PACIFICA — The City Council unanimously approved a no-bid contract with Recology Monday night that cleared the way for the trash hauler to purchase Coastside Scavenger and its sister company, Seacoast Disposal.

The agreement stems from a deal that Recology, formerly known as Nor-Cal Waste Systems, made with Coastside Scavenger several months ago to take over the financially imperiled local waste and recycling service provider and pay off all its debts to the city of Pacifica, amounting to $842,630. Recology offered the city an additional "assignment fee" of $100,000 in exchange for approval of the arrangement.

In return, Recology got an extended eight-year no-bid contract in Pacifica and a likely 5 percent rate increase in August 2010. In November 2010, the contract allows Recology to submit a request to increase rates again between 4 and 8 percent, to take effect in March 2011. Pacifica's waste service rates are already among the highest in the Bay Area, a fact that was noted by a few locals who spoke out against the deal.

"The real purpose of this contract is to provide a cash cow for the city of Pacifica," said Lionel Emde. "The council members appear to be so desperate for revenue that they have decided that the ends justify the means. This was not a democratic process in any sense of the word."

Other Pacificans endorsed the agreement in light of the new collection services Recology will provide as of Aug. 1, including

single-stream recycling and compost collection. Recology will provide new, larger-wheeled carts for recycling but will pick up every two weeks instead of once a week. Recology officials will also keep Coastside Scavenger's management team and pledged to retain as many current employees as they can.

City Council members said they understood residents' concerns about the lack of a request for proposals that could have allowed competitive bidding, especially in light of likely rate increases.

Councilman Jim Vreeland portrayed the deal as a win-win. He noted that, according to a city consultant hired to analyze the Recology agreement, a request for proposals could have cost the city "hundreds of thousands" of dollars. Going through that process would also have involved keeping Coastside Scavenger on board until the company's contract expired in 2012, potentially adding to the significant debt it owes the city — without any guarantee of having it paid back.

"My understanding is it would have cost the city more, and the city would have been in jeopardy of losing the $800,000," said Vreeland.

The city's hands were tied to a certain extent, because of a clause in its current contract with Coastside Scavenger that the city could not "unreasonably withhold approval" of the transfer if Recology fulfilled a list of obligations.

City Council members also questioned Recology officials about whether the 5 percent rate increase scheduled for August would be negotiable; city documents portray it as inevitable. Recology officials said the rate increase would be open to discussion.

Coastside Scavenger and Seacoast Disposal are owned by Pacifica resident Louis Picardo and have served the area for decades. Seacoast Disposal handles trash hauling and recycling for parts of the Midcoast area, including El Granada, Princeton-by-the-Sea, and the northern portion of Half Moon Bay.

The Granada Sanitary District approved a resolution last week to transfer its franchise agreement from Seacoast Disposal to Recology but did not sign a new contract with the company. Recology will serve the area under the terms of the current franchise agreement, which expires in 2014. The current rate structure applies until 2011, after which Recology will be free to negotiate new rates, according to district Administrator Delia Comito.