He said the company would do the job for half of what the city was paying its own sanitation department.
The deal came under fire for putting people out of work. Residents were also asked to pay $12 a month for the service.
The city council has refused to ratify the deal with Allied, leaving residents caught in the middle.
"I think its wrong to charge people an extra fee for a general service," Gary resident Samantha Norton said.
"The citizens of Gary, Indiana were paying out of their property taxes. They were paying $41 a month, $12 a month residential," Gary Mayor Rudy Clay said.
Clay says former city workers were given a first chance at jobs with Allied.