CITY OF HENDERSON

PUBLIC WORKS DEPARTMENT SANITATION DIVISION

1. Pursuant with the 2009-2010 Strategic Plan for studying possible areas for privatization (Action Plan 1-3)

2. Consistent with prior study performed in 2008 with the goal of converting to curbside sanitation service and possible conversion to privatization.

WHY are we considering privatization of Sanitation and Recyclables and the

Conversion from Backdoor to Curbside Service

3. Improve customer service. • The use of curbside sanitation will allow for more consistency of service by performing the service at the same location and time required for collection. Waste Industries provides for only three observed holidays therefore there is less disruption to customer. • Also, with curbside collection, there is a higher probability that the work can be continued in inclement weather as long as the roads are passable. • Waste Industries has an automated phone calling system which alerts the customers of scheduled or unscheduled changes in the collection date due to weather or holidays. • Customer service will also improve in other areas of Public Works where Street, Grounds Maintenance and Cemetery divisions will no longer be required to fill in for vacancies within Sanitation. • Waste Industries has the advantage of pulling trucks from a larger fleet in the event of

mechanical failures.

4. Avoid future direct costs of equipment capital purchases. • Initial purchase of three (3) garbage trucks and roll out containers for sanitation and

recycling equipment. Annual sequenced purchasing of one (1) truck per year.• Garage staffing could be reduced to four (4) and one (1) frozen (unfunded) position could

be eliminated plus more time would be available for preventative maintenance and repairs on remainder of City’s fleet.

5. Reduction in labor and liability cost such as workers compensation (i.e. needle sticks, dog bites, etc.

AGE OF VEHICLES WITHIN SANITATION FLEET

Description FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14 FY 14-15 FY 15-16

2005 GMC 4 5 6 7 8 NEW 1

2004 GMC 5 6 7 8 NEW 1 2

SPARE              

2000 GMC 9 10 11 NEW 2 3 4

SPARE              

1994 GMC 15 NEW 1 2 3 4 NEW

1992 GMC 17 NEW 1 2 3 4 5

1992 GMC 17 NEW 1 2 3 4 5

1997 Ford 12 13 NEW 1 2 3 4

Capital Expenses to be Incurred and Cost Increases/Savings

Fiscal Year

Items Cost

09-10 None

10-11 1-Recycle Truck(side loader)2-Garbage Trucks (side loader)5,400 – 95 gallon carts (garbage5,400 – 65 gallon carts (recycle OR10,800 – 18 gallon bins (recycle

$165,000 each = $495,000 Debt Service $97,000 annually for 6 years$44.55 ea (95 gal) and $37.85 ea. (65 gal) = $445,000Debt Service $102,200 annually for 6 years OR$10.00 each - $108,000Debt Service is $39,510 annually for 3 yearsTotal Curbside Annual Debt w/2 Rollout Carts $199,200Total Curbside Annual Debt w/1 Rollout Cart and 18 Gallon Recycle Bins $136,510

11-12 1-Garbage Truck (side loader)3% increase for cost of livingStaffing reduction – 2 positions3people /truck to 2 people/truck – will be done by attrition

$180,000 Debt Service $33,000 annually for 6 yearsSavings of $55,000

12-13 1-Garbage Truck (side loader)3% increase for cost of living

$180,000 Debt Service $33,000 annually for 6 years

13-14 1-Garbage Truck (side loader)3% increase for cost of living

$180,000 Debt Service $33,000 annually for 6 years

Cost Avoidance

030000

80000 80000 80000

0 10000 15000 20000 250000

200000

233000

266000

299000

0

50000

100000

150000

200000

250000

300000

350000

09-10 10-11 11-12 12-13 13-14

Fiscal Years

Do

llars

Personnel

Insurance

Capital/Debt

6. Improve and expand recycling program.• As of October 1, 2009, State regulations have expanded to exclude items previously disposed of in the landfill and now must be recycled.

• By transitioning to a 65 gallon roll out cart, it is believed that recycling will increase by residents therefore reducing the amount of waste going to the transfer station.

• Wheeled carts are easier for citizens to get recycling to the curb than the existing 18 gallon bins.

• Items recycled would not be exposed to adverse elements and be subject to blowing of material from carts to street and neighboring yards.

• We currently recycle 20 tons a month vs. 335 tons of garbage a month to the transfer station or about 6%.

