Dive Brief:

• The Reno City Council said that a positive three-page financial audit of Waste Management's contract compliance took too long and didn't answer their questions about the company's operations, as reported by This is Reno.
• Council members had questioned whether the company was paying the required franchise fees on recyclables and what was happening to that material. The audit found that Waste Management is "in compliance with the contract as far as payment of franchise fees to the city," but didn't look at disposal.
• Local outlet News 4 reported that the council first asked for a review of the contract in June 2015. Funds were approved in December, yet the contract wasn't awarded until May. 

Dive Insight:

Waste Management has exclusive rights to collect a large portion of Reno's waste via multiple subsidiary companies as part of a 2012 franchise agreement. This arrangement has been attacked through antitrust lawsuits by multiple local haulers over the years, though the most recent one was dismissed by a judge in August.

This current dispute is partially a result of local political dynamics, though it also brings up an interesting point about the expectations of contracts and franchise agreements. A lawyer from the firm which performed the audit said in his personal opinion the recyclables collected by Waste Management are their property to dispose of as they see fit. Haulers have landfilled recyclables in other cities before, though no evidence indicates that is happening in Reno.

These types of questions have led to more detailed requirements around diversion rates and processing destinations in other municipal contracts — especially as more cities and states set diversion mandates. For example, the proposed Los Angeles franchise contracts have lengthy requirements around recycling with penalties for not doing it at sufficient levels.