By David L. Rose – May 11, 2014
Once of the inevitable tasks of any society besides the proverbial death and taxes is waste management.
As human populations have swelled, and nowhere is the more evident than during my lifetime in Southern California, the challenges of waste management have increased as dramatically. Issues swirl around recycling vs. inundating our landfills. Other issued include finding ways to recycle e-waste and yard waste, and the cost impact of waste disposal trucks on city streets.
The change from historically sweetheart “evergreen” contracts to recently more competitive contracts, due mainly to more public scrutiny, has created the inevitable tension between service and cost. As State of California legislation has imposed stricter minimal disposal standards include that for more stringent recycling requirements for businesses and yard and electronic waste for residents, cities in Orange county have felt the pressure to reduce costs while meeting standards that one official described as having been “shoved down the our throats by the State”. Disposal service providers find themselves pressed to meet state standards and address the needs and desires of a public that has greater awareness of historical excesses in evergreen contracts.
In order to gauge the cost-benefit of a new disposal contract for the City of Cypress I researched rates throughout Orange County and weighed them against services provided.
I found that, with one exception, the last four cities to negotiate new waste disposal contracts—Lake Forest (2014), Los Alamitos (2010), Mission Viejo (2010) and Orange (2013)— had significantly lower rates than most of Orange County. Currently Cypress residents pay $15.77 per month although for half the bins collected per week effectively doubling its effective rate to $31.54 per month, nearly 50% above the highest rate in Orange County. Of the 29 cities in Orange County contracting individual (vs. mixed waste collection), Cypress has the dubious distinction of being the only city that does not have weekly single bin recycling.
The range in recently contracted residential rates was much lower and very narrow from $12.30 to $13.73 per month. And all were one bin pick-up each for refuse, recycling and yard waste. The average rate is $12.80. Irvine currently has the lowest rate at $11.79 per month for full three-bin weekly service. These rates indicate Cypress could achieve a low market rate of $12.00, and it should be no higher than the mid-range market rate of $13.00 per month range (again, based on three-3 bin collected per week).
Some residents have suggested providing more bins for less collection on a bi-weekly basis to reduce the number of truck trips on city streets, limiting wear and tear and future maintenance costs. If done, fewer trips should also mean lower cost. I estimate that if refuse and yard wastes are collected weekly and recycling bi-weekly with two bins, the mid-range rate should be lower adjusted downward to about $11 per month.
Cypress also has the dubious distinction of having the highest commercial rates in Orange County, currently paying $180.99 per month, for one three cubic yard bin per week. The most recent contracts from the above cities ranged more widely from $49.46 to $120.11 per month. However, the exception was the rate for Los Alamitos that was nearly double other contracts, resulting in a lawsuit from business owners. Therefore, excluding Los Alamitos, the most recent commercial rates narrowed from $49.46 to $78.91 per month, indicating a possible low market rate of $50, and a mid-market rate of $65 per month for Cypress.
One significant concern I have is with the recommendation by consultant Sloan-Vazquez for a street repair reimbursement fee of $560,000 to the city. In the 2010 the Los Alamitos city council agreed
to receive approximately $100,000 per year in retail sales tax revenue. They in in turn agreed to a commercial rate that was 88% higher than the average of other recent contracts, estimated by some to cost business owners as much as $1 million per year—a $900,000 per year loss to residents. Cypress currently has 11,966 residential accounts and 1,109 commercial bins serviced in the city. Based on the approximate ratio of $1 in residential fees for every $5 in commercial fees, over a 10-year period the net effect on rates of the $560,000 should be nominal at only $0.27 per resident per month, and only $1.33 per business per month. Therefore, the City Council should be wary of any claim by a waste disposer that the reimbursement fee requires any significant increase in rate.
The same is true for the purchase of new trucks. All of the new contracts included new trucks including natural gas-drive light weight options as part of the lower rates.
Overall, while the issues seem complex the actual rates have become competitive enough to simply the process. Legal standards and best practices are well understood by the waste disposal companies. As long the City Council votes in an unbiased fashion and does not allow itself to be duped by fee stratagems as what happened in Los Alamitos, they should be able to procure a great new contract for the residents and business of Cypress.
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