The trash-hauling consortium serving half the homes in Minneapolis is facing an ultimatum: Cease the lawsuits or risk losing all city business.

The action by two City Council committees was preliminary and wouldn't be final until Friday but was supported by a majority of council members.

Minneapolis Refuse Inc. (MRI) is a consortium of 14 private haulers that has served half of the city since 1972. City crews serve the other half.

A staff recommendation would award 41 percent of MRI's current territory of more than 52,000 households to Aspen Waste, which underbid MRI in a request for proposals. Aspen would serve southwest Minneapolis.

Although the awarding of contracts to both firms is conditioned on each waiving its right to sue under state trash-collection law, MRI has repeatedly sued the city over its steps toward opening up garbage hauling to competition for the first time in 37 years.

Each firm has 10 days from Friday's council vote to act on a waiver, or its recommended share of households goes to the other. MRI said it will respond after its members meet.

Both firms also are required to waive their rights to sue under the city's requested no-strike clause. That's aimed at Aspen, which was perceived by council members to offer a weaker pledge than MRI.

The staff proposal was approved by the council's budget and public works committees, with a cumulative eight yes votes, a majority of the 13-member council. Robert Lilligren abstained, saying he was concerned that female- and minority-owned haulers would fare worse.

City staff calculates that splitting the five-year contract would save an average of $786,000 annually from what the city currently pays MRI. That's 50 cents per household per month.

Mayor R.T. Rybak has urged the council to raise the solid waste fee by $1 per month next year. That's the first increase since 2006 and would raise the fee to $21 monthly. It covers services ranging from trash disposal to graffiti removal.

Council Member Sandra Colvin Roy said she thinks that some of the mayor's proposed increase might be avoided if the council splits the contract.

MRI proposed charging $10.49 per household, compared with an average of $10.09 for Aspen, which offered an escalating rate. City officials said that concerns about displacing existing haulers led them not to name Aspen for the entire city.

The council voted in 2006 to seek proposals but has been tied up in court with MRI's challenges and following a court-required negotiating process.

Steve Brandt • 612-673-4438