Carson City supervisors tab Waste Management for contract talks
November 4, 2018
The Board of Supervisors on Thursday decided to enter into negotiations with Waste Management of Nevada for Carson City's next trash collection and recycling services contract.
After an afternoon of discussion, much of it about the vendor's customer service record, the board determined Waste Management provided the best value for service among the five companies that submitted proposals.
Waste Management's proposal included the lowest rates for service, both slightly less for residential customers and significantly less for commercial users.
Mayor Bob Crowell said it was the board's responsibility to go with the lowest rates because the new contract marks the start of mandatory pickup. Starting in July, when the contract goes into effect, residential customers will be required to use the collection service unless they can provide routine proof of using the city's landfill for trash disposal.
“From a fiduciary responsibility I think we have to go with the lowest rates and do customer service through the contract.”
— Mayor Bob Crowell
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Waste Management is the city's current provider and has received ongoing complaints about customer service. According to a survey of 476 stakeholders, mostly residential users, 83 percent were satisfied with service while 17 percent had various problems including failure to pick up and difficulty reaching customer service.
"From a fiduciary responsibility I think we have to go with the lowest rates and do customer service through the contract," said Crowell.
The new contract will require a local customer service office and Crowell said it should include more than a liquidated damages clause to guarantee a certain level of service. A liquidated damages clause specifies damages an injured party collects for a breach of contract.
The specifics of the contract will be negotiated with city staff and the contract brought back to the board for its approval before the end of the year.
The current rate for residential service is $20.76 monthly and Waste Management's proposed rate is $17.59. The next closest proposer, C&S Waste Solutions, proposed $17.95.
Commercial rates vary based on the amount of trash hauled, but based on the vendors' projections of customer count and levels of service, Waste Management expected to collect $1.5 million less revenue annually from commercial customers than C&S and $1 million less than Recology, another proposer.
C&S, Eagle Valley Environmental, Olcese Waste Services, and Recology were the four other vendors who submitted proposals.
The board did discuss the possibility of negotiating with two or more vendors and then deciding. Charissa McAfee with Sloan Vazquez McAfee, the consultant for the entire process, said she had worked with clients who negotiated with the top two proposers when the proposals were essentially the same or there was the possibility of reducing rates more.
"Neither of those cases are in play here, but we serve at your pleasure," said McAfee.
The waste management contract process involved a request for proposal, and not for bids, and can be awarded based on value rather than low cost. There's no statutory requirement to go with the lowest bid as there is in many contracts.
The supervisors also discussed why Waste Management was able to come in with lower rates than it charges now, and city staff said they, too, had questioned the company's proposal.
"The questions asked here today are the same questions we asked. We about fell out of our chairs when the results came in because it was not what we were anticipating. I think the overarching issue with the current hauler is not so much about cost but the complaints have been on the customer service side. We need to put something in the contract we are comfortable with," said Darren Schulz, Public Works director. "We were surprised, but we are comfortable with it."
Supervisor Lori Bagwell pointed out Waste Management took over Capital Sanitation's contract so didn't negotiate the original rates of the current contract.
In the morning, the board initiated the process to redirect some sales tax money to road projects.
In 2005, the then-Board of Supervisors approved a plan to earmark one-eighth of 1 percent of the sales tax to service the debt on bonds issued to reconstruct the Virginia & Truckee Railroad.
Recent tax collections have been more than needed to pay the debt and the V & T Special Infrastructure Fund is expected to have a balance of $1.3 million at the end of fiscal year 2019.
The new plan is to leave a reserve of $550,000 and spend the remaining $754,000 on two projects — $581,000 to reconstruct Roop Street between 5th and Musser streets, and $173,000 to micro-seal Clearview Drive from Carson Street to Line Drive.
After that, according to the revised plan of expenditure, the city will pay the debt service and be able to allocate any money left over to other street projects.
Currently, the annual sales tax share is about $391,000 above the $1.04 million needed for the debt.
The supervisors discussed putting the extra funds into an escrow account that would accumulate enough money to pay off the bond debt two years ahead of schedule. Technically, the city wouldn't be paying off the bonds early, just saving the needed funds two years in advance. After that, all the tax collections could be used for street projects.
But, the supervisors agreed there was more value in doing road work now than in postponing projects to 2023, two years before the bonds are due.
Bonkowski said he wanted to ensure future boards didn't take advantage of the change to keep funding roadwork this way instead of ending the tax allotments as initially planned.
"My belief is the tax should sunset when we said it would," said Bonkowski, who included that in his motion to approve the new plan of expenditure.