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CR&R, Incorporated - Artesia's Waste Hauler
Waste Hauler CR&R, Incorporated is now serving Artesia residents and businesses
Residents and businesses began receiving waste hauling services from the City's new contractor on November 9, 2015. CR&R, Inc. provides waste hauling services to customers in many Southern California cities, including Artesia's neighbors in the cities of Norwalk and Bellflower. Artesia's City Council unanimously approved the new waste hauling franchise agreement with CR&R, Inc. on July 20, 2015.
FEATURES AND BENEFITS OF THE NEW CONTRACT
The new agreement puts the City on the cutting edge of modern and best practices for franchise agreements. It provides for numerous community benefits:
For Residential Customers
- Contract holds rates down to current levels for a minimum of two more years and caps future rate increase requests
- Collection programs provided for solid waste, recyclables, green waste, and organic waste
- Free cart walk-out service for persons with disabilities
- Bulky item service including four free pick-ups per year
- Free holiday tree collection
- Free residential sharps collection (provides for the safe disposal of needles for residents managing health issues such as diabetes)
- Free electronic waste collection
WHY DO WE NEED A NEW CONTRACT?
In response to a national crisis in landfill capacity, and broad acceptance of the strategy known as reduce, reuse, recycle - environmentally sound land filling and transformation as the desired approach to solid waste management, California passed Assembly Bill 939 in 1989. This legislation mandated an integrated framework for program implementation, solid waste planning, and solid waste facility and landfill compliance.
Since then, California cities have had to respond effectively to increasingly rigorous solid waste management strategies, diversions goals, and regulatory requirements.
The program complexities, with which the City of Artesia must comply, have increased exponentially in the last twenty-five years. Reflecting the realities of this complex service delivery environment is the fact that the new contract with CR&R for solid waste management is 103 pages long. It replaces a seven-page contract.
The City of Artesia's existing trash hauling franchise agreement expired in November 2015. In anticipation of its expiration, the City Council convened twelve months in advance, in November 2014, to consider its options for addressing the expiration of this contract. Councilmembers ultimately decided that the best approach would be the direct negotiation of a new franchise agreement with prospective haulers. Those negotiations took place during the first half of 2015. The negotiations resulted in a proposed contract for solid waste handling services with waste hauler CR&R. The proposed franchise agreement was considered by the Artesia City Council at two properly-noticed special meetings held on July 1, 2015 and July 20, 2015.
Franchise fees are classified as General Fund revenues; as such they can be spent on necessary General Fund operations as required for general governmental services, including public safety, streets, sidewalk maintenance, and parks, or any other important City services. Franchise fees are paid in lieu of business taxes. This is the underlying reason why they can be used for any General Fund purpose. Other fees can only be used to pay for the costs of providing the service for which they are being charged.
The solid waste franchise agreement with CR&R provides for various payments to the City of Artesia resulting in about $3,091,000 in first year revenues and savings to the City. Continuing annual franchise fees are $510,000. CR&R will also be responsible for funding the cost of periodic auditing of their franchise records.
This replaces the financial provisions of the current contract, which called for the hauler to pay an annual franchise fee of $28,000. Unfortunately, since the City also had to pay for all trash hauling services at an annual cost of approximately $21,000, the net impact of the franchise agreement was roughly only $7,000 per year.
The structure of the new agreement is important because this new revenue can be used to stabilize the City's financial foundation and pay for important basic services like public safety.
One percent of ALL fees paid to the City by the waste hauler are placed in the City's General Fund, where they are allocated via the public budgeting process, by the City Council, at public meetings, in accordance with the Government Code, and to public programs for the benefit of Artesia's residents.
The proposed contract maintains current rates for residents and businesses and, in keeping with the City Council's goals, strategically includes a provision to allow the lowering of rates in the future as the City stabilizes its long-term financial situation.