Fresno pays $2.9 million to settle suit over garbage privatization

FRESNO, Calif.

The first move to get the city out of the garbage collection business was supposed to be an economic windfall, with private companies paying big bucks to take over.

Under the urging of Mayor Ashley Swearengin a majority of the city council approved the deal to let Mid Valley Disposal and Allied Waste split the businesses and apartment houses in the city. They also got to collect recyclables, even though the city had a contract with Sunset Waste to handle recyclable materials.

Sunset sued, claiming a breach of contract cost it $8 million. City Council Member Sal Quintero Warned his colleagues there would be consequences.

"With Sunset already having an agreement with the city to me it's a no brainer, it's gonna cost us money there's gonna be a lawsuit. And I wasn't in support of that, the majority of the council supported it and here we are today."

The council majority voted without any discussion to approve a settlement with Sunset. $2 million now, another $900 thousand next year.

The city's defense was they interpreted the contract with Sunset differently. We spoke to City Manager Bruce Rudd about that:

"Does that mean there was some flaw in the deal in the first place?"

"I think it comes down to whether or not one party or another wanted to spend any money on determining whether there was or wasn't but I can assure you in the future the language will be very clear there will be no uncertainty in future contracts."

The money to pay the settlement will come out of the city's solid waste account, an account funded by money from ratepayers.

Sunset still handles the recyclable waste from the city's residential garbage service. Voters turned back the effort to turn that over to a private company in a special election last June.

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