Sanitation Department Awards Contracts to Commercial Waste Haulers with Hundreds of Safety, Environmental, and Labor Violations, Comptroller Finds

 

Comptroller Lander’s review calls for stronger oversight and transparency to achieve the safety, labor, and environmental benefits intended by the 2019 “Commercial Waste Zone” law

New York City Comptroller Brad Lander released a review of the Department of Sanitation (DSNY)’s implementation of the Commercial Waste Zones (CWZ) program developed by Local Law 199, a 2019 reform enacted to address safety, labor, and environmental risks in the notorious commercial waste removal industry. While the review finds that DSNY technically complied with the law, it identifies numerous failures to address key industry issues.

“The Adams Administration’s rollout of Commercial Waste Zones raises serious concerns,” said Comptroller Brad Lander. “By awarding contracts to bad actors with terrible safety records, the Department of Sanitation is undermining the goals of the program. The City must improve transparency and be willing to hold bad carters to higher standards to ensure this law actually improves the conditions for workers and our environment.”

While DSNY itself collects waste from residents, for commercial businesses, the City manages a network of more than 90 private carting companies licensed to contract with and collect waste from businesses. Collectively, the City’s commercial businesses generate more than 3 million tons of waste each year.

For decades, the private carting industry operated in a disorganized, inefficient, and hazardous manner. Private garbage trucks crisscross the city collecting waste from businesses across long, overlapping routes. In some parts of the city, over 50 carters serve a single neighborhood; a single commercial block could see dozens of different private garbage trucks on a given night. The overlapping routes and high concentrations of trucks in a single area result in millions of excess truck miles each year, negatively impacting the city’s air quality and public health.

Local Law 199 gave DSNY the authority to reform the commercial waste industry by dividing the city into 20 “commercial waste zones,” each served by up to three carting companies selected through a competitive process for ten-year terms. New York City Business Integrity Commission (BIC) must license each carter. In January 2024, DSNY announced the selected carters and in September 2024 began implementation of the first Commercial Waste Zone. After environmental advocates, labor unions, and elected officials expressed concerns on the implementation of the CWZ program, Comptroller Lander launched the review into DSNY’s carter selection.

Auditors found that, despite following the letter of the law, the 18 carters selected by DSNY accumulated an average of 241 violations over a four-year period for traffic safety, hazardous waste disposal, and labor violations. Ultimately, DSNY chose eight of the ten carters with the worst safety records to participate in the CWZ program. One company alone, Action Carting Environmental Services Inc, received over 1,000 violations. Moreover, DSNY selected Cogent Waste Solutions to participate in the program, despite the company receiving $50 million in fines for violations issued by BIC. Cogent Waste Solutions’ violations resulted in a $500,000 settlement, the highest-ever payout on record with BIC, for overcharging customers in close to 5,000 instances from March 2020 to December 2022.

The Comptroller’s review uncovered problems in the program’s implementation:

• Active litigation did not impact selection: 12 out of the 18 awarded carters faced some form of civil litigation. Two companies (Royal Waste and Action Carting) accounted for 60% of the pending cases.
• Prices varied widely between and within zones, lacked transparency, and carters that scored highly on pricing were not necessarily awarded zones. The Comptroller’s review confirmed that pricing was DSNY’s most heavily weighted factor in reviewing proposals. However, carters’ proposals did not explain how they derived pricing, with the maximum five-day monthly price that some carters could charge being at least 50% more than what other carters could charge within the same    zone.
• The weighting process may have disadvantaged smaller operators. DSNY awarded 4 companies (Action Carting, Waste Connections, MRT BWR, and Cogent) 70% of zone assignments. DSNY gave higher scores to proposals submitted by the larger carters.

To improve implementation and transparency, Comptroller Lander’s review recommends tracking key indicators like vehicle miles traveled and safety violations in the Mayor’s Management Report. It also urges DSNY to investigate pricing discrepancies and closely monitor performers with major violation histories. While DSNY selected all carters for the Commercial Waste Zones program, full implementation will not be completed until 2027. In the meantime, carters with fewer violations that were not selected by the City are shutting down. As the industry consolidates, the City faces a narrowing window to rebid contracts to more responsible operators before they exit the market.

The Comptroller urged the City to consider interventions to ensure the program’s success:

Accelerate the rollout of Commercial Waste Zones to achieve full implementation by 2026 rather than 2027.

• Make public the safety and zero waste plans submitted by carters during the RFP process to hold them accountable, along with any customer education and training materials.
• Grant DSNY additional enforcement authority over carters, including an escalating violation structure where repeated safety, environmental, and labor infractions lead to higher fines and ultimately the loss of a carter’s BIC license, where appropriate.
• Require carters with the most serious safety, environmental, and labor records to pay DSNY a bond to compensate victims in the event of future violations or legal infractions.
• Explore the agency’s ability to void and rebid contracts with carters that fail to meet program requirements or are in violation of City, State or Federal law.
• Open permitted marine transfer stations to commercial waste haulers in order to reduce truck traffic and take advantage of underutilized capacity at these facilities.