Notes from the Utilities Committee from today are below, there was quite a bit of blame leveled at members of council for allowing the trash fee to be reduced with it being said if they would have left the fee at $15.00 for everyone there would be no problem now. I think it’s important to point out that on April 22, 2010 Councilman George Sarantou announced that Mayor Mike Bell agreed that if Issue 5 passed the $15.00 monthly trash fee will be revised to:
$5.00 Seniors with Homestead Exemption
$8.50 Residents who Recycle
$15.00 Residents who do not Recycle
LINK to that press release. I also think it’s important to remember that the trash fee alone was never intended to pay for the entire trash service. If that’s what a majority decides to agree to, that’s one thing, but trash service comes from the general fund, it has never had it’s own dedicated stream of revenue and the current trash fee is not a dedicated stream of income, at least not in the past, it’s been used to prevent layoffs in other departments, etc. Supposedly Toledo has over a 90% recycling rate, something that in other areas would be cause for celebration, but here it’s being blamed as part of the reason for the $7.6 million dollar hole.
Now on to the notes….
Dave Welch said the city generates $8.9 million from refuse fee – program costs 16.5 million dollars the other option outside of going with the County is to raise to $17.25 month fee to pay for services by March 1.
2.8 million is included in the budget in savings if they go with Lucas County
One big issue is the trucks, that would be part of the RFP that those would be sold Toledo would own the refuse carts for 10 years, any new carts would be part of the RFP for the new provider to provide.
Started talking with the County back in November. They’ve talked to contractors.
Ordinance must be passed before February 15, so services could begin Sept. 1
We are at 99% people participating at recycling so most pay the $8.50 — $750,000 a month is what they generate in trash fees
Gerken: Lucas County solid waste district with their boss being the Ohio EPA
They have to submit a plan to the EPA every 5 years on trash, yardwaste, electronic waste, recycling, etc. City has been a cooperative partner in making sure that the solid waste district is in compliance.
If the city went out of compliance, the solid waste district would be out of compliance and they’d have to sue the City.
Gerken said he started talking to Bell and staff in October.
Gerken said the costs were not sustainable for Toledo with a $7 million dollar loss.
He said it could create a situation where the amount loss reduced every year eventually getting to zero loss.
Reyclables are a commodity, if we want to flatten our costs, a regional system and a MRF, central recycling system. His job is to represent the whole county, that make sense to the taxpayers and keep them in compliance with the EPA.
Gerken said if they don’t want to go this way he respects their decision, he doesn’t disagree with the time line, it takes time to get proposals, they are also under the gun with the EPA for a plan. thsi is not a gun to the head type of deadline, there are real reasons behind it, it’s a huge decision.
McNamara – what is in the best interest of the residents as far as services,
Welch – services would stay the same, weekly trash, bi-weekly recycle – possible changes in the leap forward system. The quarterly pick up may be different.
McNamara is what is the cost to them under this proposal — Can Lucas Counyt provide this service more cheaply than the City.
Welch said it is costing them 16.5 million, they lose those costs by going through a vendor, in 2008 it was 8 dollars a house, they think it will be lest costly, will it be less than $8.50? He doesn’t know, but he thinks it would be less than $17.25.
There would no longer be a refuse fee from the City of Toledo, but it would still have to be paid for.
Gerken they envison a contract with Toledo, how Toledo pays for it is their decision.
Gerken said suburbs pay between $12.50 and $27.50 so there is some interest of joining this effort in a way that works for them.
He feels the more numbers in it the cheaper the system. Suburbs will vote with their wallets, Gerken see’s it as having several price points, they would have a range of options, like the value menu at McDonalds, they’ll have to decide what they want.
Materials Recovery Facility – MRF was explained by Welch
There is no single stream so they ship their recycling to Ann Arbor – if they had a MRF costs would go down. This would appeal to the smaller communities because they could use the MRF. one of the best ways to increase recycling is to make it single stream.
Gerken thinks they could attrack haulers from outside of the area
Swayco in Columbus is comparable, but they don’t provide the services we do, we would be the first in the state welch said.
