Minneapolis to start sorting through trash deals

Charlie Hall keeps a laminated map of his trash pickup route through Bryn Mawr in the front of his truck — driveways in red, alleys in yellow — but he knows the city's streets so well that he hardly needs it.

After all, collecting Minneapolis trash has been the family business for three generations. Hall drives five days a week before sunrise to a lot in Northeast to meet his son and another worker to go out on a garbage truck, much as he once did with his own father decades ago.

It's one of a dozen small businesses that makes up the Minneapolis Refuse Inc. consortium of haulers that has essentially held a monopoly on picking up half the city's residential trash through a series of five-year contracts since the early 1970s (municipal crews do the other half). And if all goes as they hope, they'll soon win another such agreement with the city.

Minneapolis opened bidding Monday for the next multimillion-dollar trash contract, a process that last time around included a lawsuit, the threat of a rival trash company and a heated debate about whether the city had been getting the best deal by staying with the same company year after year. Some observers say this latest request for proposals to pick up city garbage continues to favor MRI and shuts out competition by including a pro-labor provision that other companies have said they cannot meet.

"If the city is hoping to get the largest amount of competition, labor peace will hinder that," said Susan Young, the city's former longtime solid waste director, though she added that it could help the city achieve other goals.

Young was referring to what's known as a labor peace provision, requiring companies that bid on projects to agree to be part of a collective bargaining agreement with any union seeking to represent their employees if a majority of them signs union recognition cards. Workers join the union only if they wish and must agree either way not to strike.

The requirement in the previous round of bidding five years ago — the first big test of competitive bidding — led the only other competitor vying for the contract to back out. That contractor, Aspen Waste, had submitted a proposal that would have cost the city $800,000 less over five years than MRI's.

One Aspen executive said the firm is hesitant to submit a proposal for the job, though no final decision has been made.

"I'm just not sure how competitive the [bidding] is going to be if the city takes the same position," Vice President Thor Nelson said. "They spent more money on the contract than our proposal was, and what did they get for it?"

Independent mayoral candidate Cam Winton recently called for Minneapolis to bid out trash collection for the entire city and take out the labor peace provision, which he dubbed "an Orwellian term" for extortion, to ensure taxpayers get the best price.

Hall, the chairman of MRI, noted that nothing is stopping other companies from bidding, and that even the consortium had hesitated to support the labor peace provision, but went ahead to keep the city's business. He insisted the city is getting a good deal.

"The argument about what's cheaper and what's the better way to do it has been going on forever," Hall said.

About half unionized

In 2006, city leaders stunned MRI when they decided to seek competitive proposals after decades of dealing solely with them. A judge ruled in MRI's favor after the organization filed a lawsuit against the city alleging violations of Minnesota's trash collection regulations, deciding that the city must go through the lengthy state planning process before it could request other trash collection proposals.

Council members voted in 2008 to transfer nearly half of MRI's households to Aspen Waste, which underbid the consortium by about 40 cents per month per household. But Aspen — after ordering extra trucks in preparation for the job — backed out after the city stipulated the peace agreement.

Despite all the controversy, the Teamsters have unionized only about half the workers of MRI — 16 recycling employees, according to Hall. None of the trash-hauling employees has joined, including Hall's son Josh and his other employee, Alan Wright.

Young said she isn't surprised, because the union told her at the time that it was more interested in gaining an entree into organizing workers at the national haulers that were part of MRI. But those companies, Waste Management and Republic, wound up leaving over the issue.

Taxpayers are getting "a heck of a deal," she said, but the only way you keep the competition honest is ensuring both sides have a check on themselves.

"The only way that you keep the competition honest is by making sure that both sides have to check themselves, and if MRI knows that they'll always be able to peg their price to whatever city employees do the job for, MRI has no incentive to be more efficient," Young added, explaining that the same was true in reverse.

City asked to rethink provision

In recent months, with an eye toward the expiration of the contract in January, MRI and the Teamsters have advocated to city leaders that they keep labor peace as a requirement when they request trash collection proposals again.

Others have asked the city to reconsider: Elite Waste Disposal, which declined to comment, wrote a letter to the city this spring saying that it would bid on the work if Minneapolis ever removed the provision.

"It was really strongly supported the last round … It's important to the city as a way of preventing work stoppages and it's a value of ours," Council Member Robert Lilligren said.

Teamsters Local 120 organizer Paul Slattery said he didn't know what the other trash haulers were afraid of.

"There's kind of a misconception that people are forced to join, but it's really up to the individuals and it's their choice of whether they want to," he said.

Aspen is among the largest waste haulers in Minneapolis, picking up garbage from the commercial sector, and is the largest direct hauler to the county's trash incinerator. It has about 100 workers in the city.

Nelson said that while the labor peace resolution is rooted in the city's desire for uninterrupted service, Aspen has never missed a day and won't have a strike because its workers are not unionized.

"We've been confused because the city on one hand says they want a more competitive process and yet if labor peace is applied like it was last time it might not be very competitive," he said.

The Teamsters and trash workers have also made campaign contributions to City Council members. In recent years, the union has made at least seven contributions worth $1,900 to city officials, while members of MRI and its lobbyist at the time made at least 15 donations totaling over $2,000. Aspen employees made three campaign donations of at least $550. Most of those donations came in 2009, the last year of a municipal election.

Roughly 40 percent of metro cities have unorganized trash collection, a system in which households individually contract with garbage companies, according to Carl Johnson, a lobbyist for the Minnesota League of Cities. Organizing the job — through city workers or contractors — is considered more efficient and easier on the roads and environment.

Some of MRI's haulers even compete with one another for business in those "unorganized" towns. But in Minneapolis, they're all on the same team.

Said Hall: "It's a pretty close-knit group."

Maya Rao • 612-673-4210