Testimony of the Real Estate Board of New York Before the New York City Council Committee on Sanitation and Solid Waste Management Concerning Legislation to Reform the Collection of Commercial Waste

INTRODUCTION

The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association representing commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople, and other organizations and individuals active in New York City real estate.

REBNY thanks the Council for the opportunity to testify on legislation to reform the collection of commercial waste and other matters pertaining to the regulation of private waste carters.

REBNY appreciates the Council’s desire to reform the commercial waste collection system to promote environmental efficiency, reduce waste, better protect workers, strengthen customer service standards, and promote accountability in the carting industry. The critical task for the Council is to determine the best way to achieve all of these collective goals.

Receiving the highest quality waste removal services is of paramount importance to commercial property owners. In large commercial office buildings, effectively managing trash and recycling requires hard work and careful coordination from the time cleaning staff starts their work at 6pm to the time that a truck arrives in the loading dock to remove the waste, often between 2am and 6am.

Successfully completing this operation each night is essential so that tenants can conduct their daily commerce in a pleasant environment, companies can meet their environmental stewardship and waste diversion goals, and communities can remain desirable places to live, work, and visit.

It is with this in mind that REBNY continues to be deeply troubled by the consequences of policies that constrain owners’ ability to choose the carting company who is best able to meet their needs, particularly Intro 1574.

Intro 1574, would authorize the Department of Sanitation (DSNY) to divide the city into at least 20 zones and allow only one carting company to serve the businesses in each zone. As contemplated by this legislation, as few as two carting companies could be allowed to serve all business in New York City for up to 20 years. In doing so, the bill would completely eliminate all competition in the carting industry and remove all choice property owners have in how they manage their buildings.

Under this proposal, if an authorized carting company were to fall short of its responsibilities, New York City businesses would have no ability to change companies in order to have their garbage and recycling collected in a timely, reliable manner. Without the flexibility to change carters, owners would have limited ability to receive customized service to meet their needs. Indeed, it would only take one missed pick up or a slight erosion in service for the building to smell, trash to spill on the street, and quality of life to erode.

Consequently, it is imperative that any legislation to reform commercial waste collection ensures that businesses have a choice in the carting companies they utilize for waste removal and recycling services and retain the ability to quickly change companies should the quality in service erode.

Meaningful choice is particularly critical for the largest commercial properties in the city that utilize compactors and other containers to manage the large volumes of waste produced each day. As the trucks that remove waste from these buildings do so without making any intervening stops prior to reaching the waste transfer station, greater regulation of these properties will not produce any environmental benefits for the city and its residents. On this basis, REBNY urges that any reform proposal will preserve the ability of these properties to obtain services from as many qualified carting companies as possible.

REBNY offers the following specific comments about the measures under consideration, noting that additional regulatory and cost burdens imposed on carting companies and transfer stations generally result in higher prices for customers small and large alike.

 

BILL: Intro No.1082

SUBJECT: A Local Law to amend the administrative code of the city of New York, in relation to requiring global positioning systems in certain waste hauling vehicles.

SPONSORS: Salamanca, Jr.; Holden;Gibson

Intro No. 1082 would require trade waste vehicles be equipped with GPS systems by January 1, 2020 and to report location and speed data to the Business Integrity Commission (BIC) every six months. REBNY supports efforts to better track vehicle routes for the purposes of accomplishing the City’s environmental goals. However, it will be important that BIC have the resources to effectively carry out this additional mandate.

 

BILL: IntroNo.1083

SUBJECT: A Local Law to amend the administrative code of the city of New York, in relation to fines for unreportedemployees

SPONSORS: Salamanca, Jr.;Holden

Intro No. 1083 would impose civil penalties between $5,000 and $10,000 for failure to comply with the license application standards of §16-508 of the Administrative Code. REBNY supports efforts to ensure that BIC licensees provide accurate information when applying for licenses.

BILL: Intro No.1084-A

SUBJECT: A Local Law to amend the administrative code of the city of New York, in relation the number of employees on trade waste hauling vehicles

SPONSORS: Salamanca, Jr.;Holden

Intro No. 1084-A would establish standards for the minimum number of workers who must be present for the operation of each vehicle. REBNY believes that it is not appropriate for the Council to legislate the minimum number of workers who must be present for a vehicle to operate. Such a decision is best left to the companies, manufacturers, workers, and others directly involved in the design and operation of these vehicles.

 

BILL: Intro No.1573

SUBJECT: A Local Law to amend the administrative code of the city of New York, in relationto regulating the trade wasteindustry

SPONSORS: Reynoso; Rosenthal; (by request of theMayor)

Intro No. 1573 makes numerous changes that generally increase the regulatory authority of the Business Integrity Commission. REBNY generally supports these improvements.

 

BILL: Intro No.1574

SUBJECT: A Local Law to amend the New York city charter and the administrative code of the city of New York, in relation to the establishment of commercial waste zones, and to repeal sections 16-523 and 16-524 of such code, relating to a pilot of special trade waste removal districts

SPONSORS: Reynoso; Johnson; Lander; Chin; Brannan; Ayala; Levin; Rosenthal;Lancman; Constantinides; Powers; Kallos; Levine;Richards

As previously stated, REBNY is extremely concerned that this legislation would entirely eliminate competition in the waste removal and recycling industry, thereby reducing the incentive for carting companies to provide high quality services at competitive prices for businesses across New York City. Any reforms made by the Council must ensure businesses large and small receive waste and recycling service needed to keep our city clean and livable.

