(note- I was just notified that the list server rejected my original posts due to too many distribution cc's. I originally posted this last evening and reposted again this a.m., since the list server hadn't posted it; sorry if you have received duplicate copies). ~~~~~~~~~~~
Thanks very much to Susan Young for her timely response (Nov 27) to my questions concerning the city trash hauling contract. In her response, Ms. Young indicated, in part, that the Transportation and Public Works Committee will meet on Wednesday, November 28 to discuss a Public Work's report on the potential cost savings and rate effect if City workers were to provide solid waste management services to the entire City (vs. contracting with MRI to handle half the city as is the current practice). Per City Council directive, Public Work's has also negotiated a draft contract with MRI for a five year period that, if approved, would start in January 2002. MRI has held the contract since 1971, and has been the only entity to hold the contract (currently valued at about $5.35 million annually). MRI's current contract began in 1997, expires December 31, 2002 and is for one half of the City's households (about 54,000 dwelling units). [MH] Again I must ask, "Why is the city trash hauling contract not specified and put out for competitive bid (RFP/RFQ) over a reasonable period of time?" MRI has held a sole-source, negotiated contract with the city since 1971-- that's 30 years!! This item of city business deserves increased public scrutiny. With MRI only hauling half the city trash, the cost for hauling city-wide must be well in excess of $10 million annually. Ms. Young notes that Public Work's report provides "estimates of cost savings and residential rates for solid waste services provided for the entire City by the City's own crews, commencing January 2003." The report states that there are operational cost savings to the City, and secondary social and personnel benefits, that can be achieved by deciding to provide service to the entire City using only City forces. This will require a significant amount of the cash balance that has been achieved by the Solid Waste Enterprise Fund to be used to purchase capital equipment (trucks). [MH] Any insight here (re: Enterprise Funds) from CLIC folks familiar with PW budgets (Bob Gustafson maybe)? I assume these "operational cost savings" include the amortized capital cost for all the new trucks and their ongoing maintenance and repair expenses over the term of the contract, plus the every day labor costs, etc.-- with all fixed and variable costs properly allocated to determine rates charged to customers? You'd think so, but unless you ask, you can never be sure (wit. internal services deficits, etc.). I just want to be sure we're comparing apples to apples. After all, MRI's rates must include all their fixed and variable operating expenses, including the capital cost of trucks, etc. Ms. Young also notes that "the City Council has adopted a Pro Forma for the Division, which projected service rates to our customers and expenditures by the Division of Solid Waste and Recycling for a 5-year period. The Report finds that neither contracting with MRI nor providing service to the entire City with City personnel would require a change to the Pro Forma, and therefore there would be no effect on rates to our customers under either condition." [MH] So, am I to understand that, financially it's a wash-- doesn't matter if the City does the whole job or if we continue status quo with MRI doing half. If it's a wash, why should the city be spending capital funds to buy trucks... can't we use that money for something else and just keep paying MRI via their trash rates. And what of the finance charges, or are we just paying cash? All the more reason this contract needs to be competitively bid! These two entities are competing against themselves (Public Works and MRI) rather than the marketplace. There is no incentive to achieve any customer savings in this model. Just who is running this ship? As taxpayers, we deserve a better accounting! I hope the current and new City Council will actively pursue competitive bidding for the city trash hauling contract-- there is nothing to loose; only taxpayer money to be saved. I hope list members and the local press also pursue this issue-- over the life of the new contract (5 yrs), we're talking over $50 million dollars... think out 10, 20 years (it's already been 30!). What are the potential competitive savings to be realized?? Are we not even going to formally ask via a RFP/RFQ? Michael Hohmann 13th Ward www.mahohmannbizplans.com > -----Original Message----- > From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of > Young, Susan A > Sent: Tuesday, November 27, 2001 1:02 PM > To: 'Michael Hohmann'; [mpls] > Subject: RE: [Mpls] City Trash Hauling > > > > The City Council did not contract with MRI for an additional five year > period. The Council did direct David Sonnenberg, Director of Public > Works-City Engineer, to negotiate with MRI for an additional five year > period. Mr. Sonnenberg did this, and the draft contract was extensively > discussed at both Transportation and Public Works Committee and Ways and > Means Committee meetings. On September 28th the Council directed Public > Works to report on the potential cost savings and rate effect if City > workers were to provide solid waste management services to the > entire City. > That report will be heard by the Transportation and Public Works Committee > on Wednesday, November 28. The cover letter for the Committee report is > copied below. If folks wish to have a copy of the report, please > e-mail me. > > > To: Transportation and Public Works Committee > Referral to: Ways and Means Committee > > Subject: Report on Potential Savings if City Employees Provide > Solid Waste > Management and Collection Services to the Entire City. > > > Since 1971, Minneapolis Refuse Inc (MRI), a consortium of solid waste > haulers, has collected residential solid waste under a contract with the > City. The contract with MRI has always been renegotiated, usually before > the term of the existing contract has been due. MRI has been the only > entity to hold this contract. The current contract began in 1997, expires > December 31, 2002 and is for one half of the City's households > (about 54,000 > dwelling units). Since 1997, the contract fee paid to MRI has been $8.25 > per dwelling unit per month (about $5,346,000 annually) for the collection > of solid waste, recyclables, problem materials and yard waste. The > current contract was the result of many deliberations by the Council with > several discussions of alternatives to contracting with MRI. including > collection of the whole City by City forces and issuance of a Request for > Proposals for the services. The current contract, in fact, was of such > interest to the Council that it was the primary subject of the second > longest Council meeting in City history. > > On March 23, 2001, at the request of MRI, the City Council > directed staff to > negotiate a new 5-year contract with MRI. In late September, staff > distributed to Council a draft MRI contract that, if approved, would start > in January 2002. In addition to the increased prices for MRI service, the > draft contract was also revised to be more specific with respect > to service > expectations and consequences and to comply with the City's contract > standards. > > On September 28, 2001, the Council directed the Department of Public Works > to prepare a report within 60 days with "estimates of cost savings and > residential rates for solid waste services provided for the entire City by > the City's own crews, commencing January 2003." The Finance > Department was > also directed to assist in "analyzing these costs and the capital costs > associated with the necessary equipment purchases for a service provided > entirely by the City's crews." A multi-department project team produced > this report in response to these Council directives. Business > representatives from the four unions affected by the potential service > changes were invited to all team meetings, and representatives actively > participated in most meetings. > The Report is attached and states that there are operational cost > savings to > the City, and secondary social and personnel benefits, that can > be achieved > by deciding to provide service to the entire City using only City forces. > In order to accomplish this, a significant amount of the cash balance that > has been achieved by the Solid Waste Enterprise Fund would be used to > purchase capital equipment (trucks). This expenditure would not > jeopardize > the health of the Fund. Since these are Enterprise Funds, they are > restricted for use for capital or operation expenses in the Fund, or to > lower rates to our customers. > > The Council has adopted a Pro Forma for the Division, which projected > service rates to our customers and expenditures by the Division of Solid > Waste and Recycling for a 5-year period. The Report finds that neither > contracting with MRI nor providing service to the entire City with City > personnel would require a change to the Pro Forma, and therefore > there would > be no effect on rates to our customers under either condition. > _______________________________________ > Minneapolis Issues Forum - A Civil City Civic Discussion - Mn E-Democracy > Post messages to: [EMAIL PROTECTED] > Subscribe, Unsubscribe, Digest option, and more: > http://e-democracy.org/mpls _______________________________________ Minneapolis Issues Forum - A Civil City Civic Discussion - Mn E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
