Dive Brief:
- Oakland landlords that are part of the East Bay Rental Housing Association have filed a lawsuit over the city's $1.5 billion collection contract on the basis that rates are exceeding the true cost of service.
- Some apartment owners say they've seen rates for collection increase by 150% since a new contract was worked out in 2014. Rates are set to go up again in July.
- A recent report from the Alameda County civil grand jury found that the 30% franchise fee which Oakland receives from the deal is "disproportionately" higher than other cities. Alameda has a 10% fee and Berkeley has a 20% fee for businesses.
Dive Insight:
This all stems from the Oakland City Council's decision in 2014 to choose California Waste Solutions (CWS) over previous hauler Waste Management (WM). After WM filed a lawsuit the city worked out a new deal to let the two companies split collections, though costs were shifted to landlords and businesses in order to alleviate the burden on homeowners. Rates for restaurants were lowered after complaints, but critics say the city's franchise fee is still driving up costs.
The attorney who filed a lawsuit on behalf of the housing association said that fees for property-related services that exceed the cost of that service are considered a tax under California law and need approval from voters. These franchise fees currently generate $30 million for Oakland. As noted by the grand jury, discussions of this fee were not held publicly.
According to the Chronicle, multiple council members have said they didn't read the original deal in detail before approving it. The city's vice-mayor also said rates have gone up higher than expected. WM — which handles billing for CWS — has previously recognized the confusion among residents, but said that all rate increases have been well-publicized in advance.
