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Lynwood Rejects Waste Alliance

August 16, 2003|Richard Marosi | Times Staff Writer

The Lynwood City Council, at a special meeting Friday, decided against forming a controversial public-private partnership with a Newport Beach businessman to handle the city's waste collection.

Despite appeals from businessman Kosti Shirvanian, who said his venture is the "future of the industry,'' the council awarded the contract to a competitor that the city staff had concluded would provide greater revenue.

Mayor Fernando Pedroza and council members Arturo Reyes and Paul Richards voted to award the seven-year contract to Consolidated Disposal Service. The deal will not be final until council members approve the completed contract at a future meeting.

The vote followed an acrimonious session attended by representatives and attorneys from several waste haulers, as well as residents from Gardena, where the venture also is being considered. Shirvanian, the owner of Waste Resources Inc., said he had missed a campaign fundraiser with President George W. Bush to make his pitch to the Lynwood council.

Under terms of his proposal, Lynwood would have received 40%, about $110,000 annually, of trash collection profits. Shirvanian also would have paid an annual $688,000 franchise fee.

But financial analyses by city officials showed that the Consolidated proposal over a 10-year period would generate at least $400,000 more than the Waste Resources proposal. Officials said trash rates also could increase under the revenue projections by Waste Resources.

Questions have lingered about the legality of Shirvanian's proposal. Some trash company representatives and residents have said the venture violates Proposition 218, which prohibits municipalities from profiting from public services.

Shirvanian declined to comment after the meeting. His attorney, Robert Philibosian, declined to comment about the proposal's legal status.

Adding to the controversy is Shirvanian's background. He was under federal investigation for suspected political corruption and bribery but was never charged.

Urging the council to reject the deal, three Gardena residents raised questions about the venture's legal status. One woman cited a garbage contract in nearby Carson that recently led to guilty pleas by several officials on extortion charges.

"Don't get involved in those problems,'' she said. "Keep it clean."

Pedroza, who had been noncommittal, angrily denounced the publicity that has surrounded the process, and said it had not swayed his opinion.

Ultimately, Pedroza said, he was rejecting the Waste Resources proposal because the company had not provided all the information he needed to make a decision.

"I'm not comfortable with the public-private partnership at this point," he said.

Richards, who had shown some support for the proposal, criticized a media report that he said had created "anxiety and tension.'' He voted for Consolidated after unsuccessfully proposing that Consolidated receive only the residential portion of the contract.

He had proposed continuing negotiations with both companies for the city's commercial trash-hauling business. Waste Resources, he said, showed "a lot of economic promise.''

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