When the town has a voter mandated competitive bidding process for our garbage collection, green waste and recycling and we enter into a contract pursuant to that mandate, can the town change the terms of the contract prior to the contract expiration?
About 20 years ago, the then-town council awarded the town’s waste contract to their then-current hauler, Empire Waste Management, for an additional 10 years.
In response, a referendum was successfully passed by Windsor voters voiding that extended contract and requiring that the town’s garbage contracts be awarded through a competitive bid process. Through that process the Ratto Group was awarded Windsor’s contract for a 10-year period and they were subsequently selected in the bidding process 10 years later in 2008.
In 2018, Sonoma County Resource and Recovery (SSCR) was awarded Windsor’s garbage contract for a 10 year period. A majority of the council, 4-1, felt SCRR was the better choice through a competing bid process even though they were not the low bid, Ratto Group was. I was the lone dissent.
The town’s competitive bid process has been one of considering several points and qualifications, which have always been disclosed to the prospective bidders. Cost to the customer is one of the criteria.
Once the bids are received and the time period for bids closed, the council, in conjunction with their consultant, reviews the bids and choses the bidder who scores highest on the combined criteria. When the contract is awarded, rates are set for the duration of the contract subject to stated adjustments allowed within the contract, such as pass through costs and limited annual adjustments based upon criteria laid out within the contract.
Several months ago, our current contractor SCRR notified the town of a financial difficulty they were having meeting their capital investment obligation. They provided a number of reasons for the difficulty including their need to unionize almost immediately after the award of the contract causing increased labor costs, the steep decline in revenue and increased costs in the recycling market, under reported tonnage of the town’s waste by the prior hauler and the extent of the waste services required by Windsor’s schools.
Through a performance evaluation it was determined that SCRR’s annual deficit would be $621,000, which would require an 8.87% rate increase across the board. SCRR has requested some form of relief, such as increasing rates, looking to separate waste services to the school and fire districts and other suggestions that were presented at the May 6 meeting.
A two-member council subcommittee presented four options for the Council’s consideration: 1) Deny the request but give further consideration to providing an increase based upon the “National Sword” which is the policy that caused the world-wide recycling market to go from one of profit to loss; 2) Grant the full cost recovery of $621,000 resulting in an overall rate increase of $8.87%; 3) Grant a limited cost recovery of 1.6% based upon the how the “National Sword” adversely effected the recycling market generating $163,000 annually to SCRR and allowing a change in the billing cycle which would result in an additional annual $50,000; and 4) Deny the request and continue a dialog with the school and fire districts regarding possible separate contracts.
Three members of the council chose Option 2, full cost recovery while two chose option 3, limited cost recovery. Direction was given for option 2, a contract amendment granting full cost recovery with a rate increase and change in the billing cycle to be brought back to council for approval, tentatively scheduled for the July 15 meeting.
It is my position that the council cannot increase the overall garbage rates as agreed to in the ten-year contract without findings that meet the terms of the contract or as the result of changes in law. While the performance evaluation concluded, and the council agreed, that SCRR is performing well and in many areas exceeding, I feel the pending rate increase reflects rather poorly on Windsor’s voter-mandated competitive bid process.
For the town to increase rates in year two of the ten year agreement outside what I believe is allowed within the contract is something I cannot support. How do you feel?
Sam Salmon is a member of the Windsor Town Council.
