Western Waste gets splattered in San Jose squabble: brand-new, major contract tarnished by major gripes.

Only two weeks after beginning service on its $80-million trash pickup contract in San Jose, Western Waste Industries of Torrance is battling allegations poor service has resulted in garbage piling up in the streets and in more than 36,000 complaints being lodged with the city.

The problems have been the subject of front page articles and editorials in the local newspapers since the contract went into effect July 1. Western Waste took out a full-page ad last week in the San Jose Mercury News apologizing for the service.

San Jose officials, claiming they were under pressure from angry residents, exercised a clause in their contract with Western Waste and hired another contractor last week, Oak Brook, Ill.-based Waste Management Inc., to service some of the homes that Western Waste was missing, said Regina V. K. Williams, assistant city manager for the City of San Jose. Waste Management formerly had the San Jose contract.

Under the terms of the contract, Western Waste must pay the cost of Waste Management's work, which is averaging $6,000 a day, Williams said. The next step, if the situation doesn't improve, is contract termination, she said.

"It is standard to have a termination clause in a contract and we will exercise it if we don't have (the service performed at) an acceptable level," said Williams. Western Waste's service level has been improving but was still not up to acceptable levels last week, its second week of service, she said.

Among the complaints are that "garbage had not been picked up, recyclables had not been picked up," Williams said. "We've had some households which have not been picked up for three to four days. We've had some complaints about maggots that were growing."

The city has the option of sending Western Waste a letter which gives the firm a deadline of 30 days to fix the problems or the contract will be terminated, Williams said.

City officials are assessing the need to send the letter "daily," Williams said.

"We could be provided with a 30-day notice but we don't expect that to happen," said Rich Widrig, spokesman for Western Waste. "We have worked very hard to clean up the city of San Jose. ... That has improved day by day and it's only two weeks into the program."

The contract provides about $12 million of Western Waste's $220 million to $240 million annual revenues, Widrig said.

Under the contract, one of the biggest residential waste pacts in the U.S., Western Waste is expected to pick up garbage and recyclables from 105,000 homes a week, Williams said.

San Jose, unlike most large cities which have their own sanitation departments, awards its residential garbage collection contract through a competitive bid process. When Western Waste won the contract away from Waste Management last August, Western won the responsibility for a carrying out a much more comprehensive and complicated recycling contract, Williams said.

The new contract and the recycling program began the same day, July 1, Williams said.

The company has been missing an average of 200 homes a day and the city has been receiving about 3,000 to 5,000 complaint calls a day in the two weeks since the contract has been in effect, Williams said. She described the residents who called as "irate."

Widrig and Larry McQuade, Western Waste executive vice president, said some of the problems are the sort to be expected when a new contractor takes over a contract.

But some problems have been exacerbated by the fact that this is one of the nation's most ambitious recycling contracts, Western Waste officials said.

Under the terms of the contract, residents are provided with a 32-gallon or 64-gallon container for garbage and a larger container for recyclable items, Williams said. Residents are expected to recycle about two-thirds of their waste and dispose of about one-third as garbage.

McQuade said a number of residents have put garbage in recyclable item containers, even going so far as to "hide" garbage under recyclable items in the recyclable containers.

McQuade said, "Our attitude has been that whatever is on the curb, we're going to take off the curb."

As a result, spokesman Widrig said, "such things as lawn chairs and water heaters and refrigerators and wash tubs" have been placed on the curb. "Cardboard is also being picked up. We're getting so much cardboard, it's plugging up our recycling trucks," Widrig said.

He said one of the good things about Western Waste's service which hasn't got much press is the fact that the city is recycling more. Since Western Waste has had the contract, the city is recycling 400 tons a day vs. 149 tons before it took over.

McQuade said he met with some San Jose residents last week who were pleased with the service. "I personally ran across very few irate residents and many of them were very complimentary," he said.

The San Jose pact is the largest municipal contract that Western Waste services, Widrig said.

When the company won the contract last August, Western Waste Chief Executive Officer Kosti Shirvanian said the company intended to use it as "a platform" for expansion into the Northern California market.

Western Waste has had its share of problems this year.

In May, it reported a loss of $9.1 million, or 78 cents a share, for its third fiscal quarter ended March 31, due to an $18 million charge related to development of landfill projects.

Locally, Redondo Beach city officials voted to audit Western Waste's books after 600 residents complained about the firm's service under a $25 million garbage contract with the city.

In Inglewood two weeks ago, a group of small garbage company owners hired a political consultant to fight Western Waste's attempts to hike garbage collection fees by 10.7 percent for Inglewood business owners.

But Widrig said, "The bottom line is, we are not going to lose this (the San Jose) contract."