Eager to stave off a rate reduction, an attorney for the consortium of trash haulers that service 1-to-4 unit residential buildings in St. Paul informed the city council that the pricing formula agreed to by all sides in 2017 was irrelevant.

That formula uses gas costs, a consumer price index, county “tipping” or disposal fees, and actual tonnage to determine residential rates for the next year — adding up to a $1 million rate reduction next year for St. Paul property owners, according to city officials.

But costs at the Ramsey County disposal facility that the haulers are mandated to use under the contract have increased, said Daniel Schleck, legal counsel to the haulers’ consortium, even though tonnage has gone down.

“Disposal rates went up 20 percent,” Schleck said, addressing the council Wednesday. “For some reason the city thinks disposal pricing should go down.”

Schleck told the council that in presenting a $1 million rate reduction, city staff “attempted to intimidate the haulers, that it’s the city’s way or the highway. … They’ve told us what the rates are going to be, with no negotiation. … The haulers are proposing to keep the rates the same.”

Council President Amy Brendmoen was not pleased.

“We’ve been attempting to set the rates … since July,” Brendmoen said. “We have one week left, and here we are feeling like we have to reopen the whole contract in order to do something set out under the terms of the contract.”

Council Member Rebecca Noecker said if the equation set by contract shows a rate reduction, St. Paul homeowners should get a rate reduction.

“My constituents are not going to have a ton of sympathy,” she said.

The issue has been quietly contentious for months.

A $2.5 MILLION RATE HIKE, OR $1 MILLION CUT?

Last August, six trash haulers informed the city of St. Paul they wanted residential rates to rise $2.5 million next year, a 10 percent hike.

The city, pointing to the pricing formula laid out in the five-year contract, responded with a counter offer: a $1 million rate reduction, as well as limited cart sharing for duplexes, triplexes and four-plexes — something “zero waste” households and owners of small rental properties have demanded for months.

Rejecting that proposition, haulers later offered to keep rates flat for six months, but declined to discuss any other contract changes.

The conversation, made public this week in 57 pages of letters between the city and the private consortium of haulers that service St. Paul, quickly hit an impasse.

Proponents of cart-sharing took their opposition to the trash hauling contract to the Minnesota Supreme Court this year and, on Tuesday, a public ballot referendum. Voters chose to uphold Ordinance 18-39 — the city regulations that paved the way for trash collection a year ago — by a vote of 63 to 37 percent.

But that hasn’t ended discussions behind the scenes.

Rather than turning a deaf ear, Solid Waste Program Supervisor Chris Swanson presented both ideas to the consortium of six residential trash haulers that, under a five-year contract, service the city’s 1-to-4 unit residential buildings.

“The city,” Swanson wrote on Aug. 30 and then again on Sept. 6, “proposes permitting limited cart sharing including requiring duplexes to have at least 1 large cart between the two units; triplexes to have at least 1 medium cart and 1 small cart; and four-plexes to have at least 1 large cart and 1 medium cart.”

Town homes, said Swanson, should have the option of opting out entirely. Overall trash collection rates would drop for residents by roughly $1 per month.

“Our questions are if the haulers want to sit down and discuss these three items,” said Swanson in the Sept. 6 letter, adding in bold: “Yes or No answer.”

He added, “If the answer is no they don’t want to negotiate, then we will send our 2020 rates according to the terms of the contract.”

On Sept. 9, Greg Revering, chief manager of the St. Paul Haulers consortium, told the city to leave it alone.

“The St. Paul Haulers Consortium is not interested in meeting and discussing the 3 items listed below in your email,” Revering wrote.

Instead, the haulers asked the city to hold off on decreasing rates by $1 per month until the outcome of the city’s Nov. 5 vote. They asked instead for rates to be frozen at 2019 levels for the first six months of 2020.

On Sept. 25, Schleck, an attorney with the law office of Messerli Kramer, informed the city that it needed to figure out what would happen if the Nov. 5 ballot referendum overturned the legal structure for trash collection billing: “Focus efforts on preparing a contingency plan for addressing the potential success of the referendum to overturn St. Paul Ordinance 18-39 before addressing any 2020 rate adjustments.”

He went on to say that “as an accommodation to the city and the citizens of St. Paul, the consortium is proposing that no adjustment be made to the current rates published on the city’s website and being paid by (residential users) for trash collection for first six months of 2020. This proposal takes the urgency and time pressure out of the impasse and will give the two sides (time to) work together to collaboratively address the rate adjustment for 2020.”

A ‘RANDOM SYSTEM OF PRICE ADJUSTMENT’?

He said the city had proposed a “random system of price adjustment which subsidizes some (homes) at the expense of others,” and needed to take into account actual county disposal costs, delays and gaps in data collection and “past practice” into account, rather than rushing into new rates for “political” reasons.

On Wednesday, he repeated several of those comments before the council, causing open frustration and confusion among the council. At one point Shleck pulled out a copy of the contract and called the cheapest trash rates too expensive.

“The people who are paying for the every other week service are subsidizing the rest of the city,” Shleck said.

Council Member Jane Prince, who had voted against organized trash collection a year ago and also opposed the contract signing in 2017, looked flabbergasted.

“I agree … but that was something you guys agreed to,” Prince said. “I cannot believe that you guys are revisiting that. … You’re going back to 2017 to say, ‘Wow, this isn’t fair’? I don’t understand how this factors into this rate discussion.”

Responded Schleck, “I think that you’re missing the point.”

Brendmoen said it was the second time he had a told a female council member she was confused.

“Just clarify and don’t tell us that we’re misunderstanding. Thank you,” she said.

Schleck reiterated, “One should be double the other.”

Revering, the representative of the consortium, took the microphone to explain that complete tonnage numbers were not available until Sept. 30, and the city’s pricing equation does not reflect the latest figures.

“All we’re looking for is to negotiate,” Revering said, “and not have a rate that is pushed and set by the city. … We didn’t have all the tonnage in place. The formula that the city is going by right now is inaccurate.”

Council Member Chris Tolbert noted there are other items the city wants to negotiate. “Are you open to that?”

Added Prince moments later: “Are you suggesting that you’re willing to lower the rates of the every other week cart?”

Said Brendmoen: “We have to set the rates. … and your position is that there’s an error in what’s presented to you?”

Council Member Mitra Nelson: “There’s a dispute with total tonnage collected. Knowing that is helpful but … here are the four factors (that set pricing). … I would not characterize that as us telling you what it’s going to be.”

Said Tolbert again, “Am I right? You want to renegotiate this part of the contract?”

Schleck responded: “We want to follow the contract. … The consortium will continue to follow the contract.”

Tolbert to Revering: “My question is to you, sir, not the lawyer.”

Revering: “We want to negotiate the rates as set.”

Tolbert: “You’d like to negotiate because you don’t like the outcome of some of the pricing.” He then asked if the haulers would revisit cart sharing.

Revering: “I think we could handle some of the negotiations around sharing. … We need to be able to sit down with the city.”

Schleck then objected, saying the contract allows for discussion around pricing, not around other aspects of the contract.