West Covina, Calif., has a 25-year contract with Athens Services, which automatically renews each year. As part of the agreement, the city has the option to initiate the termination of the contract’s evergreen clause once a year, but due to concerns about potential rate increases and the loss of an annual $300,000 payment Athens makes to the city’s general fund, the City Council has never moved forward with the option of termination.
Some fear that this rollover contract will cause issues in the future when the contract expires, and the city starts to negotiate a more reasonable rate for services.
San Gabriel Valley Tribune has more details:
West Covina won’t get rid of a clause in its contract with a longtime trash hauler that allows the relationship to automatically renew.
Despite ongoing concerns about the contract’s rolling term, the West Covina City Council on Wednesday declined to initiate a process to get rid of the evergreen clause in the 25-year agreementwith Athens Services.
As part of its agreement, the city has the option once a year to initiate the termination of the clause. But due to concerns about potential rate increases and the loss of an annual $300,000 payment Athens makes to the city’s general fund, the council declined to move forward with termination.