Garbage Monopolies Coming to L.A.?
Matthew, Nancy and Greg Kotanjian: Small firms, with their secure local jobs, expect to be wiped out.
PHOTO BY TED SOQUI
The Kotanjian family has been picking up L.A.'s garbage for more than 100 years. First there was Simun Kazarian, who walked dirt roads picking up trash in the 1900s with a horse and wagon. In the 1920s, his son George started AAA Rubbish. George's nephew, Samuel Kotanjian, bought him out after returning from service in World War II. He passed it to his son, Greg, who runs the Bell Gardens–based business with his wife, brother and two sons, Phillip and Matthew.
"When we were 8 or 9 years old, my grandfather would pick us up from school in one of our trucks," Matthew Kotanjian recalls. "He taught us how to operate controls. We just love what we do."
He adds: "Now they wanna throw us out."
In Los Angeles, businesses and apartment buildings aren't served by the Sanitation Department trucks that stop at single-family homes but by private, independent waste haulers who take some 2.1 million tons of trash to landfills yearly.
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A plan being pushed through the City Council by the Los Angeles Alliance for a New Economy (LAANE), the National Resources Defense Council and the Sierra Club Angeles Chapter would set up exclusive franchises by carving L.A. into 11 sectors, with haulers bidding to entirely control one.
Trash removal from apartments and commercial buildings, now akin to ordering cable or satellite from various choices, would become more like having the monopoly public utility DWP, where there's no choice. And like the Department of Water and Power, the rates would no longer be set by the market but decided by — and upped by — the L.A. City Council.
Matthew Kotanjian sits in the tiny cab of his truck, about the size of a middle row in the coach section of a 747. He wears a Bluetooth headset, wraparound shades, and a poker face. His seat squeaks incessantly as the truck bounces along the desperately cracked streets of South Central.
Matthew says that if unions and environmental groups push the monopoly system through this month, his family's 100-year-old business likely will be wiped out.
With nine drivers and 1,400 hauling accounts, AAA Rubbish is not quite big enough to become a monopoly picking up big-building trash for 9 percent of L.A. They're a boutique company that specializes in custom service. "Every single customer we have, I know the sound of their voice," Kotanjian says.
Anyone who thinks garbagemen would not be proud of what they do hasn't met the Kotanjians. They love to work.
"When I'm on my deathbed, I'm gonna say, I wish I coulda worked harder," says Matthew. Which explains why AAA Rubbish is still around.
"We've taken on big companies, Fortune 500 companies," Matthew says. But, "I never in my life thought that the City of L.A. would be our biggest competitor."
But Greg Good, of the union advocacy group LAANE, insists, "Today, we have an antiquated and archaic system. ... It's a system that perpetuates overlapping truck haulers." He claims that, in some areas, "Five, six, seven waste haulers all drive on the same streets."
LAANE, the Sierra Club and NRDC officials theorize that, by installing exclusive monopolies, the lucky 11 haulers selected will create efficient routes to minimize miles driven. This will, they hope, reduce garbage-truck traffic and air pollution.
However, the proponents aim extremely high by claiming their plan will radically increase recycling and help achieve L.A.'s mythic-sounding "zero waste" goal.
By touting that goal for the year 2030, city officials really mean "very little waste." Getting to zero "is impossible," agrees Hillary Gordon of the Sierra Club. "But [cutting] 90 percent to 95 percent is possible."
Greg Kotanjian, the patriarch of AAA, scoffs, "It's not gonna happen. For a township to have zero waste, you're gonna have to burn off the excess."
AAA Rubbish produces zero waste — sort of. Its trucks take their trash to a transfer station, where it is separated. Some is recycled; the rest goes to an incinerator that creates energy that can be used instead of fossil fuels.
But to Gordon, that does not qualify as "zero waste" — which is more a philosophical ideal than a concrete benchmark.
"Incineration, even if it creates energy — it's destroying all those resources," Gordon says. "Material that goes into the incinerator is not there anymore."
Gordon dreams of a monopoly franchise system in which companies compete to recycle far more than they do now — in hopes of impressing City Hall and being awarded one of the lucrative 11 franchises.
But recycling costs more than dumping, and that means apartment dwellers and businesses in L.A. can expect to pay more if the City Council approves the plan. "Basically they're saying, 'We're going to raise the cost of running a business in Los Angeles in order to hopefully increase the amount of recycling we do,' " says Adrian Moore at the Reason Foundation.
Because the haulers would be monopolies, "Almost universally ... quality goes down and cost goes up, because there's no incentive to improve quality and reduce cost," Moore says.
The plan defies the trend in many U.S. cities, where mayors and city councils are privatizing services. "Leave it to L.A. to say, 'How can we kill more jobs?' " Moore quips.
And, some critics suggest, reduce the quality of service, to boot.
Take the massive Park La Brea, a 60-year-old complex on Fairfax Avenue composed of 18 high-rises with 4,255 apartment units, spread over 50 acres. For more than five decades, its trash has been picked up by A&B Disposal, owned by the Mazaroff family. The Mazaroffs created specialized bins that fit into the Park La Brea towers to catch trash dumped by residents into chutes, which then are carried by trucks through the complex's narrow, private streets.
A&B comes daily and is always on-call.
"We really don't think we're going to get the level of service and understanding of our needs" if forced by the City Council to do business with a big monopoly, says Ron Bowdoin, Park La Brea's general manager.
City Administrative Officer Miguel Santana, the candid fiscal adviser to Mayor Antonio Villaraigosa and the City Council, opposes the plan for the same reason Bowdoin does. "Businesses, if they're not happy with their service, if their needs can't be met, they'd be stuck using the hauler the city selects for them," Santana says.
He says many of LAANE's environmental goals could be met if the City Council simply mandated more stringent benchmarks for recycling and fuel-efficiency standards.
Of course, that probably wouldn't get L.A. to zero waste, but then again, neither does "zero waste."
Sean Rossall of Cerrell Associates, a lobbying firm hired by a small group of trash haulers including AAA, says independent haulers, in response to the union plan that threatens several hundred jobs, are offering the City Council the same basic deal: "Cleaner trucks on the road, better workplace safety and more recycling."
While AAA hires only union drivers, not all small trash haulers do so — and therein lies the rub. Opponents of the monopoly franchise plan believe the real intent is to turn the private L.A. trash business into a union membership push, then apologize later for skyrocketing trash-removal costs and monopoly bad behavior.
"Unfortunately, this city is run by labor," says Stuart Waldman, president of the Valley Industry & Commerce Association. "Every franchise will [be awarded by the City Council] only to labor-friendly companies if this passes — regardless of what the cost is."
LAANE's Good calls that "a red herring," insisting that requiring union labor is "not on the table."
He says the exclusive franchises would hold haulers accountable, since officials would have fewer companies to regulate. He claims the free market in Los Angeles fails to "serve the largest interests of the community" by wastefully sending trucks all over town and not pursuing the utopian zero-waste plan.
Matthew Kotanjian finishes up his South Central route and drives over to Southland Disposal in East Los Angeles, where the garbage is separated. Some will be recycled, the rest burned for energy. His dad, Greg, calls him, wanting to know where he is. "I'll be back soon, Pop," he says.
Greg is 66 and all that bouncing can wreck a man's back. But he can hardly believe that, after more than 100 years, his family soon could be out of business. "To get thrown out on your ears after all these years of working," he says. "All the politics ... I'm disgusted at the whole arrangement."
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