I came across a flyer that is being recirculated around town. The flyer appears to be written by someone who is supporting the recycling contract that was signed with Sunset Waste and it basically amounts to being a personal attack on R&F Disposal and the previous city council.
The flyer was circulated in Spanish and we had it translated into English:
http://home.earthlink.net/~rrodartejr/mcrg/garbage/Flyer_Spanish.pdfhttp://home.earthlink.net/~rrodartejr/mcrg/garbage/Flyer_English.pdfKey Points that the anonymous author attempts to make:
1. McFarland residents are paying $17.25 per month per home for garbage and green waste service. Delano residents are paying $14.00 per month per home for the same service. The author claims that McFarland residents should be paying less than Delano residents because of the simple fact that McFarland has less residents. The author's logic here is so simplistic that I am convinced that this person has never owned their own business or taken a basic course in economics.
My response: Any business or organization with a larger volume of sales has more room to adjust and drop their pricing because the larger sales will offset a good portion of the lost profit margin. So because the company that services Delano can count on revenue from over 45,000 residents it can afford to take more risk and reduce their pricing. Where a company that has to rely on only 9,000 residents needs to be more careful and be more conservative to make sure they don't price their services too low. Also, the author failed to mention that the City of McFarland gets a 5% franchise fee from R&F. So in reality we actually pay ~$16.39 and the city keeps the rest. Another thing, why does the author assume that this justifies the council's decision to approve a service contract that is twice as expensive as the one that R&F proposed? Are they implying that this is a good manner of punishing R&F because they charge a bit more than Delano for our regular garbage service? 2. The author states that the contract that R&F has allows for 5% annually increases in their service charges and they have a contract with the city that will allow them to increase our rates.
My response: This is totally misrepresented and shows the author's lack of experience in negotiating service contracts. The 5% increase is a consumer price index (CPI) that is built into the contract to protect the company against years when our economy experiences large rates of inflation and when energy prices rise. The 5% is a maximum cap. So if our economy experiences a CPI increase of 10% in one year, R&F can only increase their service rates by 5%. 3. The author complains that the city awarded a 20 year contract to R&F.
My response: Most businesses that invest a significant amount of money expect long term contracts. No competent business person would invest half a million dollars and sign a short term contract of less than 10-15 years unless they had guarantees that their investment would yield a good return in that short period of time. The city council just approved a 40 year lease option on the community center. Consumers typically sign off on 15 and 30 year mortgages. Does a 20 year contract really sound unreasonable? Maybe for someone that has never put their own money on the line with a large investment.4. The author complains that the city loaned $300,000 to R&F for the purchase of a fleet of trucks.
My response: The $300,000 was actually an interest free loan from Kern County. The county provided this loan to R&F along with a grant for free trash cans during the time when the county decided to shutdown the Delano-McFarland landfill. The shutdown of the landfill had a negative impact on R&F's costs, R&F petitioned the county for assistance and their effort was rewarded. The city of Delano also received some grants from the county for this same reason. The loan disbursement is being administered by the City of McFarland. Proof of this can be found in this following page from the 2003 financial statements for the city. It clearly shows that Kern County Waste Management (KCWM) loaned $300,000 to the city for this purpose. KCWM Note Payable:http://home.earthlink.net/~rrodartejr/mcrg/garbage/finstat.pdfBottomline on this flyer, it is a bunch of garbage! No pun intended. I understand why the author was ashamed to print their name on this.