Some Downtown Building Owners Think New Trash Hauling Policy Stinks

Many Downtown property owners complain that the amount they pay for trash hauling has soared under the city’s recently adopted RecycLA program. In the past building owners negotiated with individual companies for service. Now, trash hauling companies have exclusive agreements for large geographic areas.

DTLA - Man-Lin Jung has owned two small apartment buildings in Chinatown for years, and of the many concerns she faces, hauling away trash has never been one.

In July, however, she received a notice stating that a new waste hauler — one she had not selected — would begin serving her neighborhood. There would be new fees, all with the goal of increasing recycling and efficiency.

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On Aug. 1, the new policy took effect, and Jung realized exactly what was happening: Her previous provider, Haul-Away Rubbish Service, was out. Under a new exclusive agreement with the city, Universal Waste Systems was in. 

Instantly, Jung’s monthly base trash hauling cost rose from $117 to more than $200. She was also hit with a new “distance fee” of roughly $100, and another new $100 fee for the use of recycling bins.

“I’m paying about $400 a month now, and I can’t pass these fees on to tenants,” Jung said with exasperation, noting that rent control rules mean she can only raise rates 3% a year. “So I don’t know what to do.”

Jung is one of many property owners in Downtown and across the city who have been stunned by the rising rates that are part of the city’s RecyLA program. Three months in, many are also angered by stumbles in service.

It’s an issue that could hit renters, too: Across Downtown, the rising price of trash service is expected to be passed on to some residents and businesses in the form of higher rates.

For decades, private waste hauling companies competed for business around Los Angeles. RecycLA has divided the city into 11 zones, each operated exclusively by a company that won a bid. NASA Services is the operator within nearly all of the Downtown “freeway ring,” while Universal Waste Systems has the contract north of the 101 Freeway around El Pueblo and Chinatown.

Under RecycLA, the 11 operators are more tightly regulated than in the past, with city mandates for low-emission trash trucks, more transparent pricing, higher wages for workers, and a push to make more consumers recycle. The city continues to handle trash removal for single-family homes.

The new system came about, in part, because previously private waste management companies were not incentivizing recycling to enough consumers, said Elena Stern, a representative for the city Department of Sanitation. That meant spotty recycling from roughly 80,000 businesses and apartment buildings. They account for 70% of the waste headed to landfills, according to a study by the L.A. Alliance for a New Economy, which helped lead the charge for the new program.

“There are other cities that have taken this exclusive franchise approach, but not at this magnitude and the level of benefits provided under RecycLA,” Stern said. “The fundamental aim is to reduce landfills, as the vision is for L.A. to be landfill-free in the next decade, if not sooner.” 

Staggered Rollout

The rollout has already begun in neighborhoods such as the Financial District, South Park, Chinatown and much of the Arts District. A big swath of the Historic Core will see the transition this week, on Wednesday, Nov. 1, followed by a Dec. 1 start in part of the Industrial District and a Jan. 1 launch in the Fashion District.

Despite outreach efforts by the city, many have complained about RecycLA.

“Our office has heard some of the same complaints we’ve heard citywide — mostly about rates going up,” said Rick Coca, spokesman for City Councilman José Huizar, whose 14th District includes Downtown.

Coca said workers in the office have met with NASA Services customers and looked at ways for them to reduce their bill.

“However, the Bureau of Sanitation must continue to work with the haulers to remove all extraneous and unnecessary charges,” Coca added.

The Apartment Owners Association of California has heard numerous grievances. In June it filed a lawsuit to attempt to halt the rollout of RecycLA; a court hearing is expected on Monday, Oct. 30, when a judge could rule on an injunction.

Daniel Faller, president and founder of the AOA, said the new recycling program kills competition and consumer choice in favor of getting more money into the hands of the chosen waste management firms and the city.

The 10-year contracts given to the exclusive waste operators are valued at $3.5 billion total; a portion of that goes into the city general fund. Universal Waste, for instance, must pay a quarterly franchise fee of 10.5% of gross receipts billed to customers for base services, and another 10% of gross receipts from additional services. The city is expected to reap $35 million a year from the program.

