California's long-suffering city of Compton has taken the bold step of taking over waste collection from the private sector. Could this represent a trend?
This summer, residents of Compton, the notorious Los Angeles suburb, weathered a particularly brutal wave of crime - brutal even for a city that has suffered gang violence for a long time. With temperatures and tempers high, eight people were murdered in 10 days.
This time though, instead of just bolting its doors and pulling down the shades, the city took a bold step in response. Compton's city council, led by outspoken Mayor Omar Bradley, disbanded the city's police department, handing over policing duties to sheriff's deputies employed by Los Angeles County.
Many criticized the move as just an example of Bradley's well-publicized bullheadedness, but the mayor contended that it was just one aspect of his broad plan to rejuvenate the city.
"Some would have you believe that we are merely a city in turmoil," Bradley said in a recent address. "However, I would prefer to define it as a community standing at a crossroad."
This dichotomy seems to exist in the solid waste department as well. This year, the city decided to take back its solid waste collection from the private sector.
Until this fall, CalMet Services, Montebello, Calif., had served Compton's residential customers. Commercial sector waste had been picked up by Waste Management Inc. operating out of San Rafael, Calif.
When these two companies' contracts came up for renegotiation this year, the city opted instead to invest in a new automated fleet and pick up the trash itself.
The city claims that it simply wants more control over the quality of service its customers receive. But is there a deeper underlying issue?
Some industry analysts feel that more cities will "de-privatize" as long as private waste companies get larger and more bureaucratic through consolidation.
Others feel that Compton is an isolated case - a city struggling to define itself as something other than a ghetto.
A City in Control Consolidation still is the name of the game in the waste industry. As this magazine has reported, about one in three of the top 200 waste companies were acquired in the past year, with the largest companies growing to gargantuan proportions and the medium-sized and smaller companies expanding as well. Clearly, the waste industry is solid and strong - but could customer service be suffering?
At least one industry analyst says that several cities are "starting the clock" to take over waste collection from the private sector.
"Long-term contracts are being lost to consolidation," says Kosti Shirvanian, founder of Western Waste Industries and a former board member of USA Waste (which acquired Western Waste in 1996 and now exists as Waste Management Inc. based in Houston). "The private sector doesn't recognize how important the needs of the little government are ... What is happening is we've lost middle management, and we've lost the service. And this is a service-oriented business."
Shirvanian says that when he was at Western Waste, he began instituting the now-common phenomenon of public-private partnerships, facilitating bonds between municipalities and the private sector. "I retained 97 percent of my contracts," he says. "These new companies are losing most of their contracts because they don't understand people and relationships."
Although Shirvanian is not talking specifically about CalMet or Waste Management, and although a city spokesman will not identify any specific service-related problems associated with the two companies, better service is exactly what Compton says it wants to provide. In addition to controlling rates, the city wants to be more hands-on and provide increased recycling opportunities.
"The city has to comply with state laws requiring more recycling," explains Mike Aloyan, the city's project manager for the transition. "Plus, we want to give better services to citizens, maintain rates - there were a lot of issues."
So far, the transition from private to public waste collection has been smooth. In a somewhat ironic twist, the city outsourced the management of the transition.
Aloyan actually is employed by American Utilities Services, a Compton-based firm with strong ties to the city. The firm, in turn, hired contractors to help figure out what equipment Compton needed and to survey customers about what they wanted.
The city invested $6 million in the program, covering the costs of a new, fully automated fleet to replace the manual collection services offered by the private companies. The city also invested in new carts for residents. Now, each of the city's 17,000 households has a 60-gallon container for green waste, a 60-gallon recycling container and a 96-gallon residential trash container.
"Both companies have been very helpful during this transition period," Aloyan says. The city adopted basically the same routing system employed by the private companies and bought many containers from them as well. Furthermore, the city was able to lure drivers and other employees from the private sector - including a shop foreman formerly of Republic Services, headquartered in Ft. Lauderdale, Fla.
"We hired supervisors from the existing residential company and a couple drivers came from the same company and from other companies," Aloyan says. "They have experience with automated collection. We put the routes together with other drivers. It took about three or four months to organize everything."
