Discussion:
The City's contract with Republic Services expires on May 31, 2019. The Council is asked to consider its wishes with regard to this contract. Staff recommends the following options for consideration:
- Direct staff to prepare to renegotiate the existing contract with Republic Services.
- Direct staff to prepare a request for proposals to obtain competitive bids for refuse/recycling services.
Background
The City has employed an organized collection system for residential refuse collection since 1993. Since June 1, 2014 the City's contracted refuse and recycling hauler has been Republic Services. Republic Services was chosen following a competitive request for proposals process that took place in 2013. The authority for a city to engage in organized collection is codified in MN Statute 115a.94.
Overall, the organized collection system in Shakopee has served the city well. Organized collection ensures that all residential properties have refuse and recycling services, decreasing the likelihood of garbage stockpiling in or around residential properties. Organized collection also decreases truck traffic on City streets. Decreasing truck traffic serves a public value because it increases the life span of a street, and because it decreases truck noise in our neighborhoods. An analysis of refuse collection rates shows that the costs have been managed well - only increasing $2.23 per month (17.5 percent) over 27 years for a 65 gallon cart. There are also additional benefits to the City and the public that help keep property taxes low, such as free cardboard recycling at the Public Works yard and no-cost collection from City facilities.
Existing Contract
The existing contract with Republic Services allows for two extensions of up to two years each with the mutual agreement of the parties. The current contract does not have any major provisions that staff would recommend adding or changing. However we may wish to explore more clearly defining the causes and caps on cost, ensuring excellence in customer service, and offering additional services that benefit the public.
Request for Proposals
Should the Council wish to move forward with developing a request for proposals, staff would likely re-use the great majority of the request for proposals from 2013. Attached to this memo is a document from 2013 that outlines the features of the request for proposals from 2013. If the Council chooses this option, staff would prepare an RFP to be issued in October, Due in November with a decision to be made in January of 2019 so there is time to plan for any potential transition.
Other Considerations
The City decided in 2013 to purchase all of the garbage and recycling carts and have the refuse/recycling vendor manage the carts. At that time, approximately 24,000 carts were purchased at a cost just over $1 million. Since 2013, with the expansion of the City there is a need to purchase new carts. It is anticipated that somewhere in the range of 2500 carts should be ordered, to maximize buying power and to meet the need for the next two to four years. It is estimated at this time that this order will cost approximately $100,000. In 2013, a loan was taken from the sewer fund, which is being repaid using funds collected from the cart fee portion of each customer's bill. It is anticipated that staff would recommend the same approach with this additional purchase.
The costs for refuse and recycling pickup and disposal are likely going to increase no matter the option Council chooses. The reasons for this are (1) MPCA has begun strict enforcement of statutes that require municipal solid waste to be delivered to waste to energy facilities, (2) Increased overall costs, fuel prices and prices for equipment are rising and (3) the market for recyclable materials is stagnant and regressing.