County ends recycling contract with Emmet

county government header
A measure for Charlevoix County to end its recycling contract with Emmet passed 4-2 despite overwhelming protest

By Benjamin J. Gohs, News Editor

Stating a desire to save taxpayer money, the Charlevoix County Board of Commissioners voted 4-2 to end its contract for recycling services with Emmet County two-and-a-half years early.

Last week’s move to award the recycling services contract to American Waste of Charlevoix came after nearly six months of controversy over the bidding process which apparently shows the county will save $86,000 in the first year with its new service provider.

We’re dealing with two good companies,” said Charlevoix County Recycling Committee Chairman Nancy Ferguson. “But, the fact of the matter is we sent a bid out for hauling because we had processing already handled.”

Some of the apparent controversy stems from the root of the rebidding process which began back in September 2012.

Charlevoix County asked for a bid on hauling only. One response, from American Waste, was received. The quote was higher than anticipated. But, American Waste then offered to provide hauling and processing at a rate which appeared to be $70,000 to $80,000 lower than what the county spent in the previous year.

After a seemingly convoluted back-and-forth between committees and bidders, the Charlevoix County Recycling Committee opted to continue its contract with Emmet County for processing and also recommended Emmet County be awarded the hauling contract.

Due to an apparent disparity in the bids based on the amount of materials hauled and the pricing for such, the Charlevoix County Building & Grounds Committee requested both bidders answer a nine-question document intended to clarify their bids.

Only American Waste responded to the committee directly and it was determined—in a 2-1 vote—that the committee would recommend to the Charlevoix County Board of Commissioners that American Waste be awarded the bid.

The contract does contain an opt-out clause which allows either party to end the contract with 60-days notice.

The resolution to end the contract with Emmet County detailed certain attributes possessed by American Waste including that it pays more than $31,000 in property taxes annually and employs 16 people.

Various public officials from Charlevoix and Emmet counties spoke in favor of retaining the contract with Emmet County.

Following the vote to end the contract, Boyne City Manager Michael Cain made additional comments concerning the county’s level of thoroughness in the bidding process.

I know how hard it is to make decisions, and when you don’t have the proper information in front of you or you don’t have common information in front of you, I think it makes your jobs a lot harder,” he said. “For us to be coming to the recycling discussion in the last few minutes and trying to decide whether we have a $85,000 difference between the low bidders, a couple thousand dollars difference one way or the other then that’s a key point in making your decision and it means that you don’t have the right or the complete information in front of you.”
Cain added, “And, for us to be working on this process for as many months as we have been, and to not have that information before you in a solid form … is a disservice to you in your decision-making process and ultimately to the entire community.”

Cain said there should be no last-minute surprises and, if information is brought in at the end, the matter should be tabled until all commissioners have been apprised of the situation.

Emmet County Commissioner Charlie MacInnis (District 3) urged the Charlevoix County Board of Commissioners to continue its working relationship with Emmet County.

He told commissioners that Emmet had made significant investments in order to deal with Charlevoix’s recycling needs.

It was expanded by Emmet County in response or as part of the contract to accept waste for recycling from Charlevoix,” MacInnis said. “So, we have an investment that we made to accommodate the waste, the recyclable materials from Charlevoix.”
He added, “We, of course, have a long-term contract that’s in place, that we hope will continue with Charlevoix County. It’s a good contract.”
MacInnis said his county’s recycling program is run like a business, adding that the benefits of it accrue to those with whom Emmet partners.

We were … the low bid for hauling waste, recycled materials, to Emmet County. It was recommended by the recycling (Charlevoix County) committee—the bid still stands in our minds as does our recycling contract,” he said. “We hope that you would acknowledge that our bid is the low bid and it would serve the residents of Charlevoix County, in our minds, the best.”

East Jordan City Administrator Chris Yonker said he was troubled with certain aspects of the process leading to the recycling bid issue.

One thing I don’t see before you, at least at this meeting … is a copy of the committee’s recommendation—I think you need that before you today before you make a solid, educated, informed decision,” Yonker said. “Secondly, you’re bidding out a service, not a project or a product. Service bids are always not just the low bidder but they’re the lowest, best bidder that’s most advantageous to the county.”
He added, “I think there are a lot of intangibles that come with a recycling service that I think you need to take into account besides just a dollar figure”

Yonker said he felt the dollar figures between Emmet County and American Waste were “comparable” over a 10-year contract.

I’m sorry, but I can’t support a 10-year bid,” he said. “That’s a long time at a 2.9 percent multiplier.”

Yonker said he comes from a family of public servants who put their ethics above all else.

Were this county to withdraw from a contract we made in good faith with our sister-county to the north, Emmet, is not just borderline it’s unethical,” he said. “Yes, you have the right to do it. But, should you do it? No.”

Yonker added, “If you want to award transportation and pick-up and delivery separate this time, I think that’s where you need to put your efforts.”

Cain introduced himself to the county board as a resident of Charlevoix County, a taxpayer—and a heavy user of the county’s recycling program.

I think it’s very appropriate and just in your roles as county commissioners that we should be looking to get the best service at the best possible price,” Cain said. “But, I think you have to be careful with how we’re doing that. There are some things that have put up red flags in my mind with regards to what I have heard and seen so far.”

Cain queried about the relationship with the committees involved and asked the board if they were on the other side of the issue, is this how they would want to be treated.

I’d also take a look at this process of bidding,” Cain said. “From what I can see from the outside it looks like it has been a contorted process. It seems that there has been some confusion with regards to it.”
He added, “At some point it almost looks like we’re stretching it out to get some predetermined results—I would doubt that’s the case but it almost has an appearance with regards to it.”

