- April 25, 2024
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An effort by the City Commission to lower costs for pickup of garbage, yard waste and recycled materials backfired recently when waste companies came back with much higher bids than were expected.
The city is currently paying $4,068,881 per year, and the new contract calls for $4,957,135 per year. Residents currently pay $16.81 per month and will pay $17.61 in the new contract, which begins in October.
The new monthly fee would be $19.21, but the city is going to subsidize the rate for three years. The city has subsidized the waste rate for many years, using money from the sale of trucks when the city first outsourced waste pickup. After three years, residents will pay the full amount.
In March, Waste Management Inc. asked for market-based increases to be built into a new five-year contract, in addition to a retroactive cost of living increase of 1.67% back to Oct. 1, 2013. The market-based increases would be as much as 3%, and would occur in years three, four and five of the contract period.
A representative from a competitor, Waste Pro, at the meeting urged the commission to send out a request for proposals, known as an RFP.
The commission voted to reject the offer from Waste Management and to send out the RFPs. Mayor Ed Kelley and Commissioner Troy Kent were in the minority, voting to continue the contract with Waste Management.
When the bids came in, they were much higher than the current contact. Waste Management bid $5,933,861 and Waste Pro bid $4,957,135.
If the commission had approved the increases requested by Waste Management in March, their fee for the final year of their five-year contract would be $4.52 million.
The commissioners met in a special meeting on June 30 to select one of the RFPs.
At the meeting, Janie Coleman, municipal services manager for Waste Management, said the higher bids were a result of corporate headquarters reassessing the costs.
“I said our rate was below market and these RFPs proved it was true,” she told the commissioners.
Coleman urged the commissioners to reject all offers and negotiate a new contract with her company, but City Attorney Randy Hayes said the only legal options they had were to accept one of the bids or go back to the original contract with Coleman’s company, Waste Management.
However, Waste Management rejected the idea of returning to the original contract.
“We’re forced to accept this bid, because Waste Management has chosen not to go back to the original contract and that’s our only other option,” said Mayor Ed Kelley.
Commissioner James Stowers said calling it an unfortunate set of circumstances would be an understatement.
“I don’t feel good about this for the city,” he said. “But calculations were made on the facts and here we are,” he said.
The commission voted unanimously to give staff the go-ahead to finalize the contract with Waste Pro. Commissioner Kent was absent. The commission will formally consider the contract at the next regular City Commission meeting on July 29.
City Manager Joyce Shanahan said Waste Pro will be held to the same standards as Waste Management and there will be no change in service to customers.
Ted Dolan of Waste Pro said the company operates in several municipalities in Volusia County and “has a good reputation.”