McNamara – what will happen to the current sanitation workers
Welch – they could get other jobs within the City or end up with one of the contractors since they are experienced.
Gerken – Living wage is something he is committed to work hard with any vendor to make them understand, just like they did at the arena, it was a union, prevailing wage job. He can’t speak for the other commissioners but he thinks they would support making the
Toledo workers whole.
Collins said the pesky problem is the employees that go to work for a private vendor the city is still responsible for their PERS contribution and to pay it. The truth of the matter can not change that pesky fact, that if those employees go and they want to maintain PERS, but we who do not have them anymore will still have to pay the 14% percent of what they earn.
Collins said in 2008 they were doing 16% recycling, that changing the fees they would increase the recycling, they looked at the traditional model was not doable. Contrary to statements that were made, they made it with due dilligence, trial areas in the City with loaned automatic trucks. Odesky did a survey in the pilot area and it had an 80% positive. This was not happazardly decided.
To Welch, what are we going to get as an ROI on the used vehicles – Welch did not know. Collins if the assessment was 25% of the purchase price? Welch said they’d have to decide when that happened, he said they can either do this plan or raise the fees.
Collins presented document from Franklin and Highsmith, he said either that report was wrong or something is wrong with the numbers the cost per household was estimated at $9.20 and the cost of being done by the private sector was $8.85. The objective then
was to considered managed competition.
Police, fire and solid waste are three core services, they are cost shifting, they will be at the mercy of that system that they don’t control and they are the biggest user, when the calls come in, call the county is going to be the expression needed, that’s not going to work.
Collins said the worst thing we can do is get into private busiess we have failed miserably everytime we have tried, we should provide the ability to provide a MRF we have no business in a MRF. The City eliminated the incentive program for workers, you eliminate the incentive there is no surprise there’s no incentive.
Collins said the Bell administration took this on at the worst time ever, trying to rush something that should have taken several years, yes they are still trying to refine this. Before we jump out of this core service let’s make sure we are running this core service the best way we can. There is an overtime issue and there are some who are collecting a lot of overtime that are not contributing to the collection of trash service.
Welch said he never said they should not have gone with the service, he said they have to do something different but it has to be a sustainable one.
He said the MRF would be contracted out, they would not operate it. They would get the funding. They can’t fund the MRF, Collins said they shouldn’t be building it they should do what they do as far as sewer, roads, let the MRF company come in and build their own lines and put in their own streams.
We don’t need to do a lessor/lessee, we can’t even run a boat dock so we can’t run a MRF
McNamara said there is debate about what constitutes a core service since there are private trash haulers.
Sarantou said we have a 7 million dollar problem, for all intensive purposes, our citizens are still going to pay, it’s not going to be a free service.
Sarantou asked if there was other evidence where a county does this service for the entire county, Welch said no, but there are cities that do private trash services.
Sarantou wanted examples of a private trash company in a large city, he knows Toledo was one of the last to start automation. We have a whole new system, the citizens are getting used to it. He wants county and city to come back and show them were a plan
like this is working.
Waniewski asked about the MRF time frame being 2012. Welch said it would be design/build/operate for the MRF.
Gerken said that is still under development, the county owns the arena but someone else operates it, the county protects the taxpayers that way. He thinks the MRF is the same principle. He also cited the Downtown Parking Authority as an example.
Waniewksi how would the MRF funds be split, Welch said it would be able to be tracked so it could be rebated back to whoever brought it in.
Gerken said it’s not going to be a profit making process, they are required by the state of Ohio to provide waste management, this is not making money for the County.
Waniewski asked about the status of the other municipalities, Gerken said those are questions for the RFP, they have to price it out to the vendors so that if other municipalities decide to join the price can be adjusted. In Springfield Township they like to pick, they are going to vote with their wallet, they are eventually going to.
Gerken said there would be a billing process in place instead of the trash fee.
McNamara said the Lucas County solid waste would be paid for they just have not decided on how that would happen. Gerken said it is not free, the question of how to pay for it is for a later day.
