Trash hauling contract 1/21

Though we just finished a long process sealing a new trash disposal contract... now the Town's trash hauling contract is about to expire on June 30 2009.

So to recap some critical numbers, we generate about 8,000 tonnes of residential trash per year:

And the hauling fee for that 8,000 tonnes is:My question - do we bid the service?

My immediate reaction was to suggest we go out to bid. As I said last night... particularly with all of the controversy (think Gallante) surrounding this service... my automatic reaction is to go to bid. And we obviously need to do that, but not necessarily this year.

Because on the flipside, extending a five year contract by one year is not necessarily bad*... though in this case, I'm much more hesitant in doing so... for the above mentioned reason.

I asked staff if there were administrative reasons to extend the contract for one year. The answer was "no, we can make the bidding process happen in a timely manner."

So the answer seems simple - go bid it right now. But...

As many of you know, the commodities market has tanked. In other words, the recyclables market has tanked. I mentioned this in early December 2008.

Therein lies a potentially costly issue.

According to our current hauler, AJ Waste, residential garbage includes about 1,000 tonnes of paper and 500 tonnes of plastic... above and beyond the 8,000 tonnes of garbage. They elaborated saying that paper sold for $60/ton one year ago and now costs $30/ton to dump. Likewise, plastics have had a similar but less dramatic swing in the $50/ton range... rather than a nearly $100/ton swing.

So the two possibilities currently under consideration:

1) If we stay with AJ for one more year, they would give us about the same rate that we currently have... with a bump up.

2) If we go out to bid, prices could come down. But the recyclable component may add a significant new cost to the program.

Obviously, the Council needs to confirm some of these recycling numbers. So staff is going to make that happen.

In the meantime, I'd really like to hear from you... particularly in light of the Gallante stuff... must the Town go out to bid this year? Or would it be appropriate for the town to extend this contract one year in light of the volatility of the recyclables market?

And there's one more possible consideration... if we bid for a new contract to begin on July 1 2010, then we could incorporate automated collection in the bid. That means you'd get a 96 gallon bin that could be picked up with a big arm. This would reduce the staff on the truck from three to one. So over the course of time, AJ would reduce staff costs and get the payback on the new equipment. But if we go out to bid right now, that's likely off the table for July 1 2009 because of time constraints... as well as the realities of the credit markets.

My gut reaction is to always go out to bid. But in this case, considering:

1) the recyclable aspect
2) the possibility of moving to a more automated pickup
3) the well-known budgetary constraints facing the taxpayers this year

I'm leaning toward extending it one year.

What do you think?

Tim White

* The Council extended the most recent former auditors contract by a year or two

Also want to mention that the Solid Waste Chairman, Matt Altieri, did a good job guiding this meeting... as he did with the trash disposal discussions.