NORWALK, Conn. – It’s been more than a year since Norwalk outsourced solid waste and recycling collection to City Carting amid much controversy. Eight union workers were forced into lower-paying jobs, touching off howls of protest. Skeptical residents looked askance at the projected $17 million savings over the life of what was called an unprecedented 10-year contract. Residents questioned the loss of quality control by turning over the service to an outside vendor.
Others questioned the length of the contract, whether there was an escape clause for the city (there is), the lack of serious bidders (City Carting and the smaller Finocchio Brothers), the thousands of dollars City Carting officials donated to Mayor Richard Moccia’s re-election campaign months before the contract was issued, and connections to people with ties to criminal activities, people that were not allowed to have anything to do with a contract the company pursued in Westchester County, N.Y.
But, in spite of the peripheral issues, the one thing most everyone wanted was this: “Show me the money.”
Nancy on Norwalk asked that question this week, and Bob Barron answered.
According to Norwalk’s director of management and budget, after nearly a year and nine months, the savings are real.
Back in January, Hal (Alvord, director of the Department of Public Works) renegotiated the rates with City Carting, which were approved by the City Council to provide further savings, as follows:
Contracting-out Garbage Collection
- I’ve attached two files that show the savings from the original contract and the recently amended contract
- The original contract’s total savings were $16.8 million or a net present value of $14.6 million over the 10 full and one partial year covered by the contract
- The total savings increase to $17.9 million or a net present value of $15.5 million when you include the amended contract’s rates for the 9 remaining years of the contract
- The Common Council, in its 1/14/14 meeting, approved a contracted rate reduction highlighted in pink in the SOLID WASTE-AMENDMENT SAVINGS attached file
- The amended contract will be effective 7/1/2014
- The savings in both analyses are generated from avoided contractually obligated increases in costs so the savings are not seen in a year-over-year Public Works budget reduction, rather the savings are in what the Public Works budget amount would have been if the contracting-out of garbage had not occurred
- To answer the question, “have we achieved the savings anticipated by signing the contract with City Carting?” and the answer is yes, the contracted rates from both the original and amended contracts are what the city is currently paying for the myriad of services covered by the contract
Looking at the SOLID WASTE-AMENDMENT SAVINGS.pdf file you will find that there are five services identified, three of which are based on a contracted rate per month — these rates have been achieved and as a result the savings realized, specifically:
1) MSW Collection partial year (12/13) $607,760 savings and full year (13/14) $855,328 savings or a total of $1,463,088
2) Recycling Collection partial year (12/13) $0.00 savings and full year (13/14) $206,200 savings or a total of $206,200
3) Transfer Station operations, no savings forecast until next fiscal year beginning 7/1/2014
The remaining two categories, Recycling Revenue and Tipping Fees, have also successfully contracted the stated rates which has resulted in savings, but the accumulated savings depends on the volume in each of the last 20 months.
4) There was no change in revenue/ton contracted for recycling revenue in the partial year (12/13), but an additional $30,109 was anticipated in the current fiscal year (13/14) due to increased volume. The forecast called for an incremental $30,109 from $101,500 to $131,609; however, we’ve already booked $136,053 as of today or an additional $34,553 before the year is even over.
5) There were no savings forecast for Tipping Fees for the partial year (12/13). In the current year Public Works reports in its MSW and Recycling Report-May 2014 that the total “tonnage out” is 21,654.38 so at a $1/ton savings ($86/ton to $85/ton) we’ve saved $21,654 in our Tipping fees. Here’s where it gets tricky, part of the savings in this item is an avoided cost of hauling away the incremental recycling tonnage so Public Works reports that in the first 11 months of this fiscal year we’ve already recycled (sold for revenue, not carted off at $86/ton) an additional 1,114 tons so at the old rate of $86 (what it would have cost without the new contract) the additional savings is $95,791 before the year is even over.
“This is a snapshot of the savings as of today (Monday, June 16), before we complete the first full fiscal year of the contract, Barron said. “Also, there has been additional savings negotiated beginning next month that Hal negotiated this past January.”