Anonymous Flyer on Recyclable Garbage Issue
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.pdf
http://home.earthlink.net/~rrodartejr/mcrg/garbage/Flyer_English.pdf
Key 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.pdf
Bottomline 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.
posted by Rafael Rodarte @ 10:34 PM
6 comments
6 Comments:
Rodarte in your response you speek much about buisness. You state McFarland City should be run like a buisness! Business are built to make profits. What your saying is McFarland should charge more than the actual cost for the services they provide. McFarland is a non profit organization, therefore they do not fit under your way of thinking.
Your logic is contradictive! In one of your responses you state that R&F has to charge what they do "to be careful and conservative to make sure they don't price their services to low." In another response you disagree with the City's approval of the more expensive contract than R&F's. Are they not doing the same as R&F "making sure they don't price themselves to low."
How long were the past mayor and city council members in office? If you know the answer, then we should allow the present mayor and city council that much time to get it right. I'm sure the past Mayor and city council members made mistakes and learned form them. We should be considerate and fair to the present mayor and city council members. I'm sure when you started your job you didn't know then what you know now on how to do your job. No matter what your profession is , from farm laborer to Governor of California.
If McFarland was a non profit organization then how would they be able to repave roads, improve existing conditions, pay for the Mayor's wife to go to Korea!! McFarland is a business that makes profit that should be used to improve itself...if the current city council thinks otherwise its only a matter of time before the city has no budget because they believe in spending and not saving!! If both both Sunset and R&F gave bids to do the recycling and both gave amounts that they believe were enough to provide the service, then why wouldn't the city go with the lower bid?? Mr. Rodarte isn't contradicting himself, I think you are just confused. I'm not even a businees owner and I get it!!
HI Everybody,
It is great to see people voicing there opinions,concerns, questions, and most importantly getting involved. I feel like all the walking today was worth it from looking at all the recent comments not to mention all the phone calls. I'd like to remind everybody we will have a meeting January 14, Saturday at the Mouser Center at 12PM in regards to the recall, we'll answer any questions you have, and we will also help anyone who would like to register to vote. Hope to see you there!
To the person who thinks we should give the mayor more time to prove himself. He's been in office for nearly three years now, don't you think that is enough time? When I started my job as an engineer at Intel 5 years ago, I was given a 9 month probationary period to prove myself. I think the mayor has had more than enough time and I am no longer willing to pay the price for his mistakes.
Rodarte, It is very apparent that your just a computer technician by the comments you gave. You also claimed that you have some great knowledge with running a business but how can you get that from running a gas station with a handful of employees that are hired on a part-time basis so you won't be required to offer them benefits. McFarland's least experienced grape labor contractors has more business dealings than that! First, you can not compare a sales company with a government contracted company. A contracted company negotiates its revenues for the duration of that contract and has more control of its expenses and growth since their day to day operation and expenses are known. Therefore contracted companies and small business are more adapted to survive in cities like McFarland. A sales company must invest much more money in marketing, advertising and can only predict and not control its sales volume. That's why we always here about down-sizing and lay-offs with sales companies when there are unexpected shifts in the economy. Therefore R&F is more apt to be able to reduce its rates since they have exact figures for labor and equipment. If they didn't know this before hand, how could they submit a proposal!
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