Politics & Government

Putting the Brakes on a $25M Contract

The city decides not to renew Waste Management's service agreement before first going out to bid.

Citing a need for transparency and adherence to "the process," City Council members voted last week to put the city's largest contract—a proposed $25-million service agreement with private haulers Waste Management—back out to bid.

With its current seven-year contract expiring in April 2011, Waste Management had come before the council in February asking for a six-year renewal that included a 19 percent rate increase phased in over three years. Costs to residents would be changed from a flat rate to a three-tiered rate system in which  customers would pay less for using smaller containers.

Attendees of last week's meeting urged the council to renew its contract with Waste Management, a company that has become part of the community fabric. Several leaders of city environmental groups touted the company's contributions on local green measures, such as donating bins for Earth Day and helping local schools reduce waste.

In determining which company to award the contract, "service and relationships should also play a roll, not just cost," said Suzanne Kretschmer, president of local nonprofit Grades of Green.

"What I like about [Waste Management's] program is that it rewards people for cutting back on the amount of trash they throw out," she said.

Councilmembers made clear their satisfaction with Waste Management's service for the past two decades.

"If I could move myself to say I love a waste hauler," said Mayor Mitch Ward with a grin, "it would be Waste Management. I know you contribute to local scholarships and help educate our kids about the environment."

But, in the end, Ward and three other councilmembers voted against renewing the company's contract before soliciting bids elsewhere, primarily out of a stated desire for transparency.

"Sometimes it's the not going out for bid that raises suspicion of a sweetheart deal," said Councilman Wayne Powell. "I can't tell our residents they're going to get a rate increase when we didn't do our due diligence by going out to bid... This affects everybody—residents, businesses and schools. I really want to go through the process."

The rate increase would be felt most dramatically by larger households with a need for greater bin sizes.

Vicki Wippel of Waste Management defended the increased rates, which she said are meant to offset higher company costs associated with labor, fuel and general inflation. "I can't guarantee these are the cheapest rates you'll see," she acknowledged. "But they're fair, they're honest, and on a personal level, we want to stay here."

Some councilmembers expressed reservations about whether the company had presented the city with its lowest possible offer.

"I'm not satisfied that [the rate increase] is the true cost of doing business," Councilman Nick Tell said. "We haven't gotten those figures, though we've asked for them. The only way to get them is to go out to bid."

The bid process requires competitive proposals from interested haulers, and representatives from at least two outside companies were present at the council meeting to demonstrate such interest. Contract costs cannot be determined until Request for Proposal (RFP) bids are opened in September and pricing received from haulers is made public. The city has hired HF&H Consultants to complete the RFP process at a cost of $105,000.

"Will it be a waste of time?" asked Councilwoman Portia Cohen of the RFP schedule. "No, because the public demands this process."

Mayor Pro Tem Richard Montgomery—the lone "nay" vote on whether to go out to bid—said that "the idea that we're not being transparent is wrong."

He also stressed that cost was not always the most important issue in deciding whether to renew a contract.

"There's no guarantee," he said, "that because we're back here after the RFP with a lower price, that it'll be good service."

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