Recycle Increase Goal

199237

282336

400

476

150

200

250

300

350

400

450

500

08-09 09-10 10-11 11-12 12-13 13-14

FISCAL YEAR

To

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(HIG

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To

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(HIG

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Garbage Reduction Goal

46274522

43864254

412640034000

4100

4200

4300

4400

4500

4600

4700

08-09 09-10 10-11 11-12 12-13 13-14

To

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(LO

WE

R I

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FISCAL YEAR

TERMS of the contract with Waste Industries

1) Waste Industries will enter a 10 year contract with 2 automatic 5 year renewals. This locks in a very favorable base price of $8.94 for household garbage and recyclables.

2) Waste Industries will use the Department of Labor and Statistics Consumer Price Index for annual cost adjustments.

Year Annual Avg Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1999 2.8 3.1 2.6 2.8 2.8 3.0 3.0 2.8 2.8 2.6 2.5 2.8 2.5

2000 2.3 2.5 2.7 2.2 2.2 2.3 2.2 2.3 2.5 2.4 2.0 2.0 2.0

2001 2.1 2.2 2.0 2.0 2.0 1.9 1.9 1.9 2.0 2.0 2.5 2.7 2.5

2002 2.7 2.7 2.7 3.1 3.1 3.0 2.9 3.0 2.5 2.6 2.4 2.3 2.4

2003 3.2 2.4 2.3 2.9 2.9 3.1 3.2 2.9 3.5 3.3 3.5 4.2 4.2

2004 3.9 4.6 4.7 3.7 3.7 3.7 3.8 3.9 3.7 3.9 3.8 3.3 3.4

2005 3.5 2.7 2.7 3.0 3.0 3.3 3.3 3.6 3.7 4.0 4.3 4.5 4.3

2006 5.2 5.1 5.1 5.4 5.4 5.0 5.2 4.9 5.2 5.4 5.3 5.1 5.2

2007 4.7 5.3 5.0 5.0 5.0 4.9 4.6 4.7 4.6 4.1 3.8 4.2 4.8

2008 5.5 4.9 5.0 4.7 4.7 5.3 5.6 6.1 6.3 6.2 6.4 5.8 5.0

2009 3.6 4.2 4.0 4.4 4.4 3.9 3.7 3.1 2.4 2.3

Waste Industries will allow the City to provide fuel for its trucks that are strictly assigned to the City of Henderson. This will save on the Fuel Adjustment cost as well

as actual fuel expense. It is estimated about 16,000 gallons of diesel fuel will be used. The City does not have to pay the road tax of $0.5455 and purchases fuel at a much cheaper rate per gallon than Waste Industries would. This equates to an annual savings of about $875.00.

Consumer Price Index Seasonally Adjusted U. S, City Average

Garbage and Trash Collection

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

An

nu

al A

vera

ge

(Les

s i

s B

ett

er)

3) There will be an additional $4.00 each cost for additional roll out carts over the one (1) provided for sanitation and the one (1) provided for recycle.

4) Waste Industries will provide backdoor service to all citizens with verifiable disabilities (no other residents in household to roll cart to street) at no additional cost. Forms will be developed for resident to request service.

City of Henderson Public Works Department Post Office Box 1434 Henderson, North Carolina 27536 Phone 252-431-6118 Fax 252-431-0124

Backdoor Garbage Service Application In Lieu of Curbside Collection

This application applies only to those households where no one in the household is physically able to roll the carts or carry recycle bins to the street for collection by the City/Private Contractor.

APPLICANTS NAME: ____________________________________________ADDRESS: ____________________________________________TELEPHONE: ____________________________________________Name and age(s) of person(s) living in this householdNAME AGE1. _______________________________________ ___________2. _______________________________________ ___________Reason for backyard service request ( Be Specific)The above is a true and accurate statement, and reflects the existing conditions. I acknowledge the city’s right to investigate the information furnished.

____________________________________________________

The document to be renewed annually Applicant Signature___________________________________________________________________________________________________________________________

CERTIFICATE OF DISABILITY To: Public Works Department, City of Henderson From:______________________________________________________________________________________ Attending Physician Name – Address – Telephone NumberIn my opinion Mr/Ms. ______________________________________________ is physically unable to move the mobile garbage and/or recycle bin from their home to the curb. Such action would be detrimental to his/her health._______________________________________Physician Signature___________________________________________________________________________________________________________________________

For Official Use OnlyAPPROVAL: GRANTED ______________ DENIED____________________ ________________________________________

Public Works Director

COMPARATIVE SANITATION FEE

Town of Louisburg Backdoor 2/wk $18.55

Town of Franklinton Backdoor 1/wk $16.00

Town of Youngsville Curbside 1wk $17.25

Town of Warrenton Backdoor 1/wk $24.00

Town of Oxford Backdoor 1/wk $20.55

None of these towns offer curbside recycle to their citizens.

