220420 1039 RE_ Cypress Trash Rates Are Going Up AgainFrom:Steven Mauss
To:Frances Marquez
Subject:RE: Cypress Trash Rates Are Going Up Again
Date:Wednesday, April 20, 2022 10:39:08 AM
Thanks for the response, Frances. When is a good time to call?
Steve
From: Frances Marquez <fmarquez@cypressca.org>
Sent: Wednesday, April 20, 2022 10:33 AM
To: Steven Mauss <steven.mauss@gmail.com>
Subject: Re: Cypress Trash Rates Are Going Up Again
Steve,
Thank you for your concern and for reaching out to me. Please call me at
909-996-0619 so I can thoroughly discuss the issue with you.
Sincerely,
Frances
Sent from my iPhone
On Apr 20, 2022, at 9:46 AM, Steven Mauss <steven.mauss@gmail.com> wrote:
Scott,
Thanks for the reply. As you can tell from the addressee line(s), I have emailed the request to
every Council member (including Jon), and to Peter Grant. Both you and Anne have now referred
me to Jon and a white paper; I look very much forward to reading it. Unfortunately, Jon has not
responded to me yet.
I assume that the white paper you (all) are referring to will provide direct answers to the questions
I have asked. Most helpful would be if someone (Jon?) could simply answer my questions with
“Yes” or “No” with a reference to a place in the white paper that explains the reasoning. I’m sure
you folks have all thought these issues through and I am sincerely interested in your perspective.
Misinformation only seems to crop up when people fail to listen to all sides of an issue with an
open mind. I really don’t want that to happen but I don’t think it should be more difficult to get
your respective viewpoints than it is to get George’s.
Thanks,
Steve
From: Scott Minikus <SMinikus@cypressca.org>
Sent: Wednesday, April 20, 2022 8:03 AM
To: Steven Mauss <steven.mauss@gmail.com>
Cc: Paulo Morales <pmorales@cypressca.org>; Anne Hertz-Mallari <ahertz-
mallari@cypressca.org>; Frances Marquez <fmarquez@cypressca.org>; Jon Peat
<jpeat@cypressca.org>; Peter Grant <pgrant@cypressca.org>
Subject: RE: Cypress Trash Rates Are Going Up Again
Good morning Steve,
Please reachout to Councilmember Peat as he has all of the historical data on the City’s trash
hauling rates and services, including a white paper that he has offered up several times in the
past month and most recently at the last council meeting.
Respectfully,
Scott
On Apr 19, 2022 4:44 PM, Steven Mauss <steven.mauss@gmail.com> wrote:
All,
I wrote to all of you last week asking for some clarity regarding the City’s trash hauling rates and
services. I would like to thank Councilmember Hertz-Mallari for taking the time to respond to
me but I confess to a certain amount of disappointment that the rest of the recipients did not
even offer the courtesy of an acknowledgement of receipt. I am sincerely confused as to why.
With all of the controversy swirling around this subject, whether online or in print, I would think
that you would want to get as much accurate information out to your constituents as possible.
It will be very difficult to continue references to “misinformation” if you provide no clarity of
your own.
Ms. Hertz-Mallari has informed me that Councilmember Peat maintains a whitepaper on this
subject. Has this been shared publicly somewhere? Can it be emailed to me?
Once again, I ask for a response with direct answers to my questions below.
Sincerely,
Steve Mauss
From: Steven Mauss <steven.mauss@gmail.com>
Sent: Tuesday, April 12, 2022 2:12 PM
To: pmorales@cypressca.org; ahertz-mallari@cypressca.org; fmarquez@cypressca.org;
sminikus@cypressca.org; jpeat@cypressca.org
Cc: pgrant@cypressca.org
Subject: FW: Cypress Trash Rates Are Going Up Again
Dear Members of the Cypress City Council,
During these times of rapid information dissemination, it is often difficult to keep up with what is
factual and what is opinion or hearsay. I recently received some information from my friend,
George Pardon (see email below), and in fairness (as well as a means of fact-checking), I am
writing to all of you (whom I also consider to be friends) to get your take on what he has
written. Specifically:
1. Is it true that we will experience a roughly 38% hike in our trash rates this year? If not, what
percentage will the rate hike be? If there is to be a large hike, what is the rationale for such an
increase all at once?
