The contract with Allied Waste Services allows the company to increase its rates according to the Consumer Price Index each year.
Michael Reeves, municipal marketing manager at the company’s Corpus Christi office, said a 1.2 percent increase in the CPI would allow his company to increase the rate for all solid waste customers.
However, Reeves said Allied was offering a suspension of the increase for one year if the city would agree to extend Allied’s contract for another three years.
Reeves also offered a two-year suspension of the increase in return for a five-year extension of the agreement.
Interim City Manager Marvin Townsend questioned whether the city could extend the agreement without holding a public hearing and passing an ordinance related to the extension.
Townsend said he was not certain if the agreement would be considered a contract of a franchise. If the agreement is considered a franchise, extending it would require passing an ordinance to approve it. And that would require a public hearing.
Reeves explained that an extension to the current agreement was a concern with his company because Allied had made a $1.5 million investment in the Beeville operation two years ago.
That investment included the purchase of two new collection trucks and the purchase of large, blue containers to be placed at residences and businesses that do not use the larger, steel dumpsters.
One of the toters is used for recyclable discards such as paper, plastics and metals. The other container is used for trash, household garbage and other items that are to be discarded in a sanitary landfill.
Reeves said the extension of the agreement would allow his company to recover the cost of that investment.
City Attorney Frank Warner said he did not think the agreement was extended by ordinance when it was last acted upon by the council.
He said approving a city ordinance requires two public hearings and a 30-day delay with publication notices.
“Our company has been very generous in the past,” Reeves said. He told the council that the delay in the rate increase would be for residential customers only and not for commercial customers.
“We’re OK with this contract,” Warner said. “We have a contract right now that’s been in effect since 2011.”
Martinez then made a motion to grant the extension for three years, and Councilman George P. “Trace” Morrill seconded the motion.
It passed without opposition.
Gary Kent is a reporter at the Bee-Picayune and can be reached at 358-2550, ext. 120, or at reporter@mySouTex.com.