220420 1414 FW_ Cypress Trash Rates Are Going Up Again1
From:Peter Grant
Sent:Wednesday, April 20, 2022 10:45 AM
To:'steven.mauss@gmail.com'
Subject:FW: Cypress Trash Rates Are Going Up Again
Hi Steve,
To be clear, I haven’t responded to your emails because they were addressed to the City Council.
With the exception of the question quoted below, it appears your inquiries are about why Council Members made the
decisions they did (again I think if you watch the meetings I referenced you’ll see their explanations). The relevant recent
meetings are November 22 and January 24 and I’d encourage you to read those agenda reports and watch the City
Council’s deliberations. I believe you’ll find they provide a comprehensive explanation of the actions the City Council
took. Here is a link to the August 28, 2017 agenda report from the City Council subcommittee:
https://destinyhosted.com/agenda_publish.cfm?dsp=agm&seq=296&rev=0&id=29773&form_type=AG_MEMO&beg_m
eetmth=1&beg_meetyr=2017&end_meetmth=12&end_meetyr=2022&mt=ALL&sstr=Valley%20Vista&dept=ALL&hartke
ywords=&sortby=f.form_num,%20f.rev_num&fp=ADVSRCH&StartRow=1
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.
I believe you’re aware the franchise agreement (article 8) includes this provision. I recall (although I’m not certain) this
was recently explained at a Council meeting (and it is certainly in the administrative record). As part of the 2017
amendment and 2021‐22 organic waste recycling program development, the city conducted thorough, third‐party led
evaluations of VVS. The city also cooperates with VVS annually to provide the State with waste diversion and recycling
data. These combined efforts have not identified any information that would cause the city’s professional staff to
request (what would effectively) be a third audit of VVS. Had the 2017 and/or organics recycling program reviews not
been conducted, this would be about the point in the franchise when an audit would be a consideration.
I appreciate you disagree with the City Council’s decision on the recent amendments to the trash franchise. But the facts
are that the city was transparent (the matter was discussed at nine different City Council meetings); the State‐mandated
organics recycling program and other amendments were reviewed by independent, third‐party industry experts who
judged them reasonable; and trash fees in Cypress are low (much lower than what I pay in another city).
I have blind copied the City Council on this response to avoid the Brown Act violations that can arise if a Council Member
clicks Reply All.
Best,
Peter Grant
City Manager
City of Cypress
Office 714‐229‐6680
Cellular 714‐335‐1685
pgrant@cypressca.org
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From: Steven Mauss < >
Sent: Wednesday, April 20, 2022 09:45
To: Scott Minikus <SMinikus@cypressca.org>
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
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
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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
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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
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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
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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
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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.’
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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.