2. Is it true that, although the City has the right to audit Valley Vista Services (VVS), the Council and
the City Staff chose not to do so? If not, why not? If there is an unwillingness to audit VVS,
could you please explain the rationale.
3. I realize that re-bidding contracts is time-consuming and costly but is this the reason that the
City chose to take a concessionary position with respect to VVS vs. re-bid? As a business owner
myself, I understand both sides of this issue but I am wondering if a cost/benefit analysis was
performed by City staff and, if so, would you be willing to share that with me?
4. Are the calculations related to the concessions outlined by Mr. Pardon in his email accurate? If
not, can you please provide me with accurate information that drove the decision to offer
concessions vs. rebid?
5. Is it true that VVS has essentially been awarded a 22-year contract term? Is there any other city
of similar size and make-up that has been awarded a trash franchise agreement with such a
lengthy term? How will such a term benefit the City, specifically residents?
Please understand that my only interest in writing to you is to avoid any kind of
misunderstanding regarding this matter at hand. I have sometimes heard members of the
Council refer to “misinformation” that is being circulated in the community and I do not wish to
be misinformed. If you could provide some feedback on these issues, it would be much
appreciated.
Thank you for your service to the City,
Steven K. Mauss | President & CEO | 714.761.6760 Office | 714.209.6680 Mobile
From: George Pardon <georgepardon@gmail.com>
Sent: Sunday, April 10, 2022 10:12 PM
To: undisclosed-recipients:
Subject: Cypress Trash Rates Are Going Up Again
Cypress Trash Rates Are Going Up Again
This Monday, the Cypress City Council will vote on increasing the trash rate by another $1.01 per
month based on the consumer price index. Prior to the increase approved in January, the
residential rate was $16.17 per month. As such, if this is approved, since January residential
rates will have increased $6.28 per month or 38.8%.
While some Council Members say we have a great rate compared to other cities, comparing our
rate to other cities’ rates can be very misleading as rates do not provide an appropriate ‘apples
to apples’ comparison. Cypress received several competitive bids for trash services in 2014.
Valley Vista was awarded a ten-year contract to begin in July 2015. Less than 2 years later,
Valley Vista came back to the City requesting a rate increase and relief from reimbursements
required in the contract. Valley Vista made the request pursuant to the Extraordinary
Adjustment section of the contract. An independent review of their request by R3 Consulting
concluded that an Extraordinary Adjustment was not justified. The August 2017 City Council
stated that ‘Unfortunately, the current Franchise has become financially unsustainable for VVS
which creates uncertainty regarding the future of trash collection in Cypress.’
I recently asked the City Clerk for a copy of any and all audits the City has performed pursuant to
Section 8.04 of the Valley Vista agreement which provides the City the right to audit Valley
Vista’s payments, operations and financial records. The response from the City Clerk stated that
‘the City has determined that there are no records responsive to your request.’ Rather than
taking the contract back out to bid, the City Council made substantial changes to the contract in
August 2017 without even conducting an audit although R3 consulting stated that Valley Vista’s
problems resulted from “inaccurate estimates by the Collector of its cost of operations”.
The amendments made to the contract by the City Council in August 2017 included the
following:
-Graffiti Removal Services
Section 6.08 of the original contract stated ‘Collector shall remove graffiti, at its sole cost and
expense, use and furnish all labor, supervision, equipment, materials, and transportation
necessary for the satisfactory performance of graffiti removal services to public and private
properties in the City of Cypress.’ The rationale in the agenda to remove this requirement
stated: Contracting for graffiti removal service outside of the Franchise will enable VVS to focus
on the efficient collection of solid waste. The City maintained a separate graffiti removal
contract when Republic Services was the trash Franchisee and the annual cost is estimated to be
$110,000. It is also recommended VVS continue to provide graffiti removal service under the
terms of the Franchise while the City secures a graffiti removal contractor, but no longer than
December 31, 2017.
