City Directors seek legal opinion about trash franchise agreement options

A decision about a franchise agreement with Altes Sanitation awaits a legal decision on what the city is required — or allowed — to do at the end of the franchise agreement expiration in July 2010.

During Tuesday’s (Sept. 8) study session, Fort Smith City Directors asked City Administrator Dennis Kelly to obtain a legal opinion on the city’s contractual obligations once the franchise agreement expires.

At issue is about 4,700 residential trash accounts in the southern area of Fort Smith around Fianna Hills. The contract Altes had to provide the service expires July 2010, and Fort Smith Department of Sanitation (DOS) Director Baridi Nkokheli has asked the board to allow the department to handle all residential trash collection in the city. Presently, Altes is the only third-party trash service handling residential waste in Fort Smith, with the DOS handling 82%, or the other 20,820 accounts. (Link here for more details on the issue.)

Kelly said it is his understanding that Altes does not automatically get a renewal. He said if the board chooses to seek another franchise agreement, the contract will have to be put up for a public bid. The other option, Kelly noted, is to pull 100% of the city’s residential waste collection under the DOS.

DOS Director Nkokheli opened his comments by citing the differences in quality — city has newer, automated trucks that can do more in terms of waste removal — between the city and Altes, and reminded the board that all city residents pay the same fee but get different service.

“Separate is inherently unequal,” Nkokheli noted.

To address the allegations that government service is inferior to the private sector, Nkokheli told the board that efficiencies in equipment and procedures has allowed the department to serve a customer base with 12 people and eight trucks that once required 24 people and 12 trucks.

Bobby Altes, operations manager for Altes Sanitation, told the board that his company offers the same level of service, if not better, than the DOS. Altes said his best evidence for keeping Altes is the 72% satisfaction rate the company garnered in a January 2008 survey. Also, he noted that if Altes lose the agreement, the city would lose about $360,000 a year in tipping fees the company now pays to use the landfill. Altes questioned how the city board could not “honor the wishes of 72% of their constituents.”

City Director Bill Maddox jumped to the defense of Altes, saying that Altes and the DOS could use “a lot of improvements,” but noted that the 72% satisfaction rate was a “substantial amount for us to seriously consider.”

Maddox also said most of his complaints about trash service were against the DOS. However, City Director Cole Goodman said the majority of comments he received were supportive of the DOS.

City Director Kevin Settle said he is an Altes customer and is an unhappy customer. He said the board could, as Maddox did, talk about anecdotal problems instead of addressing the real issue of equal trash service for all city residents. Settle said he is convinced that the DOS provides better service although all citizens pay the same rate.

“The question is, ‘Do we want two levels of service in the city?’” Settle said in addressing his fellow board members.

Settle said the board should decide between all private or all public service, adding that he wanted to give the DOS a chance to prove it could provide superior service to all city residents.

The board is expected to reconsider the issue at its Sept. 22 study session.