By Clarence Cromwell
As they dispute numerous details of their contract in court and through the mail, public officials and Green Valley Disposal Company managers say they're beginning to agree on one thing--a new contract might be a good idea.
A contract allowing an automatic yearly increase tied to the consumer price index, such as Green Valley signed with other Bay Area governments, would be an improvement, say Green Valley officials and representatives of West Valley Cities, the agency that represents Los Gatos, Monte Sereno, Saratoga and Campbell in trash-rate negotiations.
The current contract, which guarantees the trash carrier a 5 percent profit after costs, is too complicated and encourages cheating, critics say.
Los Gatos Town Councilmember Steve Blanton said the system might lead Green Valley to inflate its costs, thereby increasing the profit. "I think it's just a terrible way," Blanton added, "it invites abuse."
Whether or not both sides play fair, the contract requires Green Valley to supply reams of financial data to justify costs when it wants to raise rates. Town employees in turn spend hours examining data to confirm that costs are legitimate.
Then there are the disagreements.
Although more cumbersome than modern contracts, the system worked smoothly until about 1990, when Green Valley was hit with landfill taxes by the city of San Jose and other agencies. As Green Valley asked to charge its customers for higher and higher costs, the West Valley cities began exercising more vigorously their right to rule that individual expenses cannot be charged to customers. All four, for example, ordered Green Valley not to charge customers the 5 percent profit on taxes paid to state and local governments.
Green Valley sued Los Gatos, Saratoga, Monte Sereno and Campbell in August, 1995, asking the court to award $788,000. The suit charges that the cities aren't allowing Green Valley the 5 percent profit gauranteed in its contract. The first of a series of mediation meetings was scheduled for June 10.
Green Valley's recent application to raise rates is subject to similar disagreement. The company wants to charge 37 percent more in Los Gatos, but town officials' position is that residents should be paying 3.5 percent less than they currently pay.
The rate review committee is holding the application, calling it incomplete. When the committee gets the information, the application will go to city and town managers and then to elected officials.
Officials on both sides of the contract suggest a new agreement that would automatically increase trash rates each year with a formula based on the consumer price index. The index is a measurement of changes in certain retail prices, and is often used to compute cost-of-living raises in union labor contracts.
Green Valley's recent contract with Santa Clara County to serve unincorporated areas, including some pockets of Los Gatos, includes a yearly rate hike based on the consumer price index. Likewise, the town's contract with Green Valley for recycling services adjusts rates by the index.
Green Valley Disposal operations manager Phil Coucheé told the Monte Sereno City Council last week that the company is "willing to discuss" a new contract for trash collection based on the index. To do that, both sides would have to agree to toss out the current 20-year contract, which otherwise will expire in the year 2003.
Los Gatos community services director Regina Falkner said a new contract makes a lot of sense. She's also a member of the West Valley Cities rate review committee.
The difficulty, Falkner added, would be in agreeing on what rate to charge during the first year.
Gerard Wen, Green Valley general manager, said setting the first-year rate of the county contract was not difficult. "We basically worked out a number and they added surcharges on top of that."
Los Gatos Town Manager Dave Knapp said he'd also like to see such an agreement, even if it had to be imposed by the court.
This article appeared in the Los Gatos Weekly-Times, June 12, 1996.
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