Waniewski said but the admnistration is putting this out there as a savings.
Welch said if they are out of the business many of the costs go away which is why they have the 2.8 million in savings.
Webb asked Gerken if they would do this without Toledo, he said no. The MRF may be something that could be discussed.
Gerken said this only works if there is 100,000 mass household.
Webb said she thought they had worked through the trash issue. Gerken confirmed the MRF is a separate issue that the County could still partner to the City with.
Webb the devil is in details as how the RFP is structured, the range of options, she has no say in the RFP. Webb asked if the RFP could come before Council, Herwat said they would provide council with a copy of the RFP. She wanted to know what the permaters were.
She referenced a communication from Teamsters, that the contract language states they have to negotiate with them and give them the option to meet whatever proposal is out there, would they be violating their contract by agreeing to an RFP? She said this is an ongoing thing with the Bell administration, act now grieve later.
Herwat said they will provide Council with the previous arbitration and they would not discuss that on the floor of council. He said Council adopted the trash fee and the promise with Issue 5. If they would have left the trash fee at $15.00 they would not have this issue.
Webb said she believes in the collective bargaining process and a contract is a contract, they can not ignore it. It’s the same thing she argued about the Ottawa Hills fire department, if the Teamsters are right and we are on the hook and we’ve already contracted, it’s our peril.
Webb referenced the commodity price aspect, she wants to make sure if they outsourcing garbage they are not giving up their ability to make a profit on the MRF.
Gerken if there is a profit it’s taxpayer dollars and would go back into the system.
Gerken said the MRF is more of a protection against a loss than a profit, it gives you a reserve to ride out the fluctuations in the commodity market.
McNamara said we are trucking tons up to Ann Arbor so even if we got the same amount we’d save. Welch said they pay 22 dollars a ton above and beyond the MRF.
Webb said citizens trust us with basic services, that we look out for what is good in the long term not just the current budget problem.
Council needs to be involved in the RFP process to the extend they are allowed under the charter, they need to approve the RFP, be involved in drafting the RFP, something.
McNamara suggested Webb write what she wants to see in the RFP, Webb said until sees what’s on the menu she doesn’t know what is missing or needs to be included. she’s not adverse to this, she just wants the preliminary documents of the RFP.
Welch said there is no draft of the RFP. Gerken said it’s out of respect for the process, he said he’d want a copy if he were her. He understands they are going into an area they’ve never been in before.
Welch said the legislation was to start the dialogue, there is not an RFP but there are components, they are trying to engage them.
Webb said she’d like what they have so far. Welch said if she has ideas she could share them.
Webb wanted to know how they went from $8.20 to $17.25 per month in costs.
Herwat said they are collecting $8.50 and $5 from the seniors, so that would be march through december that gets you 16.5 million, if they would have had a higher fee for the entire year they would have the money to pay for the service.
Bell said our employees are doing a good job, that’s not the issue, they are trying to find a way to do the service for less. As to Webb asking why are the numbers different now from what they were told in 2009, he said if she doing due dilligence questioning the former system as much as she is him she may have had her answers as to was it real or memorex.
He said they’ve figured out what it takes, these are just proposals, they have brought up a couple regional things that could be cheaper to do. He realizes as Mayor, they have 12 votes to take it in whatever direction they wanted to take it.
They want to look at providing a cadillac service, for less. Bell said if they left the fees as they were, they would not be in the situation they are in now.
There are going to be further discussions, you can bring in lists of what you want on an RFP. This was the whole concept to start the discussion, but they have to have a balanced budget by March 31. He’s not tryign to be adversary to council, but if they have a system that is 6 million or so out of wack you are going to have to have a solution, this is a possible solution.
Webb her intentions related to this is she is open, council has it’s own process she is not going to, the idea that she did not do her due dilligence on the decision to automate or to purchas the trucks is something she takes issue with. The decisions he made led to the overtime issues, the idea that she did not do her due dilligence she takes extreme exception to, he was not here, she is looking at
a document created by some who are still in the city’s employment, she does not feel the information was faulty at the time, she simply wants to know how they got from the numbers that were presented in 2009 to 2010.
