Athens Services’s Phony Rate Increase: Ask & Ye Shall Receive (link) - In the fall of 2013, trash hauler Athens Services sent letters similar to this one to its Los Angeles County client cities. In the letters, the company claimed that since the Puente Hills landfill – the largest in Los Angeles County, not to mention the nation as a whole – was closing in the fall of 2013, cities were now going to risk higher and uncertain costs to get rid of their trash in the future. The proposed “Athens Solution” was for the cities to take action outside of their normal contracts with Athens and give the company a 10% or more rate raise at the expense of their residents.
Two big problems with what Athens said:
1) The landfill closure was no surprise. For a decade – since 2003 – the entire region knew that the Puente Hills landfill had been scheduled to close, and had been preparing for its closure. Athens had even negotiated contracts with some of the very same cities they sent the letter too a few years back using the same trick: “pay a bit more to us now so that we can take into account and stabilize the future costs coming because of the Puente Hills landfill closure.”
2) The landfill closure was no excuse. There was no legitimate reason for the Puente Hills closure to significantly raise costs. After extensive review, the Sanitation Districts of Los Angeles County predicted a very slight increase in costs due to the closure: “For an average home, this equates to an increase of approximately $0.50/month household.”
So the entire rate increase request was a ruse. But we can’t blame Athens for asking, I guess. A 10% increase in rates leads to tens if not hundreds of millions of extra dollars in their pocket over the long lives of their decades long contracts with these cities. Plus, in the corrupt world of Southern California politics, it works!
What happened over the course of last year in response to this shameless request to allow Athens Services to take more from the pockets of the residents of Los Angeles County for no reason? I poked around a bit, but there is still lots more to uncover.
Two cities were smart about it and “just said no.” A few “negotiated” the unjustified increase down a little. But lots of them just rolled over and sold their residents out to completely unjustified rate increases.
In fact, a few cities even negotiated new, no-bid long term contracts with Athens Services that raised rates far more than 10%. And only one city thought these significant rate increases given outside of set contracts ought to trigger Proposition 218, which one might think requires voter approval for such significant rate raises made virtually arbitrarily by the city councils.
(Mod: In July of 2013 Sierra Madre entered into a new "long term one time" agreement with Athens Services that extended the existing contract for an additional 25 years - link. Was there any connection between the Puente Hills landfill closure and this new understanding? 2013 seems to have been a big year for new contracts at Athens.)
(Mod: More if I figure it out.)
An interesting article titled "California’s Challenge to Reliable Water isn’t Infrastructure. It’s RHNA" can be found on a very well done blog called "DroughtMath." Click here.