MRI files lawsuit against city

Garbage haulers say city didn't follow state law in opening up contract for bids

The company that provides garbage hauling services for roughly half of the residences in Minneapolis has filed a lawsuit against the city, claiming the city did not follow the process outlined by a state law when it opened the garbage collection contract up for bidding.

Minneapolis Refuse Inc. (MRI) filed the lawsuit March 21 in Hennepin County District Court. MRI is a group of private haulers that has managed garbage collection services on the city's west side since 1971. The city's Public Works department manages the east side.

The complaint alleges that under the state's Organized Collection Act, the city is required to take part in a 180-day planning process with interested garbage collection services - in this case, largely MRI - before taking any steps to reorganize its trash collection. The suit aims to force the city to comply with the planning process, during which time garbage haulers would have the opportunity to negotiate and discuss the collection service with city officials.

&#8220We've asked the city to comply with the state law and provide MRI with this 180-day procedure and because they have not, we have filed this suit on behalf of MRI,” said Mike Rothman, MRI's attorney.

The City Council voted Feb. 10 to issue a request for proposals for the garbage contract without first taking part in the 180-day planning process. MRI filed a motion for a temporary restraining order to halt the city's request for proposals process, but a judge denied that request at a March 23 hearing. A temporary injunction hearing has been scheduled for June 20.

A court document drafted by city attorneys in opposition to the motion for a temporary restraining order contends that the city does not need to follow the procedures outlined in the Organized Collection Act because Minneapolis already had its own rules regarding garbage collection services by the time the state statute was enacted in 1987. The city further argues that moving forward with the request for proposals process will not affect its current contract with MRI or the legal proceedings.

&#8220The city is pursuing requests for proposals in the hopes of being able to provide residential solid waste collection services in a potentially more efficient or less costly fashion. The process should continue unhindered by [MRI's] lawsuit,” the court document states, noting that MRI is free to participate in the request for proposals process.

The city's current contract with MRI was set to expire on Dec. 31 of this year, but the city recently agreed to extend the contract through the end of June 2007. MRI's contract is worth $6.5 million annually.

Rothman said MRI, which services approximately 54,000 residential units under its current contract with the city, does plan to submit a bid to the city as part of the request for proposals process. He said the courts have ruled that because MRI has filed the lawsuit, it can submit a bid and the city cannot use that to argue that the company waived its right to the 180-day planning process.

MRI Chairman Greg &#8220Red” Burt said if the city did not renew its contract with the consortium, 12 of the 14 haulers in the company would be financially devastated. Those companies are all small, local businesses that make up 70 percent of MRI's force. Burt said they undoubtedly would be put out of business by the loss of the contract. The other two companies are national businesses that make up no more than 30 percent of MRI.

Burt said he's confident in his company's pricing and service level, but he felt forced to file the suit because he wants the city to follow the procedure outlined in the Organized Collection Act.

&#8220It was the last thing in the world we wanted to do,” Burt said, noting that MRI and the city have worked well together for 35 years. &#8220I sit here kind of numb, thinking, ‘Why are they wanting to unravel this present system when it's worked so well and we have worked so well together?' We don't want to fight with the city. We want to continue doing the job that we've been doing all along, and do it with the city. It's a good partnership.”

But at the March 23 hearing, City Attorney James Moore argued that city officials have the right to examine whether taxpayers are getting the best deal under the contract with MRI.

&#8220Are we doing the best we can do for our taxpayers by renewing the existing contract on whatever terms we can negotiate with MRI for another five years or should we look at something else?” Moore said at the hearing, according to a court transcript. &#8220The time has come when the elected officials say we should look at something else.”