Covington reviews solid waste contract bids; Republic scores highest on combined evaluation, no award yet

Covington city leaders on March 11 reviewed results of a request for proposals for the city's solid waste collection contract and discussed optional service changes and rate impacts, but made no award.

The consultant leading the procurement, Jeanette Jurgensen of Been There Consulting and Epicenter Services, told the council that three haulers submitted proposals and that the evaluation combined a quantitative price score (60 percent) with a qualitative score (40 percent). Jurgensen said Republic Services submitted the lowest-priced proposal and also earned the top combined score; the panel's totals were Republic 90 points, Recology 85.6 points and Waste Management 84 points.

Why it matters: the city's current contract is roughly $4.3 million per year under the consultant's customer-count assumptions, and all three bids came in noticeably higher. Jurgensen summarized the submitted annual contract values as Recology about $6.4 million (roughly 50% above the current baseline), Republic about $5.2 million (about 22% above) and Waste Management about $6.0 million (about 41% above).

The evaluation process and committee City staff and a multi-department review committee read proposals, visited recycling sorting facilities, interviewed each hauler and performed reference checks. Jurgensen said the committee scored qualitative elements such as customer service and sustainability (40 percent of the overall score) and combined that with the price-based quantitative score (60 percent) to reach the final rankings.

"I am pleased to see that our lowest rate increase is in the twenties," Jurgensen said, referring to the range of proposed price changes compared with the city's current contract.

Alternatives presented for council consideration Staff asked the council whether to include any of six optional services (each priced separately by proposers and not included in the quantitative 60/40 evaluation): - Weekly recyclables collection (current service: every other week). A city survey found 79 percent of respondents preferred to keep the current every-other-week recycling schedule, largely because of cost. - Embedded organics/compost collection (currently offered as a subscription). About 4,400 households currently subscribe to organics service, which the consultant said represents roughly 70 percent of the customer base under the RFP's customer-count assumptions. The survey found 55 percent of respondents preferred to keep organics as subscription service rather than embedding it for all customers. - New carts for all customers (swap-out). Proposers provided per-customer annual impacts if the city required new carts for the entire service area. - A 50 percent low-income discount linked to eligibility similar to King County's property tax exemption program (intended for low-income seniors, persons with disabilities and disabled veterans). Staff said the city does not yet know how many households in Covington would qualify; the consultant noted the utility-tax-rebate program historically had about six applicants in Covington. The consultant also presented an illustrative breakeven analysis showing the number of discounted customers required for each proposer to justify the projected revenue change (Recology ~41, Republic ~280, Waste Management ~16, based on the most-common service level and the proposers' pricing assumptions). - Contract term change from 10 to 12 years. Staff told council that extending to 12 years increases the proposers' base pricing in the bids rather than reducing cost, primarily because truck replacement and continuing uncertainty in recycling markets factor into proposer pricing. Staff said the 12-year option would add roughly $100,000 per year in the initial contract-year equivalency for one illustrative proposer, which aggregates to about $1.2 million over a 12-year span in nominal terms (the consultant explained that the additional amount would escalate with the contract inflators). - Change to the service-fee escalation index (moving from CPI-W to a Water/Sewer/Trash index or a flat percentage). Staff noted that the Water/Sewer/Trash index can track higher than CPI-W in low-inflation periods and lower in high-inflation periods; council asked staff to run specific numbers for the proposers using the alternative index.

Survey results and policy context Staff reported a city-conducted community survey that informed the alternatives: a majority preferred keeping recycling every other week (79 percent) and keeping organics as subscription service (55 percent); 51 percent supported a low-income discount if it slightly raised rates for other customers. Staff also noted a pending state "organics management" law that will require cities to provide organics collection (the law will allow cities to issue exemptions for households that can demonstrate they do not generate organic waste). Council and staff discussed how a mandatory organics law might be implemented mid-contract and agreed the city could amend the contract later or rely on subscription rates already included in the RFP.

Council questions and staff direction Council members questioned how qualitative scores were reached, whether service-level agreements (SLAs) and call-center KPIs were part of the base contract, and how the low-income discount would be administered and budgeted. Staff said SLAs and minimum call-center requirements were raised in the base contract language and that the RFP increased minimum customer-service standards based on community feedback. On the low-income discount, staff said eligibility parameters had not yet been finalized but that the city was likely to align with King County standards used for the utility tax rebate.

No award; next steps Staff told council the item would return as new business at an upcoming council meeting with a staff recommendation on which hauler to select and which optional alternatives, if any, to include. Council did not take a formal vote at the March 11 special meeting.

Implications and timeline If the council selects a proposer, staff said they would finalize contract language and bring a formal contract award to council. Council members repeatedly emphasized the tradeoff between price and service quality, noting residents often want both lower rates and improved customer service but that price historically drove the 60/40 evaluation weighting used in the RFP.

Ending Staff and the consultant asked for council direction on any alternatives to add to the contract and said they would return with formal recommendations and the necessary numbers for the council business meeting.