Report to Mayor and City Council
Tuesday, February 16, 2021
Special Orders of the Day
SUBJECT:
Title
PUBLIC HEARING TO CONSIDER RESOLUTION NO. 21-014 TO CONSIDER AND APPROVE A RESIDENTIAL AND COMMERCIAL WASTE MANAGEMENT SERVICES RATE ADJUSTMENT FOLLOWING NOTICED MAJORITY PROTEST HEARING AND APPROVING AN ATTENDANT SECOND AMENDMENT TO FRANCHISE AGREEMENT FOR SOLID WASTE SERVICES, AN INCREASE OF 7.95%, AND APPROVE THE SECOND AMENDMENT TO FRANCHISE AGREEMENT FOR SOLID WASTE HANDLING SERVICES (CITY COUNCIL)
Body
I. SUMMARY
The City's residential and commercial waste hauler is WASTE RESOURCES LOS ANGELES, INC., a California corporation ("WRLA"), WASTE RESOURCES, INC., a California corporation, ("WRI") and WASTE RESOURCE TECHNOLOGIES, INC., a Delaware corporation ("WRT", and collectively with WRLA and WRI the "WRT Parties"). In recent years, WRT has suffered unexpected monetary losses and financial burdens as a result of certain legal disputes with the former hauler over the City's bidding process and the transition of the franchise. As a result, WRT has submitted a rate adjustment request of 7.95% for the residential and commercial waste hauling services, which rates would take effect mid-2021. In addition to the losses and financial impacts related to the litigation, which is the basis of this rate increase request, WRT has suffered significant fiscal impacts as a result of COVID-19, as have all solid waste haulers.
WRT's rate proposal was reviewed by a City Council subcommittee consisting of Mayor Davis-Holmes and former Mayor Robles. The subcommittee negotiated and analyzed the rate proposal with WRT over the course of nearly a year, prior to the final recommendation being presented to City Council. WRT's initial request to recover their litigation- and delay-related costs was nearly twice what is recommended here and was reduced through the Subcommittee's negotiation.
Property-related fees such as refuse rates are subject to a "majority protest" pro...
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