AGENDA – MAY 14, 2025 PAGE 1 of 7
CITY OF SAN MARINO
CITY COUNCIL AGENDA
Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
Philippe Eskandar, City Manager
www.SanMarinoCA.gov
(626) 300-0700 Phone
City Hall Council Chamber
2200 Huntington Drive
San Marino, CA 91108
SPECIAL MEETING OF THE
SAN MARINO CITY COUNCIL
WEDNESDAY, MAY 14, 2025 AT 4:30 PM
CITY HALL EMERGENCY OPERATIONS CENTER (EOC)
2200 HUNTINGTON DRIVE
SAN MARINO, CA 91108
The City of San Marino appreciates your attendance. Citizens’ interest provides the Council with valuable information regarding issues of the community.
Regular meetings are held on the 2nd Wednesday of every month at 6:00 p.m. Typically, adjourned meetings are held on the last Friday of every month at 8:30 a.m.
In compliance with the Americans with Disabilities Act, any person with a disability who requires a reasonable modification or accommodation in order to participate in a meeting should contact the City Clerk via email at [email protected] or by phone at (626) 300-0705 prior to the meeting for assistance.
CALL TO ORDER
ROLL CALL
Council Member Chang, Council Member Chou, Council Member Lo, Vice Mayor Chou, and Mayor Shepherd Romey
CLOSED SESSION
The City Council will recess to closed session to discuss:
AGENDA – MAY 14, 2025 PAGE 2 of 7
1. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION GOVERNMENT CODE 54956.9 (D)(2)
The City Council is meeting with respect to one (1) matter of significant exposure to litigation against the City related to Athens Services (see attached).
2. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
GOVERNMENT CODE 54954.5(C), 54956.9(D)(1)
Name of Case: Diana Mancillas and Gabriana Gutierrez vs City of San Marino, et al.
Los Angeles County Superior Court Case Number: 25NNCV03045
RECONVENE TO OPEN SESSION
CLOSED SESSION REPORT
ADJOURNMENT
Posted: 05/09/2025 ALISON WALKER
CITY CLERK
14048 Valley Blvd., City of Industry, CA 91746
(888) 336-6100
March 24, 2025
VIA FIRST CLASS MAIL
VIA COURIER
VIA EMAIL
Philippe Eskandar
City Manager
City of San Marino
2200 Huntington Drive
San Marino, CA 91108
Allison Walker
City Clerk
City of San Marino
2200 Huntington Drive
San Marino, CA 91108
Re: Election to Terminate Agreement for Solid Waste and Recyclables Collection Notice of Termination of Street Sweeping Services
Notice of Government Claim for Damages (Govt. Code, Sec. 910 et seq) Mr. Eskander and Ms. Walker:
As you know, Athens Services (“Athens”) has been a trusted partner in the City for over 50 years, serving as the solid waste collection hauler and recycler to San Marino residents and businesses. With the unique backyard service, we provide, our drivers have become a part of the community we serve. There is a certain trust created when someone is allowed into the sanctity of your backyard. Our drivers have developed a trust within the community.
It is with our shared history in mind that we regret to inform the City that, by this letter, Athens hereby elects to terminate our franchise with the City, in accordance with Section 2 of the Non-Exclusive Agreement for Solid Waste and Recyclables Collection dated October 1, 2003, as last amended by that certain Amendment No. 4 dated October 11, 2023 (“Agreement”). Having provided the requisite 60 days’ notice, our last day of service will be May 30, 2025. Similarly, this letter will serve as notice of our intent to cease street sweeping services in San Marino effective May 30, 2025. Athens does not want to be in this position. This is the first time in our company’s 68-year history that we have elected to exercise the termination clause of one of our franchise agreements.
In addition, the City’s actions compel us to concurrently submit this letter as a formal Claim for Damages pursuant to Govt. Code, §§ 910 et seq. (“Claim”). On October 11, 2023, the City signed Amendment No. 4 to the Agreement. In its Staff Report the City Manager recognized that “turnover of City Staff in the last two years has made negotiations problematic.” Athens had been working with prior City Staff since 2021 to bring a SB 1383 Amendment to Council, and one was with the Finance Committee, when the Staff turnover occurred. Amendment No. 4 contained an explicit language that negotiations would be undertaken “in good faith” and “meeting sessions conducted at least twice per month” from PAGE 3 of 7
October 11, 2023 through December 31, 2024. The City breached the Agreement and did not negotiate in good faith.
