OAKLAND -- The two firms bidding for Oakland's garbage and recycling business are being asked to improve their offers, but garbage bills still could rise 50 percent or more next year.
After nearly five hours of discussions, council members on Thursday said they were unsatisfied with a city-endorsed offer from Waste Management that would leave Oakland homeowners with the second highest trash collection rates in the East Bay.
But it's unclear whether the city has the leverage to significantly reduce the proposed 50 percent rate hike or whether council members would be willing to sacrifice environmental and pro-union positions in order to lower garbage bills for residents.
The city has long known it was facing a steep increase for curbside garbage and recycling collection and landfill services. Oakland's last deal with Waste Management, which expires next year, tied rate increases to the Consumer Price Index, which failed to keep up with the company's fuel and labor costs.
Adding to the sticker shock of any new garbage franchise is the fact that Oakland is seeking expensive perks such as green bins for apartment dwellers, more bulky waste pickups to help curb illegal dumping on city streets, and higher wages for union garbage sorters.
Mayor Jean Quan advised council members Thursday to "take some of your priorities off your list if we're going to have a significant reduction."
Yet, in statements that illustrated the council's struggle to satisfy competing constituencies, Quan then backed requiring the winning bidder to provide a call center in Oakland and pay garbage sorters up to $20 per hour. Both of those relatively small add-ons would result in a rate increase even greater than 50 percent under the offer provided by Waste Management and endorsed by city staffers.
The garbage franchise is monetarily the biggest agreement negotiated by the city. The proposed 10-year deal with Waste Management would be worth more than $1 billion to the firm.
The Waste Management offer would boost monthly garbage bills for single family homeowners 50 percent from $29.30 to $43.93. In the East Bay, only Piedmont would have higher rates. Rates would increase 25 percent for apartment buildings and 22 percent for commercial properties.
However, the offer marked a significant price drop from prior Waste Management proposals and was contingent on the company being awarded every facet of the city's franchise.
While council members said they received lots of emails Thursday complaining about the proposed rate increase, no residents addressed the council on Thursday about their soon-to-rise garbage bills. Instead, the council chamber was packed with supporters and employees of California Waste Solutions, the other firm that bid on the garbage contract.
Company leaders noted that the firm employed mostly Oakland residents. They also said they should have been given the opportunity to bid on the same terms given to Waste Management, which included provisions that were less favorable to the city in order to lower the proposed rate increase. The company's most recent proposal would have increased garbage bills 66 percent next year, according to a city report. The council, which hopes to have an agreement wrapped up by the end of July, voted unanimously to give California Waste Solutions an opportunity to submit a lower bid, and urged Waste Management to do the same.
But Council President Pat Kernighan cautioned residents to brace for big price spike. "I don't think we should kid ourselves that just by negotiating harder, we are going to eliminate that whole big increase," she said.
Contact Matthew Artz at 510-208-6435.