Solid Waste Agreements

For many local governments, a well-crafted solid waste services contract is an important mechanism in arranging for a vital public service. It is also an essential instrument in maintaining productive a relationship between the local jurisdiction and a private service provider.

When challenges or opportunities arise, it is often prudent for the local government to obtain an outside expert. MSW Consultants has assisted several local government agencies with competitive procurements, sole-source negotiations, and on-going contract administration. MSW Consultants has significant expertise in dealing with contracts for solid waste collection, processing, and disposal.

Characteristics of Solid Waste Agreements

Solid waste agreements typically have the following characteristics:

High Dollar Value - The cost of providing solid waste collection and disposal is significant. Oftentimes, an exclusive solid waste franchise agreement is a local government’s single largest contract, representing millions of ratepayer dollars each year.
Impact Every Resident and Business - Solid waste collection touches every sector of your community. Your residents and business owners seldom give this vital service much thought; until the service fails to meet their needs.
Long Term Commitment - Solid waste management is capital intensive. It takes several years to amortize investments in land, buildings, vehicles, equipment, and containers. Solid waste management contracts represent multi-year commitments that often span the tenure of elected officials and agency staff.

Challenges of Solid Waste Agreements

Local government staff responsible for solid waste agreements often find themselves facing one or more of the following challenges:

New Environmental Regulations - Mandatory recycling laws and changing waste diversion requirements often require new or modified services that were not anticipated in the original agreement.
Changing Solid Waste Landscape – Changing world markets can lead to volatile changes in the market price of recyclable commodities. The closure of disposal facilities often result in extraordinary changes in the private waste hauler’s operating costs.
High Customer Rates - Customer rates can evolve over time and result in significant disparities between the customer rates in your city and those in nearby jurisdictions.
Mediocre Service - The overwhelming majority of private solid waste service providers deliver excellent service. However, if the quality of service that your residents receive is ‘not amazing,’ it may be time to consider other alternatives.
Market ‘Island’ – Your jurisdictions may be located in a relatively isolated region in which a single waste hauler dominates the market. As a result, there may not be enough qualified firms to create a competitive market for solid waste collection service.
Pressure to ‘Go Out To Bid’ - Some elected officials may naturally be inclined to ‘go out to bid’ when the end of a contract term approaches. Some jurisdictions may be required by law to solicit competitive proposals for solid waste services. However, the fact that a contract term is coming to an end is not, by itself, a reason to conduct a competitive procurement. There are many situations in which re-negotiating with the current service provider can be the best option for the local agency.

How We Help Our Clients - Negotiate vs. Competitive Procurement

If your solid waste agreement is approaching the end of its term, your jurisdiction may have already decided whether it wants to conduct a competitive procurement, or begin negotiations with your current service provider. Either way; we can help.

If your jurisdiction has not yet decided whether to negotiate or conduct a competitive procurement, we can help by meeting with agency management and key elected officials to review your unique situation. For a comparison of the pros and cons of sole-source negotiation vs. conducting a competitive procurement, please read more here [link to comparison of Negotiation vs. Conduct Competitive Procurement].

How We Help Our Clients - Sole Source Negotiation

The objective of sole-source negotiations is to obtain the same or similar outcome to the local agency as would have been otherwise achieved through an RFP process, while maintaining continuity of service to resident and businesses.

Every contract negotiation is unique, however, our approach to assisting local governments in negotiations with private waste companies typically include the following principles:

Focus on objectives that are common to the local agency and the waste hauler (e.g., safe reliable service, competitive rates, enhanced waste diversion, etc.)
Use objective independent benchmarks to evaluate and negotiate key deal points.
Craft agreement terms that foster a productive and transparent relationship.

How We Help Our Clients - Competitive Procurement

The objective of a competitive procurement is to conduct an RFP process in an objective, fair, and transparent manner that results in an agreement with a qualified service provider that delivers the best value for the community.

Our approach to competitive procurements typically include the following steps:

Prepare RFP Package

Review and confirm scope of service and key deal points.
Gather and analyze service information to develop service specifications and rate proposal forms.
Outline procurement process (e.g., schedule, pre-proposal meeting, process integrity guidelines, etc.).
Outline proposal content requirements and evaluation criteria.
Prepare draft agreement to include in RFP package.

Evaluate Proposals

Confirm experience and qualifications of proposers.
Confirm safety record of proposers.
Calculate aggregate cost to customers based on proposed rates.
Facilitate interviews and site visits.
Score proposals based on evaluation criteria.

Present Findings; Negotiate New Agreement

Present results to staff and elected officials
Negotiate final agreement with successful contractor.

Case Study: City of Anaheim

In 2010 and 2015, we assisted the OCCMA, which represents all the incorporated cities in Orange County, in negotiating a long-term waste disposal agreement with the County of Orange. The County owns and operates the three landfills used by the Cities.

In 2010, the OCCMA and the County negotiated a new long term Waste Disposal Agreement with a value of over $1 billion. MSW Consultants served as lead analyst. Work included reviewing the County’s extensive landfill tip fee model, and evaluating the reasonableness of the County’s projected tons, revenues, operating expenses, and capital expenditures. We also identified and quantified key deal points, and recommended negotiating strategies. In 2015, we again assisted the OCCMA in re-negotiating the Waste Disposal Agreement.

Cities We Have Served

Have a look at the different ways we have helped these cities. How can we help you?

Solid Waste Agreements