Santek Waste Services Vice President for Marketing Cheryl Dunson said the homegrown company is going on record that if the contract is not let for bid, the city is selling itself short.
Dunson was speaking in response to an offer made by Waste Connections during the Nov. 26 Council meeting. Waste Connections Municipal Marketing Manager Doug McGill offered to forego a price increase effective Jan. 1, if the city exercises the option to extend the contract five years. The company would accept the CPI increase during the five years of the extension.
The Council asked for the extension to be placed on the agenda when it meets Monday afternoon at 3 p.m.
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.
Based on the budget, the city will pay Waste Connections $2.14 million in the 2011-12 fiscal year.
“We want an opportunity to bid on it and based on a letter we’ve sent to city leaders and hand-delivered to them, this contract should be bid because of its size and magnitude,” Dunson said. “We are guaranteeing that what residents are currently paying under the current scope of work, we can meet or beat that price.”
Tim Watts, executive vice president of operations Waste Collection, said the guarantee includes commercial service.
“We state in our letter that we can save the city more money through the procurement process than they would save through the forgiveness of a CPI for one year,” he said.
“We’ve run the numbers for that scope of work and we know what we can do it for under that same scope of work,” said Vice President of Business Development Kenny Fuquea.
He said part of the cost is time and distance to the landfill.
“Because the Bradley County Landfill, which we operate, is basically adjacent to city of Cleveland corporate boundaries, it’s much easier for us to get the waste to the landfill and less expensive,” Caylor said.
Waste Connections runs its collection through a transfer station south of APD 40, which means it is handled once at the curb, again at the transfer station and is then transported to the landfill in McMinn County.
“That just adds to the cost. Any time you handle that waste, there is a certain amount of fixed cost along the way,” he said.
According to the city budget, the city’s current contract with Waste Connections is for a five-year period ending Dec. 31, 2013, with a five-year automatic renewal unless either party gives a 180-day notification requesting termination. The contract provides for annual contract increases or decreases based on 90 percent of the CPI and 10 percent of the CPI Gasoline.
Residential garbage collection and disposal is provided once per week with curbside pickup. The city pays Waste Connections $6.64 per month per household serviced. Landfill costs of $24 per ton are included in this price. The city charges residential customers a sanitation fee of $6.95 monthly, which is included on their monthly utility bill. The residential sanitation fee covers 100 percent of the actual cost plus the administration cost for billing, uncollectible debt, and reporting incurred by Cleveland Utilities that provides the billing services for the city.
Commercial garbage collection and disposal is provided up to six times per week, using front-end loaders and metal containers measuring from 2 to 8 cubic yards. This service is contracted with Waste Connections. The city pays Waste Connections $1.76 per cubic yard. Transfer station landfill costs of $24 per ton are included in this price. The city charges commercial customers $1.83 per cubic yard.