First, negotiations never proceeded in good faith on the City’s part or with the regularity promised by the City. The City did not meet with us at least twice per month. The City refused to meet in a regular cadence to develop negotiating momentum. This failure disserved the residents, business, and local leaders that expected City staff and its consultants to do the basic work they were asked to do.
Second, when meetings did take place, the City attempted to negotiate certain parts of a new agreement while delaying discussion of other interrelated provisions, despite Athens’ objections and concerns. Athens requested a draft agreement from the City in November of 2023. Despite repeated request from Athens for a draft agreement and promises from the City that one was forthcoming, the City did not publish a draft agreement until November 2024—a year after the City executed Amendment No. 4.
It is impossible to negotiate a contract when a contract does not exist to negotiate. When the City did provide a contract it did not reflect what was discussed during the months of discussion. Athens responded to the draft 360-page contract in early December, working over Thanksgiving weekend, to provide a thoughtful response. City staff was then “unavailable” to meet in December, impacted by vacation for the greater part of January and when staff returned, it failed to respond in kind. The delays were extreme and intolerable. The City’s unusual, piecemeal, and unresponsive negotiation process was neither meaningful nor productive—and we communicated that to the City numerous times over the course of a year.
Third, the City repeatedly painted an inaccurate picture of negotiations. For example, claiming negotiations were occurring in earnest, when that was not true. Other times, claiming Athens refused to provide SB 1383 guarantees, when Athens agreed to do so. Or, in another case, feigning frustration over rate negotiations, ignoring that the City never delivered a competent agreement, making it impossible for Athens to price services accurately. All the while, the City took ridiculous contractual positions—for instance, refusing to take responsibility to enforce its own municipal code to ensure compliance with applicable environmental laws. And this says nothing of the byzantine requirements that the City sought, which frequently made no sense. The inequity reached the level of absurdity, causing us to conclude in retrospect that the City did not proceed in good faith.
Fourth, recent events illustrate the lack of any meaningful, good faith process. The City Manager put the request to go out to RFP on the City Council’s Agenda. The City Manager did not provide us any notice of his intent to seek authorization for the RFP. Athens only found out when it saw the publicly posted agenda. In other words, an attempt to cut-off 50-year relationship cut-off without any courtesy.
At the City Council’s February 28, 2025, at Athens urging, the City Council moved to convene an Ad Hoc committee to help facilitate negotiations. Athens took this opportunity seriously, accepting nearly all City provisions except in some very limited instances where it sought industry standard terms. In advance its meeting with the City Ad Hoc Committee, of the Athens informed the City that out of the massive 360-page contract, Athens was taking exception to only 8 items, all of which were reasonable and reflect industry standards. On March 18, 2025, the City and Athens met with Athens understanding the purpose of the meeting was to negotiate. The City’s ultimate response? Except for Trash CPI and the date for new vehicles, the City offered the same contract—the very contract that caused problems in the first place—on a “take it or leave it” basis. Unbelievably, on a 360-page contract, the City would not accept any changes other than the two mentioned. Athens requests were reasonable:
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1. The right to cure a default: The draft contract provided for two days to cure before certain defaults are to be declared. We sought a 30-day period to cure a default. This was being not an unreasonable request, especially given our default free history with the City.
2. Restrictions on compensation adjustments for City directed changes, change of law and change of circumstance: The draft contract either prohibits or is overly restrictive on compensation adjustments in these instances. Our proposed language requested a change for an appropriate mechanism for making adjustments when warranted and within reason, aligning the draft agreement with industry standard.
3. City’s unilateral right to designate disposal or processing facilities: The draft gives the City the unilateral right to designate disposal or processing facilities. Inasmuch as Athens is responsible for delivering SB 1383 compliant programs and is incurring the investments for doing so, it should have the ability to make such changes, which would still be subject to City approval.
4. Use of Athens Property: The draft provides the City with the ability to use Athens land, equipment, facilities, and other property in the event of a default. We do not believe this a reasonable provision especially given our long performance history with the City and the sizable capital investments we are making for new equipment.
5. Enforcement of Municipal Code: The draft currently provides that City may at its discretion enforce the municipal code as to provisions related to waste services. There is currently no requirement to do so. For the program to be successful it is necessary for the City to enforce the municipal code.
6. Contamination Charges: The draft provides that Athens may not impose contamination charges. For a SB 1383 program to be successful there must be the ability to impose contamination charges after progressive warnings and habitual violations of law. The intent is not to be punitive but to facilitate adherence to the program and successfully maximize recycling.
7. No Ability to Pursue Claims Against the City: The current agreement prohibits Athens from pursuing any claims against the City. For the program to be successful, both parties must uphold their responsibilities, and Athens should have the ability to seek recourse if necessary.
