City adds more trash equipment

McCOOK, Nebraska -- The City of McCook is adding more equipment to haul its own trash to an Ogallala landfill following a stormy relationship with the last private contractor who performed the service.

The City Council awarded the bid for two new trash hauling trailers to IMCO Trailers, Monday evening, bringing the city's investment in new trash hauling staff and equipment to $260,251 since September 2012.

Officials have touted the shift from using private contractors, to assuming trash hauling responsibilities themselves, as a long-term cost-saving measure necessary to ensure city trash service was not interrupted.

They have also indicated on several occasions the potential for cost-savings was based on estimates, and said the city wouldn't know the true costs of getting into the trash hauling business until a year down the road, adding "we have never been in the trucking business."

The city purchased two 2006 Freightliner semi tractors in September 2012 for a combined $69,800. Some $46,189 was budgeted for new staff, a tractor-trailer operator and a part-time substitute driver. Those amounts combine with the $144,262 for two new trailers to equal the $260,251 investment by the city thus far.

The investment total does not include trailer rental fees or vehicle maintenance costs the city has also racked up. Officials informed the City Council one of the two semi-tractors already broke down while hauling trash.

Public Works Director Kyle Potthoff said during a budget meeting that the semi broke down a mile after unloading trash and was subsequently towed to North Platte for repairs.

Potthoff indicated that a third, backup semi tractor, would likely be requested in the future as well.

The city assuming trash hauling responsibilities has already resulted in a rate increase to McCook residents in the 2013-14 budget year, which is the first trash collection rate increase the city has had to impose in several years.

City manager Jeff Hancock warned during the final reading of the city budget that additional rate increases in coming years are also possible. Hancock said, even when taking into consideration the rate increase, the city implemented the first of October, there were concerns over expenses related to the city hauling trash on its own.

As a result, the council approved Hancock's recommendation to purchase new trash-hauling trailers with Keno revenue, leaving an additional $70,000 buffer in the solid waste department's budget to strengthen reserves.

Implementing changes to the city's trash hauling practice stemmed from a dispute between city staff and the former trash hauling contractor, Fritz Trucking. City staff initially announced issues with the hauler stemming from a buildup of trash in late August and early September 2012 that placed the city transfer station "one unexpected load away from having a shutdown."

In addition to the emergency purchase of two semi trucks, which officials said would serve as a backup plan, two trash-hauling trailers were rented for $4,000 per month.

Fritz Trucking owner Steve Fritz requested a rate increase during the same meeting the City Council confirmed the emergency purchase of the two semi-trucks.

Fritz asked that his trash hauling contract be amended from a per-ton rate of $13.50 to $16.50 per ton. The increase would have amounted to an estimated annual increase to the city of $42,000.

Councilman Bruce McDowell said at the time he was against the rate increase because it wasn't fair to the bid process.

Councilman Mike Gonzales opposed the requested 22 percent rate increase but indicated he would be more comfortable with a 14 percent rate increase.

Council unanimously rejected the $42,000 rate increase, as well as unanimously approving confirmation of the $69,800 purchase of two semi-tractors.

Fritz said in October 2012 the emergency purchase was unnecessary and issues with city trash hauling had been ongoing due to increased volume from hail storm repair and restrictive hours at the McCook Transfer Station, not an availability of his trucks as city staff had indicated.

Fritz's conflict with the city continued to worsen from there. In January 2013, he filed a claim for damages to his trailer he said were caused by city transfer station loaders. Fritz Trucking subsequently filed two claims for damages with the City of McCook in January and a third claim in March. Each claim cited damage caused to Fritz trailers by city staff during loading.

In April the city threatened litigation against Fritz Trucking via a letter citing issues of trash buildup at the transfer station. City staff requested a month later to cancel the trash hauling contract with Fritz Trucking and seek liquidated damages from a non-compliance penalty in the contract.

City staff also short-paid their April invoice with Fritz Trucking by $4,800 for not having two trucks and trailers on site each hauling day.

Fritz said in May he had the city tow his trucks during attempts to haul trash and was even blocked from loading on one occasion. Public Works Director Kyle Potthoff denied the claim and Fritz replied that on April 12 two police officers blocked his truck from loading. Fritz's comment was followed by several moments of silence as neither city staff or council members offered further comment on the topic.

According to court documents, Steve Fritz was arrested on April 11, 2013, at the transfer station by City of McCook police officers assisted by the Nebraska State Patrol. According to the police department, he parked a semi truck and trailer at the transfer station in an effort to prevent the city from operating the transfer station and hauling away trash themselves.

"His refusal to move the vehicle, and actions when asked to move the vehicle, led to his arrest for disorderly conduct and resisting arrest," said Chief of Police Isaac Brown.

City Attorney Nate Schneider subsequently prosecuted Fritz on a charge of disorderly conduct and Fritz was convicted and fined $300 in August 2013.

Fritz Trucking ceased trash hauling operations for the city on May 8, 2013. City Council subsequently cancelled their contract with the hauler on May 20. The cancellation was authorized on a split 4-1 vote.

During a July 2013 meeting city staff presented their first costs estimates pertaining to assuming trash hauling services themselves. The estimated savings primarily relied on the city taking advantage of their tax exempt status for fuel purchases, which was estimated offer the city a $.243 per gallon advantage over private contractors.

That advantage translated to an estimated $5,740 at a rate of $4 a gallon, which is more than the city is paying for fuel now.

At $4 a gallon, the estimates figured an annual total disposal cost to the city of $592,110, which is more than the $557,820 rate previously paid, but less than the $598,320 Fritz Trucking had requested via a rate increase.