Detroit — The City Council signed off Tuesday on two emergency manager-approved agreements to let two private firms handle the city’s garbage pickup and recycling services.
The panel voted 5-3 in favor of both contracts after lengthy debate on the deal, which officials say is the largest privatization arrangement in Detroit’s history.
Members Mary Sheffield and Scott Benson and Council President Brenda Jones voted no. Saunteel Jenkins was absent.
“People just want trash to get picked up,” said Councilman Andre Spivey, who supported the contracts. “We’ve got to move on it today and move to our next hurdle to continue being somewhat relevant here in the city of Detroit.”
The city said in November that it had selected the two firms — Advanced Disposal Services and Rizzo Environmental Services — for the five-year solid waste disposal contract that’s expected to save the city $6 million per year. The contract also provides the option of five, one-year renewals.
Under it, Detroit will institute citywide curbside recycling and more frequent bulk collection.
Rizzo will be paid up to $49.1 million to provide services to about 106,000 households. Advanced Services will service about 141,000 households and be paid up to $73.5 million.
The contracts will be paid through the city’s Solid Waste fund, not Detroit’s general fund, as is the case currently.
Rizzo is expected to begin work on May 1 and Advanced on June 1.
“This is the first big effort to look at restructuring services on a large scale in the city and we obviously think it’s worthwhile,” Bill Nowling, a spokesman for Emergency Manager Kevyn Orr said after the vote.
Jones, who was among the council members to vote against the contracts, questioned if the agreement “Is it really going to save the city money?”
Orr gave the council an opportunity to accept or reject the agreement under the state’s emergency manager law.
Detroit’s Chief Operating Officer Gary Brown, who led a committee that reviewed the bid proposals, has said the process was “extremely thorough and competitive.” No unions placed a bid the emergency manager’s office previously confirmed.
“We let the facts drive our decision and, in the end, the committee concluded that the residents of Detroit are better served by turning over trash collection to private contractors better equipped to provide improved and expanded service,” Brown has said.
Officials say the agreement will improve services and remove the city’s burden of finding adequate staff and funding to invest in repairing its fleet.
Brown said most of the department’s 120 trucks are 14 years old. It would cost the city about $35 million “it does not have” for new equipment, he said.
Rizzo will spend $13.2 million on equipment and Advanced will spend $21 million on carts and trucks.
When the transition is complete, officials said the city plans to sell its fleet of garbage trucks and use the proceeds to finance a blitz effort to clean up illegal dumping in city neighborhoods and school areas.
Some unions have expressed concern over potential job losses. Orr’s office said the companies will extend job offers to current employees who meet qualifications. The city also has offered to meet with labor unions to discuss the transition.
The companies said they will hire 130 employees to perform the work — at a rate that’s $2 higher than what the city currently pays, the letter notes.
A job fair for existing DPW staff is anticipated within two weeks.