Complaints: City’s Wastehauling Program Failing Business Owners, Consumers

January 11, 2018 by · Leave a Comment 

In response to thousands of complaints about the city’s new commercial wastehauling program, Los Angeles City Councilman Paul Koretz introduced a motion Wednesday that seeks information on service providers while threatening to cancel any that are not meeting their obligations.

The RecycLA went into effect in July 2017 and has been rife with problems, as the city has received 28,000 complaints about missed collections and 1,500 bill inspections revealing 1,000 inaccurate bills, the motion states.

“What has been happening is not the world-class commercial waste-hauling system the City Council voted for, it is not the system that LA Sanitation designed, and we must not put up with any companies who are not performing to the high standards we set. Period,” Koretz said.

The franchise waste hauling system that became operational July 1 is meant to expand recycling opportunities to thousands of businesses and apartment buildings while also cutting down on pollution by reducing the number of trucks on the street.

Under the RecycLA system, seven companies handle an estimated $3.5 billion in commercial waste hauling in Los Angeles. Each company is assigned as the sole trash hauler for commercial sites and multi-family complexes in one or more of the city’s 11 zones.

Some customers have complained about skyrocketing costs under the new program, while maintaining that the quality of service has fallen, and several City Council members have said their offices have been flooded with calls since it was implemented.

Some business and apartment complexes have reported bills that were as high as four times the previous rate while receiving the same or worse service.

“LASAN appreciates the commitment of the councilmembers to the success of the program, and will continue to work with them to hold the service providers accountable for providing RecycLA customers with the timely and responsive services they expect and deserve,” Elena Stern, a spokeswoman for the Public Works Department, told City News Service.

Koretz’s motion would direct the Bureau of Sanitation to report in 30 days to the City Council on whether certain RecycLA service providers have failed to fulfill their obligations, and whether to “proceed with taking the necessary steps to terminate their individual contracts for such substantial failure.”

The motion comes ahead of a Feb. 1 deadline when the city can begin to levy fines or move to cancel contracts with RecycLA service providers.

“When I voted for this, we were promised a world-class system. We are not going to stop demanding improvements in RecycLA until we get just that,” Koretz said. “If any of the service providers doing business with the city don’t understand or can’t live up to their contractual obligations, we are happy to show them the door and replace them with companies who will.”

In response to the billing issues, the city created an online portal in December that allows customers to submit billing disputes and get information about trash pickup.

“Inappropriate overcharges for trash pickup are unacceptable, so we are making sure that Angelenos can more easily submit billing disputes, and better understand how to keep costs as low as possible,” Mayor Eric Garcetti said in December.

“I know this transition has been tough for some customers — so we’ll keep working hard to ensure that RecycLA works for people in this city, and meets our goal to make L.A. cleaner, greener, and healthier.”

Garcetti’s office said at the time that more than three-quarters of customers pay only the base rate, but some have reported sudden cost increases.

Koretz is not the only council member to threaten to cancel contracts with RecycLA service providers for poor service or high rates.

About six weeks after the program started and the negative reports
were starting to roll in, Councilman Paul Krekorian said during an August 2017 committee meeting that he hoped companies granted a monopoly were not “doubling down by increasing rates, by manipulating the bin handling in a way that will oversell their service to their customers. In fact, quite to the mcontrary, I expect those providers who have been given this monopoly to go the other way to bend over backwards and ensure that each and every customer’s needs are met.”

He added, “I, for one, will be looking at changes in this policy if I don’t see that result.”

L.A. Adopts ‘Social Responsibility’ Rules for Banks Working With City

December 14, 2017 by · Leave a Comment 

The Los Angeles City Council Wednesday approved more stringent rules for banks that want to do business with the city, which could result in Los Angeles divesting its funds from Wells Fargo over its fake accounts scandal and support of the Dakota Access Pipeline.

“We all realize that banks have done such bad things that we couldn’t have written it if it were fiction, or imagined that companies would be creating phony bank accounts and checking accounts and making phony loans and doing all kinds of things without even letting the customer know,” Councilman Paul Koretz said.

