the consumer price index under the next contract.

"On the face of it, it doesn't seem unreasonable," Mr. McCarthy said of the contract. "Certainly, I think we would have liked to have seen a shorter term. To say it's awkward to have a lame-duck service provider negotiating future agreements ... well, it's a very awkward situation."

The regional waste agency's divorce from Allied was not a happy one. Allied alleged that the bidding process had been corrupted, hiring a PR firm to help it make that point, and eventually inspiring an investigation of the matter by the San Mateo County Civil Grand Jury.

Evan Boyd, general manager of Allied Waste, said the company did the best it could to reach a fair agreement with the Teamsters union. He maintained that five-year contracts are standard in the waste-collection industry, and that the Teamsters would not have accepted a shorter term.

Asked why the company offered substantial raises while the country was sinking deeper into an economic recession, Mr. Boyd noted that negotiations had begun before the precipitous stock market slide in the fall of 2008, and said that the union has substantial leverage.

He also noted that the increased cost of labor is only one of many reasons that Menlo Park and Atherton residents have seen steep garbage rate increase in recent years; Menlo Park's rates have increased by more than 70 percent in the last two years. Higher fuel costs and landfill charges have also been factors, and Menlo Park has had to work to pay off a debt to the waste company.

To Mr. Robinson, the situation indicates a need for a policy advisory board on the waste agency, similar to other regional committees and agencies.

"So many of these regional labor contracts get approved with very little public scrutiny," he said. "Regional agencies just don't have the same (burden) of expectation" that cities have.

The contract calls for a $5.75-an-hour across-the-board pay increase, bringing salaries to a range of $37.30 to $39.96 per hour.

"Are these folks paid well for what they do? They certainly are," Mr. McCarthy said. "On the other side of it, it's a tough job to be out there every day on the street, it's a job that most people don't want to do. ... Allied understands they're in an awkward position, and I don't think they have any incentive to provide overly generous terms."

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Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on May 18, 2010 at 7:09 am

"When Menlo Park Councilman Heyward Robinson looked into the issue, he found that there are no checks in the waste collector's contract with the regional waste agency to keep labor costs down"

Doesn't the city staff and the Council READ these contracts BEFORE they agree to them???

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Posted by Menlo Voter
a resident of Menlo Park: other
on May 18, 2010 at 7:12 am

Doesn't the city staff and the Council READ these contracts BEFORE they agree to them???

Of course not.

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Posted by Recology(NORCAL) ratepayer
a resident of Atherton: West of Alameda
on May 18, 2010 at 10:46 am

Well it certainly looks like we should have listened better to the San Mateo County Civil Grand Jury last year which put thumbs down on how this recent contract was handled by the South Bayside Waste Management Authority (SBWMA)...BTW we have just heard that this agency,the SBWMA, of which Kevin McCarthy is the Executive Director, has recently changed it's name to Rethink Waste...

Right around the time the Grand Jury's report on the SBWMA came out last year, NORCAL also changed it's name to RECOLOGY...Need we ask why both a company and a governmental agency with name titles that have been in the "coin of the realm" for years and years and years all of a sudden decide to change their names in the wake of San Mateo County's Civil Grand Jury Report on this multi-million dollar contract and how it was selected...Maybe we all should rethink waste....and who runs it in this county!

We need to have our City Council do a much better job of reading the Grand Jury reports, the garbage contracts and the letters from their citizens. That's what they're elected to do and by the way why don't we have elected officials on this SBWMA/Rethink Waste Board? Isn't that one of the safeguards that the San Mateo County Civil Grand Jury recommended and the SBWMA refused to do? Enough! Stop having "the tail wag the dog". Get our elected officials on this board and get them on now!

We are tired of paying unreasonably high rate increases with nothing in the future but more to come. We may be an affluent area but we didn't get here by being stupid with our expenditures. Can't someone do something about these contractors and that agency's management now, not three years from now?