RATE COMPARISONS BACKDOOR SANITATION SERVICE AND CURBSIDE RECYCLE

CITY FY – 10 FY – 11 FY – 12 FY - 13 FY-14

RATE $ 9.91 $13.79** $ 14.09 $15.10## $15.55

REVENUE $634, 273 $883,301 $ 902,606 $ 967,352 $995,698

CONTRACTOR

RATE

SANITATION $ 11.25 RECYCLE $ 2.49

TOTAL $13.74

$13.74 $14.15 $14.57 $15.01

REVENUESANITATION $720,360 RECYCLE $159,440 TOTAL $879,800

$879,800 $906,053 $932,946 $961,120

**City backdoor – FY -11 Adding staff to allow floaters in driving and puller positions for vacancies, vacations and illness FY – 11 Adding debt service to buy curbside recycle carts and 2 new garbage trucks and 1 new recycle

truck## City backdoor –FY – 12 & 13 Adding 1 new garbage truck to continue cycle of replacing older vehicles

RATE COMPARISONS CURBSIDE SANITATION AND RECYCLE SERVICE

CITYFY – 10 FY – 11 FY – 12 FY - 13 FY-14

RATE $ 9.91 $13.32*** $ 12.78**** $13.07 $13.46

REVENUE $634, 273 $853,301 $ 818,789 $ 837,352 $861,871

CONTRACTOR ####

RATE

SANITATION $ 6.45 RECYCLE $ 2.49 TOTAL $ 8.94

$8.94 $9.21 $9.49 $9.77

REVENUESANITATION $ 413,006 RECYCLE $159,440 TOTAL $572,446

$572,446 $589,735 $607,664 $625,593

*** City curbside – FY 11 Adding debt service to buy curbside garbage and recycle carts and 2 garbage trucks and 1 recycle truck**** City curbside – FY 12 Elimination of 2 positions by attrition#### Contractor will supply 5,339 - 95 & 65 gallon carts for household garbage & recycle and put 3 new trucks on routes

Diesel Fuel - by City FY – 10 FY – 11 FY – 12 FY - 13 FY-14

Reduction for Fuel by Waste Industries to cost of service $51,225 Sanitation $0.60/$38,419Recycle $0.20/$12,806

16,000 gallons

@ $2.50/gallon

$40,000

16,000 gallons

@ $2.70/gallon

$43,200

16,000 gallons

@ $2.90/gallon

$46,400

16,000 gallons

@ $3.10/gallon

$49,600

16,000 gallons

@ $3.30/gallon

$52,800

Road tax on Diesel is currently $0.5455/gallons which the City does not pay.

