Recycling hauler risks contract with Shakopee

  • Article by: DAVID PETERSON
  • Star Tribune
  • June 9, 2012 - 9:20 PM

A proposal from Shakopee's garbage hauler to dramatically upgrade recycling service has ended up with the firm at risk of losing its contract.

The proposal from Lakeville-based Dick's Sanitation to move to single-sort recycling would bring all sorts of side benefits, the city agrees.

But it seems only to have reminded the city that it has let Dick's slide along for ages as its lone hauler without going out to the marketplace to seek better bids.

Cast suddenly into a new world of competition, Dick's is warning that cheaper isn't always better.

"We were one of the proposals that came in with one of the highest rates," David Domack, vice president of sales and marketing, reminded council members last week. "We worked hard with staff and residents to offer quality service and good value."

Shakopee is proud of being relatively unusual in Minnesota in offering organized hauling, meaning a single city-designated operator rather than the scads of competing trucks that bring noise and wear and tear to city streets in neighboring communities.

Dick's proposal late last month would have improved that situation still further. Under single sort, where all recyclables are tossed into a single lidded bin, trucks would have come around only every other week.

But the new and oft-requested system threatened to cost the firm an estimated $1.7 million, what with new bins and trucks designed for them. So it sought to extend its contract for another five years, in hopes of assuring enough return on the investment to pay off the cost.

Dick's wound up wading into an unsettled state of affairs in which council members weren't sure they were getting the best possible rates and other haulers were calling steadily offering their services, according to an internal memo from City Administrator Mark McNeill.

"The single-sort system is becoming more widespread and is seen favorably by many customers in that it eliminates the need to separate recyclables and to bundle cardboard and newspapers," he wrote. "It also offers the advantage of eliminating the debris caused by windblown materials in that the recyclables are kept in a covered container."

Not only does a single hauler mean "less wear and tear on streets," he added, but "overall rates seem to be lower than in neighboring cities with comparable services due to the greater efficiencies provided by the organized system."

Dick's reacted diplomatically to the change in circumstances, and council members were quick to assure the firm that it's not a sign of any restiveness.

Since the commitment would last for many years, said Mayor Brad Tabke, "It would be irresponsible not to bid it out."

The existing contract was to expire in 2014. Dick's proposed to extend it for another five years beyond that, or seven from the present day, so as to cover its costs.

The council -- not the exact same group as today, to be sure -- has been willing in the past to extend its contract with Dick's in exchange for concessions. That happened as recently as 2010, when a voluntary drop in rates brought an extra three years' worth of business.

But not since 2001, when Dick's got the business, have bids been taken.

Said Council Member Steve Clay: "No problem with your work or service, but, 10 or 11 years? It's time."

Council Member Matt Lehman agreed: "Let's give the open market a chance."

Late last week, the company pointed to Domack as the appropriate person for any additional comment, but he was out of town. Addressing the council, he said the company "can respect" a desire to test the market, while adding that it is with Dick's that the city has a history and track record of service.

Council Member Jay Whiting agreed. "You are the incumbent, we know your service, and that is always a consideration."

Asked at the end of the week whether he felt any twinge at what happened to Dick's, Mayor Tabke said no.

"That's too long with no competitive bids," he said. "We're not saying Dick's won't continue as our provider, but we need to see what the market can bear. I'd love to have single-sort right now, but it's more responsible to wait."

Does he blame his predecessors for being too soft with Dick's?

"Past councils did what they did," he shrugged, "and we're not going to worry about that. Their rates are extremely competitive, but moving forward, we need to bid out big projects like this."

David Peterson • 952-746-3285

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