Issues with trash
Two monopolies for the price of one
Local residents will not be able to buy their own trash bins under the agreement negotiated by the city of Reno with Waste Management Inc. (WMI).
How much that will cost customers is unclear.
When the RN&R ran a cover story on a new trash collection system that is now coming on line, a reader posted a comment after the story that read in part, “[A]fter reading this article I get the gist that everyone is going to have to pay for green bins. Currently, I own my own trash cans because rent on WMI’s trash cans is not cheap. With this trash change, I’m going be forced to rent their waste/recycling cans? Does anyone know this answer for sure?”
The new system negotiated by the city is now being phased in, and everyone is supposed to be in it by January. The new system is less informal, with more services spelled out and limited, and customers must choose among four levels of service that involve different bin sizes.
WMI’s Reno office apparently does not have any local spokespeople. Calls to that office were returned by WMI publicist Karen Stern in Oakland. She said, “That is not a part of the contract. They have to use the Waste Management bin” by January.
When the large green bins with hinged tops first came to Reno, it prompted a strong consumer reaction against Reno Disposal, then the local system. Protests were organized by a local chapter of Association of Community Organizations for Reform Now (ACORN) against what were called the “Big Green Monsters” (BGM).
It may come as a surprised to residents to know that they have never been required to used BGMs under the current, outgoing system—though the corporation didn’t go out of its way to inform residents of that. Customers can put out neatly tied trash bags once a week if they choose and will still get pick-up service, Stern said. But that will end in January. After that, customers must use bins and will have only a limited number of bag pick-ups under much more complicated rules.
Another customer, who contacted the RN&R by phone, said she has used Rubbermaid containers she purchased at Lowe’s in order to avoid paying the corporation.Off the city’s radar
Stern said she could not tell how much the monthly or quarterly rental for the WMI will be devoted to bin rent, because there will be a monthly fee, and she does not have a breakout for the various expenses covered by that fee. So it is difficult to know how quickly a customer’s investment would be paid off if she bought a bin instead of using WMI’s. Outlets like Lowe’s and Home Depot sell hinged-top plastic trash bins for prices ranging from about $60 to more than $100.
From the corporation’s point of view, the reason for the use only of WMI bins is “to work with our equipment and make sure that every thing works with our system.”
But what was the reason from the city’s point of view? With the city giving Waste Management a monopoly on trash collection, should it have also given it a monopoly on trash bins?
In fact, the city apparently never raised the issue with WMI. According to city environmental services administrator Jason Geddes, “We did not include that as an option in the current changes.”
Andrew Barbano is a longtime critic of the city’s franchise activities and agreements and editor of NevadaLabor.com,
“Waste Management has substantially cut costs, having gone to one-man trucks save for some narrow-alleyed older areas of Reno and Sparks,” he said. “This is the reason for demanding that governments require standard Dumpsters. It cuts their payroll in half. … The recycling Dumpster add-on appears to be a surcharge that will never die. Long after the Dumpsters are paid off, WMI will still be charging rent with no accountability or transparency. But they will be paying an ever-increasing kickback to the cities and county unless some public servant steps in to regulate an out-of-control public service.”
Barbano characterized the city’s relationship with WMI as primitive and allows the corporation to take advantage of its customers. He said at state and federal levels, when government grants monopolies, there is usually regulation and ratesetting to accompany it, but Reno has no such mechanism.
“In my experience, municipalities care about one thing above all others where monopolies are concerned: getting the franchise fee, a percentage on their gross revenue,” he said. “This gives governments a perverse incentive: the higher the rates on their constituents, the more money the city or county get, truly a hidden tax. WMI will next go to Sparks and Washoe County for similar rate hikes. Reno iced the cake with 10-year franchise extension through 2029.”
Barbano said cities and Washoe County “should demand a fair and open ratemaking process where the company is only entitled to a fair rate of return on un-depreciated capital investment. Such regulation is the tradeoff for monopoly control.”Billing inquiry
The same reader who told us she used her own Rubbermaid trash bins originally called us about a billing dispute she had with WMI. She said that for years she has paid her bill at the end of each quarter and now is being billed in advance. The bill is stamped payable “upon receipt.” If she fails to pay immediately, she receives a notice reading, “Please accept this as a friendly reminder that your account is now overdue. If full payment of the invoice amount is not received on or before the delinquent date you will be charged a monthly late fee of five percent.”
She said she did not understand why other utilities like power, phone, and water are paid after services are rendered, but WMI wants to be paid in advance.
“They want payment for services not rendered,” she said.
Sarah Polito, another WMI publicist, responded, “Waste Management of Nevada has always billed residential and commercial customers in advance.”
There was no response to an inquiry on why advance billings are used.