County to save $86k

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County officials propose breaking existing recycling contract with Emmet County in order to save money

By Benjamin J. Gohs
News Editor

A 2-1 vote by the Charlevoix County Building & Grounds Committee could break a recycling contract with Emmet County that would save taxpayers $86,000 in its first year.

While the matter will now go before the Charlevoix County Board of Commissioners for a decision on March 13, Charlevoix County Building & Grounds Committee members Larry Sullivan, George T. Lasater and chairman Rich Gillespie almost did not reach an agreement during their Wednesday March 6 meeting.

 

“I feel an obligation. We should honor, for the credibility of Charlevoix County, our contract with Emmet County upon the recommendation of the recycling committee,” Lasater said.

Gillespie said he would have voted for honoring the contract if it weren’t for the significant amount of money the county will save by switching service providers.

Sullivan said he had received numerous calls from his constituents who were concerned about prematurely ending the contract between Charlevoix and Emmet counties.

“I have serious concern with dropping that contract,” Sullivan said. “My recommendation would be that we stay with the processing contract with Emmet County until the completion of that and then have at it for any and all parties at that time.”

The issue dates back to September of last year when, despite being in the last two years of a five-year contract with Emmet County to haul Charlevoix’s recyclables, Charlevoix County officials requested new bids for the service.

It should be noted that the agreement between Charleviox and Emmet counties included a clause that either party could end the agreement with 60 days notice.

The decision to recommend that American Waste be awarded the $175,000-per-year contract came after nearly eight months of bidding, re-bidding, numerous meetings and disagreement among Charlevoix and Emmet counties, building and grounds and the Charlevoix County Recycling Committee.

Charlevoix County Human Resources Coordinator Kevin Shepard discussed the general time-line of the recycling bid issue during the building and grounds meeting.

• September 2012 the county requested bids for hauling only and only one bid—American Waste—was received.

• American Waste’s bid was higher than for hauling than anticipated.

• American Waste then sent the county an unsolicited bid for hauling and processing.

• In October 2012 the county decided to re-bid for hauling only.

• Several responses to the hauling request were received that November.

• The number of loads of material to be transferred differed significantly between American Waste’s and Emmet County’s bids, leading it to appear as though Emmet County had the lower cost of services.

• December 2012, a special meeting of the recycling committee was held to discuss the inconsistent numbers. The committee instead went against its own bid procedure and recommended awarding both the hauling and processing to Emmet County. The bid requirements had specified “hauling only.”

“As it would come out later, by passing this motion, it actually went to a higher bidder,” said Shepard.

• In January 2013, Shepard, Sullivan and Charlevoix County Building and Safety head Frank Shaler looked at the bid process to ensure it had been properly handled and the most economical recommendation would go to the board of commissioners.

• In February 2013, the building and grounds committee sent a nine-question letter to American Waste and Emmet County seeking clarification on their services.

“It was kind of disappointing that Emmet County did not answer the questionnaire,” Shepard said. “They’re stating they’re standing behind the bids they previously submitted but it’s exactly that bid information that we’re seeking clarification on.”

Charlevoix County Clerk and Fiscal Officer Cherie Browe said Emmet County did not make their intention about allegedly standing by their original bid in any official capacity to Charlevoix County.

“If they did it publicly, they didn’t do it directly to this committee saying ‘I want you to consider our first bid because we’re not to going to respond to this,” Browe said.
Sullivan said he did receive a letter to that effect.

“Again, we have tried to resolve this in a reasonable way,” Gillespie said. “I just don’t know what we do other than we’re here to open bids.”

The recycling committee’s recommendation was to award the bid to Emmet County.

“Emmet County has publicly stated that they are standing behind their bid that was submitted earlier this year,” Sullivan said. “I think this committee needs to resolve whether or not we’re going to consider that or not consider that bid.”

Gillespie said that, since Emmet County did not respond to the nine-question questionnaire, he isn’t sure if their bid could be considered.

During the public comment portion of the meeting, several people voiced concerns about ending the agreement mid-contract.

Planning Commission Chairman Denny Jason said the county should not vacate Charlevoix County’s contract with Emmet County.

