Who Will Challenge Waste Management’s Price? City Of Orange Case Study

by MissionViejoDispatch.com on December 18, 2009

   Last week the MV City Council adopted specifications upon which trash hauling companies can bid for a 10-year contract.  The vote was 3-2.  John Paul Ledesma and Cathy Schlicht dissented because they wanted separate bids for residential and commercial contracts, like some other cities.  They noted some haulers specialize in commercial business which could lead to lower rates as opposed to a unified contract, where residents might subsidize business rates. 

   There were also differences of opinion regarding the inclusion of mandatory twice-yearly cart washing, which will increase rates. Cart washing remained in the specifications, although it is anticipated the feature will be negotiated further after a contractor is selected.  A Dispatch online poll showed residents oppose cart washing by a 2-1 margin, 67% to 33%.

   CR&R, which has contracts with 12 OC cities, was selected last week by the City of Orange to replace Waste Management, which serves 10 cities. The Orange consultant rated CR&R the best choice on qualifications, technical expertise, financial stability and cost of service.  A committee of city staff members agreed. Last Tuesday the City Council voted 4-1 to award the contract to CR&R.  Mayor Carolyn Cavecche cast the opposing vote because Ware Disposal had the lowest bid for residential service at $10.46 per month.  She noted the lowest rates would result from splitting the contract between Ware Disposal for residential and Athens Disposal, which bid $84.90 for monthly business service, according to the OCR.

   Orange residents have been paying Waste Management $14.15 per month. MV is paying $14.00, with 5% discounts to HOA’s and 20% for seniors.  Orange single family homes will pay CR&R $11.42 monthly when their new contract takes effect in February.  Orange has 90,000 residents compared to about 99,000 in Mission Viejo.

   Mission Viejo’s consultant is expected to review proposals and make a recommendation in March or April.  A new contract, which could be worth over $100 million, would become effective in 2011.

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