I cannot attend tonight's City Council meeting that seeks public input on 2002 budget matters. I offer the following input and suggestions to all CC members and list members in this public forum, concerning city solid waste service:
First, I recommend that the City Council not transfer city-wide waste collection services responsibility to Public Works/Solid Waste Division in the immediate future. Secondly, I recommend that the services currently performed by MRI, be specified and that an RFP/RFQ be issued seeking competitive bids on the open market. I believe more significant savings are possible via competitively bidding the services than are projected with the city assuming all service responsibility city-wide. [Currently the City contracts with a private consortium of waste haulers (MRI) to collect solid waste in half the city, while Public Works-Solid Waste employees collect waste in the other half of the city. MRI has held the contract since 1971, and the city has never solicited competitive bids to get the work done.] Background- I have reviewed the Public Work's "Expansion of Service Area by Minneapolis Solid Waste (MSW) Crews: Financial Projections and Cost Comparisons" report, dated Nov., 2001, which recommends that city crews provide waste collection services for the entire city. I have also corresponded with Council Member Mead, Chair of Transportation and Public Works Committee and talked with Susan Young, Director of the Solid Waste Division of Public Works regarding the report. Total costs under the current system (with city and MRI crews) amounts to approximately $25-$26 million per year. Public Works is proposing to spend over $4 million (from a current cash balance account) to purchase new trucks, and then hire somewhere between 60-80 new employees in order to handle the entire city. The financial projections presented in the report only cover the period of the next MRI contract (2002-2006) so the long term financial implications can't be determined from the data provided ( i.e. over the life of the new trucks, etc.). Projected savings (discounted at 5%), presented under two possible operating scenarios, estimate operating savings ranging from less than 1% to 2.1% ($1.03-$2.27 million) over the period 2002-2006. The amount of annual savings declines each year through 2006, but no data is presented thereafter. I also note that the ending pro-forma cash balances are lower by $2-3 million each year when comparing All City Collection vs. City-MRI Collection (Appendix A-B). These cash balance shortfalls greatly exceed the projected operating savings each year. Per City Council direction, Public Works negotiated a new 5 year contract with MRI. I note at the top of p. 3 in the report, that the negotiated fees contained in the proposed MRI contract were based primarily upon the City's costs of providing service, including their administrative cost estimates. I discussed this with Ms. Young, but I still find the entire process highly questionable-- where PW negotiates a contract with their competitor (on behalf of the City Council), then comes in and under bids the competitor by pennies to cut them out of the competition. For cost estimating purposes, the city calculated all staff salaries at top pay level with a 27% increase for fringe benefits, and 4% annual wage increases after 2003. Conclusion- The Public Work's report presents interesting information, however the projected operational savings are insignificant. The current dual-supplier (city & private contractor) approach is attractive in terms of possibly helping assure secure service in times of labor strife. Being reliant on only one service provider places city residents and taxpayers at increased risk of service shutdown during prolonged bargaining periods. These factors should be considered before making a change. Most importantly, before action is taken to reassign responsibility for city-wide solid waste collection, it only seems prudent that competitive bids should be solicited to determine what savings, if any, are actually available in the open market. If the question is not asked, the answer will never be known. The MRI contract has not been bid since 1971. Absent bids, we are speculating. I hope City Council members take the prudent approach and ask the question formally, via solicited bids. Michael Hohmann 13th Ward www.mahohmannbizplans.com Also sent electronically to all City Council members, Ms. O'Brian, R.T. Rybak and Ms. Young under separate cover. This list places limits on #'s of allowable addressees. _______________________________________ 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
