Legal fight brewing over KC’s trash policy for many apartments, condos

Free trash pickup has been one of the big selling points with Kansas City’s 1 percent earnings tax, from the 1970s to just this month, when voters overwhelmingly approved the tax renewal.

It has been a major convenience for city residents of single-family homes.

But for owners of multi-family buildings, a different approach to trash has applied, and that’s at the heart of a brewing legal fight. Hundreds of apartment building and condominium owners, along with thousands of renters, have a stake in the outcome.

It all stems from a court order in the 1970s requiring the city to make payments to multi-family buildings to cover their trash services, and the city’s decision in 2010 to halt those payments for some property owners, but not all.

Owners who still pay the earnings tax but no longer get the rebates are fighting back in court.

Lawyers for the plaintiffs in a class-action lawsuit filed a motion Wednesday asking a Platte County Circuit Court judge to hold the city in contempt for violating a 1976 judgment on trash rebates.

“This case is about treating everyone equally in Kansas City with regard to trash,” said Greg Leyh, an attorney for the Sophian Plaza Association, Townsend Place Condominium Association and other members of the suit.

Leyh said Kansas City municipal government was ordered in 1976 to provide trash collection payments to owners of buildings with seven or more units. The city did just that until early 2010, when it stopped for budget reasons. At the time, those payments cost about $1.4 million annually.

The Heartland Apartment Association, a group of 117 major apartment complex owners, threatened to sue, and the city settled with them later in 2010. It agreed to pay them annual rebates, costing about $750,000 in recent years, so they could hire trash contractors.

But Leyh said it’s not fair that other property owners with more than seven units — his clients — don’t get those rebates and have to pay all trash collection costs on their own.

The city responded that none of the current plaintiffs was part of that 1970s case, nor do the Heartland settlement terms apply to them.

Plus, the city says, its solid waste policies have changed dramatically since the 1970s.

While free trash pickup for single-family homes continues, Kelly said overall trash services have changed considerably.

Residents of single-family homes can put out two free bags of trash most weeks but must buy tags for extra bags. She said apartments generally have dumpsters, and it’s not possible to monitor whether their residents comply with the two-bag limit.

Meanwhile, single-family households get unlimited recycling, but that’s not practiced in most apartment buildings, she said.

“Most apartment buildings do not do recycle, so that means they are sending a larger amount of waste to the landfills,” she said.

Leyh says trash policy changes over time are irrelevant, and what matters is that the city is still under the 1976 court order.

The judge at the time said Kansas City had improperly created two classes of earnings-tax-paying residents by providing free trash pickup for individual homes but not for large apartment buildings.

He ordered Kansas City to provide free trash pickup for everyone or provide a cash equivalent for apartment owners. The city agreed to make payments.

But in 2010, during the recession and when the city’s budget was facing massive cuts, the City Council and then-Mayor Mark Funkhouser voted to eliminate the apartment trash rebate program.

Shortly after, the city settled with the Heartland Apartment Association.

One of the class representatives is Dennis Walker, who with his wife, Rita, bought the 112-unit Stadium View Apartments near the Truman Sports Complex in 1993.

For years after that, Walker recalled, the city sent a trash rebate every month based on occupied units, amounting to about $7,000 per year.

“It certainly helped,” Walker said, to cover the cost of contracting with Deffenbaugh.

Then the payments stopped. Walker now pays the total cost for Deffenbaugh to clear six dumpsters three times per week.

Walker later discovered Heartland Apartments members had worked out a deal with the city to continue the rebates, and that made him mad.

“It kind of puts the screws to us because that’s our competition,” he said.

Walker said he didn’t raise rents just to cover the trash costs, but as his expenses increased over time, including trash, he had to increase rents. He learned a lawsuit was in the works and decided to join in.

“The city currently provides trash rebate program benefits to wealthy and politically powerful members of Kansas City’s real estate community, and refuses to provide equal benefits to less wealthy and less politically prominent owners of trailer parks and buildings with seven or more dwelling units,” the motion filed last Wednesday argued.

Leyh said that regardless of budget constraints, the city can’t just ignore a court order.

A trial is scheduled for Dec. 19, but there could be a hearing before then on the plaintiffs’ motion to hold the city in contempt. The motion seeks an order requiring Kansas City to comply immediately with the 1976 judgment.

The city’s answer is due soon.

The motion cites a March 18 deposition in which City Manager Troy Schulte said the city wanted to eliminate the trash rebate program in 2010 because of its serious financial constraints. Schulte said in his deposition that he recommended the city “go to court” before formally eliminating the rebate program, to request relief from the 1976 court order.

But the city never went back to court.

Kelly said Wednesday that Schulte is not an attorney, and the city attorney’s office had determined at the time that the court’s 1976 decision applied only to the 14 plaintiffs, was not certified as a class and did not involve this new group of plaintiffs.

“All of the 14 original plaintiffs so far as we could find for the successors of interest, all belonged to Heartland,” Kelly said.

The city, she said, had a financial responsibility to the taxpayers to get the best deal it could in 2010, and that involved settling with Heartland.

This story was originally published April 17, 2016 at 10:01 PM with the headline "Legal fight brewing over KC’s trash policy for many apartments, condos."