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.
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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
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