After lengthy negotiations, Costa Mesa Sanitary District approves new contract with trash hauler

After more than a year of negotiations, Costa Mesa Sanitary District board members gave thumbs-up Thursday to a new contract with CR&R Environmental Services that will keep the company as the district’s trash hauler for at least the next decade.

The pact — approved on a 4-1 vote with board President Mike Scheafer opposed — will take effect as soon as the two sides sign all the documentation, which could happen next week.

“We look forward to a long-term relationship,” said Dean Ruffridge, a senior vice president with CR&R.

Most sanitary district board members seemed overjoyed about the agreement, extolling its terms as a major win for the district and its ratepayers.

“This is the best contract we’ve ever had,” said board member Art Perry.

The district has contracted with CR&R to collect residential trash since 2006 and has traditionally paid roughly $4.1 million annually for services including curbside and bulky-item pickup and green waste recycling. That payment is based on how much trash is collected and how many residences are served.

Only one major sticking point emerged during Thursday’s discussion about the contract — the mechanism for extending it beyond the initial 10-year term.

District staff recommended incorporating two five-year extension options that would be at the board’s discretion, while CR&R countered with one 10-year extension that would kick in automatically, provided the district determined the hauler was fully complying with the contract.

Board members chose two separate five-year extensions that would go into effect automatically if the district certifies that CR&R is performing to the conditions of the agreement.

Among the services CR&R will provide under the new contract are a districtwide door-to-door household hazardous waste collection program that will give ratepayers three pickups per year, a free springtime mulch event for residents and complimentary trash cart roll-out assistance for senior citizens and those who are disabled.

CR&R also will reimburse the district $30,000 in the first year of the contract and at least $35,000 each following year to fund various public education and anti-scavenging efforts, as well as the alkaline battery recycling program and hiring a consultant to evaluate the hauler’s performance.

Additionally, the company will open its financial books for review so district staff can determine whether future requests for Consumer Price Index-based rate increases are justified. CR&R also will stage a comprehensive outreach program to help the sanitary district meet its goal of diverting 75% of its waste stream from landfills by 2020.

Scheafer said “the concessions and the new things that we’re getting are all beneficial to the residents” but added that he preferred a contract that would give the board more freedom when it comes to extensions.

The board, he added, has taken some political lumps over the years for an “evergreen” clause in the previous CR&R contract that essentially required the district to provide six years’ notice before canceling the pact. Though that provision was scrubbed in the new agreement, an automatic extension might be viewed in the same light, he said.

“I have no doubt that in 10 years they’re going to be performing to the same standard that they’re performing now, giving us the benefits,” Scheafer said. “They’ve given up a lot to get to this point … but having the flexibility, or the board that’s here in 10 years having the flexibility, makes me more comfortable.”

Board Vice President Jim Ferryman, however, said: “We’re in the driver’s seat no matter what configuration we use here. If for some reason they don’t perform, we’re not going to hesitate to pull the trigger.”

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