Faller described the new fee structure as a de-facto tax. The AOA’s legal complaint argues that, under Proposition 218, voters must approve new charges on property owners.

“The city gave waste companies the ability to triple or even quadruple rates with some consumers. And obviously the city can now benefit from that,” Faller argued. “We’re saying it’s not justified.” 

More Recycling, or Not?

Mark Chatoff, owner of the California Flower Mall and a director on the board of the Fashion District Business Improvement District, knew the change was coming. In an attempt to streamline the transition before the Jan. 1 start date, he began a new contract with NASA in July.

The results, he said, have been disastrous: Chatoff’s waste costs have doubled, and in some cases tripled, he said. A majority of the Flower Mall’s waste is green material, which used to receive a discount under Chatoff’s old trash hauler. Now it comes with a surcharge.

“Now it’s costing more per ton for green versus regular mixed trash, which is appalling if we’re trying to be environmentally friendly,” Chatoff said. “And there’s penalties if that green waste is contaminated in any way. So what’s the point? I’ve chosen to pay for mixed waste.”

Managers of large developments are feeling the same pressure. GH Palmer Associates, headed by developer Geoff Palmer, is one of the most prolific apartment builders in the city, with a number of massive Downtown properties including the recently opened Broadway Palace.

Jamie Meyer, counsel for GHP Management (which oversees property services), noted that the purported incentives under RecycLA have not helped increase the volume of recyclables collected at GHP properties, and is unlikely to do so in the future.

In the meantime, he reports an “astonishing decline in the level and consistency of services provided despite exorbitant price increases.” This is particularly the case, he said, with “access” and “distance” fees that are triggered when a trash hauler has to unlock a padlock to open a gate or drag a dumpster more than 100 feet.

Complaints, meanwhile, are largely going unaddressed, Meyer said.

“Across the board, prices have increased from 200% to 800%, plus,” Meyer said. “Exclusive providers are using distance and access fees under the RecycLA program to artificially increase pricing among a segmented and underserved population of LA stakeholders.”

Chatoff admitted that the new costs have made him accelerate rent increases that may not be sustainable with his Flower Mall tenants. Residential property owners could follow suit, though landlords of rent-controlled buildings like Jung may be forced to swallow the costs.

“We’re trying to have less trash in the bin, but I get charged more anyway. It feels wrong,” Jung said.

Some customers have seen significant decreases in their waste costs under the new program. They include Vintage King Audio on Sunset Boulevard, which UWS said has seen its service price cut in half thanks to an increase in recycling.

Both UWS and NASA representatives acknowledged they have heard numerous concerns about rising costs, but reaffirmed that RecycLA is boosting recycling in Downtown, and that the new program offers more flexibility to fit the needs of individual clients.

“After our Zero Waste team performs a waste assessment, we present it to the customer. If the customer’s account is subject to fees, such as distance or access, we make suggestions that could help the customer avoid them,” said Sean Finn, sustainability manager for UWS.

Smaller clients are, in general, seeing more opportunities to save money under RecycLA versus larger clients, said Judi Gregory, Zero Waste director for NASA.

“Many of the small businesses in our zone reported that they were not able to get recycling services or negotiate good rates because they had no ‘buying’ power,” Gregory said. “Now, these small businesses are guaranteed access to recycling services and the same rate for the same services regardless if they have 20 stores or one.”

In a sense, the city is responding to pressure to reform how it processes waste. A trio of state bills mandate increases in recycling from businesses and demand major reductions in methane gas emissions from landfills. The RecycLA program gives the city a “head start” on achieving those goals, the Department of Sanitation’s Stern said.

“The cost of doing business is going up for the city,” she added. “State mandates require us to change methods, whether that’s clean-fuel trucks, doing more annual bin cleanings, more graffiti removal. And now waste companies have to pay a livable minimum wage since they’re working with the city.”

The city has hired 100 agents to handle complaints and questions stemming from RecycLA, and 40 inspectors to visit properties and deal with disputes. Stern recommends that landlords seeing increased fees get a waste assessment, which involves meeting with a hauler to review a building’s waste and negotiate more appropriate rates.

More information is at (800) 773-2489 or lacitysan.org.

eddie@downtownnews.com

Twitter: @eddiekimx

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