The Winona County Board approved a change to its five-year recycling contract with Veolia LLC Tuesday that would give the company an additional $58,000, over the original $730,000 annual contract cost—an increase of about eight percent. Residents pay a fee of $16 per parcel for the service, or $292,166 in 2012.
The county is the first in the state to offer curbside pickup of recyclable goods to every household, even in the most rural locations, a service which began in December of last year. Almost as soon as the trucks began picking up the materials, problems were identified.
First, the third-party contractor responsible for distributing the recycling totes to residents mistakenly delivered them to small businesses that were not included in the original contract, according to county staff. Nearly 600 totes were given to 146 businesses in the county that were not included in the agreement. Additionally, Veolia found it difficult to service at least 17 rural roadways, some found to be inaccessible during any snow event. In the city of Winona, Veolia found some areas where pickup at the curb was difficult, either because of the way the block was configured or because the alley was an easier spot for residents to place the tote for pickup. The company, according to county staff members, began sending trucks down both alleys and streets on about 241 blocks in Winona in January, although the original contract called for all totes to be serviced at the street curb.
Over the summer months, Veolia requested an additional $160,000 per year over the original contract price because of the problems, which would have been a 20 percent increase in the cost of the service. County commissioners balked at the request, and questioned the legality of the increase. Veolia asked that the additional money be paid retroactively. In effect, Veolia's total increased contract cost would have surpassed the cost of the second-lowest original bid. County leaders asked staff members to go back to the drawing board with Veolia and find a better solution.
Since that time, Planning and Environmental Services Director Jason Gilman said, many of the problems identified have been dealt with administratively. He said the request for $58,000 was for servicing alleys in the city of Winona. That is an “added service,” he said, which is one of the ways the county could increase the cost of the contract without worrying about violating any bidding laws. Gilman told the board that in January or February, Veolia had been informed of some initial customer complaints about needing pickup services in the alleys. At that time, he said, Veolia told county staff the issue would be taken care of, although Gilman said it wasn’t immediately clear that the business would then request more money.
“It’s a difficult issue,” said commissioner Jim Pomeroy. “As I looked at it, it’s a situation where we’ve got issues on both sides.” Pomeroy said the original contract called for recyclable goods to be picked up at the street curbs, but staff then “apparently” instructed the company to service some alleys. If the county calls for new bids for the program, he said, he said the county would likely receive bids that were much higher than the new total after the increase Veolia was requesting. “I’m not real thrilled about it,” said Pomeroy, who added he would support the $58,000 contract increase.
“To me, a contract is a contract,” said commissioner Marcia Ward. She said she felt there were a number of ways that the recycling service could be done more efficiently. She cited services to Whitewater State Park as an example. Instead of having Veolia empty 16 recycling totes at the park 34 times per year, the company should put a dumpster or larger bin and pick up the recyclable goods less often. She said there were many small businesses that had several small totes emptied frequently by the company, and that there were more efficient ways of offering the service for them. As for the city alley service, Ward said when residents in the city of Winona had recycling pickup through the city in the smaller purple bins, the service was only offered at the street curb and not in alleys. She wondered whether public education at the beginning of the service had been sufficient to let residents know they needed to get the new totes to the curbs rather than alleys.
The funding for the program comes from the county solid waste fund, which is in part funded by a $16 per parcel fee imposed on all county property owners. Gilman said there was about $500,000 in reserve in the fund that could be used to cover the $58,000 increase. Ward remarked that the $16 per parcel fee did not cover the service, and the recycling contract would likely use up all of the solid waste reserve dollars soon.
The city of St. Charles also pays the $16 per parcel fee, although residents do not receive county recycling services. Gilman said he had spoken with city representatives about the situation recently. St. Charles currently has its own contract with Veolia for recycling and garbage pickup in the city, and Gilman said it would either like to join the county’s recycling program and end its current contract, or receive some kind of rebate from the county for the $16 fee. Gilman said it would be best to come to an agreement with Veolia on the contract issues before determining how to handle the situation with St. Charles.
The Winona County Board voted 4-1 on the contract increase, with Ward voting against the motion. Veolia will not receive the extra funds retroactively to January, but to July.