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The Portola Valley Town Council unanimously agreed to a 10-year contract with GreenWaste Recovery for solid waste disposal Nov. 13.
The contract calls for a 32% rate increase for customers using curbside service, plus a whopping 50% to 400% rate hike for service that requires drivers to walk or drive onto properties to empty disposal cans, according to GreenWaste.
In Portola Valley, 40% of customers will be entitled to the larger increase for so-called “concierge services” compared with 28% in Woodside, according to the company.
“We figured out the cost if everything was curbside and then subtracted that from our total projected cost to determine what to charge (for special services),” said GreenWaste communications director Emily Hanson.
Four percent of Portola Valley concierge service customers will receive a 100% increase, 30% will receive a 101% to 200% increase and 5% will get an increase of more than 200%, according to the company.
Faced with multiple complaints about the large concierge service increases, the Woodside council decided to delay its decision until a special meeting Tuesday, Nov. 19.
Woodside was considering putting out a request for proposals to get quotes from other providers and also wanted to find out about Portola Valley’s decision before making a move.
GreenWaste could serve Portola Valley separately if Woodside decided to go with a different provider, according to the company.
The new contracts would allow for an 11% profit for GreenWaste, compared with a 2% loss in 2018-19, according to Hanson.
A number of negative factors are squeezing the bottom line, according to the company, including China’s recent refusal to buy all but the cleanest and most valuable recycling.
Stocks of waste paper for recycling are piling up at collection points in the Bay Area, said Joe Sloan of Sloan Vasquez McAfee, the consulting firm that negotiated the contracts with GreenWaste.
Before China’s change in policy, a ton of waste paper sold for between $100 to $200. Today, a recycler must pay $40 a ton to get someone to haul it away, Sloan said.
The price of a full-sized garbage and recycling truck providing curbside service has also risen from about $250,000 when the current contract took effect to between $400,000 and $500,000 today, Hanson said.
Statewide, communities are receiving an average of 30% to 70% in rate increases, Sloan said.
“The (current) rates are artificially suppressed,” Hanson told the Portola Valley council. “It’s not our role to keep coming back (over the course of a 10-year contract).”
GreenWaste implemented one 3% hike in 2014 over cost-of-living increases under the current deal, according to the company.
The huge concierge service increases come, in part, from the need to buy and use smaller collection trucks to serve hillside neighborhoods where most of the drive-on and walk-on collection occurs, Hanson said.
“The smaller trucks also have to make more trips to San Jose to dump their loads during the day (which takes them offline),” she said.
One resident at the meeting questioned the fairness of the rate hikes for concierge services, and another asked why the town didn’t seek other bids.
“In my business, we wouldn’t think of awarding a contract without competing bids,” resident Bob Schultz said.
The council seemed sympathetic to the multitude of economic pressures that Hanson and Sloan said GreenWaste and the industry in general are facing.
“Rates are going up a lot, but I’m confident we’re getting the best deal we can get,” said Portola Valley council member Craig Hughes. “We don’t have a reasonable alternative.”
“I’m comfortable not going out for a (request for proposals),” added Vice Mayor Jeff Aalfs. “They did an excellent job explaining why (rates are going up).”
Rate increases for concierge services will be phased in between Jan. 1 and June 30, and new rates for curbside services begin Jan. 1.
“We wanted to give the people with extra services the time to modify their services,” Hanson said.
GreenWaste will be sending out a mailer to Portola Valley customers on Nov. 25 that will enable them to choose alternative services if they want, as well as the number and sizes of carts that they need, Hanson said.
“If you do nothing, what you have on your account is what you will receive,” she said.
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