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It’s your money
Jack Balshaw 7/21/01

When local government is taking action related to public health and safety there is usually very little publicity or public interest. Elected officials and their employees know what has to be done, (water, sewer, police, fire, etc.), and are very aware of the need to stay ahead of problems.

However, when government wants to do something to serve a particular constituency, it goes to great lengths to justify what it's about to do to convince everyone that it's in their interest. Often the reasons given for the proposed action makes a lot of sense. But, sometimes the reasons given don't tell the whole story.

Our City Council has just announced it's going to go out to bid for future trash collection. This is being done for the stated purpose of getting the lowest cost for the ratepayer. Great idea, maybe.

The city currently collects $570,000 in franchise fees annually from Empire Waste for making them the exclusive residential trash collector for the whole city. There are approximately 17,000 trash customers in Petaluma, so the $570,000 franchise fee represents over $33 a year per customer (or $2.80 a month). This amount is built into our monthly fees by Empire Waste, thus, each customer is really paying extra so the city can collect the annual $570,000 franchise fee.

If the council was really concerned with the ratepayer they could use this franchise fee to either reduce our individual costs by $2.80 a month or give us over 2 months free service a year. But, their concern for the ratepayer seems to evaporate when they realize they would have to use their "franchise money" to do it.

As it stands, the city can and does keep all the franchise and other such fees collected as part of special contracts. These funds are put into the General Fund so they can be spent at the council's discretion. This includes the $570,000 from the trash hauler, $450,000 from the TV cable provider and from other miscellaneous sources. They could use some of the $450,000 in cable franchise fees to support our public access channels, but they prefer to keep the money for their purposes and charge us $2 a month ($24 a year) each as a cable surcharge and make us fund the public access channels without any city help.

Getting back to the trash contract, there will be an interesting twist with a low bid contract. The appropriate definition for a franchise fee in the city's case is "a fee paid for the exclusive right to market a product or service in a specified area". A franchise fee is in effect the money paid to the controlling entity for the negotiated right to do business in a specific area. Whether you're talking McDonalds, Ace Hardware, trash or cable, a franchise fee is the money paid for a negotiated contract.

But, in the instance of going out for bids to benefit the ratepayers, what is the rational for a franchise fee? With no negotiations, there should be no franchise fee. The low bidder gets the contract, period. Is the city really interested in saving us monthly trash hauling fees at the cost of letting go of the $570,000 they now collect yearly? Or, will the low bid have a "franchise" or some other fee added to it (and to our monthly bill) so the city will still get its money at our expense?

There is a growing trend by our City Council to divert funds from the purposes for which they were originally collected, to other legal uses that further other council interests. Part of the money we pay for trash pickup pays the franchise fee but the city puts that money in the general fund. Part of the money we pay for cable service pays the franchise fee but the city puts that money in the general fund. Similarly, redevelopment funds and traffic mitigation fees are diverted to questionable uses.

Councilmember Moynihan is trying to shed light on these diversions of funds but isn't getting very far. A majority of the council seems to feel that what we don't know won't hurt them. You should care because it's your money. 


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