CITIES AND TOWNS ‑- THIRD CLASS CITIES ‑- GARBAGE ‑- GARBAGE CONTRACTS ‑- COMPETITIVE BIDDING ‑- PURCHASES OF SERVICES

CITIES AND TOWNS ‑- THIRD CLASS CITIES ‑- GARBAGE ‑- GARBAGE CONTRACTS ‑- COMPETITIVE BIDDING ‑- PURCHASES OF SERVICES

Third class cities requiring garbage disposal service may not contract with private contractor for collection, whereby the charges are payable to the city and the private contractor paid 90% of monthly receipts, without calling for annual competitive bids and awarding contract to lowest responsible bidder under RCW 35.23.352.

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                                                                   June 11, 1956

Honorable E. Roy Mundy
State Representative, 13th District
P.O. Box 545
Ephrata, Washington                                                                                                             Cite as:  AGO 55-57 No. 283

Dear Sir:

            We are in receipt of your letter requesting the opinion of this office on the following question:

            "Can a city of the 3rd class negotiate a 10-year contract for the collection of garbage and refuse with a garbage contractor, where that city has a universal garbage collection ordinance requiring all persons in the city to use this service, and all funds are payable to the city, deposited in the city garbage fund and the city then pays the contractor a sum equal to 90% of the monthly charge to patrons, and the city retains the 10%, and the city does the billing and collecting?"

            We answer your question in the negative.

                                                                     ANALYSIS

            The pertinent statutes provide as follows:

             [[Orig. Op. Page 2]]

            RCW 35.21.120

            "Every city and town may by ordinance provide for the establishment of a system of garbage collection and disposal for the entire city or town or for portions thereof, and award contracts for garbage collection and disposal or provide for it under the direction of officials and employees of the city or town."

            RCW 35.21.130

            "A garbage ordinance may:

            "(1) Require property owners and occupants of premises to use the garbage collection and disposal system and to dispose of their garbage as provided in the ordinance; and

            "(2) Fix charges for garbage collection and disposal and the manner and time of payment therefor including therein a provision that upon failure to pay the charges, the amount thereof shall become a lien against the property for which the garbage collection service is rendered.  The ordinance may also provide penalties for its violation."

            RCW 35.23.352

            "Any city or town of the second, third or fourth class may construct any public work or improvement by contract or day labor without calling for bids therefor whenever the cost of such work or improvement, including cost of materials, supplies and equipment will not exceed the sum of two thousand dollars.  Whenever the cost of such public work or improvement, including materials, supplies and equipment, will exceed two thousand dollars, the same shall be done by contract after a call for bids which shall be awarded to the lowest responsible bidder.  Notice of the call for bids shall be given by posting notice thereof in a public place in the city or town and by publication in the official newspaper once each week for two consecutive weeks before the date fixed for opening the bids.  If there is no official newspaper the notice shall  [[Orig. Op. Page 3]] be published in a newspaper published or of general circulation in the city or town.  The city council or commission of the city or town shall have power by resolution to reject any or all bids and to make further calls for bids in the same manner as the original call, or if in its judgment the improvement or work, including the purchase of supplies, material and equipment, can be done by the city at less cost than the lowest bid submitted it may do so without making a further call for bids or awarding any contract therefor.  If no bid is received on the first call the city council or commission may readvertise and make a second call, or may enter into a contract without any further call or may purchase the supplies, material or equipment and perform such work or improvement by day labor.

            "Any purchase of supplies, material, equipment or services, except for public work or improvement, where the cost thereof exceeds five hundred dollars shall be made upon call for bids in the same method and under the same conditions as required herein on a call for bids for public work or improvement.

            "Bids shall be called annually and at a time and in the manner prescribed by ordinance for the publication in a newspaper published or of general circulation in the city or town of all notices or newspaper publications required by law.  The contract shall be awarded to the lowest responsible bidder."  (Emphasis supplied.)

            The foregoing statutes give third class cities the power to make contracts with private contractors for garbage disposal.  You have indicated that the proposed contract will contain a provision or provisions making service charges for garbage disposal payable to the city.  The city would place these moneys in a separate fund and pay the garbage contractor 90 per cent of the monthly receipts.

            Thus, it would be the city's responsibility to collect and enforce collection of these charges.  The money collected would be regarded as a special city fund.  The private contractor would have no authority to collect or enforce collection of garbage fees from members of the general public within the city.  Rather, he could look only to the city for compensation for the services performed.

             [[Orig. Op. Page 4]]

            For these reasons we feel that the proposed contract is a purchase of services by the city within the meaning of RCW 35.23.352.

            Also, we are of the opinion that the cost of this service will exceed the $500 maximum provided by RCW 35.23.352 beyond which all such purchases must be submitted to annual competitive bids.  It would clearly be impossible for a private garbage contractor to provide garbage service to a third class city for $500 a year.  Therefore, the city must call for annual bids and award the contract to the lowest responsible bidder.

            We are aware of the following decisions of our supreme court which might appear to hold the contrary.  However, for the reasons stated, we feel that they may easily be distinguished from the present situation.

            The case ofCity Sanitary Service Co. v. Rausch, 10 Wn. (2d) 446, appears to approve a ten-year contract for garbage disposal without discussing the issue of competitive bids.  We must point out that that case was decided in 1941, before the competitive bid statutes, Rem. Rev. Stat. 9055 and 9145, were repealed and replaced by RCW 35.23.352 (§ 2, chapter 211, Laws of 1951), which first required bids for purchases of services exceeding $500 in cost.

            The cost ofFriese v. Edmonds (1930), 158 Wash. 316, held that a contract whereby the City of Edmonds allowed a private contractor to dig wells on land owned by the City of Edmonds and agreed to pay the contractor $163 per month rental for water, if water were produced, did not require competitive bids under the then existing terms of the statute we have cited.  However, in that case, the court based its decision on the fact that the obligation depended upon the production of water.  If no water were produced there was no obligation, and the city could not be obligated for more than $163 at any one time during the agreement.

            In the instant case, as we have indicated, it appears certain that the city will collect revenues and be thereby obligated far in excess of $500 during the term of the contract.

            The case ofWashington Fruit and Produce Co. v. Yakima (1940), 3 Wn. (2d) 1952, holds that a contract which would otherwise require competitive bidding under a city charter provision requiring  [[Orig. Op. Page 5]] competitive bidding in all cases where public work is to be done by contract, did not do so where there was only one person or firm capable of furnishing the services for which the contract was entered into.  This is not true in the instant case.  Garbage collection and disposal service to a third class city is not such a tremendous undertaking or one requiring such expensive and specialized facilities and equipment that only one person or firm would be capable of providing it.

            We conclude that a city of the third class, which has an ordinance requiring all of its inhabitants to use garbage disposal service may not enter into a contract with a private contractor for collection of the city's garbage and refuse, whereby the charges for such service are payable to the city and the private contractor is paid 90 per cent of the monthly garbage service charge receipts, without calling for annual competitive bids and awarding the contract to the lowest responsible bidder in accordance with the terms of RCW 35.23.352.

            We trust that this opinion will be of assistance to you.

Very truly yours,

DON EASTVOLD
Attorney General

DUANE S. RADLIFF
Assistant Attorney General