Maybe how that agency protects the ratepayers in this County warrants yet another San Mateo County Civil Grand Jury investigation....

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Posted by E.F.
a resident of Menlo Park: Sharon Heights
on May 18, 2010 at 1:15 pm

[Post removed; disrespectful language violates terms of use]

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Posted by watcher
a resident of Menlo Park: Fair Oaks
on May 18, 2010 at 1:56 pm

I think one of the folks from Recology joined tge Chamber of Commerce shortly after the contract was approved.

The 10-year agreement was too long in my judgement.

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Posted by watcher
a resident of Menlo Park: Fair Oaks
on May 18, 2010 at 1:57 pm

Joined the Chamber of Commerce 'Board'

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Posted by truth
a resident of Menlo Park: Belle Haven
on May 18, 2010 at 3:52 pm

Another tea bagger moment. Lord help us.

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Posted by Recology (NORCAL) ratepayer
a resident of Atherton: West of Alameda
on May 18, 2010 at 6:09 pm

It's not the Chamber of Commerce Board that's the answer. It's the Executive Board of the SBWMA aka Rethink Waste that needs to be shook-up and replaced with elected officials! And, if not elected officials, at least different people, because the current board membership and the current SBWMA/Rethink Waste executive management staff appear to not be doing the job we need them to do!

Wasn't the SBWMA/Rethink Waste management staff, headed by its Executive Director Kevin McCarthy, supposed to be the "experts" explaining how things work to everyone, including our elected officials? How does an Executive Director forget to point out that the contract extended beyond the time that Allied's contract ended and the new contractor refuses to honor the existing union contracts and the ratepayers get left "holding the bag"? How does that work? Who was there watching out for us? It would appear that it wasn't SBWMA/Rethink Waste Executive Director Kevin McCarthy or the city officials.

If someone was truly watching out for us ratepayers, how would this latest snafu have happened? When a company takes over from another company's contracted business, they do just that, they take over the business, lock, stock and all contracts, so why isn't Recology paying the increased wages out of their nice big fat contract that was approved by the SBWMA's Executive Director, his staff, and our city officials, among others involved in these decisions? Why didn't this guy McCarthy explain to everybody on how their contracts would work and when they start, end and begin and who would be responsible for what...And if he did, was there not one person, at least one person, listening and understanding what he was saying, if he truly did reveal the truth of the matter so that everyone could truly understand?

Very poor management and communication skills if you ask me. Isn't that part of his job description to explain clearly how everything works beforehand? He's the expert. We are the public. Who was protecting our rights in this screw-up? Whose staff is making the big bucks(SBWMA), whose company is making the profits(Recology)...bottom line- who's making the money on this one (both), certainly not us ratepayers?

And from the articles that we've just been shown, it sure looks like there needs to be a closer look at SBWMA/Rethink Waste Executive Director Kevin McCarthy, his staff and this company Recology on the operation that they are running at the SBWMA/Rethink Waste agency,in conjunction with Recology, before the only running McCarthy, his staff and Recology will be doing is out of town. If you ask me, this garbage saga "stinks on ice"!

I remember reading a lot about this trash agency and its foibles last year and as Yogi Bera used to say, "Seems like deja vu all over again!"

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Posted by Virginia Chang Kiraly, 2008-2009 Foreperson, SMCCGJ
a resident of Menlo Park: other
on May 19, 2010 at 4:56 pm

Heyward Robinson, who stars in the Almanac story above, was the Mayor of Menlo Park when the Grand Jury report, which was critical of the South Bay Waste Management Association (SBWMA), was released.

The Grand Jury recommended that member agencies "amend the Joint Powers Authority Agreement to include elected officials from member agencies onto the SBWMA Board of Directors." In its response to the Grand Jury report, the Menlo Park City Council rejected the idea that there be political oversight, concluding that Menlo Park's SBWMA Board member and alternate "are required to observe City policy and direction given by the Council, and are accountable for their actions to both the City Manager and the City Council.”