-Bulky Item Collection
Under Republic Services, residents received two free bulky item collections each year. The VVS
Franchise increased free bulky item collection to 12 items per year and, in doing so, created a
significant cost for VVS and the potential for the service to be abused. Adjusting bulky item
collections from 12 items to two items per year, while maintaining two citywide Clean Up Days
and free Christmas tree collection, will provide residents a high level of service and strengthen
the Franchise. Should a customer need more than two bulky items collected, outside a citywide
Clean Up Day, they would be charged $52.37 per item.
-City Fees
Beginning with FY 2015-16 the VVS Franchise provided the City new Franchise-related revenue
of $213,000 above what Republic Services paid. These Expenditure Reimbursement Fee
revenues are unrestricted and represent less than one percent of the General Fund. They are
adjusted annually for inflation and budgeted at $223,000 in FY 2017-18. Releasing VVS from
these new fees will strengthen the Franchise while maintaining the same Franchise Fee the City
received from Republic Services.
Fee Franchise Section 2017-18
Budget
Annual Roadway Maint. Cost Recovery Charge Section 8.05 $122,000
Annual Water Pollution Prevention Cost Recovery Section 8.06 $26,000
Shared Sales of Recyclable Materials Section 8.07 $50,000
Sales Tax Revenue Section 8.08 $25,000
Total Expenditure Reimbursement Fee Revenue $223,000
-Extend the Franchise Term to June 30, 2027
The current 10-year Franchise expires June 30, 2025 and provides the City Council with the
option to extend the Franchise for one two-year term and two one-year terms (a total of up to
four years). Exercising the two-year extension provides VVS additional certainty and strength
with lenders and financial institutions.
These amendments were made without a bid. More substantial changes were made in 2021
including adding another 10 years to the term of the agreement along with substantial price
increases. While the City Council now states that the City could incur substantial penalties if
they were to go out to bid, the question remains as to why the City didn’t rebid the contract in
2017 with full knowledge that the contract was financially unsustainable for Valley Vista. Why
did they extend it in 2017 for 2 years and again in 2021 for another 10 years?
In a 2019 article by Teresa Santin regarding renegotiating a public contract after the award, she
makes some excellent points:
1) Modifying contract terms after bid opening could impair the sanctity of the sealed
bid process and otherwise undermine open and honest competition, which protects the
public and other bidders from favoritism and fraud.
2) With these principles in mind, a “substantial” deviation or modification of a contract
post-award impermissibly affords the winning bidder a competitive advantage. A
modification is substantial if it affects the amount of the bid and affords a bidder an
advantage not allowed to the other bidders.
3) Substantial modifications after bid opening include waiving or renegotiating any
aspect of the contract affecting the price.
Teresa Santin is an Associate at Brouse McDowell LPA practicing primarily in the area of
construction and real estate litigation, both in commercial and residential contexts.
Los Alamitos went out to bid recently and evaluated 7 bids from 7 different companies yet Valley
Vista submitted the highest residential rate. You might understand how they could come in 2nd
or 3rd but 7th out of 7? Besides a great rate, the Los Alamitos contract also provides the city
with $125,000 reimbursement for street services. Again, the rates the city compares us to is not
an ‘apples to apples’ comparison. We would need to be told what reimbursements or services
each of these cities receive besides simply trash pick-up which is pretty much what Valley Vista
provides.
In a 2011 presentation by city attorneys made to the League of California Cities, the following
was stated: ‘The purpose of requiring governmental entities to open the contracts process to
public bidding is to eliminate favoritism, fraud and corruption; avoid misuse of public funds; and
stimulate advantageous market place competition.’
It’s really just that simple. This contract should not have been extended from the original 10
years to the current 22-year term and most likely should have been rebid in 2017 when it was
determined that the contract was not financially sustainable. Actions like these cause many
residents to question what else goes on behind closed doors.