Waste Connections Municipal Marketing Manager Doug McGill offered on Nov. 26 to forego a one-time price increase if the city exercises the option to extend the contract five years.
At-Large Councilman George Poe requested the issue be moved to the first meeting in January due to the absence of At-Large Councilman Richard Banks.
“It’s a big decision. I think we all need to be here,” Poe said. “It affects every home in the city of Cleveland and it’s a lot of money.”
Councilman Bill Estes questioned City Manager Janice Casteel about the procurement process and the transfer station at APD 40 and Blue Springs Road where Public Works takes bulk garbage. The transfer station saves the city on fuel costs and the additional 45 minutes it would take to haul bulk garbage to the Bradley County Landfill.
Public Works Director Tommy Myers said his trucks hauled 2,170 loads to the transfer station in 2011.
Estes asked, “We could do nothing in 2013, and this contract would continue for five more years.”
Estes said he was told residents enjoy a low rate at the expense of commercial trash pickup.
Casteel said she felt the city received a good bid on both residential and commercial.
If the contract were let for bid, “We would ask for the same scope of service we have today, which would include the transfer station,” Casteel said. “We have to have a transfer station so they don’t have to wait in line at the landfill.”
The contract expires Dec. 31, 2013. McGill offered to forego the automatic price increase in the final year of the contract if the Council acts before Jan. 1.
The cost the company charges is tied to the Consumer Price Index published annually. The current CPI adjustment is 2.49 percent. Not taking the adjustment equates to a $35,000 savings to the city in 2013. The company would accept the CPI increase during the five years of the extension.
“If you compound that by six years — the last year of the contract and the five years of the extension — this would give the city an approximate savings of $210,000,” McGill said. “This is a cumulative savings to the city no matter what happens. We would look to get the CPI adjustment at the first year of the extension.”
McGill said the city of Cleveland has the best rate in the market area.
“At $6.77 (per month), you have the best rate of anybody in the market area, I promise you do,” he said.
Tim Watts, Santek Waste Services executive vice president of Operations–Waste Collection, said Monday that company leadership has been building the company to be more competitive and preparing for the chance to bid on the city contract in 2013.
“I ask the Council: Do you want to limit the proposed savings by foregoing the CPI for one year, or do you want to maximize the savings with a guarantee that the price will definitely be lower than the current rate for both businesses and residences through the bid process?” Watts said. “I ask that the city go ahead and bid the contract out now with a short turnaround time and take us to task.”
He said the contract has been let for bid only three times in the last 30 years.
McGill said residents of Cleveland haul the trash.
“Our trucks do come home and our employees do come home to Cleveland every night,” McGill said. “Our trucks are all parked in Cleveland. Our trucks are not parked in the city of Chattanooga.”
McGill said the last contract let for bid in this market area was in Soddy-Daisy. Waste Connections bid $7.50 per home.
“Our competitor who just spoke bid the same services you have now, curbside collection of residential trash in customer-supplied containers. Our bid was $7.50. They bid $10.09,” McGill said.
McGill said Waste Services would have to service the city for less over a five-year period.
“I’m offering you a $210,000 savings over a six-year period,” he said. “I feel we should be rewarded with an extension for the great service, the savings we have offered you ... and we request you award us the contract.”
Watts said Santek would still stand by its low-cost guarantee.