Council mulls over terms of solid waste disposal contract

Seattle generates a little over 300,000 tons of non-recycled solid waste per year. The contract for hauling away and disposing of all that garbage, under the auspices of Seattle Public Utilities (SPU), has been in place since 1990 and runs until 2028. But the Council is now arguing over whether it should opt out in order to put it out to bid for the first time in over a quarter century.

Just to be clear, this isn’t the contract for street collection of garbage; it’s for the bulk shipping and disposal of garbage from the city’s transfer stations to a landfill, which is a separate contract. Trucks take shipping containers full of solid waste from the transfer stations to the Union Pacific Railroad’s Argo Yard in South Seattle, where they are loaded onto trains. Three times a week the trains haul the city’s accumulated solid waste 320 miles to the Columbia Ridge Landfill in Arlington, Oregon. There the containers are emptied into the landfill and the train hauls the containers back to Seattle to repeat the process (in case you suffer from insomnia, you can read the full specifications for the process here).

As SPU’s web site notes, it wasn’t always this way. Up to the 1980’s, the city’s garbage was dumped into local landfills. Then they filled up and were declared Superfund cleanup sites. That led Seattle in 1990 to sign the current contract, with a company now known as Waste Management, to haul and dispose of its solid waste to “an environmentally safe, privately owned landfill.”

The original contract specified a 37-year term, running to March 31, 2028. The contract specified specific dates when the city can opt out without cause along the way and terminate the contract early, such as if it is unhappy with the vendor’s performance or it thinks it can put it out to bid and get a better deal.In 1996, 2001, and 2009 the city amended the contract to delay out those opt-out dates in order to secure better contract terms.  The issue in front of the Council is that the next opt-out date is March 31, 2019, and SPU would like to once again push out the opt-out date in order to reduce the rates it is charges.

It’s a strangely structured contract. Technically the amendment doesn’t extend the term of the contract; it still terminates in 2028. In practice, though, by pushing out the date when the city can opt out, there isn’t much difference between it and simply having a contract with termination dates and an option to renew at specified terms.  The 37-year term seems long, but with the opt-out clause it isn’t really; still, the long contract length makes sense given the huge up-front and ongoing investment in infrastructure by the vendor in order to haul the garbage by train, including train engines and cars, shipping containers, and machinery to load and unload the containers.

The proposed amendment to the agreement would push the opt-out date five years, from 2019 to 2024. In exchange, it would discount the hauling and disposal rate by $2 per ton this year, an additional $2 in 2019, and an addition $.50 in 2021.

Over seven years, this is projected to save $8 million for the city. SPU recommends using the saving in part to cover capital project expenses, and in part to reduce the rate it charges its customers for solid waste disposal.

According to SPU, the 2017 rate, $42.51 per ton, looks good compared to Snohomish County’s $51 per ton and Clark County’s $41 per ton for a shorter haul and a different mode of hauling its solid waste.

When it was discussed in committee two weeks ago, there was a sole voice of dissent: Council President Bruce Harrell. His objections:

  • The contract hasn’t been bid out in 26 years. He thinks that’s too long, and the city should “test the market.”
  • He also wants the chance to explore opportunities to leverage new technologies, such as methane capture at landfills, to both save money and be even more environmentally friendly.
  • SPU didn’t bother to tell the Council last year that it was negotiating an amendment to the contract, and is pushing the Council to make a decision quickly without opportunity to hear from stakeholders and the community.
  • He doesn’t think the city should be sending its solid waste out of state, and in particular to a non-union site, when he believes there are better alternatives in Washington State that would support jobs here.

SPU isn’t convinced that this is a good time to test the market, nor that there are viable alternatives that would better meet the city’s socially responsible commitments. But with the accelerated timeline they have pushed for, there’s little opportunity for the Council, in its oversight role, to validate that on its own — and that rubs Harrell the wrong way.

The committee vote was 3-1, with Council members Herbold (the committee chair), O’Brien and Sawant voting “yes” and Harrell voting “no.” The bill still passed to the full Council for consideration, but with a divided report that spells out both sides of the issue and a mandatory extra week for deliberation. Unfortunately, Herbold was unavailable for today’s Full Council meeting, so the Council voted unanimously to hold it until next Monday’s meeting so she can join in the deliberations. That also buys them another week to push SPU for better information and for their own staff to validate the utility’s claims.

We’ll see where this ends up next week.