The city’s efforts to change the rules for its banking partners was undertaken as a result of the Wells Fargo fake accounts scandal, in which 3.4 million accounts were fraudulently created by employees given aggressive sales goals, and its support of the controversial pipeline. The city does the majority of its banking with Wells Fargo through roughly 800 different accounts.

Some of the rules were approved immediately in a 14-0 vote that drafted new language for a request for proposals for banks, and others were included in a 12-0 vote that directs the city attorney to amend the city’s Responsible Banking Ordinance. The city attorney would need to make the changes to the ordinance, and the council would have to approve of the updated language in a future vote.

The approved rules include “social responsibility” factors in the RFP that will be weighed heavily when the city considers proposals from banks.

Councilman Paul Krekorian said at a recent Budget and Finance Committee meeting that “the weight of the social responsibility component” in the new rules would “exceed what has been done by any other city.”

Wells Fargo’s financial support of the controversial Dakota Access Pipeline was also cited in a council motion as motivation for the city to explore divesting its funds from the bank while outlining criteria and standards the city would have in any future agreements with financial institutions.

“It’s time for us to endeavor to only do business with ethical financial institutions that have high standards and ethical standards. This is a very fiscally sound approach to looking at what divestment will mean, and it’s a very complicated and intricate matter,” Councilman Mitch O’Farrell said in June when he co-introduced the motion with Koretz.

In response to the fake accounts scandal, some council members expressed a desire to ban banks the city does business with from having individual or branch-level sales goals, but the Budget and Finance Committee was told several times by city staff that banning banks from having sales goals would be too difficult to monitor and could eliminate all possible bidders.

“Disallowance of sales goals may result in no or limited eligible bidders qualified to provide the city’s general banking services,” according to a report from the Office of Finance.

The committee then shifted to the idea of requiring banks to disclose sales goals practices in their bids, and an amending motion that was approved as part of the vote on the Responsible Banking Ordinance included a request for the city attorney to include the requirement that banks disclose their branch-level or individual sales goals and if they would promote or fire an employee based on them.

“The disclosure would solve a lot of the problems, because if they had a set of sales goals that were not humanly possible in the normal course of business, we would be able to spot that relatively easily, so if you had Wells Fargo-style sales goals it would be pretty obvious that no one could meet those without engaging in inappropriate behavior,” Koretz said at a previous committee meeting.

The amendment was introduced by Councilwoman Nury Martinez.

“As city leaders, we must expect the highest level of financial and social responsibility from our banking and service providers. While the city is not a regulatory agency, our taxpayers deserve to know that they’re money is being handled the right way, by the right banks,” she said.

The new social responsibility score would include things like a bank’s Community Reinvestment Act score, which tracks its level of lending, investments and services in low- and moderate-income neighborhoods. Wells Fargo’s score took a significant hit due to the fake accounts scandal.

Under the new RFP guidelines, the first phase of a banking bid will focus on its financial and organizational capacity while giving it a total score up to 100. The second phase of scoring will include a possible 30 points for its social responsibility score on top of the first phase score, for a total possible score of 130.

The new rules in the RBO will also require that a bank disclose any recent regulatory action taken against it, and that it have whistleblower protections and certify that it is in compliance with all applicable consumer financial protection laws.

In a settlement last year stemming from the fake accounts scandal, Wells Fargo paid $50 million in civil penalties to the city of Los Angeles and $135 million to two federal agencies, and was ordered to provide restitution to affected customers.

The Dakota Access Pipeline that runs more than 1,100 miles from North Dakota to Illinois sparked a months-long protest near the Standing Rock Sioux Reservation. Members of the tribe opposed the project on grounds that it passed over a sacred burial ground and would threaten their water source.

Pipeline construction was halted in November 2016 by the Army Corps of Engineers, but President Donald Trump signed an executive order in January instructing the agency to finish the project. Oil has been flowing through the pipeline since March.

Wells Fargo executives said in a February statement that Wells Fargo is not the lead bank on the project but merely one of 17 financial institutions that made a loan to the developers of the pipeline. The company said it lent $120 million to the project.

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