The push to outsource the city’s solid waste enterprise — nearly 2 years old — is slowly reaching its conclusion after the city presented its evaluation of four outside proposals for the service at a Killeen City Council meeting Tuesday.
While letting go of the service could have a positive effect on residents’ wallets, friction is building over how top city management is handling the effort and how much input residents should have in the process.
This week, council members Gregory Johnson, Shirley Fleming and Steve Harris pushed Killeen City Manager Ron Olson for resident involvement in the decision to outsource the 87-employee, $17.4-million enterprise.
However, concerns over business competition and communication between council members and outside companies could make it difficult to bring residents into the discussion. That reticence to engage solid waste customers has spurred accusations from council that the city is pushing the topic down the road and attempting to sway the council’s decision making.
With so many unanswered questions still floating around in council chambers, an authoritative decision on the outsourcing doesn’t seem likely at Tuesday’s special workshop, the first time the council will dive into the meat of the private proposals.
‘A lack of respect’
At least one council member saw Tuesday’s presentation as a rush job intended to shut residents out of the process.
On Wednesday, Johnson unloaded on Olson in a conversation with the Herald, calling him “authoritarian” and directly opposed to outsourcing the solid waste enterprise.
“I feel this city manager and senior staff think we are part-time ‘rubber stampers,’” Johnson said. “I think (Olson) has a lack of respect for council members who don’t agree with him.”
Olson was not out of town and unavailable for comment late this week.
Johnson blasted every step of the city’s process of seeking outside proposals for the service, saying the city’s request for proposals and its staff evaluation committee revealed little business or industry expertise.
Johnson specifically pointed to the city’s proposal evaluation committee comprised of Assistant City Manager Dennis Baldwin, Director of Public Works David Olson, Finance Director Jonathan Locke and city engineer Amy Burlarley-Hyland, saying the committee included no residents or solid waste professionals.
“At least one of our citizens should have been appointed,” Johnson said. “They had no intention to include citizens in this decision.”
On Tuesday, Olson told the council that staff would explore the possibility of resident involvement in the process, including a possible public hearing or forum at a later date. However, Olson said, protections on business competition would limit how many details of the proposals were available for public review.
Mayor Jose Segarra, who aided Olson in shaping the council presentation Tuesday, said the report was purposely inadequate and expected the council and residents to have more time to discuss outsourcing in the coming weeks.
“I would probably agree it was inadequate because we just wanted to put it forth for (the council) and give them a week to digest,” Segarra said. “Next week, we are going to go more in depth. By no means are we trying to shove it in.”
Segarra said he had no indication Olson was trying to sway the council’s decision on the outsourcing.
“(Olson) tries to keep his bias out of it, so whether he has an opinion or not, he doesn’t reflect that,” Segarra said. “I guess he’s learned how to be a good city manager, because he doesn’t try to be biased either way.”
Johnson said he intended to push for a resident face-to-face forum with the four companies vying for the service in the coming weeks, despite concerns over violating the city-imposed ban on ex parte communication between the companies and council members.
“I will go out of my way to make sure the citizens will be informed before I vote,” Johnson said. “I’m not here to condescend the city manager, I’m not here to turn this into a conspiracy theory. I am here to say there are problems.”
According to the findings from the city evaluation committee, Northampton, United Kingdom-based FCC Environmental met all of the city’s desired criteria for an outside residential and commercial solid waste service.
According to a request for proposals issued Feb. 12, the city offered companies three service options, one mimicking the city’s current enterprise and two alternatives.
In its “base plan,” the city sought proposals that would provide one-day-a-week residential pickup for a tiered cart size system with 32-, 64- and 96-gallon options. The contractor would be required to pay a 9 percent franchise fee to the city’s general fund as part of its agreement.
The city’s first alternative limited those options to only a 96-gallon cart with weekly pickups. In the second alternative, the city desired proposals for only 96-gallon containers and the return of curbside recycling, which the council voted to dissolve in August 2016.
The city’s proposed plan would provide a 96-gallon trash cart and a 96-gallon recycling cart to each residence that would each be picked up once a week. In return, the contractor would pay the city $10,000 monthly in recycling sales fees on top of a 9 percent franchise fee due to the city.
The city also sought proposals that would purchase the city’s solid waste fleet and equipment, provide a plan to hire all 87 of the city’s solid waste employees and lease the city’s recycling center and transfer station.
According to the city, each of the four proposals were judged on six categories, including qualifications and experience, project methodology, service yard and facilities, transition plan, customer service and public education, and rates and fees. Rates and fees, according to the city’s request, was weighted at 50 percent of the proposal’s evaluation.
The city evaluation scored FCC at a total of 688 points out of a possible 100 due to the company’s meeting of almost all the city’s stipulations.
The only area where FCC offered lower rates than the city was for 96-gallon containers, where the company proposed 22 cents less per month for the average 96-gallon customer. The company offered higher rates for both 32- and 64-gallon containers.
However, FCC did offer to purchase all city vehicles and equipment, agreed to lease the recycling center and transfer station and intended to hire all “qualified” displaced city employees.
The other three companies — while not meeting all of the city’s checklist — offered a range of rates for those services. Notably, Hillsboro-based Frontier Waste Solutions offered lower rates on all residential cart-size rates and commercial rates. The city noted the company is only 1 year old and submitted a proposal that “did not provide sufficient details, evidence and information to display their ability to perform.”
The other two companies who submitted a proposal were:
Houston-based Waste Management, which currently contracts with the city to truck trash from Killeen to the landfill in Temple
Austin-based Texas Disposal Systems, which previously pitched a privatization bid to the council in August 2016.
The council will next discuss the proposals at a special workshop Tuesday following its regular meeting.
Due to concerns over business competition, the council is able to view the four proposals in full at City Hall, but the public will not be allowed to view the documents until a possible contract is signed by the council.
In the style of council workshops, the council will be asked for a consensus on the direction of the outsourcing moving forward — and those options are numerous.
On Tuesday, Olson asked the council to consider re-issuing an RFP for a 15-year contract with outside companies if the body decided an outsourcing presented a feasible option. The current RFP only asked for a five-year term, but Olson said some of the proposals asked for a longer term to help defray the company’s initial investment.
Olson also told the council it would have to consider “shifted costs” — or expenditures in the solid waste department that an outside company would not pick up — in its decision. An example of a “shifted cost” is mowing, a $900,000-a-year expenses the solid waste department currently performs.
During budget talks in summer 2017, Olson said he was unsure why some mowing expenditures were being paid through solid waste but was hesitant to move all expenditures back to the general fund in one year. Olson’s original plan was phase mowing back into the operational fund over time.
If the council decided to outsource, mowing and other expenditures would have to be picked up by other funds with no clear revenue source. Olson predicted the effect on the city’s operational fund alone would be $1.185 million annually.
Segarra said he didn’t expect the council to make an immediate decision any time soon and expected council members to do their due diligence in studying the issue.
“If we have a discussion and there’s not enough, let’s just do another one,” Segarra said. “I don’t think its enough, it’s too big of a decision to make in two weeks. We have questions that have to get answered.”
The council is scheduled to discuss the decision during a special workshop Tuesday at the Utilities Collection Building, 210 W. Avenue C, immediately following its regular meeting at 5 p.m.
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