OAKLAND -- The company that lost out on Oakland's $1 billion garbage and recycling contract is asking a judge to reject the City Council's decision last week to contract with a competing firm and force it back to the bargaining table.
The lawsuit filed Monday by Waste Management creates more uncertainty as to how much garbage bills will rise and whether curbside trash and recycling pickup will suffer next July when the service is scheduled to switch over to Oakland-based California Waste Solutions.
City staffers had recommended the council stick with Waste Management, which has held Oakland's garbage contract for decades, even though it proposed higher rates. They feared that California Waste Solutions would struggle to meet a tight timeline to build new facilities and buy millions of dollars worth of new trucks and bins to satisfy the contract.
City and company officials declined to comment Monday on how the lawsuit might impact California Waste Solutions' preparations to take over the contract. The company, which currently only handles curbside recycling for about half the city, has reached an agreement with Republic Services, the nation's second-largest trash collector, to provide backup services.
Waste Management, the country's largest trash company, argued in court papers that the City Council had "unilaterally and unlawfully derailed" its process for picking a garbage company last May when it rejected Waste Management's offer and allowed California Waste Solutions a second chance to bid.
The council's action resulted in California Waste Solutions submitting a late bid after the city had further violated its own rules by providing the company details of Waste Management's offer showing exactly how it had priced its services, Waste Management's attorney John Lynn Smith said.
"If you give all of that work product to your competitor, they move from the back seat to the driver's seat," Smith said.
Waste Management is asking an Alameda County Superior Court judge not only to rescind the city's contracts with California Waste Solutions, but also to throw out that company's most recent contract offer, which it maintains violated the bidding process. That could give Waste Management powerful leverage in negotiating a new deal with the city.
The company significantly reduced its proposed rate increases in a final offer made last week. However, Waste Management of Alameda County President Barry Skolnick said in a prepared statement Monday that it would be "premature to speculate" on whether that offer would still be on the table should the company prevail in court.
Whether or not council members acted legally, they did negotiate much lower rate increases for residents. Waste Management's original offer back in May would have cost single-family homeowners $48.72 per month -- a 66 percent increase -- to split the contract with California Waste Solutions. Waste Management's final offer last week knocked down that price to $37.53 -- only 71 cents more than the bid from California Waste Solutions. Both of those offers, however, do allow rates to increase more quickly.
Councilwoman Rebecca Kaplan said the winning bidder not only provided lower rates, but it also agreed to several provisions sought by the council: setting up a local call center, providing composting bins to apartment dwellers and working with a local nonprofit.
Kaplan also said city staffers made it more difficult for any firm other than Waste Management to get the contract by allowing the current contract -- which offers lower prices set in place a decade ago -- to expire at the end of next June when it could have been extended until the end of the year.
"If anyone looks at the process, there is far more to show that the process was biased toward Waste Management," Kaplan said.
Contact Matthew Artz at 510-208-6435.