Lexington's longtime garbage contractor is challenging the city's decision to award a five-year pact that could be worth up to $17 million to a new contractor with a landfill in Scott County.
Republic Services, which has had the contract to manage the city's transfer station and to haul garbage to Republic's landfill since 1995, has filed an appeal with the city alleging that Waste Services of the Bluegrass was awarded the contract inappropriately.
That appeal will be heard Wednesday. A lot is at stake: the city's trash contract is one of Lexington's biggest ongoing expenses.
Bill Lear, a lawyer for Republic Services, told the council during its March 10 meeting that the city did not score Republic Services' bid proposal correctly and that there were concerns Waste Services of the Bluegrass did not have enough landfill capacity over the next five years for the city's garbage.
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"There seems to be a scoring anomaly," Lear said. "Our price appears to be lower."
He said Waste Services of the Bluegrass has enough landfill capacity for only four years instead of the required five.
James Frazier, a lawyer for Waste Services of the Bluegrass, disagreed.
At the March 10 council work session, Frazier said there has been no "misguided information. We have more than enough capacity."
Frazier said that after Republic learned Waste Services of the Bluegrass was awarded the contract, Republic gave the city new prices.
In a letter to the council, Republic says fuel prices have gone down since it submitted its bid in August, which would lower its overall bid. Originally, Waste Management of the Bluegrass's bid was $3.86 million compared to Republic's bid of $3.98 million. But if Republic's lower fuel costs were factored in, Republic's bid would be lower.
Republic Services argues that Waste Management of the Bluegrass has only one landfill and that an engineering report sent to the city incorrectly calculated the amount of remaining capacity in Republic's Lincoln County landfill.
Waste Services of the Bluegrass submitted letters from other landfill operators saying they would serve as a "backup" landfill if needed.
Frazier said not only is the independent engineering report correct, but Waste Services of the Bluegrass has an application pending to double the capacity at its Scott County landfill. In addition, Waste Services of the Bluegrass has come up with some innovative green initiatives, including trying to develop rail systems to haul waste from Fayette to Scott County. It is also going to sell methane gas from its landfill. The city will get a portion of the sales of that methane as part of the solid waste contract.
"We not only had the best price, but we also had the best bid," Frazier said. "We were the only company to bring in green" initiatives.
Republic also alleges that Waste Services of the Bluegrass has been fined and had state violations at its landfill in Scott County.
According to state Energy and Environment Cabinet records, Republic also has had violations at some of its landfill operations during the past five years
Gene Vance, a lawyer for Republic, said those violations — at landfills in Frankfort and Ashland — were not covered in the city's bid. The city wanted to see violations only for landfills where the city's garbage would be taken.
Frazier said any violations with the state have since been corrected. Moreover, the city has thoroughly vetted Waste Services of the Bluegrass.
"The city has assembled a blue ribbon panel since August of last year; they have looked at this contract inside and out," Frazier said.
Todd Slatin, the city's purchasing director, said price was one of five categories in the bid. Waste Services of the Bluegrass scored higher than other bidders in several of the categories. The city received three bids for its garbage contract.
Lear had asked that the council delay the first reading of Waste Services of the Bluegrass' contract during its Tuesday meeting until after Republic's appeal was heard.
But Slatin and other city officials told the council that the city does not delay approval of contracts when an appeal is filed. If the council did so in this instance, it would be setting a precedent.
If the appeal is successful Wednesday, the council could table the contract at its meeting Thursday, Slatin said.
The contract is for a little less than $4 million a year for five years. The new contract begins July 1.