CITY OF OAKLAND’S COSTLY PURSUIT OF ZERO WASTE FRANCHISE CONTRACT GRAND JURY EXECUTIVE SUMMARY
The Grand Jury received numerous citizen complaints concerning increases to garbage and composting collection rates in the city of Oakland as a result of the city’s new Zero Waste franchise contracts. The Grand Jury also received citizen complaints that these 2015 franchise agreements for garbage and recycling collection had been awarded improperly; that garbage collection rates charged to Oakland businesses violated California law; and that $30 million in franchise fees paid to the city passed on to Oakland ratepayers are an alleged “illegal tax.”
The Grand Jury undertook a comprehensive investigation related to the solicitation and award of the city’s Zero Waste contracts. The Grand Jury determined that: (1) although intended, the city’s contracting process failed to achieve a competitive bidding environment; (2) the city’s contracting process was for all intents and purposes abandoned by the city council before the process was completed; (3) even though intended, the city’s contracting process lacked reasonable transparency; (4) collection rates paid by Oakland businesses and multi-family residences were markedly higher than surrounding communities; and (5) franchise fees paid by the city’s garbage collection contractor, passed on to Oakland ratepayers, are disproportionately higher than franchise fees paid to other Bay Area municipalities and special districts.
A franchise agreement is an authorization granting an exclusive contract by a government entity to a private enterprise enabling them to carry out specified commercial activities. Oakland ratepayers are the primary beneficiaries of the Zero Waste franchise contracts.
The city council owed a duty to, among other things, safeguard the ratepayers’ financial interests. Nevertheless, the city council failed its duty. Reasonable financial analysis of numerous ancillary collection services directly impacting rates was not performed, and there was little to no public debate concerning disproportionately high franchise fees. Read more… Alameda County Grand Jury (pdf) , Pages 31-42
City Administration Acknowledges Findings of 2015-16 Grand Jury Report
… Concluding the City’s Zero Waste franchise agreements was a lengthy and challenging process. We continue to evaluate aspects of the program that can be improved to better serve the public and will work closely with both our contracting partners to achieve those improvements. Read more… City of Oakland