We made it clear to the City that we were willing further discuss these items. During our meeting, we even reached what appeared to be a compromise on Item 3 above. However, when the City presented its final position to Athens, it rescinded that compromise and adopted the “take the draft as is” position.
A take it or leave it posture, especially one premised on a strategy to simply repeat the same tactic over (and over again) is not a good faith negotiation. The City should know better.
Fifth, as is the City’s right, it relied on a consultant to advise in negotiations. However, the consultant, EcoNomics, has no experience in the San Gabriel Valley, and the few jurisdictions (i.e., Laguna Beach, Laguna Hills, Lake Forest, Newport Beach, Rancho Mirage, and Tustin), are not similar in size, service needs, customer composition, or geography to San Marino. The lack of expertise is not theoretical. At one of our initial meetings, EcoNomics actually requested pricing for automated curbside service, which compelled Athens to remind the City’s consultant that the service requested is prohibited by San Marino PAGE 5 of 7
Municipal Code. As far as we can tell, EcoNomics only connection to San Marino is through the City’s current Public Works Director who utilized EcoNomics in Laguna Hills. A negotiation cannot be successful when a party does not understand industry standards.
Now, with the Agreement to be terminated, EcoNomics stands to profit from a six-figure contract extension. The City will have invested more money in consultants than cities two or three times its size. A negotiation cannot be successful where a party stands to profit if a negotiation fails. Yet, this is precisely the dynamic the City created, and the City’s ratepayers will be footing the bill.
When the City presents a draft agreement and refuses to accept any changes to the agreement, the City is not negotiating, yet alone negotiating in good faith as it was required to do. A fundamental principle of any negotiation is that the parties are focused on finding a mutually beneficial agreement by focusing on fostering cooperation and seeking a win-win solution. The record shows that the City employed a strategy aimed to “run the clock” on agreed-upon exclusivity provisions while benefitting from deferred price adjustments. This is the height of bad faith. The most unfortunate part of all this is that the residents of San Marino will be losing a trusted service provider, who offered a great rate.
What happened here is sad for all involved. The City did not need to proceed this way. The City failed its residents, its business, and our fifty plus year partnership. We present this claim because, frankly, we have no other option. Athens proceeded in good faith. The City did not. Athens incurred or will incurred in excess of $10,000 in costs and damages.1
The City has apparently decided that in is more important to adhere to the dogmatic misplaced advice of its consultants than maintain the excellent service and good rates that Athens has provided. It should be noted that Athens accepted the consultant’s initial year rates.
As I stated at the beginning of our letter, Athens does not want to be in this position. We want to continue serving the residents and businesses of San Marino. However, the current situation as described above leaves us with no alternative but to exercise our termination option and pursue our legal remedies.
That said, Athens remains willing and able to engage in true negotiations with the Ad Hoc Committee principals to reach a fair and reasonable agreement. We are hopeful that the elected leaders of the City will take advantage of this last opportunity and do what is in the best interest of the residents who have entrusted them with this important position and decision. 1 Government Code § 910(d) requires a “general description of the indebtedness, obligation, injury, damage or loss incurred so far as it may be known at the time of presentation of the claim.” The items of damage or loss associated with this claim include but are not limited to the following recoupment of all costs incurred in connection with the contract negotiations arising from or related to Amendment No. 4 and any damages that arise or result from the loss of an extension or restatement of the Agreement. Relatedly, Government Code § 910(f) states: “If the amount claimed exceeds ten thousand dollars ($10,000), no dollar amount shall be included in the claim. However, it shall indicate whether the claim would be a limited civil case.” In accordance with the Government Code, Athens provides notice that the amount claimed exceeds $10,000 and the claim would be asserted in an unlimited civil action. In addition, the public employees with knowledge of this claim include Phillipe Eskander, Amber Shah, and the San Marino City Council. To the extent not specified herein, Athens does not yet have knowledge of the names of the public employees that may have assisted in causing the damages or losses presented in this Claim. Please contact Joseph Brajevich at [email protected] should the City require additional information. Athens reserves all rights, remedies, and privileges. Nothing contained herein shall constitute or be construed to be an implied or express waiver of Athens’ rights or remedies of any nature and kind. Athens further reserves the right to supplement the information provided herein.
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Sincerely,
ATHENS SERVICES
Matt Niklas
Executive Vice President
cc: San Marino City Council
Gary Clifford, Athens Services
Joseph Brajevich, Athens Services
Brandon D. Young, Esq., Manatt, Phelps & Phillips, LL
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