Bell said they are fixing something that happened before his administration, he said everyone takes a shot at what has been presented, provide solutions. If there is something you want included, put it on a list.
Craig said all the resolution said expressing support, to say let’s start looking at this, Collins and Webb put forth some significant obstacles moving forward at least as it is proposed this far. They need to look at the relationship we have with the Teamsters and the employees we have. If that can’t be resolved, then we have to look at other options. The Mayor is right, this is the place to start, if we want them to address the contractual issues with the Teamsters, then it’s on them if they don’t. They have three full months of hard work to balance the budget, how they can move forward and save residents money and still have the same great
services. We can’t address the teamsters issue if we aren’t going to go forward with this, he thinks they need to take this out of committee and pass this and then address any issues with the administration.
Collins echoed what Webb said, there is no way that he as Mayor can even imply this council did not do their due dilligence in 2009, to even imply it is wrong, he won’t sit silent and have Bill Franklin’s work or experience questioned, his numbers were valid and he was a consumate professional. Collins believes his numbers are true and accurate and if we are going to eliminate a core service, then we need to address the 2 and a quarter percent, how much of that 2 and a quarter percent do we really need. He takes issue with cost shifting and still collect the same amount of money as we were collecting the same services.
Bell, he wasn’t here when all these decisions are made, if those figures are correct and we are working at 8.50 than we shouldn’t be 6 million dollars behind. With the system running for a year we are running 6 million dollars behind,he’s not blaming Franklin, but they have a six million dollar problem they have to address. No matter how we got to where we are today we have to fix the problem. This is just one option to fix that problem. He’s not trying to dishonor anyone in this chamber. Herwat said the cost of implementing the plan as approved by the previous administration, if you divide the cost by 95,000 homes that equals $14.50 a month.
Mark Sobczak first public comment, he was there on behalf of the Teamsters. For half a century Teamsters have collected refuse for the citizens of Toledo, it’s been a source of pride. Today the city is considering abandoning that core service. No matter the scenario there is an obligation, the union will protect their intersts, they would find it unconscionable that the city would dump their obligation. It was always supported by the general fund, paid for with taxes and any refuse fee that was being paid would have to go up if the city pulls back their subsidty from the general fund, it never paid for itself, it was always provided by the city fathers, when they raised the trash fee it didn’t pay for services, it called by 75 police officers. The citizens will end up paying the full cost if they shift this, there are certain citizens can’t afford this. He thinks that would break the contract they had with the citizens. The recycling center may be a great option but it doesn’t mean the city has to go with the county for the trash collection service.
Jenny Brown they would not be having this discussion if there was not money to be made, they are accustomed to having garbage collection, now that they are paying for it, they should also recognize there is money to be made here. If there is a 17 million dollar cost in operating that department, they have not taken into account, the solid waste department has increased their efficiency, they
have new trucks. She said you can’t look at the budget without looking at the maintenance department and the other costs that come into this. The workman’s compensation costs have decreased. She felt it needed more time to operate at maximum efficiency.
Greg Files, 21 year employee, he doesn’t get involved in the council stuff, they work hard, they are trying to figure out what they are going to do with them, they didn’t ask for the automation but they showed they can do this. They have cut overtime, they are frustrated because they don’t know where they are going and they are hearing bad news for just doing their job. They don’t know what is going on with the paperwork part of it, they just do their jobs, he doesn’t want to be a part of the private sector, he wants to be a solid waste employee of the City of Toledo. Why are they always targeted for working hard.
Louie Boyer lived in Toledo for 50 years, he used to work on the trucks. Where is the MRF going to be built and who’s going to pay for it to Gerken. Gerken said all he knows is right now they are paying other people to do it. He said he is on a fixed income and the taxpayers are broke, they keep raising fees, which is why people are leaving. He said they were promised rebates, they lied to the entire city. He said they are running out of taxpayers.
McNamara made a motion to refer to council without recommendation.
