At the same time Mayor Mitch Landrieu is proposing substantial increases to monthly sanitation fees, the mayor said Thursday he is haggling with the city's two largest trash-collection vendors, Metro Disposal and Richard's Disposal, to reduce the cost of their contracts. The firms earn a combined $27.5 million annually to pick up trash in areas outside the French Quarter...
At the same time Mayor Mitch Landrieu is proposing substantial increases to monthly sanitation fees, the mayor said Thursday he is haggling with the city's two largest trash-collection vendors, Metro Disposal and Richard's Disposal, to reduce the cost of their contracts.
View full size'We're working very hard to get them to try to understand that we believe the city is paying too much for garbage services and the contract is not consistent with what we believe the fair market value is,' Mayor Mitch Landrieu said of Richards Disposal and Metro Disposal. The firms earn a combined $27.5 million annually to pick up trash in areas outside the French Quarter and Central Business District, though each took a 10 percent pay cut in January in return for a three-year contract extension from then-Mayor Ray Nagin.
If the parties can't reach a long-term agreement, Landrieu said he will rebid the deals next week.
"I believe these contracts are too rich," Landrieu said after his 2011 budget address at Gallier Hall. "We're working very hard to get them to try to understand that we believe the city is paying too much for garbage services and the contract is not consistent with what we believe the fair market value is."
SDT Waste & Debris Services, which picks up trash and cleans streets in downtown areas, agreed this summer to cut the cost of its city contract by 25 percent, from $5.16 million to $3.84 million a year, for the rest of its term. While the company continues to perform most services required under the deal, it quit providing free perks, such as pressure washing in certain areas. City crews are picking up some of the slack.
Daniel Davillier, a local attorney who represents Metro and Richard's, said both firms have offered "significant financial concessions," even though the companies contend their original rates are comparable with what other local parishes pay for similar service.
The companies also do not believe City Hall has the right to "unilaterally disregard" their contracts and seek new bids, he said.
The matter puts Landrieu in delicate territory, and not just over legal technicalities.
The garbage deals are the most lucrative city contracts ever awarded to companies owned by African-American businessmen. And since former Mayor Ray Nagin awarded them in 2006, questioning their terms or the manner in which they were awarded generally has met with fierce resistance.
For his part, Landrieu has pledged to expand access to public contracts for local entrepreneurs, especially women and minorities. A series of executive orders he issued in June was lauded by the New Orleans Regional Black Chamber of Commerce, which counts Davillier as its chairman.
As the mayor haggles with Metro and Richard's, he said he will try to achieve the objectives of that effort.
"I am sensitive to the racial overtones here, but I don't think there's any citizen in New Orleans -- African-American, Caucasian, Vietnamese, Hispanic -- that wants to pay somebody $3 for a loaf of bread when you can buy it at the corner drug store next door for $1," he said.
The mayor's job is to make sure City Hall gets the best value "irrespective of the race, religion, origin, sexual orientation of a city contractor," Landrieu said.
"I just asked the citizens of New Orleans to put up more money and to make a sacrifice. I can do that with a clear conscience and a clear heart if I can say to them that I have gotten every contract at the right price," he said. "It's very hard to ask them to pay more money to pay for a service that we're being charged more than we should for."
Michelle Krupa can be reached at mkrupa@timespicayune.com or 504.826.3312.