Cain said he is sure what the county is doing is legal but asked if it was in the “spirit” of the law.

There’s more than just dollars and cents in this process, there’s good sense as well,” he said.

Following public comment—which consisted entirely of those opposed to breaking the contract with Emmet County—the Charlevoix County Board of Commissioners opined on the matter.

Charlevoix County Commissioner Larry Sullivan (R-District 6) read several letters from public officials supporting the retention of the contract with Emmet County.

Charlevoix County Commissioner Ron Reinhardt (R-District 3) said he needs to look out for the taxpayer.

I would like to see that contract carried to fruition,” Sullivan said. “We have a tremendous amount of agreements with … (other counties) and I think it’s going to put our credibility right down the sewer … if this contract is broken.”

He added, “We’ve got two, two-and-a-half years left with the Emmet County processing. Let’s ride that out. Again, the dollar costs are not as … great as what some of the other figures that are being bandied about.”

Charlevoix County Commissioner George T. Lasater (R-District 1) said 95.5 percent of the constituents he contacted indicated that Charlevoix should honor the contract.

It’s very important to maintain our credibility in Charlevoix County,” he said.

Charlevoix County Commissioner Richard Gillespie (R-District 5) said a couple hundred thousand dollars of savings to the county is a “very valid reason” to withdraw from the contract.

Charlevoix County Commissioner Chris Christensen (R-District 2) said his main concern is to be fiscally responsible.

When faced with an opportunity to tackle the amount of money that we’re talking about,” Christensen said, it is difficult to pass on potential savings.

The measure to end the contract resulted in a 4-2 vote with Sullivan and Lasater as the “no” votes.

Reycling Timeline according to Charlevoix County Human Resources Coordinator Kevin Shepard.

September 2012

  • Initial Bid went out for hauling. Only 1 response was returned from American Waste. The hauling quote was higher than anticipated, however they included an offer for hauling and processing which potentially could save the county $70,000 to $80,000 per year. Emmet County did not submit a bid.

October 2012

  • The recycling committee decided to rebid for Hauling Only.

November 2012

  • Received several responses to the Hauling only bid request. American Waste still had their hauling and processing bid on the table from their unsolicited offer from September. The recycling committee verbally requested Emmet County submit a bid for Hauling and Processing in addition to just hauling.
  • Emmet County’s bid for hauling and processing was based on 732 pulls; the quote from American Waste was based on 875 pulls. So this gave the appearance that Emmet County was the lower bid, but it wasn’t a true comparison.

December 2012

  • During a special meeting of the Recycling Committee a discussion took place concerning the inconsistent numbers of pulls which led to a suggestion to table a decision to allow for more discussion. (As stated in the minutes)
  • This suggestion wasn’t accepted and a motion was made to award Emmet County the hauling and processing contract, which passed on a 4-1 vote. (In minutes)
  • In passing the above motion the Recycling committee went against their own bid requirements and awarded Emmet County the hauling and processing contract when their own bid requirements clearly stated hauling only.
  • Also in passing this motion the recycling committee awarded a bid to a “higher bidder”. This is proven in a letter from the Recycling committee to the board of Commissioners in January 2013.

January 2013

  • A letter from the recycling committee (dated 1/3/2013) to the Board of Commissioners outlined the recycling bid numbers for clarification. It states that for hauling and processing, based on 875 pulls, American Waste came in at $180,000 and Emmet County came in at $182,896.55. Remember hauling and processing was the motion that passed during the December Recycling Committee meeting.
  • It was also explained in the letter that we would need to spend an additional $20,000 in bins if Emmet County were to be awarded the contract.
  • B & G named Kevin Shepard, Frank Shaler and Larry Sullivan to dive into the numbers and bring the most economical recommendation back the committee in February.
  • Emmet County released 2 ½ page public relations summary concerning this situation on their web page. Included on the web page was incorrect information and was taken down a couple days later.
  • One of the inaccuracies was Emmet County’s claim that they were the low bidder. This was incorrect based on the information provided in 1/3/2013 recycling committee letter to the board. It clearly states for hauling and processing based on 875 pulls, American Waste $180,000 and Emmet County was $182,896.55 plus $20,000 purchase for bins. These numbers are relevant because hauling and processing was the motion passed by the Recycling Committee and these numbers have not been disputed since November.

February 2013

  • B&G committee sent out a nine question clarification letter to both Emmet County and American Waste. It was my understanding that this was just to clarify information already received.
  • Emmet County did not answer the questionnaire. Stating they will stand by the bids they have previously submitted, which is exactly the same information we were seeking clarification on to make our decision.

March 2013

  • B&G Committee received 1 Bid questionnaire from American Waste, Emmet County refused to answer. American Waste bid was for $175,000 per year not to exceed.

Conclusions: (Based on information provided by the recycling committee and previous information)

  • $175,000, 10 year, not to exceed price, plus 2.9% yearly increases – American Waste
  • $182,896.55, 2 year, plus $20,000 additional cost for bins – Emmet County
  • American waste bid will save CC taxpayers $86,047 per year based on last year’s numbers
  • It will cost CC taxpayers an additional $43,000 to stay under contract with Emmet County for 2 years.
  • American Waste is a guaranteed not to exceed bid, CC taxpayers will have a fixed cost for up to 10 years.
  • Emmet County’s bid is based on 875 pulls, and not fixed. So if we exceed 875 pulls CC will pay more with no cost guarantee from year to year.
  • At the end of American Waste’s proposed 10 year contract CC will pay in year 2023 Approx. $30,000 less then we paid in 2012.