Robinson now calls for Political Oversight of the SBWMA which he rejected two years ago; therefore, for him to be “shocked” now is, well, shocking.

Furthermore, the Grand Jury report was very concerned about SBWMA operations, but the Council was clearly not.

Anyone who read the documents published by the SBWMA knew that Allied Waste had concluded negotiations with its unions at the end of 2008, and those negotiations would have to be honored by Recology, which is an employee owned company, and is probably not upset by the huge compensation increases. So, for Robinson now “to be blown away” by the “lack of incentive to control employee costs” is, well, mind blowing.

The failure of former Mayor Robinson to pay attention to what happened two years ago is costing Menlo Park residents dearly now. Voters should remember this at the City Council elections this November when they have an opportunity to vote for change and better representation.

Link to the Grand Jury's report and Menlo Park's response: Web Link

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Posted by Recology (Norcal) ratepayer
a resident of Atherton: West of Alameda
on May 19, 2010 at 8:07 pm

Thank you Ms. Kiraly for shedding more light on the Grand Jury Report that investigated the SBWMA(Rethink Waste) and the apparent hard work that your Grand Jury must have done in writing it last year, only to be met with a somewhat arrogant and highy questionable response by the SBWMA management staff and Executive Board, which ostensibly refused to make the suggested changes to improve the operation of the SBWMA and the selection process of our garbage contracts, as recommended by the San Mateo County Civil Grand Jury.

I just don't get it. How can the SBWMA get away with such arrogance? Are they not accountable to anyone?

Personally, I'm beginning to not believe a word of the SBWMA's response to the Grand Jury Report and am relying strictly now on just what your Grand Jury investigated and came up with...the proof is in the pudding...and I firmly do not believe that Recology is anyway near being the "good guys" they would like us to think that they are, nor does the smooth-talking SBWMA Executive Director's responses to journalist's questions appear to be an example of governmental agency leadership that is as transparent and open as it could be, but rather it appears to be obscured by industry jargon and political doubletalk.

Again, I ask, where was everyone when this was being discussed? Is "Waste Management" such an esoteric subject that no one knows what anyone is saying when they are trying to explain it? I think not. It's not rocket science, granted I'm sure that the subject does have it's intricate involvements and challenges, but like I said, it's not rocket science! Although it sounds like your Grand Jurors understood it, all too well. Why did'nt our elected public officials understand what was really going on at that time as well as your Grand Jurors did?

How do our elected representatives accept an explanation such as the one that SBWMA Executive Director McCarthy gives in the interview with the Almanac that leaves the public "holding the bag" in making up the difference in rate increases because now the rate increases are calculated by a a "different approach", and think that you are doing a good job as an elected representative on behalf of that same public? Someone wasn't doing their homework when these contracts were being negotiated,(maybe no one)... so it's of no comfort at this point to have our elected officals say that they are now shocked" at what's unfolding.

Why these City Council members were ostensibly mesmerized by the SBWMA's selection of Recology and quick to rid themselves of Alllied Waste is quite beyond me, but I am irate that the city councils in the SBWMA's territory did little more than nothing but appear to go along with whatever explanation about future rate increases that SBWMA Executive Director Kevin McCarthy was saying and Recology was pushing at the time. "Artifacts of a system no longer common in the industry?" Flowery words but what is he saying? Translation: "Tough and too bad, it is what it with it" Well that answer doesn't sit well with me.

If the elements of that contract were so transparent at the time, how come none of our city council members "got it" about these "artifacts of a system no longer common in the industry" and how much our rates would be going up, with no end in sight and who would be "left holding the bag"...Was everyone sleeping at the switch?

After reading the Grand Jury Report once again, I further did my own checking on the background of Recology (NORCAL) under their old name NORCAL and I didn't like what I came up with in Santa Clara County, Alameda County, San Francisco County, San Bernardino County and other areas....Millions of dollars in fines paid, bribery accusations,poor service, alleged backroom deals with elected officials...remember the Mayor of San Jose a few years back, and the problems he got into? Well Norcal(Recology's former name) was the garbage contractor in San Jose at the time that scandal broke wide open.