Gillespie said the bid process was carried out democratically, legally and that certain provisions of the request for bids had been altered to better meet the county’s needs.

“We revised the process to include hauling and processing,” Gillespie said.

Jason said, “I realize that but I think right now we’re under a obligation to have the processing done for the next two years. We have a five-year contract with them. We have a moral obligation. I think we need to stand by that.”

Charlevoix County Recycling Committee Chairman Nancy Ferguson said it may be legal but, if they ended the contract with Emmet County, it could make future business deals more difficult.

“If we decide to end the contract we have with Emmet County … who’s going to want to make a contract with us?” she said. “Do we honor our contracts? Contracts are made for a specific amount of time and they are meant to be honored for that specific amount of time.”

Ferguson said the recycling committee acted in accordance with the bid procedure and that it was American Waste who muddied the process by including information that had not been requested.

“Emmet County … answered the bid so that we could compare apples and apples, and one company decided ‘We have this information because we do this.’ Which isn’t necessarily wrong but please do the bid the way we specified it, which would have made it easier right from the get-go,” she said.

Ferguson said in 12 years the recycling committee has never had a problem like this.

Shepard disagreed with Ferguson’s assertion that the bid process was not flawed.

“I disagree with that comment wholeheartedly. The bidding process went out to the recycling committee for hauling only,” Shepard said. “If they were so worried about the integrity of the process then they should not have awarded the bid for hauling and processing.”
He added, “You have to compare hauling and processing to hauling and processing.”

Sullivan said the recycling committee never offered a contract or awarded one—they simply made a recommendation.

Lasater queried why there was a proposal to change vendors in the first place.

“Other than the financial picture, is there any probable cause why we should cancel that contract?” Lasater said.

Gillespie said there was an overall agreement to send the job out for new bids.

“I believe we’re here to finally try to resolve this and put it to rest,” Gillespie said. “Whether we have to excuse ourselves from the contract or not? Clearly we have the right to do that if it’s in the best interests of Charlevoix County.”

Jason questioned the process; Gillespie said the committee’s civil counsel assured them the process they followed was proper.

Only one bid was received and only American Waste responded to the questionnaire.

American Waste bid $200 per pull at a rate of 875 per year for a total cost of $175,000 annually with a projected cost increase of no more than 2.9 percent annually.

Shepard said the first year of the contract with American Waste would save the county $86,000 and that, even by the end of the 10-year contract, the county would be saving $30,000 annually.

Before the committee made a motion to vote on  sending American Waste’s bid to the county board, Sullivan commented that he had seen the prices change and that he understood bidders might do so in order to win a contract but, “Emmet County was definitely the low bidder on hauling at $135 a pull. Processing is another issue.”
American Waste’s initial bid on hauling, according to Sullivan, was $235 for hauling.

“With the processing, in addition to the hauling, that has dropped to $200 per bin. That tells me there’s some value in that recyclable material to American Waste—probably $30 a bin,” Sullivan said.

“Would it be out of line to hire Emmet County to haul the material to Traverse City for $135 a bin; and, every bin that gets there, American Waste would compensate the county $30 because there appears to be that value at least in terms of what’s in the bins?”

Sullivan added, “I say it somewhat in jest but looking at the way the numbers came all over the board.”

Gillespie said that is not what the point of the meeting was about and asked for a motion to award the bid to American Waste.

“I will not make that motion or support it,” Lasater said.

Gillespie responded: “You’re going to shove this process back even further, gentlemen.”

Gillespie made the motion to award the bid to American Waste.
Gillespie said the point of the meeting was to award a bid and asked where the committee should go from there.

Sullivan mentioned the letter he received from Emmet County but Gillespie said that letter was “out of order” and did not follow proper procedure.

“The longer this process goes on it’s $9,000 to $10,000 a month more we’re paying to drag this process out,” Shepard said.

Lasater said his opinion remained unchanged but, in order to move the process along, he seconded Gillespie’s motion to recommend American Waste receive the contract.

Sullivan was the lone nay vote on the matter.

The matter will now go before the Charlevoix County Board of Commissioners on March 13.