Loading...
HomeMy WebLinkAbout1996-11-13 97-15 ORDERCOUNCIL ACTION Date: 11-13-96 item No. 97-15 Item/Subject: ORDER, Accepting the Recommendation of the Recycling and Finance Committees to Not Privatize Curbside Recycling Responsible Department: City Manager Commentary: Proposals were requested and received for the potential privatization of the City's curbside recycling program. The attached memo from Arthur Stockus, our Public Works Director, provides ananalysis of these proposals and o current costs. While that analysis indicates that our full costs are comparable but slightly higher than the proposed contract costs, it also shows that actual budgetary savings will be less than the contract amount primarily due to the reallocation of City and Departmental overhead to other functions. In effect, our marginal cost savings from no longer directly providing the service are less than the contract price. If the service was contracted, the overall budget would increase. Both the Recycling Committee and the Finance Committee recommend that this service not be contracted. Managar'e Comments: Associated Information: Order, Memo from Arthur Stockus Budget Approval: Legal Approval: h _Introduced For x passage First Reading pageof_ Referral 9J-15 Aadgndro Cow TYler November 13. 1996 :.r CITY OF BANGOR (TITLE.) Mrbgrr, .__-_ Accepting the Recommendation of the Recycling and the Finance Cotmzitteae to Not Privatize Cuxbside Recycling By the City CowwB of Um My Of Danger. ORDERED, TEAT the recotmaendation of the Recycling and Finance Committees that curbside recycling collection not be privatized is hereby accepted. IN CITY COUNCIL November 13, 1996 Doug Clendenning. Bangor resident, questioned the bid process in regard to privatisation Passed CI CLINK 97-15 ORDER Title, Accepting the Recommendation of the Recycling and the Finance Committees to Not Privatize Curbside pec�clA ..................... ...... ..{. y,a.•F.........ilman /J Gowcilman 97-15 \L w u Tfua 3u To: Dave Pellegrino, Ed Barrett From: Arrout P, Stockus Date: 09/11/1996 Subject: Bids for Cordite Recycling Services We have completed our review of the bids received for Curbside Recycling Services in the City of Bangor. Bids were opened on Wednesday, August 14, 1996 at 2:00 PM. There were three respondents; Sawyer Environmental, Bickford Enterprises and BFI of Maine, Inc. A tabulation of the bids received for three years of curbside collection services is attached to this more, The apparent low bidder was Sawyer environmental for the first two years and Bickford Enterprises for the third year (with some assumptions regarding the CPI during those years). The three year total for collection had Sawyer Envir omental as the low bidder. We can readily attest to the competence of the Sawyer collation program through our own Curbside Rubbish Collection program which Sawyer Environmental has performed for us for the pan three years as well as the municipal programs collared, by Sawyer Environmental, and brought through the City of Bangor Recycling Center for processing and shipping. The following table represents the City of Bangers costs related to wrbside recycling collection for the past three years (FY94, FY95 and FY96)_ FISCAL YEAR LABOR EQUIP. MATERIAL OVERHEAD TOTAL (2) 96 48,980.66 55,600.25 261.14 33,99033 138,63243 95 36,729.6 39,226.25 71.88 16,20L7 92,22943 94 31,035.49 38,388 10969 (1) 13,689.99 83,223.17 TOTALS 116,545.75 133,214.5 442.71 63,882.07 314,08503 AverageAmual Costs 38,848.58 4,404.83 147.57 21,294.02 10,69501 (I) Program coal did not Include Ora'M1ead. dxiscrimoMy 44.1%issued to cover overhead as noted in FY95 andFY96. Program cost in remrdifor 11794 iss 69,533.18 (2) the rotablr Mislingwar nett a change occurring In IT95 In that a second clothing cdlection vehicle and operator were added to the pogrom with Me expansive ojMe program to called chessboard and8iodomdon Me c hrouse roulet The mcondvehicle was also used to cert down on Me overtime ow"iredoJMe single vehicle to mase Me entire ciiycollectuar Ac cm be seen from the above table the only effective comparison that can be made is with the collection program costs associated from FY 96. In FY95 the curbside collection program changed with the addition of a recycling trailer and dispersion of the curbside Program. The trailer was purchased with funds from the MWIdik Capitol Investment Gant (CI(3 992A56) to augment the recycling truck thin was being inundated with material. The collection with two 97-15 k / vehicles required the addition of Moth" operator to the Curbside collection program. This operator was drawn from the Highway Division work force and was not a new position created for the curbside collection. FY96 was the only full year of collection for the two recycling units. The base costs therefore, for City collection that will be used for comparison with the curbside collection bids wJl be the FY96 figures totaling $138,623.43. If we were to award the low bid to Sawyer BovironmraW the City would have to look for a savings in the amount of the bid. A it awards now two positions could be eliminated to cover a portion of the costs of prwafzing. Raw Labor represents