The Cypress City council last Monday weathered a withering verbal barrage from angry citizens, yet ignoring their pleas to not give Valley View Services a 10-year exemption without a bid process and voted 3-1-1 to accept a higher rate structure for the waste hauler that will generate huge sums for the company.
Mayor Paulo Morales, Council member Jon Peat and Council member Scott Minikus voted in favor of the rate increase, Mayor Pro-Tem Ann Hertz-Mallari recused herself and Council member Frances Marquez voted no, but not before many longtime residents had their say.
During a three-hour session, the council’s meeting room was filled with angry citizens there to protest the cities long and somewhat sordid relationship with VVS.
The City Council voted back in November to award a massive rate increase to VVS, a provision that also included a rate adjustment and a potential 10-year extension, which the city claimed is necessary to satisfy the state’s new organic waste requirements.
The city approved a proposed rate structure at their Nov. 22 that will raise rates more than 30 percent for residential trash customers, and a similar amount for commercial customers. Marquez was the only no vote.
In addition, VVS will get an additional bump in July and potential cost of living increases allowed in the new agreement.
Under Proposition 218, cities are allowed to raise taxes, rates, etc. without a vote of the people, provided that 50 percent, plus one, of property (parcel) owners do not object.
Therefore, Cypress residents, in a pandemic and enjoying the holidays, were given the holiday period and until Monday’s meeting to have 7,300 parcel owners object in writing to the new VVS agreement.
More than 660 parcel owners did object, as citizens delivered the written petitions and launched a verbal assault on the way the city council is seemingly coddling VVS.
In addition, most residents who did understand that this was underway, though that the additional 10-year contract extension was also conditional to deadline.
When Council member Jon Peat said the additional 10-year extension was already signed, sealed and delivered to VVS, residents were both shocked and disheartened. Moreover, he suggested the city could suffer legal losses if for any reason now they breached the agreement.
Another council member, Scott Minikus, surmised that it might cost the city as much as $100 million if they broke the agreement with VVS.
Nevertheless, residents who spoke at the meeting said they were deeply offended by the way the Council is conducting public business.
George Pardon, an activist for “responsible development,” bitterly complained and wondered why the Cypress Council continues to bail out VVS and award them no bid agreements.
Pardon first objected to a potential conflict of interest by Hertz-Mallari by Peat, both of whom are affiliated with the Boys and Girls Club of Anaheim Cypress. Pardon said VVS has provided free trash services for 35 years and company executives donate to the charity.
Hertz-Mallari protested, saying the city’s legal counsel told her she had no conflict, “and I can absolutely tell you there is no conflict…donations have absolutely no impact on my opinion or my vote,” she said, but “to avoid any questions or appearances of conflict, I will recuse myself from this vote.”
Peat, however, refused to recuse himself.
Pardon explained that the original Valley Vista contract, approved in 2014, has now been extended to 2037 without any bids from other companies. He called the council’s action “unconscionable.”
Further, Pardon said when it was clear in 2017, even from an independent consultant, that VVS was “not financially sustainable,” and “not deserving of a requested rate increase,” the Council not only gave the rate increase to them but also “substantially reduced the kind of money they were supposed to reimburse the city.”
“While I understand that there is a need for negotiations on this organic project, to extend it for another 10 years (until 2037) just seems unconscionable and clearly completely outside of the scope of the original request for proposals,” said Pardon.
Pardon is a retired financial executive who served within the California State University system.
“I don’t know why they won’t put the contract out for bid, unless they are concerned VVS won’t be contractor,” he said. “Every time they (VVS) doesn’t perform, we bail them out,” he said.
“And it’s not like you’re locking in a great price (with VVS). In the recent bid process at Los Alamitos, they evaluated the bid proposals of seven different solid waste companies and Valley Vista proposed the highest monthly residential rate of the seven companies evaluated.”
David Burke, the founder of a nonprofit in Cypress, said “frankly, this isn’t even about the competitive bidding anymore, is it? Because I was shocked, like I think a lot of people were surprised to learn that you’ve sort of already made the agreement and that this public hearing is more of a farce.”
Another resident, Lisa Belfius, said “originally, when you guys set the contract, there was an issue of some money laundering with the original president of the company and we’re still here with them. I don’t understand why you guys can’t find another company. My trash hasn’t been picked up every single time. I have to call them (VVS). So obviously that’s a breach of contract right there.”
Mayor Paulo Morales nonetheless said VVS had been mailing stuff for more than a year regarding organic waste and the city had mailed everyone a notice regarding the impending change. He implied it was the residents’ fault, that they should pay more attention to the mail.
