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Mayor Jean Stothert | City of Omaha

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(November 19, 2019)

Firstar Fiber’s bid to process recyclable products for the City of Omaha will be rejected and the City will rebid the contract with different terms.

The City notified Firstar today of its intent to reject the $4 million dollar bid. The bid equates to $200/ton, double the amount the City expected and greater than Firstar’s retail rate for its other customers, $110/ton.  

In a letter to Firstar Fiber CEO Dale Gubbels, Public Works Director Bob Stubbe wrote, “the bid exceeds the City’s budgeted estimate for the work to be performed and is therefore, being rejected.”

In September, the City advertised a Request for Bids to award a new 5-year contract for processing that would respond to uncertainties in the recycling market, and still be affordable and fair to taxpayers. The contract would have replaced the current agreement with Firstar Fiber, which ends December 31, 2020. The new contract could have been implemented as early as January 1, 2020 if the City had received favorable bids. Firstar Fiber submitted the only bid.

Firstar Fiber has been under contract with the City since 2006. The initial contract (2006-2015) required Firstar to pay the City based on the volume of recycled material.  The second contract (2016-2020) required Firstar to continue those payments.  Due to the plummeting recycling market, the City and Firstar amended the contract, requiring for the first time, the City pay Firstar $25.92 per ton to process recyclables, the same fee paid to dispose of solid waste at the landfill.  Monthly payments to Firstar started in September 2019. 

“We recognize the changes in the recycling business require us to pay for processing, but this bid is excessively high and would require significant cuts in our 2020 budget,” said Mayor Jean Stothert.

The processing contract is separate from the solid waste collection contract, recently awarded to FCC Environmental.  That contract includes $5.3 million for curbside recycling collection and takes effect January 1, 2021.

“We are committed to recycling, but we must have a fair price,” said Mayor Jean Stothert.

The City currently collects approximately 17,000 tons of recyclables annually for delivery to Firstar Fiber for processing. Volume is expected to increase to 20,000 tons or more with the switch to the new solid waste collection system and covered carts.

A new Request for Bids will be developed with new terms, which will include input from industry experts, including a longer term contract.