about 548,980 66 of the City's casts. Please remember that these two positions were not created for this curbside collection but rather they were drawn from the Highway Division to provide this service. About $ 21,766 of the overhead would relate directly to salary and employee fringes, bringing the total deductible from Recycling with the elimination of these two positions to 5 90,549. The remainder of the Overhead costs (about S 12,244) in the table would also be removed from the Recycling Division operational budget. It is obvious that the equipment cost; in the form Of motor pool charges (approximately S 55,600) for the collection vehicles, associated with the curbside collation would be deleted from this Division as well. There is little of capital value in the recycling truck as it has been used for an intensity of service for which it was never designed. The value would be small and I would estimate that it would be or the vicinity of$10,000 or lower. TheRecycling trailer I would propose to keep and use in the private Mobile Home Park collection and in other private developments in the City. The net effect on the Recycling Division operating budge, of awarding a private curbside collection comma would be to burned the annual costs of curbside cOlgWtiou One draw back to the City maintaioigg the curbside collection is that we will requite new equipment. Com ul has approved the purchase of a new van ($ 35,000 in FY97 budget) to pull the recycling trader used in curbside collection, but the City also meds to replace the curbside recycling truck, which has past its useful life and has become a liability. The war of the new cock will ran close to S 100,000. Both of these units will be carved for a seven to ten year life. Using the shorter life span the straight line depreciation of these vehicles would amount to about $ 19,295 per year and for the ten year period it would be about S 13,500 per year. Adding the equipment depreciation to the current operating cost of the City collection gives a total of $ 159,919 projected for an annual cost compared to he fust year bid of S 156,059 by Sawyer Environmental. Although it appears that the private bid is lower The new equipment should not raise the motor pool charges to the Recycling Division as the new equipment will require far less maintenance recon the current alder equipment now in use. The current recycling van has been deedlined and we are curremly using a Public Works one ton dump truck to pull the trader. The motor pool annual charges to the recycling Division of $ 55,600 will nes be deleted from the City charges, but will be reallocated to other division within the City with Public Works absoribing approximately 95% based on the current equipment allocation. The actual reductions (about $ 70,549) as a result of any award will be the salaries and benefits associated with the two operators now driving the recycling vehicles. Although an award will eliminate the need for the two new pieces of equipment the annual increase in Public Services expenditures to food the award of a collection contract would be about $ 85,512, in the fort year. 9)-15 ` \ The prices received for the collection appear to be fair, however, it also appears that the City crews are providing the service at a rate more favorable than the Private sector. As a result of this, I would recommend that the bids be rejected and efforts be made to fund We recycling brok to enable We collection to continue to operate in We efficient roamer it has been operating in since its inception. If Were are any questions concerning We enclosed, please bring them to my attention. PC: J. Ring R. Mace J. Hughes D. Hillman CIN OF BANGOR Page 1 of 1 BID TABUTATION Bid Opening: August 14, 1996 CURBSIDE RhUYGWN s acnviwa - I-= d Environments Ham den, Maine Item BFI of r, an8Iin Ina Brewer, Maine Item Enterprises PiltsBeltl, Maine Pittsfield, Item ITEM DECRIPTION Total Total Total 1. 2. 3, Year No.1 thmu h6130/97• Year No. 27/1/97 to 6130/90 Year No+ 27/1/98 to 6130199 156,059.00 186343.00 178,462.00 192,625.00 197,476.00 202,821.00 163,600.00 163800+CPI Year#2+CPI Hear l has not been no -rated it Is fora full 12 months PAGE 01 1 97-15 ` Memorandum To: Dave Pellegrino From: Arthur Stockus Date: October 71, 1996 Subject. Curbside Recycling bids The Finance Committee at one of their recent meetings referred the matter of reviewing the bids for the curbside rnh chug collection to the newly formed Recycling Committee for their input. On Wednesday, October 30, 1996 at 5:00 PM the Recycling Committee met to discuss this and other items. The consensus of the committee members was to endorse the recommendations I presented in my memo of September 11, 1996 recommending that the bids be rejected and the service not be privatized. They also supported my memo's recommendation to purchase the proper equipment necessarym allow the City employees to do theirjob in a safe and efficient mamer. Please see that this item is returned to the Finance Committee agenda for their review. if there are any questions in the meantime, please bring them to my attention. PC: E. Barrett J. Ring Peet'IP Fax We 7671 o W fie aq � io 0/"