A new contract agreement with waste management company Athens Services is on the horizon for South Pasadena.
The City Council, during its regular meeting on Oct. 18, directed staff to move forward with a contract which most resembles its current agreement with the company.
The majority of Councilmembers opted for a seven-year rolling contract which continues to provide backyard service with a residential rate adjustment of 22.75% and a commercial and multifamily rate adjustment of 14% — both including an annual rate based on a regular consumer price index, which is the most widely used measure of inflation.
The contract was chosen out of five options presented by Athens Senior Vice President Christian Warner, MSW Consultant President Dave Davis, South Pasadena Public Works Department Director Ted Gerber, and Environmental Services and Sustainability Manager Arpy Kasparian at last week’s meeting.
Councilwoman Janet Braun said she believed the first option offered a better rate, CPI and term agreement than the others.
“What we’re doing on the other options is we’re shifting the cost from residential and we’re putting the burden on commercial and multifamily,” Braun said. “And when we say multifamily, we’re talking about apartment owners, and that’s going to get passed through to renters, and we’re 52% renters as we all know.
“Whereas with option one, we’re keeping the proportionality among residential, commercial and multifamily the same — everyone’s just going to get hit with this 14%, one-time deal, and it’s upfront and there’s no phasing in and pretending it’s going to be OK in year one.”
City staff will now move forward with “option one” to draft an agreement. The new contract, which will provide for new trash bins, is scheduled to be rolled out by March 1, 2024, according to officials.
Other options presented to Council offered a 10-year rolling contract, a hybrid backyard and curbside service model, and a 10-year fixed term with two five-year extensions. Three options contained a “trash CPI plus 1%.” Instead of a household-based CPI rate adjustment, the rate would follow a nationwide, U.S. garbage industry consumer price index they say more accurately reflects hauler price pressures.
Some Councilmembers were initially split between option one and two, which is a 10-year rolling contract with no residential rate adjustments, but a 20% commercial and multifamily rate adjustment instituted over two periods: 10% effective upon approval and an additional 10% and an annual rate adjustment beginning July 1, 2024. The annual rate adjustment comes with a trash CPI plus 1%. That option includes a pilot program with an electric backyard service truck when it’s available.
The Council direction comes following a May 17 meeting when officials urged staff to come back with additional contract options that had a fixed term agreement. Staff initially presented three options to the Council.
“We’ve got to keep it simple,” said Councilman Jack Donovan, who was split between the first and second options. “I sat down and tried to compare these, and [it was] very, very difficult, so try to keep it simple.”
“I believe that option one is the most simple option up here,” he said. “That was the original question that came from your staff: ‘Athens, can you help us be compliant with [Senate Bill] 1383?’”
The updated contract will bring the city in compliance with new state law SB 1383. The goal of the bill, passed in 2016 and in effect since 2022, is to reduce organic waste to landfills by 50% and reduce loss of edible food by 20%.
Warner added the contract would allow the city to negotiate changes at a later date.
“Option one was our way of saying to you, ‘South Pasadena, we’ve been in business together since the late ‘70s. We’d like to stay here,’” Warner said. “This is actually lower than what we need [to recoup costs], but because of our ongoing relationship, we said let’s do option one.”
Warner said about 12 to 15% of the company’s contracts are on rolling terms, and about 10 to 12% are fixed.
South Pasadena, San Marino and Palos Verdes Estates are the three cities that opt for backyard service with Athens, Warner added. The company has never “seen those three cities want to change to curbside.”
With that, Mayor Jon Primuth suggested that city staff dive deeper into the backyard service rate and consider “the efficiency” of the city’s distinct neighborhoods.
Primuth argued that if Athens employees have an easier time with backyard service in South Pasadena, where lots and spaces are smaller compared to bigger lots in cities like San Marino and Rolling Hills, the city should get a better rate.
“If we have more efficiencies in South Pasadena, it should be reflected in our rates,” Primuth said.
Davis, on the other hand, favored option two over one because it will have “less of an impact to residential ratepayers” and offers more wiggle room in renegotiation talks.
“If you want to go to a place where you want to obtain more negotiating leverage in the future, or have some future Council do that, then option one will be the way to go,” Davis said. “But doing option one without discontinuing the automatic renewal will be kind of the worst of both worlds.”
Added Davis: “If you go to option one and you continue and you let it go for another 10 years or whatever, then you’re going to look back five years now, and you’re going to say, ‘why did we raise rates 14% back in 2023 and here we are in 2028 and we still have this rolling term out in front.’”
Mayor Pro Tem Evelyn Zneimer also leaned toward the second option, noting the change from a seven-year to a 10-year term “doesn’t make a difference.”
“It will only allow for more stable and frozen rates for the residents and it will allow the city to actually think if we would renew after the trigger point — where we tell Athens whether we like the contract — to renew or not,” said Zneimer, who added that the present contract has an out clause, so if there is a major breach by Athens the city can terminate it immediately.
In addition to organics collection and recycling, all five options contain six components of SB 1383 that Athens will assist in implementing: quarterly contamination monitoring, quarterly outreach and education, commercial account food recovery support, quarterly waste stream analysis, procurement support of recycled organic products, and data management and reporting.
First published in the October 27 print issue of the South Pasadena Review.