“I heard about not everyone being computer literate, or has one (a computer) at home,” the mayor said, explained that he understood not everyone reads all their mail, “but I received them, more than one,” the mayor said.
“I’m not saying that’s too bad on your part, but folks, Valley Vista has been sending these mailers out since last spring,” he said. “The state has mandated us to do this,” said Morales. “We don’t like it either.”
Robert Anderson said during public comment that “I am amazed at how little communication I receive from the city. I received nothing in the mail or communication of any sort on this issue,” claimed resident Robert Anderson.
There were three public comment sessions during the meeting, two sessions of oral communications and one public hearing regarding the new Valley Vista rates.
Most citizens hinted a disheartened tone at what they claimed was the cities continuing lack of interest in listening to residents and diversionary tactics in get this deal across the finish line.
One resident, Nelson MaChin, called Cypress a mini “House of Cards.” “This is not entertainment but very disheartening to see, especially bullying and beating up on Council member Frances Marquez,” he said. “The trash contract has to be put out to bid.”
Another resident, Beatrice McCallson, who said she is a 50+ years resident of Cypress, said “It’s kind of disheartening to come to this in our city. You think that that happens in other places and not where you live,” she said.
“I did not know about this. I only found out about this last week, it seems to me I agree with a lot of people who have already spoken, there should be community participation before you make this decision, and not give us one month to find out about it. And then tell us oh, just by the way, it’s too late. And if you want to do anything about it, you’re going to suffer financial consequences. That’s just wrong on every level,” she said.
A resident since the 1970’s, Robin Itzler said “the city Council just doesn’t respond to the people. You make decisions, then you invite us in to talk to you, just to get it off our chests, then go on to do whatever you want. It’s always Valley Vista versus Cypress citizens and Valley Vista wins.”
Sangeeta Swenson said, “I’m here because our council members, with the exception of one (Council member Marquez) are not representing our interests in the trash contract and our interests have not been represented and other areas as well.”
“You have an ethical, civic, financial and legal responsibility. And we will hold you accountable to that. A company that has already been fined, or illegally funding campaigns within our city deserves zero city contracts,” said Swenson.
“The conversation happening right now is pretty much reminiscent of every conversation that I feel like happened in this room every few weeks,” said Brittney Cook. “Citizens don’t feel heard, respected, or acknowledged. I want to say that just because we can do something, doesn’t mean we should.”
“There are multiple public forums are taking place to get the public’s opinion and concerns and things of that nature. Why was that not done on this,” asked Dr. Malini Nagpal? “Is it because the council members already knew that the contract was signed and sealed so what’s the point,” she wondered?
Another longtime resident, Beth Culver, said, “I, too, am concerned why this contract wasn’t opened for bids. It drives me nuts. Why, all of a sudden, is this a done deal, you didn’t include us, you didn’t ask us anything about it until it was all over with,” she asked?
Culver was not alone in suggesting Valley Vista is now making residents work harder by doing all the separating and charging more for it. Moreover, she predicted a critter invasion with all the food lying around waiting for pickup.
“Who are you going to send out once you get this organic green garbage cans, these little kitchen caddies. Are you going to have a racoon and opossum patrol, and the rat poop patrol? I already have large animals crossing my lawn. Can you imagine what it’s going to be like when you have delightful stuff sitting there in a can? The thought is nauseating,” said Culver.
“The time to recuse yourselves seems to have passed several months ago,” said resident Anthony Uy. He pleaded with the Council to better explain themselves “because It’s coming off that either you guys are compromised or corrupt or incompetent and I’d like to believe none of that.”
“It’s pretty embarrassing,” said Uy. “If the city manager and city attorney are worth their salt, they can figure out how to challenge this contract. And if not, I pray that we do not give them any ridiculous raises and bonuses like we’ve seen in the past,” he said (City Manager Peter Grant, who made $386, 783.25 in pay and benefits in 2020*, was given a substantial raise in 2021),
“There’s something wrong, you can’t reward people for putting us in this position.”
Peat however, strongly defended the Valley Vista proposal, saying in effect, it was a good deal for Cypress.
“Cypress is lower than all of the other cities in our immediate area except for the one off, Los Alamitos. Los Al is a different city, they have different requirements and I congratulate Los Alamitos and Universal Waste Systems for coming up with an agreement,” said Peat.
“That agreement is only applicable to the residents of Los Alamitos,” said Peat.
Peat said he did some research and discovered that Universal Waste Systems, the company that is now providing services in Los Alamitos, took over the waste collection services of Maywood, CA (27,000 residents) to provide the organics, recycling and waste collection.
