Trickle-down tax

The city’s waste-hauling franchise fee may result in environmental benefits, but it’s still a money grab

Four years ago, when the Chico City Council started getting serious about implementing a waste-hauling franchise agreement, this newspaper sounded an alarm.

We acknowledged that there would be benefits from such an arrangement. That’s because the two contracted companies, Waste Management and Recology, traversed the same residential streets, creating extra wear on the roadways. Under a franchise agreement that included routes—zones that would keep the two companies confined to particular regions—that inefficiency would be eliminated. Another effect of such an agreement: less smog production. In other words, a franchise agreement benefits our streets and the air. Those efficiencies would also benefit the companies’ bottom lines.

Sounds great. So, what’s the rub?

Our main concern: The brunt of the cost of the agreement—about $800,000 per year paid by the haulers to the city—wasn’t something Recology and Waste Management would part with out of generosity. No, that nearly million-dollar price tag would be passed along to customers in the form of rate increases (see “Take caution on franchising,” Editorial, Dec. 26, 2013). Fast-forward to 2018 and that appears to be precisely what’s happened, mainly for owners of commercial properties, whose rates had previously been unregulated.

Those are the folks who have been hardest hit in the short time since the agreement went into effect, but keep in mind that they will eventually pass those increases on to their tenants, including low-income residents and those on fixed incomes (see “Trash talk,” by Ashiah Scharaga, page 8). Right now, customers are in a transition period, and many are experiencing sticker shock with their new bills.

The city wants to justify the franchise agreement based on its benefits, but this is still a public money grab, one that came without approval of the voters. Fair or not, it’s perfectly legal. The lesson here: Watch-dogging local government is more important than ever.