CYPRESS, Calif.—A city councilor is challenging the city’s latest contract with a trash vendor, citing a lack of transparency and fairness by extending it with rate increases, no bidding, and no termination clause, plus recent allegations against the vendor for corruption in a neighboring town.
During an April 11 city council meeting, Councilwoman Frances Marquez, elected in 2020, alleged the city extended its agreement with Valley Vista Services after years of rate increases on residents.
She additionally raised allegations of corruption against the vendor in the City of Industry.
“It is clear to me [the contract] was written to protect Valley Vista’s bottom line, not our residents. I do not see that due diligence was taken when this contract was written,” Marquez said during the meeting.
But according to Councilman Jon Peat, rate increases for the vendor started in 2017 and were necessary to remedy the vendor’s losses.
According to Peat, Valley Vista had under-estimated its cost since the two started working together in 2014 and had accumulated losses of about $1.8 million.
“The contract was very unbalanced [in 2017]. It was very much written in favor of the city and was not sustainable,” Peat told The Epoch Times.
Other factors contributing to the current 39 percent total price rise, according to Peat, include inflation, regulatory fees, and a new state law requiring cities to recycle organic waste.
After Valley Vista laid out reasons to start increasing its prices in 2017, the city formed a temporary committee to address its concerns, of which Peat was a member.
That committee agreed to most of the rate increases while relieving Valley Vista of some duties under the original contract, including decreasing the company’s bulk item pickups and graffiti removal.
Marquez was also concerned there is no termination clause in the current contract, which is proposed to run through 2037. Such is atypical for a city contract, she said.
But Peat indicated trash pickup contracts are different because vendors have so much outlay, such as the purchase of trucks and industrial machinery, and thus are more financially vulnerable if the city terminates the agreement before it expires. Such a long contract, he said, would actually lower rates as Valley Vista’s machinery would depreciate yearly.
Events escalated during the meeting when Marquez submitted a 2021 article published by the San Gabriel Valley Tribune detailing Valley Vista’s alleged decades of corruption in the city of Industry, including a state controller’s 2016 audit that found $12.3 million paid to a company owned by Valley Vista without adequate invoices or authorizations.
Peat said he was not aware of the allegations.
“I would look at that charge of corruption … with a lot of skepticism until it’s resolved,” Peat told The Epoch Times.
It is unclear if the rest of the council knew of the allegations prior to Marquez raising them.
Cypress has never audited its contract with Valley Vista, also a point of concern for critics of the city’s contract.
Peat said such audits were never necessary since the process of rate adjustments between the city and the vendor each year “is the same as an audit.”
Marquez said she will be meeting with City Manager Peter Grant in the next month to discuss drafting a possible ordinance to address her concerns.
