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Attorney: Change redefines number of households served, reduces amount trash company pays city

Attorney: Change redefines number of households served, reduces amount trash company pays city

September 17th, 2010 in News

The current status of Jefferson City's contract with Allied Waste may soon be for the dustbin.

Michelle Gleba, Jefferson City communications manager, announced Thursday morning the City Council will hear the introduction of an ordinance to change the terms of the trash contract to alter the number of households that will be served and the amount Allied Waste will have to pay the city.

City attorney Nathan Nickolaus said the changes are being proposed to prevent the city from breaching its six-year contract with Allied Waste that began in November 2009.

The first change redefines the number of households that will be served. When the contract was written, Nickolaus said, city officials estimated there would be 14,000 singlefamily and duplex households. While there were questions about the accuracy of the figures from the beginning, both parties originally agreed to give a little time before the final number was determined. But by this June, it became clear the number should have been closer to 12,600, Nickolaus said. Because the city was not able to deliver the number of accounts that were first estimated, the city stood the chance of being in breach of the contract, he noted.

In addition to the household alteration, the city has agreed to reduce Allied Waste's road use and future planning fees by $320,000 for the first two years. After next year, the fee amount will be based on average Consumer Price Index increases or decreases.

The $320,000, Nickolaus said, primarily would have come from the road-use fee, though the amount fluctuates with the tonnage that Allied would use. The money, if it had been collected, would have been a supplemental addition to the city's street budget.

Nickolaus said that from the beginning, there were questions about the accuracy of the numbers, based on the 2000 Census.

"We've been aware of the problem for a long time," Nickolaus said. "I would say probably in the last 60 days, we've been really working on this (specific amendment)."

With the approaching first anniversary of the mandatory trash service on Nov. 1, Nickolaus said Allied Waste protests over the discrepancy increased. Because of the complaints and the uncertainty of what Allied would do, Nickolaus said the city decided something had to be done to preserve the contract.

Nickolaus said he does not know exactly what Allied Waste would do if the city were in breach of the contract, but said there were indications it would not have been in the city's best interest to continue the current course of action.

"I have asked them pointblank if they considered it to be a breach, and they do," Nickolaus said. "They had gone as far as to hire an attorney to represent them on that."

Rick Graham, general manager for Allied Waste, confirmed that steps would have been taken if the city had not resolved this issue, but said that such actions would not have been unique to just Allied Waste.

"That's a lot of homes to be off," Graham said. "Any company, I don't care if it was Allied or another, that would have come in and bid on it would have to figure that it would take you so much cost to run this town, to drive every street. You have those costs built into your prices. If you come up short, you have made a lot of investments in a lot of the cost of equipment, and you have got your returns not coming in where they need to be.

"Anybody would have been talking to the city on this issue."

Graham pointed out that there will be no change in service to customers because of the amendment. Likewise, Nickolaus said, there will not be an increase in price.

Allied Waste has been involved in the drafting of the amendment to assure it will satisfy the concerns of all parties.

A final stipulation of the amendment states if the total number of households drops below 11,000, the city and Allied Waste will renegotiate the agreement.

Nickolaus could not think of any natural reason that the number of households would drop below that level. He did say, however, a proposed ballot issue could present a problem if passed by voters.

The Citizens Action Committee Against Ordinance No. 14487 has the signatures required to get the issue on the ballot, and the City Council on Monday could decide which election will be used. The ballot issue would ask voters to make participation in the $15.34-a-month trash/ recycling program voluntary, rather than mandatory.

"It's the nuclear bomb because, what happens is, if that passes, that will be a breach of the contract in and of itself," Nickolaus said. "Allied has made it very clear to us that they would consider that to be a breach of the contract.

"Even if we do this and that were to pass, we may be forced to do something after April, no matter what. And there is nothing that we can do about that. That's just going to be up to the people to decide what they want to do. ... But our guess is that a third of the people would drop out of the system. ... You would still have the problem of so many people dropping out of the system."