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Published on 12/11/1995 All articles from this issue

Mac's Tea Room claims garbage company overcharged restaurant $50,000

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By Clyde Noel / Town Crier Staff Writer

When Ron Shanholtz purchased Mac's Tea Room in 1980, he assumed a garbage collection schedule of five days a week and paid the monthly bill of $1,183 to the Los Altos Garbage Company (LAGCo). Now he finds he was overcharged in excess of $50,000 over a 14-year period.

By making use of recycling, Shanholtz's employees take the restaurant's bottles and paper to the recycling center, so he asked LAGCo to cut back garbage collection service to three days a week.

LAGCo employees told Shanholtz he couldn't do that because "Saturday pickup is a privilege" and necessary for the compactor.

"I never had a compactor," Shanholtz said. "In fact, I have the same dumpster since 1981. When the wheels broke on the dumpster, they came and repaired it and charged me for the repair."

Shanholtz checked with other restaurant owners in the LAGCo franchise area and found that everybody receives a different monthly charge, the dumpsters are all different sizes and collection times are different. In checking with other restaurant owners he figured his monthly charge should be $494.40.

John Angin, president and manager of LAGCo, checked their records and found that Arno installed a compactor but no one brought it to the attention of the garbage company that it was removed until recently.

As a result of the overbilling, Shanholtz was forced into pending litigation because he received no response from the garbage company even though they admitted Mac's Tea Room was overcharged. He wrote a letter to Dianne Gershuny, Los Altos city manager, but she declined to answer the letter until she checked with LAGCo.

Angin told the Town Crier the restaurant's previous owners had a compactor for a short time but the garbage company never knew it was removed. He said LAGCo is aware of the problem and officials are relying on the advice of their legal counsel for the next step.

"We have a franchise with the city of Los Altos," Angin said. "The city audits our franchise agreement for years and has found no inaccuracies."

According to Shanholtz, LAGCo agreed to return $17,000 and he refused so they upped the amount to $19,000. Refusing that amount, LAGCo is now offering to return $25,000, but Shanholtz still refuses because he wants his entire overpayment returned.

"People need to measure their dumpster and find out if the collection charges are correct," Shanholtz said. "It's hard to find two dumpsters the same size and everybody pays a different price."