To that end, should the Council choose to move forward with a zone collection scheme as proposed in Intro No. 1574 and by DSNY, REBNY encourages that the following features be included.

 

Preserve Competition: Ensuring that there is meaningful competition in the carting industry is vital for businesses to receive the services needed to keep buildings clean and neighborhoods free of trash. To that end, it is vital that enough carting companies needed to create meaningful competition in the marketplace be authorized to work in each zone at all times. Contracts should be substantially shorter than 10 years with the potential for two five-year renewals to provide opportunities for new entrants to compete.

Furthermore, DSNY should be required to immediately conduct a new request-for-proposals (RFP) anytime a company with a contact to work in a zone experiences a change in ownership, has their contract suspended or revoked, or fails to provide quality service to customers. Finally, prior to initiating any RFP, DSNY should be required to periodically study whether increasing the number of carters in a zone would materially improve the quality of service and provide the Commissioner with the authority to increase the number of carters in a zone as warranted.

Ensure High Quality Service for Large Customers: Any reform plan must ensure that the largest commercial properties in New York City that produce the largest volumes of waste can obtain customized services needed to meet their needs. To do so, REBNY urges the Council to allow buildings that use roll-on roll-off services to choose from a deep pool of carting companies.

Buildings who use roll-on roll-off containers or compactors make investments in their space to allow these systems to be used in the furtherance of efficient waste management systems. In many cases, the carting company owns the equipment and customizes the containers and the trucks that service those containers to meet the unique needs of the customer. For these buildings, ending the existing relationships between the owner and the carters has the potential to erode service quality and raise costs.

Providing greater flexibility for these properties is warranted as these buildings generally produce the most waste and therefore would be most at risk were service quality to erode. Furthermore, the trucks that service roll-on roll-off containers do not stop at any other property prior to reaching the waste transfer station, meaning that the routes already operate as efficiently as possible.

In addition, reforms must preserve the ability of businesses to use brokers at their discretion. Brokers are particularly helpful for property owners whose large portfolios will span multiple zones by reducing the administrative burden on the property owner and helping that owner obtain the best services at competitive prices. Preserving this ability is therefore critical to helping large commercial property owners navigate any new commercial waste collection system.

Furthermore, reforms must preserve the ability for customers to cancel contracts with a carting company with 30 days’ notice or for cause. The ability to quickly exit contracts is one of the key mechanisms for customers to hold carting companies accountable for delivering high quality customer service. If customers—particularly large customers who often require customized service to meet their unique needs—are unable to quickly exit contracts that are not performing to their standards it will significantly impede their business operations.

Finally, it is critical that DSNY carefully evaluate the ability of a prospective carter to meet businesses recycling and diversion needs. Many businesses today choose their carting company based on the ability of that company to meet corporate waste diversion and recycling goals. If a carter selected by DSNY is unable to meet these standards, it will erode the ability of businesses to reach their goals and establish industry-leading best practices.

Protect Customers: Reform proposals will only be effective if they also protect the interest of the businesses who are the end-users of carting company services from the initial RFP to conclusion of a contract. At the outset, any legislation should include a robust requirement that prospective contractors include transition plans and contingency plans in their bid to ensure that there is no service disruption for businesses upon conclusion of the contract or if the carter is unable to provide service for any reason. Once a contract is awarded, there must be a system in place for DSNY to collect, monitor, and resolve complaints made by businesses along with a requirement that DSNY annually report to the public whether each carting company is meeting its service quality standards. At the same time, customers need to be provided with the ability to participate in a deliberative process whenever a carting company petitions DSNY for higher rates. Finally, if DSNY decided to renew a contract, that decision must be based on a publicly available analysis of the customer service performance of the carting company and follow consultation with businesses in the zone served by that carter.

 

BILL: Intro No.1575

SUBJECT: A Local Law to amend the administrative code of the city of New York, in relation to the imposition of civil penalties on businesses required to be licensed or registered by the business integrity commission for unsafe driving by persons operating vehicles on behalf of such businesses

SPONSORS: Reynoso; Torres;Rosenthal

Intro No. 1575 would impose civil penalties on carting businesses if any person operating a vehicle on behalf of such business commits certain violations of vehicle and traffic laws and standards. These civil penalties are generally significantly higher than the fines associated with the actual violations.

While increasing penalties may help promote compliance with vehicle and traffic laws, these costs will be passed on to customers in the form of higher prices for services. REBNY is also concerned that the legislation could result in job loss for workers given the severity of the civil penalties in the proposal.

BILL: Intro No.1611

SUBJECT: A Local Law to amend the administrative code of the city of New York, in relation tothe review by the business integrity commission of certain permittees and applicants for permits and requiring labor union representing employees of waste transfer stations to register with the business integrity commission. 

SPONSORS: Torres; Reynoso;Brannan

Intro No. 1611 would increase Business Integrity Commission regulation of waste transfer stations, dumps, and fill material operations that are required to obtain permits from DSNY, and require the registration of labor unions that represent workers at these facilities. REBNY has no position on this legislation.

 

 

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CONTACT:

Zachary Steinberg

Vice President – Policy and Planning Real Estate Board of New York (REBNY) (212) 616-5200

zsteinberg@rebny.com