The city began residential collection just after the Labor Day weekend, only a couple days behind schedule. Commercial collection will begin January 1 - so that the city has time to "fine-tune" residential collection, Aloyan says. Waste Management will continue to serve the city on a month-to-month basis until then.
Meantime, the city is negotiating with local transfer stations - including facilities run by Waste Management, Browning-Ferris Industries (now part of Scottsdale, Ariz.-based Allied Waste Industries) and Republic. The city is maintaining its once-weekly pickup schedule, and it will continue to handle the billing, just as it always has done.
A City in Turmoil? Although Aloyan is full of praise for the professionalism exhibited by CalMet and Waste Management, he does say that the city will "go the extra mile, where the private hauler doesn't." He adds that when dealing with large corporations, "things don't get done immediately."
Not surprisingly, the private sector has a different view. One source says that Compton's decision has more to do with the city's strong, opinionated mayor and somewhat chaotic political atmosphere than it does with wanting to provide better waste services. The city, for example, has not made a unilateral decision to bring city services in-house. In fact, soon after replacing his city's police force, Mayor Bradley stated that he is considering contracting out other city services - unspecified as of yet - to save money for a tax rebate and new programs in housing, crime-fighting and job training. Yet Bradley also says that he wants to avoid layoffs among the city's 663 employees.
The appearance of turmoil may have been compounded when, earlier this year, Bradley lunged at a political rival outside the city council building, screaming threats and obscenities.
According to the Los Angeles Times, when the mayor comes up for re-election next spring, he is likely to face "a slate of opponents who believe he has gone too far in using city contracts and patronage politics to consolidate his control." Solid waste collection may have been one notch in the mayor's belt.
Mum's the Word Although Aloyan is forthcoming and portrays the transition as positive and smooth, it is interesting to note that repeated requests to speak with other city waste employees - including the head of the solid waste department - went unanswered.
Whether this means that the city does not want to talk about the transition or is simply too busy instituting the change, the fact that the city relies on a contractor to speak about taking back a major city service could be emblematic of some internal uneasiness.
It could be that the city has weathered so much criticism that it is wary of inviting any more. Aloyan himself asked several times that Waste Age publish a positive article about the city.
For its part, CalMet Services is taking the high road, speaking largely in generalities.
"We have a strong belief in the principle that private enterprise provides this service better and more cheaply than the public sector can," says Dave Kelly, vice president for the company. "Sometimes public entities don't count all the numbers. They may have a single maintenance facility within the city that handles the street sweeping trucks, police trucks and fire trucks, for example. We believe that if they did count all their costs, they would find the private sector more efficient. But I'm not saying that's the case in the city of Compton."
Clearly, the situation in Compton has caused the private companies to be extremely cautious about what they say. Despite initially agreeing to speak about the transition, a spokesperson from Waste Management ultimately missed several opportunities for an interview and ignored a request to make even a brief statement on voice mail or e-mail.
As for whether Compton is an indicator of a larger trend toward de-privatization, CalMet, for one, does not see it that way. "I don't see this as a trend in any way, shape or form," Kelly says. "I see firm direction from most cities to continue to use the private sector and keep government small."
Nevertheless, Kelly does say that there is "some merit" to the idea that ever-larger waste corporations might neglect customer service."I always have the cliche that it doesn't take a billion-dollar corporation to collect trash on Main Street," he says, but adds that his company is not one of those giants and is readily able to serve municipalities and serve them well.
"We certainly would like to continue serving the city, and we don't like to see it taken back into the public domain," he says. "We think with a little experience under its belt [the city] might reconsider."
Only time will tell, but one thing is certain: other municipalities and private companies will be waiting and watching.
Population: 93,268 (1996).
Approximate number of families: 23,239 (1990).
Land area: 10.6 sq. miles.
Median income: $24,971.
Location: Near Los Angeles, bounded by Los Angeles County on the West and North, and by Long Beach and Carson on the South.
Source: Key to the City, www.usacitiesonline.com