Curbside Sanitation and RecyclePROJECTED-Monthly

$9.28

$13.46

$13.08

$13.33

$12.79

$9.91

$11.69

$11.15

$11.44

$11.82

$9.91

$8.94$9.21

$9.49

$9.77

$8.94

$9.01

$8.74

$8.49$8.49

$8.00

$9.00

$10.00

$11.00

$12.00

$13.00

$14.00

FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14

Fiscal Years

Do

lla

rs

LO

WE

R IS

BE

TT

ER

City w/65 gallonsrecycle bins

City w/18 gallonsrecycle bins

Contractor w/65gallons recyclebins

Contractor w/18gallons recyclebins

C urbs ide S anitation and R ec yc leP R OJ E C T E D -Annually

$853,301

$634,273

$818,789$837,352

$861,871

$634,273

$732,352$713,789

$756,871$748,301

$572,446$589,735

$607,664$625,593

$572,446

$559,941$576,739

$543,632 $543,632

$594,041

$500,000

$550,000

$600,000

$650,000

$700,000

$750,000

$800,000

$850,000

$900,000

$950,000

$1,000,000

FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14

F isc a l Yea rs

Dol

lars

LOW

ER

IS B

ETT

ER C ITY w/65

gallon recycle carts

C ITY w/18 ga llonrecycle bins

C ONTR AC TORw/65 ga llon recycle carts C ONTR AC TORw/18 ga llon recycle carts

Backdoor Sanitation and Curbside Recycle - Monthly

$9.91

$13.36

$15.55$15.11

$14.10

$13.79 $13.91

$13.34

$12.90

$9.91

$12.48

$13.36

$13.76

$14.60

$14.17

$12.91

$14.11

$13.70

$12.91

$13.30

$9.00

$10.00

$11.00

$12.00

$13.00

$14.00

$15.00

$16.00

$17.00

FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14

Fiscal Years

Do

llars

LO

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R IS

BE

TT

ER

City w/65gallons recyclebins

City w/18gallons recyclebins

Contractor w/65gallons recyclebins

Contractor w/18gallons recyclebins

Backdoor Sanitation and Recycle PROJECTED-Annually

$634,273

$995,698

$967,352

$902,606$883,301

$890,698

$854,305

$826,264

$799,237

$634,273

$934,793

$907,566

$881,132$855,468 $855,468

$826,653

$903,307

$876,997

$851,453

$826,653

$600,000

$625,000

$650,000

$675,000

$700,000

$725,000

$750,000

$775,000

$800,000

$825,000

$850,000

$875,000

$900,000

$925,000

$950,000

$975,000

$1,000,000

$1,025,000

$1,050,000

FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14

Fiscal Years

Dol

lars

LOW

ER IS

BET

TER

CITY w/65 ga l lonrecycle carts

CITY w/18 ga l lonrecycle bins

CONTRACTOR w/65gal lon recyclecarts CONTRACTOR w/18gal lon recyclecarts

Existing EmployeesAnd

Comparisons with Waste IndustriesFor comparison purposes we requested from Waste Industries annual base pay rates for their employees. The City is aware that the pay scale is low for its employees and this in turn reflects in the cost of providing service now and in the future should pay scale adjustments be made. City Waste Industries

CDL Drivers $21,169 $29,000 - $30,000Helpers $19,783 $19,760 - $20,800

Waste IndustriesEmployees typically receive overtime pay each week.

Pays a quarterly safety bonus to employees who have no workplace accidents. Maximum benefit is $300/quarter.

Pays a Christmas bonus

Has a 401(k) for employees – they match dollar for dollar up to 3% of salary and $0.50 per dollar for next 2%

Insurance premiums are $143.00 bi-weekly for family coverage

Public Works Sanitation Division has 15 employees, 12 full time and 3 part time at the present time. Ten employees will be affected by the privatization of sanitation and recyclables.

We have 3 temporary workers in place and as other employees resign/retire temporary workers will be hired in their place.

Waste Industries will need to hire 3 workers with a commercial drivers license (CDL) for the routes in Henderson. Those employees will need to pass a background check and drivers license check (City requires same).

The remaining 4 employees will be offered reassignment within the City or positions will be eliminated by attrition

The remaining 5 employees will be the supervisor, brush truck workers, knuckle boom truck worker and spare worker.

Why am I paying $25.00 per month when sanitation/recycle service only cost $9.91? Where does the other $15.09 go?

Sanitation Rate Increases/Decreases

Fiscal Year(s) Increase/Decrease in Rate

Rate Reason for Change

99-00 $ -0- $ 16.00

01-02-03 + $ 4.00 $ 20.00 2001 Revenue Bonds, Debt Service on Operations Center, Police Station Aycock Recreation Complex and State withheld funds.

05 + $ 5.00 $ 25.00 Recycling and Code Compliance

06 + $ 2.00 $ 27.00 General Revenues Increase

09 - $ 2.00 $ 25.00 Sanitation collection moved to once per week

10 $ -0- $ 25.00

Garbage/Recycle $9.91 39.6% $627,660

Yard Debris/Leaf Collection $1.85 7.4% $117,290

Code Compliance $2.05 8.2% $129,970

General Fund Services $5.52 22.1% $350,285

Bad Debt/Discounts $1.67 6.7% $106,195

Debt Service and ’01 State withheld Funds

$4.00 16% $253,600

$25.00 100% $1,585,000

$ 1.00 on sanitation rate = $64,080

Where are we now?

City staff has identified present and future cost relative to city continuing to provide same back door service and curbside and also provided comparisons relative to a private

company provided the services.

Recommendation

City Council authorize public comment on the proposed service change from back door service to curbside collection and contracting with Waste Industries to perform the

service. Upon completion of public comment and council deliberations, authorize the City attorney and staff to negotiate further details of the contract along with necessary

ordinance changes.