San Angelo Mayoral Candidate Calls for Open Market for Trash Hauling

SAN ANGELO, TX — At the San Angelo Home Builders Association luncheon yesterday, one mayoral candidate said San Angelo should scrap part of the $260 million trash contract and make commercial trash collection an open market. This happened at the San Angelo HBA candidates' forum at noon yesterday. Candidates Tony Villarreal, Charlotte Farmer and Brenda Gunter participated. Zach Taylor was absent for a prior engagement.

Because of the 2014 trash contract, commercial trash pickup fees are controlled by City ordinance and the only vendor who can collect any trash within the city of San Angelo is Republic Services.

The trash conversation began when homebuilder Chad Decker stood up at the luncheon and said, “I’m going to be the bad guy and bring up trash.”

Decker said the homebuilders were promised by the City during the 2014 trash contract negotiations that temporary roll-off trash collection fees would not be impacted. Today, Republic Services, the winner of the trash contract, has run all competition out of town doubling the cost for construction trash services at job sites.

Decker explained it was the smaller homes he builds, the ones with tighter budgets, that are most impacted by the higher disposal costs.

“It actually makes these smaller homes, when you attach all of these extra fees on them, unaffordable to some people,” Decker said. He said disposal fees per new home increased from $1,800 per site to over $3,500.

“What happened to builders being able to make a choice?” Decker asked, harkening back to the days of an open market in San Angelo.

There are two general types of commercial trash collection. Dumpsters (and smaller carts) at business addresses, and temporary roll-off trash collection, usually in 20-40-foot metal bins. Decker is concerned about the latter.

None of the candidates could answer exactly how the fees doubled. Here’s a synopsis of why, based upon our reporting:

When Republic signed the City trash contract in July 2014, and the City gave Republic the right or option to enforce its granted exclusivity in-market. Up until San Angelo’s trash contract provision, every municipality in Texas exempted temporary roll-off trash from exclusivity arrangements. Most relied upon an obscure 2007 Texas law that prohibited government entities from making temporary trash pickup eligible for exclusive arrangements.

Competing trash hauler Texas Disposal Systems began offering competition for construction trash right after the City chose Republic in the April 2014 bid process. TDS cited the 2007 Texas statute as giving them that right. This was likely the first time homebuilders benefitted from competition locally. A small start-up also began competing with Republic and TDS for building construction business, and by the end of 2016 was the largest provider of those services.

The 2014 City contract with Republic specifies that Republic may litigate to protect its exclusivity, relieving the City of the cost for doing so. Republic sued TDS for competing in the local construction market before the ink was dry on the 2014 trash contract. Republic lost at the federal district court level, but won at the 5^th Circuit of Appeals near the end of 2016. After Republic won its appeal, TDS acquiesced and ceased construction trash hauling March 1.  The small entrepreneurs, J-Bar Solutions, shutdown voluntarily as well at the end of February. With no competition, and high rates set by City ordinance, disposal costs at construction job sites immediately doubled.

“One of the things we can do with the contract is, it can be reverted back to an open market, where Republic doesn’t have exclusive rights in the city. [And where] competition can happen,” Villarreal said. “Competition is good. I think that is one of the things that needs to be looked at immediately. And other parts of the contract as well.”

He added, “I have some friends who work for the senator’s office, and some representatives’ offices, and they’re looking at the contract to give us some options as soon as they’re available. Definitely, we should be looking at those options to make it an open market where we do have competition.”

LIVE! asked Villarreal to tell us more about the “senator” and “representative(s)”; however, Villarreal would not divulge who they were without their permission. This morning, Villarreal clarified that he was talking to staffers of a state senator, but the staffers asked him to remain mum on who they were.

“They are friends of mine who I’ve know for years and years, and they serve in that capacity. So that’s the expertise that we need,” he said.

Before the HBA luncheon, text messages were passed around among the membership that accused Councilwoman Charlotte Farmer of making the promise in 2014 that homebuilder job site disposal fees would not be affected. That promise was made sometime during the trash contract negotiations in 2014. Farmer is running for mayor now.

“Chad, before we get into details, I would like to sit down with you and find out when the conversation took place and who gave you that information, [find out who was] that person giving that information, and if it was during the negotiations process. That has a lot to do with the answer to your question, and I am more than happy to look into that and see what transpired,” she said.

Gunter keyed in on Decker’s suggestion that the monopoly pricing for construction job site disposal impacts the cost of less expensive homes the greatest.

“One of the more important things we need in this city is affordable housing,” Gunter said. “We live in a city where we have a poverty level that is higher than many other cities our size, and we’d like to help raise people out of poverty. And that means [having] affordable housing. Issues like trash, water-sewer rates, property tax rates, all of those issues impact our community. The only way to bring people out of debt and poverty is to have growth and development. These are the things that will change the dynamics of this town: job growth and opportunity.”

She also said, “When we do things like that trash rate, we hurt jobs and opportunity. So we have to look at the things like the trash contract to make it more affordable for the people.”