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City enters into unique agreement for grinding services

After the loss of an expensive piece of equipment at the landfill this summer, the city has made an agreement with a local businessman, which it believes will be beneficial to both entities.

The idea for this arrangement came out of the city’s budget workshops. City workers discussed the cost of purchasing a new grinder to turn scrap wood into mulch, because the old one had burnt out. This grinder would cost the city around $300,000.

“During those discussions is when Mr. (B.J.) Raffelson approached the city about entering into a contract with him to provide grinding services if we could find some common ground,” City Manager Gary Person said. “What would benefit not only he as a business person offering the service but also the city in providing mulch.”

At Tuesday night’s meeting, the city council approved an agreement with Raffelson Rock for grinding and mulching services of scrap wood. This agreement means that the city will have the exclusive rights to Raffelson’s grinding services inside Sidney’s zoning jurisdiction.

The mulch will be sold by yard measurement at a cost set by the city council at a later date. All proceeds from mulch sales will be divided between Raffelson and the city. Raffelson will receive 75 percent of the proceeds while the city will collect 25 percent. Mulch used by the city will be sold to the city at a $5 discount per yard from Raffelson’s regular 75 percent. Raffelson will receive 100 percent of the proceeds from mulch used for city operations.

Wood accumulated for grinding will be stored on city property and all grinding and mulching will be done on landfill property. All products derived from this on city property will remain at the city landfill until used by the city or sold by city personnel. Raffelson will still be able to provide additional mulching services, if it so wishes, outside the city’s zoning jurisdiction, but it cannot provide these services inside the city while entered into the agreement with Sidney.

The city had not been able to provide mulch to the public since its own grinder had burnt out, which was a service much appreciated by the community.

“I think we all have mutually agreed with the staff and with Mr. Raffelson that these points are what we feel are fair for both parties,” Person said. “The majority of the risk Mr. Raffelson does have, because he has to purchase the machine, he has to provide the service, he has to produce the mulch for us to have products to sell.”

Raffelson will buy the grinder and will be responsible for payment and upkeep of the machine. The company will also provide all the equipment, additional material and personnel necessary to create any mulch products. The city will not be liable for injuries to people or damage to equipment that occurs in the process of making the mulch. All material, after mulching will be stored and sold by the city.

Any other grinding that the city requests of Raffelson such as the grinding of asphalt shingles will be done through a separate negotiated agreement.

When determining the proposed price of mulch the city will keep in mind the reimbursement Raffelson requires to provide the service as well as what will be fair for public sale. These prices would still be low enough that it would be more cost effective for contractors to buy mulch from the city than to truck it in from outside of town.

When the city produced its own mulch, much of it was used at the golf course and by the parks department. This was provided by the city to city departments at no charge, which will obviously no longer be the case.

“It’ll still be a reasonable amount that we can incorporate into our budgets each year,” Person said.

Grinding will be completed on the landfill site, near the location that wood is currently piled.

“I think it’s more cost effective for everybody,” said B.J. Raffelson of Raffelson Rock.

The city has plenty of extra land in this area, Person said.

“I’d like to thank the city staff and B.J. and the Raffelson organization for working out a win-win for both of us,” said councilman Mark Nienhueser. “It saved the city spending $300,000, granted we’ll have to spend some money buying mulch over time but it should save city staff time at the landfill too.”

The initial agreement between Raffelson and the city covers the time span of three years.

 

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