The Omaha City Council sent a signal Tuesday to the mayor and Public Works officials that it wants to make sure recycling services continue without interruption next year, and for the city to find a way to keep Omaha recycling for the long term.
The future of curbside recycling in the city is in limbo after Mayor Jean Stothert rejected a bid last month from the city’s current processor, Firstar Fiber of Omaha. She said the $4 million a year bid for five years, the only one the city got, was too high. She directed the Public Works Department to put the contract out for bid for 10 years, hoping to attract more bidders.
Firstar CEO Dale Gubbels appealed the rejection. The council voted 4-3 on Tuesday to postpone a decision on his appeal. They urged Assistant Public Works Director Jim Theiler and other city officials to keep working with Gubbels to at least reach a deal for Firstar to continue processing the aluminum cans, cardboard, newspapers and plastic that Omaha residents set at the curb.
Council President Chris Jerram said that if the council rejected Gubbels’ appeal, the contract “goes back on the street, and see you later Firstar Fiber, in comes the big company from out of town who says, ‘Put it on a BNSF railcar or a U.P. railcar and send it to wherever.’ And where’s that leave this company? Where’s it leave the taxpayers during the period of interruption, the citizens who want to divert from the landfill?”
Theiler told the council that the city is negotiating with Firstar on a short-term deal to continue recycling in 2020. But he said city officials, who had expected a bid of about $2 million a year, believed Firstar’s bid was too high.
“We believe a rebid process would allow us to get a better number from someone else or from Firstar Fiber,” Theiler said.
Firstar’s renegotiated rate with Omaha runs out at the end of 2019. Its contract runs through 2020, but the city and Firstar would have to agree on terms or risk the company turning away the city’s recycling.
City officials have nothing against Firstar making a profit, Theiler said.
“That’s their job, they’re supposed to look out for that,” Theiler said. “Our job is to watch out for the Omaha taxpayer. We saw a price that came in that we did not believe was fair to the taxpayer. So that was our justification for going out for the rebid.”
Theiler said city officials have had discussions with “local, regional and national” companies, and have a meeting planned with a national company that believes it can offer a better price. He did not name the company.
Stothert said in November that she wanted the city to solicit bids for longer terms. Such a move could spur more competition for the bid, including from new trash contractor FCC Environmental.
FCC CEO Inigo Sanz has said his company historically competes for recycling processing contracts once it moves into a market. Company officials have said they didn’t bid this year because the five-year contract term was too short for the investment that would be required.
Gubbels said the company submitted the lowest and best bid. He said he offered a fair price in a poor market for selling recyclables, one that would bring his company “a reasonable expectation of profit.”
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Council member Pete Festersen said he too would prefer a 10-year contract. That would align with the city’s new waste-hauling contract “and frankly give me more peace that we’re going to remain committed to recycling as we know it over 10 years, not just five years.”
But he expressed a caveat: “In no way do I want to jeopardize current service being provided to citizens in this respect. And in no way do I want to compromise the types of materials we’re recycling (and) reducing those kinds of materials, when every effort should be made at this point to increase our recycling.”
Jerram said the city could end up paying about as much to a company from out of town as Firstar proposed in its bid. He said he was disappointed that “we now face this uncertainty, this risk of interruption, let alone losing the service, losing an employer, losing jobs, losing job expansion.”
If the council had voted to grant the appeal, it would not necessarily have meant that Firstar would get the bid. The council doesn’t have the authority to approve the bid after it was rejected by the mayor, City Attorney Paul Kratz told the council. It wasn’t entirely clear Tuesday what would happen if the council eventually approves the appeal.
The vote Tuesday to postpone a decision on Firstar’s appeal was 4-3. Jerram, Festersen, Aimee Melton and Brinker Harding voted to postpone. Vinny Palermo, Ben Gray and Rich Pahls voted against doing so.