Saratoga News

City Council settles Green Valley lawsuit

Tipping fee reduced at the landfill

By Sarah Lombardo

The Saratoga City Council announced last week that a settlement has been reached in the lawsuit against the cities of Saratoga, Los Gatos, Monte Sereno and Campbell by Green Valley Disposal Company, Inc., and Guadalupe Rubbish Disposal Co. The settlement involves the dismissal of both cases and a reduction of the landfill "tipping fee" the cities are now paying.

"The method of arriving at that fee and the fee itself were the central issues of the lawsuit," City Attorney Mike Riback said. "The fee that has been established is substantially below what the company was asking for."

The settlement also involved the adoption of new contracts with both Green Valley and Guadalupe to replace previous agreements from the 1980s. The new agreements, Riback said, are "state of the art."

"[The Guadalupe contract] gets away from having to survey other landfill sites to see what they are charging and establishes a simple cost-of-living [CPI] method of adjusting the fee."

The new method, Riback stressed, not only is based on the CPI, but also states that the rates for garbage pick-up service in Saratoga can only go up by a maximum of 5 percent each year.

Both agreements also include protections for the cities in the way of performance standards, insurance against environmental damage or pollutants released in the course of the companies' service, and clearer wording about when a party in the agreement has violated a condition in the contract.

"It has very specific default provisions so it can be determined objectively if the terms and conditions of the agreement are being met, which the prior agreements didn't have," Riback said.

Green Valley president Gerard Wen complimented the city on winning such a favorable settlement, but also said he thought the "airtight" quality of the new contracts would make for better relations between the company and West Valley cities.

"I want to give credit to the city. They were tough negotiators," Wen said. "We actually suggested that we put some example situations in [the contract] so everybody would know how to interpret it. Now, the vagueness has been eliminated, and it has gone to a fixed price with a CPI adjustment only."

Saratoga Mayor Gillian Moran said the contracts could lead to fewer lawsuits.

The settlement "allows for a process of deciding compensation for Green Valley in the future that will be fair, easy to figure out and much less likely to land anyone in court," she said.

"This resolves a long and at times bitter dispute between the city and Green Valley. The negotiation and settlement process has allowed us to come together in a way that is fair to the city and the residents, and also to Green Valley," Moran said.

The battle has dragged on for two years--and, according to Interim City Manager Larry Perlin, cost Saratoga more than $53,000 in legal fees--and began when Green Valley and Guadalupe Rubbish filed a suit against the West Valley cities in August 1995. The companies claimed the cities were violating their contracts by not allowing Green Valley an agreed-upon margin of profit over costs. But each city and Green Valley disagreed about the costs of services and, thus, how much profit should be allowed.

Now that a settlement has been reached, what does this mean for residents?

"It means that the level of services will be, in effect, guaranteed to be the same, if not higher," Riback said. "It means continuity in that Green Valley will continue to be the service provider for residents through February 2007, and it will provide the users of the service with the knowledge that rates will never increase beyond 5 percent in any year."

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