Following 60 years of service as the city’s garbage pickup contractor, the City of Aberdeen will be dropping LeMay as its solid waste pickup provider in favor of Hometown Sanitation, a Hoquiam company.
The decision was made at last Wednesday’s City Council meeting, following a request for proposals that set a non-negotiable two-percent decrease in garbage services compared to what LeMay currently charges.
Aberdeen Mayor Erik Larson said the original decision back in June to terminate the contract with LeMay and put the service out for bid was in order to gauge if the city was paying a fair market rate for the garbage service.
“I dug into it, and found, ‘Oh, we haven’t bid it out.’ I’m not sure we ever have since we started with them in 1958,” said Larson. “I figured, this has been going up with inflation for 65 years, and we have no idea if this is market rate. If we hadn’t have done it, the next contract would have been for likely 10 years.”
The city had received interest from Hometown Sanitation and other companies about offering garbage pickup services, which was part of what led to the decision to terminate the LeMay contract last June, according to Public Works Director Rick Sangder.
The bids include the garbage pickup rates that customers will pay, and a “franchise” fee that goes to the city. When the city reviewed the two proposals, one from LeMay and one from Hometown Sanitation, Sangder and Larson said they were both surprised LeMay declined to reduce its rates. And they were surprised that the company didn’t propose a lower franchise fee to the city in order to offset the loss in revenue from the lowered rates.
Because they didn’t meet the proposal’s criteria for a price drop, Sangder said that prevented the council from even considering the proposal.
“If they had done a responsive bid, say they put a 1.5 percent franchise fee, it wouldn’t have been as good an offer, but it would’ve been responsive, then the council could’ve taken action to award either one of them,” said Sangder.
During the council meeting, LeMay Site Manager Roger Swalander said the company found it odd the city was now requiring a price drop, and that it’s “not common in most contracts or RFPs, setting the rates.”
“… It brought concerns of motives,” Swalander said.
Swalander added he felt the proposed contract was “not written in a way that would ensure the winning bidder could maintain sustainability and continue to be able to provide service to the citizens of Aberdeen.”
According to Sangder, the Hometown Sanitation bid agreed to to the service charge Aberdeen mandated and suggested a 5.7 percent franchise fee, while the LeMay response did not agree to the lower service rates, and suggested a two percent franchise fee.
When asked if LeMay considered accepting the new RFP and negotiating the franchise fee, Swalander would only say that “we looked at the whole financial aspect of it and came to the decision that we made.”
Swalander said LeMay was not made aware by the city why it had only now decided to reduce the service cost after decades without doing so.
Hometown Sanitation will not take over for LeMay until November, and will need to purchase additional trucks to service Aberdeen.
Swalander said there was no animosity toward the city for its decision, and that they “appreciate being able” to continue doing service until their contract runs out.
Sangder said the city was “100-percent satisfied with LeMay’s service,” and that “it had to do with competition.”
Going forward, Swalander said he’s hopeful the company won’t have to lay off employees due to the dropped contract.
“We’re still reviewing, looking at options,” said Swalander. “We’re hoping to not have to lay anyone off.”