The recommendations of the San Mateo County Civil Grand Jury Report should have been printed on the front page of every newspaper in the SBWMA district, if not in the entire County of San Mateo, and in a flyer and sent out to every garbage ratepayer in this entire area to let the public know just what they are dealing both garbage contractors and the management of the JP called the SBWMA(Rethink Waste) and its Executive Board and the selection process of these so called "shocking" contracts that we are now caught up in...

If we can't get our elected officials on that SBWMA Executive Board can we at least change the membership of that Board with individuals who,hopefully, won't be fooled by the SBWMA's smooth-talking "expert in residence" replies, and ask the tough questions and get better answers? And speaking about the "expert in residence", what can be done about that guy who heads up the SBWMA, if anything? Can you really say that "due diligence" was employed by him when it came to figuring out what would happen concerning our future rate increases and who would be left "holding the bag"?

If the answer to these questions is no and nothing, then we must work towards getting that Policy Advisory Board that Robinson is talking about in place as quickly as possible.

But as far as Menlo Park City Councilman Robinson using the word "shocked", all I can say is that there's a hollow ring to his outrage, but if you want to use that word I guess you can say that we're all "shocked"!Not only in Menlo Park, but here in Atherton, as well, and probably all over the SBWMA territory. All of my neighbors are not happy with what's happening with our garbage rates. But, who's going to do something about it? And when? I know that I'll be doing something about it this November at the election booth!

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Posted by Interested
a resident of another community
on May 20, 2010 at 9:03 am


When the people who negotiate your garbage rates are not subject to those rates why should they care what you pay?

How were these rates negotiated before SBWMA?....Directly with the City Councils.

SBWMA was formed to "save" money by negotiating as a block.....Yet it takes just as much City staff time and now has a staff of seven along with consultants and attorneys and all the benefits of public employees.

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Posted by disgusted
a resident of Menlo Park: Central Menlo Park
on May 21, 2010 at 8:46 am

Robinson was shocked. Did the shock wake him up? Are other decision-makers awake now? OK, good, now pay attention. How is this broken system going to be fixed?

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Posted by Concerned resident
a resident of Menlo Park: Central Menlo Park
on May 21, 2010 at 3:14 pm

If Mr. Robinson was not so close to the election I would heartily endorse a recall. Now someone must run against this man known better for his feckless abrogation of his fiduciary responsibility and beat him. Heyward Robinson is a disgrace. You would think that he would resign on his own. But that nitwit actually thinks he is doing a good job.

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Posted by Recology (NORCAL) ratepayer
a resident of Atherton: West of Alameda
on May 22, 2010 at 9:40 am

Statement from Interested....

"When the people who negotiate your garbage rates are not subject to those rates, why should they care what you pay?"....

Reply from Ratepayer...

Yesterday, it was my turn to be "shocked" (popular term of the week) when one of my neighbors revealed to me that rumor has it that SBWMA Executive Director Kevin McCarthy might also be a resident of Atherton.

If that is true, it would appear that the rates should apply to his household also. That is, if he plans on continuing to stay here...

Freshen up your resumes everyone. It looks like there might be some "elected" and/or "employed" administrative jobs that need to be filled...or re-filled...both in town and out of town, thanks to this garbage contract fiasco.

Best qualification for the jobs would be a staunch refusal to "drink the koolaid"...and a true desire to represent the public in a fiscally conservative manner with any and all garbage companies and their insidious contracts, no matter how smooth the talk!

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Posted by utility
a resident of Woodside High School
on Jul 10, 2010 at 7:27 am

I think our garbage rates are resonable in comparison to our other utility providers rates i.e. cable, phone, internet, gas and electric, thanks to deregulation.

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