Los Gatos Weekly-Times

Settlement announcement expected in trash dispute

By Sarah Lombardo and Clarence Cromwell

A settlement is expected this week in the two-year-old dispute over rates between five West Valley cities and the companies that pick up and dispose of their trash. And the settlement will mean bigger garbage bills in Monte Sereno and Saratoga, city officials confirmed last week, as the trash companies were still scrutinizing the proposed settlement.

Saratoga's City Council is expected to approve the contract first at its regularly scheduled July 2 meeting. Monte Sereno is to follow on July 15.

But before city councils can ratify the agreement, proposed jointly by the five West Valley cities, the managers of Guadalupe Landfill and Green Valley Disposal Co. must accept their respective 60-page agreements. Then both documents can be approved by each of the cities.

Monte Sereno City Manager Gay Strand would not say how much rates are to increase in the city, but acknowledged that the city will see an increase.

"Monte Sereno's rates haven't gone up in 212 years, and they were slated to go up, anyway," Strand said.

In Saratoga, city officials said they are happy with the settlement, reportedly involving a 5 percent raise in residential and commercial garbage rates for customers in that city.

In Los Gatos, if the agreement goes through, no rate change is expected for a long time, said Town Manager David Knapp. "Our rate is about where it should be," Knapp said.

Los Gatos will do well under the settlement, partly because Green Valley and Guadalupe would not be able to charge customers the "tipping fee" collected when a garbage truck enters the dump. Knapp said many of the concessions made to Green Valley under the settlement will not affect Los Gatos, although they will mean rate increases in other cities.

The agreement wraps up years of contention, folding together the lawsuit and Green Valley's current trash-rate application into one settlement. The rate dispute started when Green Valley and Guadalupe Landfill sued the cities in August 1995, alleging that trash rates allowed by the cities did not give Green Valley the margin of profit specified in agreements. The councils in each municipality hold the right to award contracts for trash disposal and also to regulate the rates charged to customers.

The company's original contract allowed Green Valley to bill customers for its costs, plus a 5 percent profit--but the company and every city had a different idea of what costs could be legitimately charged to customers. For example, Los Gatos didn't want Green Valley's to include taxes from San Jose and the county in expenses because that would allow the company not only to make customers pay company taxes, but also to earn a 5 percent profit on the taxes paid. Green Valley disagreed.

In the midst of the suit, Green Valley filed an application with the cities to raise its rates as much as 87 percent, in the case of Monte Sereno.

This action fueled talk of discarding the "cost-plus" contract and allowing Green Valley a tiny increase every year, based on the consumer price index. The original contract remains in place.

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