A trash-hauling company that wants to grow by taking on the City of Omaha’s contract has provided a bid that includes reasonable proposals but could be underestimating its overall costs.
That was the conclusion of a review requested by Mayor Jean Stothert. The mayor, who prefers a different company, asked for the review of the bid preferred by some City Council members.
At issue is whether West Central Sanitation of Minnesota can collect trash, recycling and yard waste as efficiently as it says.
HDR Inc., an Omaha-based global engineering firm, analyzed West Central’s bid and found two areas of risk:
- West Central assumes that it can provide curbside collection more efficiently than other bidders. If the company is wrong, it will have to acquire more equipment and workers, which will eat into its profitability.
- West Central may have underestimated the cost of the property it would need in Omaha.
The city paid HDR $18,000 for the analysis, and the company’s conclusions are in sync with an analysis by a working group that was led by the city’s Public Works Department.
The city’s Finance Department has also reviewed West Central’s financial information and concluded that the company would double in size if awarded the 10-year contract.
Omaha Finance Director Steve Curtiss called such growth a “huge risk to the city” and said it’s uncertain whether West Central could secure the financing needed to serve Omaha.
That question will be answered Wednesday morning, said West Central’s owner and president, Don Williamson. The company’s bank will send the city a letter providing its assurance of financial backing.
As for the HDR analysis, Williamson said the company stands by its record: Over the last 40 years, all of its communities have stayed with it rather than seek someone else to do the job.
He said he he’s had his eye on Omaha for years.
“Let’s be honest, if the largest trash company in the world (Waste Management) is taking care of Omaha and they’re having trouble, maybe it’s time to find a company whose only mission is service to Omaha and to doing a good job,” he said.
The contract under consideration is for 10 years and has the potential to grow to 20 years, the Mayor’s Office noted.
The company says that for $22.2 million a year, it could collect yard waste, trash and recycling separately. That’s about $500,000 less than the bid from FCC Environmental, which would collect trash and yard waste in one bin and recycling in another. Stothert recommended the FCC bid after the Public Works Department recommended against West Central.
The council could vote on the contract as soon as June 4.