While the rate was $16.43 per month when they took over the service, the rates in 2022 will be $22.89, which Peat said is “right in the middle of market pricing we have identified and higher than the city of Cypress (even with the rate increase).
“The company that everybody keeps citing in the city of Los Alamitos as having such a great rate is charging a rate higher than proposed in the city of Cypress.
“Mr. Mayor, I strongly support approving this, I know there are people who will disagree with me, but I have tried to present the facts on this issue.”
Marquez disagreed and suggested the 10-year contract extension granted to Valley Vista effective makes it a “sole source contract, meaning it did not go out for bid.”
Marquez said she thought the Valley Vista contract is a violation of the city charter, Section 10-12. ‘The extended term and significant rate hike are examples of what we call “scope creep, where the scope of a contract expands beyond the original term significantly modifying the end result.”
Had the city had the benefit of a 20-year RFP process instead of just 10 years in 2014, Marquez said “we would have had the benefit of additional bidders and lower rates,” she added.
“Instead, this proposal seeks to circumvent a competitive bid process be extending the term of the first contract without proper justification and without any tangible benefits to the citizens of Cypress,” said Marquez. “In fact, this proposal is to the citizens detriment.”
“I see no justification to lock in the citizens of Cypress to a contract that includes a 32 percent rate increase for the next 13 years,” said Marquez.
She asked for a proper bid and Request for Proposal process and asked for a complete review of the way Cypress awards contracts and suggested everyone significantly involved in the entire process should be forced to submit signed Conflict of Interest declarations “that discloses any conflict they may have with the list of contractors that have submitted proposals.”
She said the cities of La Palma, Cerritos, Buena Park, Fullerton, Garden Grove and Los Al all went out to bid for new waste collection services and Cypress should too.
City attorney Fred Galante, however, said the Valley Vista agreement is a franchise agreement, which are allowed up to 25 years under the city charter, so does not violate the city charter.
Citizens applauded Marquez, who has been under pressure during recent meetings. Even at the start of Monday’s meeting, Morales inexplicitly had Galante spend 20 minutes going over the city charter’s decorum policy.
“While in session, its members must preserve order and decorum,” said Galante in his 20-minute presentation, which gave Mayor Paulo Morales the ability to not call on her later in the meeting, which he used during the vote on the Valley Vista rate increase.
Before the public hearing on the Valley Vista rates began, citizens took to the mic during the first oral communications session to voice their concerns and express their support for Marquez.
“I want to extend my gratitude to Councilmember Marquez for asking the tough questions about the conflict of interests that council members seem to have as they conduct city business, which is made apparent by how they are proceeding on this contract,” said Sangeeta Swenson.
Demeaning treatment of Dr. Marquez, said Dr. Malini Nagpal, “is insulting to all women and to all young people of color in our community. Yelling, screaming, rolling your eyes, dismissive nonverbal behaviors.”
She said the “side chattering” that occurs when Marquez speaks, is “not only the basic tenets of harassment, but also perpetuate discrimination that we women of color can recognize very clearly when it happens.”
Katie Shapiro said her voice represented “Cypress citizens who don’t have a voice here today but want to offer support to Dr. Marquez.” Shapiro said the only thing important enough for her to spend time away from her family was “to advocate for the only female voice I know that represents me in this room.”
Another Cypress woman, Maria Krekos, complained about the “disturbing behavior displayed by councilmember Peat towards Councilmember Marquez. “Nobody on this council should display such aggression,” she said.
“Nobody in this room is better than anyone else, regardless of job title or job experience. I don’t know what was more disturbing, the ease of belittling councilmember Marquez by Council member Peat or the lack of leadership to intervene by the mayor or any other council member.”
Following the meeting, questions began to swirl about what exactly the Council had voted on Jan. 22, and Pardon said he fired off an email to Grant.
“The comments made by Council Member Peat at the January 24 meeting raised a question about what would have changed had 7,300 protest letters been gathered. My presumption was that it would have overturned all the actions approved in November related to the Valley Vista agreement,” said Pardon in an email to the city manager.
“My question is: Would both the rate increases and the 10-year extension to the agreement been overturned if there had been 7,300 letters submitted or just the rates or some other combination?”
As of press time, Pardon said he had not received an answer.
Fireworks are expected at next Monday’s meeting as Peat wants the city now “censure” Marquez for supposedly revealing closed session comments in public.
Marquez, in an interview this week, said she will continue to fight for the business of Cypress to be conducted in public view and would consider a censure a “badge of honor that I would proudly wear for the sake of the citizens of Cypress.”
