In Monday night’s work session meeting, the Thomson City Council heard a recommendation from the city administrator about which bid is best for taking over the city’s curbside garbage pick up.
The council will possibly be voting Thursday night to contract with a third-party for services. Contracting with a private company will save the city money and resources and residential customers will not see any increase in pricing. Some businesses, however, will likely see increases.
City Administrator John Waller led the council through a presentation and analysis of bids submitted by four companies.
“I wanted to walk you through what we did and how we did so everybody is comfortable with the process,” Waller told the board.
He said there is a trend now for cities to move toward contracting out garbage collection services.
“We know that there is very, very heavy maintenance costs trying to keep the fleet of trucks running,” he explained, as he talked about the money and time it costs the city to maintain garbage service on its own.
He showed the board how much money the city has lost money on the solid waste fund in recent years.
While detailing that, according to Waller the city’s solid waste fund had shortfalls of:
•$65,246 in 2016, but $48,346 was transferred from the gas fund to end the year at a loss of $16,900,
•$98,805 in 2017, but $130,805 was transferred from the gas fund for capital items and the solid waste department netted $32,000,
•$100,429 in 2018, but a FEMA Storm Damage payout of $89,000 and $95,429 in gas fund transfers put the solid waste department in the black by $84,000,
•$188,996 in 2019, but the gas fund supplied $62,500 for operating expenses and $79,429 for capital items plus $70,000 was transferred from the solid waste department’s prior year funds. Together, those funds helped the department net $22,933 at the end of the year,
•$128,29 in 2020, but gas fund transfers of $50,000 for operating expenses and $79,496 for capital items allowed the solid waste department to end the year with only a loss of $1,200.
“For the last five years, the solid waste fund has lost from a low of $65,000 to a high of $188,000. In a couple of those years, that final balance was positive but only because the gas fund contributed to the operational and, or, capital funds into the solid waste fund to make it more solid,” Waller said. “So bottom line is solid waste funds do not make money.”
He said many cities face this situation and as a result move toward contracting the service out to private companies. The City of Thomson charges $19 per month to residential customers. The bids from the four companies on residential pickup are for $12.25 from Waste Management, $14.46 from Capital Waste Services, and $17.90 for Meridian Waste. He showed the council that there would be an estimated $467,000 savings per year on the residential side if the city contracts it out.
However, much of that would be countered by an estimated $330,000 in tipping fees that would still be paid to the contractor. Actually, the net savings would be $136,838 on the residential collection portion, Waller explained.
Councilman Alton Belton asked about the $19 charge to residential customers compared to the lower dollar amount per customer charged by the bidding companies.
“The $19 that we charge has nothing to do with all with the proposals,” said Waller.
“We are going to keep the $19 intact. That is what we will bill everybody for trash service because that will cover what we pay the third party for pickup and also give us revenues for folks that pickup yard waste, furniture, and stuff,” said Mayor Kenneth Usry. “We’ve got to continue to operate that portion of solid waste. We can’t afford to back off that $19.”
Waller said one of the questions asked to the bidders was if they could pick up trash on the same day for people that the city did. A couple of the bidders said they would.
“So if we do this right, a customer never sees a difference. They continue to get billed by us, $19, they take their trash can out the same day they always have,” Waller explained.
But, then he pointed out how some commercial rates will need to change.
“Here’s what we’re going to have to do to make this work,” Waller told the board. “We’re going to have to bump up some select commercial fees. Our commercial pick up fees are low, in some respects.”
He provided a chart showing several size and frequency of commercial customers where the city does not charge enough to cover the cost of pick up by a contractor.
The commercial weekly customers that he flagged as the city charging less than it will cost through a contractor are:
•two-yard container, three times a week
•four-yard container, two times a week
•four-yard container, three times a week
•six-yard container, two times a week
•six-yard container, three times a week
•eight-yard container three times a week.
Waller moved forward and explained how the bids were evaluated and reviewed. Criteria included things like if they have a proven ability to provide innovative, cost-effective service and a proven track record of quality of performance, among other metrics.
He also asked if their trucks run on natural gas and if they would be willing to buy their natural gas from the City of Thomson.
Other questions involved whether they would be willing to contract with McDuffie County and even if they would be interested one day in taking over the county’s transfer station.
“Waste Management was yes across the board,” Waller said.
His recommendation to the council was that the city contract with Waste Management for taking over the garbage collection and entering into an initial contract for 12 to 24 months. Waller said he told the bidders he did not want to automatically be put into a 60-month contract.
Councilman Scott Whittle asked who will pick up trash containers after festivals and large public events. Waller told him the company contracted would do that at no charge to the city. He also noted that none of the city buildings will be charged for collection.
Council member Elaine Johnson expressed concerns about the public finding out the city would only be paying around $12 for residential collection and still charge customers $19.
Belton chimed in with a reminder that the difference in what the city charges and what the city will pay the contractor will be used to collect the other items such was yard debris, as discussed earlier in the meeting.
Billy Edwards, a retired city manager in Hinesville, was contracted by the city and assisted Waller in analyzing the bids.