THE VOTE COUNT HAS BEEN CORRECTED; IT WAS 3-2, NOT 4-1 AS REPORTED.
LAKEPORT – The Lakeport City Council on Tuesday granted a rate increase to its franchise garbage hauler, Lakeport Disposal, as part of an annual cost of living adjustment. {sidebar id=52}
The 2.5-percent increase will take effect immediately and be retroactive to Jan. 1. The franchise contract between the city and Lakeport Disposal calls for the annual rate adjustments.
Besides the issue of the rate increase, the council and representatives from Lakeport Disposal – owner Joe Butcher and his son, Craig – engaged in a lengthy discussion on sticking points in the original franchise contract.
That contract went into effect on Jan. 1, 2004, when the city commenced its mandatory curbside garbage, recycling and green waste collection program, according to the franchise agreement.
The sticking points
City Manager Jerry Gillham took to the council a list of 10 ongoing items relating to the franchise agreement, but only four of them continued to be an issue, he said.
Those specific issues included the city taking over billing for bins for commercial customers, conflicting language regarding franchise fee payments, increasing the portion of the franchise fee that the city has previously forgiven and wintertime green waste pickup.
The Butchers appeared most concerned about language in the contract that appeared to allow the city to take a franchise fee off a recycling buyback company that Joe Butcher said is separate from Lakeport Disposal.
Gillham, however, indicated that the most critical issue for the city – and a key impasse – revolved around the franchise fee, and when it would start to receive the full amount from the company.
The franchise agreement calls for the city to receive a franchise fee that amounts to 10 percent of the company's actual revenue.
Gillham told Lake County News Wednesday that the precise number for the fee has been changing. “The debate is, what are the actual numbers?”
A recent audit showed Lakeport Disposal had annual revenue of $600,000, which would equate to roughly $60,000, the number Gillham is anticipating to receive in the 2007-08 fiscal year. It's a number, he added, that he believes is about $15,000 less than it should be.
Over the last three years the franchise fees Lakeport Disposal has paid the city have decreased, said Gillham, in part because of an agreement reached two years ago that allows the company to pay a 3-percent fee rather than the full 10 percent on all commercial customers.
In the 2004-05 fiscal year, Lakeport Disposal paid $113,000, which dropped to $69,000 in 2005-06 and $55,000 in 2006-07, Gillham reported.
Gillham said the understanding reached between the city and the company was that the fee would be negotiated and eventually returned to the full amount. That is currently under negotiation now, he added.
Gillham said the initial agreement called for the full fee returning in 2009, but the Butchers argued that point Tuesday night, saying that timeline is too aggressive considering their growing costs of doing business and needs for new equipment.
Another key issue for the Butchers is green waste pickup.
The city has allowed Lakeport Disposal to reduce its winter pickup to once a month. Joe Butcher told the council Tuesday that the council is losing money on green waste. The company also isn't paying a franchise fee on curbside recycling, which the company said it was awarded to offset the cost of green waste.
“We’re still losing money. We’re paying more on green waste than we’re making on recyclables,” Joe Butcher said.
He told the council that he would immediately start paying the city the full franchise fee if it would do away with the green waste pickup requirement. Either that, he said, or charge city customers as much as $9 a month additionally for those services.
On Wednesday Craig Butcher told Lake County News that the company couldn't give up green waste collection, that his father was merely pointing out the company's challenges. “The green waste is part of the unit so it can never be taken off.”
City Councilman Bob Rumfelt suggested the company offer green waste pickup every other week, a suggestion Joe Butcher said would help reduce costs.
The council asked Gillham to try to resolve all the outstanding issues by its next meeting, which Gillham said he could do.
Councilman Ron Bertsch, however, asked what would happen if the issues aren't resolved. Attorney Steve Brookes said the city would notify Lakeport Disposal that it was in breach of the contract.
“Legally, they’re in breach of the agreement now, because they’re not following the contract,” said Bertsch.
Bertsch – along with Councilman Jim Irwin – has been a member of a negotiating team that has worked with Lakeport Disposal for several months to try to settle the contract discrepancies.
Mayor Buzz Bruns said the Butchers have been around a long time and their word is good. “I have all the faith in the world in you guys.”
Councilman Roy Parmentier added, “If three weeks if we don’t have a contract, we're going to go to war. That’s the easiest way to put it.”
The council voted 3-2 to approve the rate increase. Irwin said he voted no because he felt the contract issues needed to be resolved first. “Nothing against you guys,” he said to the Butchers.
The cost of living increase actually will mean less than 50 cents more per billing period for residential and commercial customers using cans. For bins, the costs will rise as follows per billing period: one yard, $2.77; two yard, $5.54; and 2.5 yard, $6.96.
Dumping issue not part of Tuesday's discussion
Not mentioned at the Tuesday meeting was Lakeport Disposal's involvement in what county officials have concluded was an illegal dumping case on Charles Fowler's Kelseyville property. Craig Butcher told Lake County News in an interview earlier this week that they had been approached by Fowler who wanted the materials for compost. The agreement also saved the company money.
However, the company has been under scrutiny by Lake County Environmental Health for taking green waste – which had some garbage mixed into it – and dumping it at the Fowler property, which is not an approved handling facility. County enforcement, however, is focusing more on Fowler than the company.
Gillham said Wednesday that the city has discussed the Fowler case with Lakeport Disposal. “They've given us full assurances that they're complying with the law.”
By taking the green waste to Fowler's, which isn't an approved facility, Gillham said Lakeport Disposal could be interpreted as being out of compliance with its franchise contract with the city.
Gillham emphasized that it's Lakeport Disposal's responsibility to make sure solid waste materials are taken to correct facilities.
However, Ken Stuart of the California Integrated Waste Management Board told Lake County News that jurisdictions such as Lakeport also have a responsibility to make sure their franchise haulers are complying with the law. That means taking materials to facilities licensed to handle waste.
E-mail Elizabeth Larson at
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