Curbside Pickup: Private Sector Plays Growing Role
(from Maine Townsman, July 1997)
by Jo Josephson

Trash haulers. They’ve always been part of the scene in municipal wasteland, especially in the urban areas, catering to the disposal needs of business and industry. But until recently they’ve played a spotty, if not relatively minor, role in the transport of residential waste in most, but not all, Maine municipalities.

That’s no longer the case. With the closing of local landfills and the opening of regional transfer stations and incinerators during the past 10-plus years, not to mention the tightening of municipal budgets, commercial trash-haulers have come to play an increasingly larger role in the collection of residential waste as well.

Replacing the municipal garbage truck and the trunk of the family car as the means of transporting solid waste from residence to solid waste disposal site, commercial haulers are providing what is known in the trade as "curb-side pick up" in a growing number of towns both rural and urban.

From data collected by the Maine State Planning Office, through its 1996 Solid Waste Annual Reporting Form, two-thirds of the 335 responding municipalities reported their residents had access to some form of curbside collection. Of those municipalities reporting, about 14 used their own trucks, 60 contracted or franchised the job out to private haulers, and 132 relied on arrangements their residents made with private haulers.

This article looks at some of those arrangements. It should be read in conjunction with another article in this issue that looks at some of the legal and political challenges associated with those arrangements.

It should be understood at the outset of this article, that there is nothing in current Maine law, vague as it is, which says or implies that towns are responsible for the curbside collection of solid waste. 38 MRSA {1305 (1) merely states that "Each municipality shall provide solid waste disposal services for domestic and commercial solid waste generated within the municipality . . ."

MUNICIPAL COLLECTION

The trend at the moment appears to be away from curbside collection of residential waste by municipalities because it is a natural for privatization, i.e., contracting out.

Faced with the costly prospect of replacing its trucks, Lewiston got out of the business in the early 1980’s and currently contracts out the job to Waste Management of Maine, Inc., which it considers "an arm of the city." Bangor got out in the mid-1990’s and currently contracts out its collection to Sawyer Environmental Services. Augusta, Auburn and Portland continue to provide residential trash pickup with their own people and trucks.

However, given the recent court rulings on flow control, there is a fear among haulers that municipalities, deprived of their ability to direct private haulers to select disposal sites, might decide to (re)enter the arena in full force.

Jay (pop. 5,171)

While there appears to be no current movement in the "municipalization" of curbside pick-up of residential trash, the arrangements developed by the Town of Jay in the early 1990’s, when it moved into the waste disposal business, are noteworthy if one is to understand why private contractors might be concerned.

Prior to the construction of its $1.5 million transfer station in 1991, residents and businesses in Jay hauled their own trash to the town dump or hired private haulers to do it for them. Today, the town provides curbside collection for 2,200 households, including the many multi-family dwellings in town and 70 small businesses. It uses an 18 cubic yard 1997 Chevrolet rubbish packer that cost the town $69,000. The fact that Jay displaced some private haulers, when it moved into the arena, did not go unnoticed by those seeking "just compensation" for such actions during the recent legislative session.

Jay contracts with nine neighboring towns for use of its transfer station at a cost of $60 a ton. The various means by which the waste arrives at the transfer station from the contracting towns is noteworthy, providing a sampling of the many variations in curbside trash collection that are now in operation throughout the state.

Three of the towns (Hartford, Carthage and Canton) each owns a garbage truck which serves as a moving transfer station. Residents bring their trash to the parked truck; when full, it transports the trash to Jay. Two of the towns (Temple and Vienna) each contract with a single hauler to provide tax-supported residential curbside pickup trucking the trash directly to Jay.

In two of the towns (Livermore Falls and Wilton), residents have a choice of bringing their trash to their local transfer station or hiring their own haulers to bring it directly to Jay. In one of the towns (Fayette) residents pay private haulers to truck their trash directly to Jay. Residents have no alternative but to pay one of the three haulers that serve the town at the going rate of about $14 a month because the Jay transfer station is only open to the haulers; individuals are not permitted on site.

None of the towns have a licensing process for the private haulers that contract with their residents, although most have solid waste ordinances that govern them.

MUNICIPAL CONTRACT/FRANCHISE

A growing number of towns in Maine contract out or franchise the collection of their residential solid waste. Awarding a contract or franchise to a single hauler to provide residents of the town with curbside pickup, the town designates where the hauler is to deliver the waste.

In the examples cited below, two of the towns pay for both the pick-up as well as the tipping fee; in one they pay for the pick up; in one they pay for neither, leaving the users to pay for both the pick-up and the tipping fee.

Bangor (pop. 32,027): Switched from Municipal Collection

Until two and a half years ago, Bangor provided its own residential curbside trash pick up. As a cost-cutting measure, realizing that the major savings - between $20,000 to $30,000 a year - would come from the fact that it would not have to purchase two new trucks at $90,000 apiece in the future, and that its workers compensation costs would also go down, Bangor privatized the service, awarding a five-year contract of approximately $1.2 million to the lowest of four bidders, Sawyer Environmental Services.

Realizing that Sawyer’s bid was 20 percent below the next low bidder (there was an extremely wide range from a low of $1.2 million to a high of $2.2 million), the city was aware it could be vulnerable at the end of the five-year contract to a major cost increase that could force it back into the business. But then again, it also realized that given the wide-range of the bids, private sector competition for hauling solid waste was alive and well.

The City of Bangor has two termination clauses in its current contract. In addition to terminating the contract for "default" (e.g., trash mixing), the city can also terminate the contract for "convenience" after giving the contractor 30 days notice. Under this clause the city will not be required to document its reasons for terminating the contract.

Falmouth (pop. 7,902): A History of Private Haulers

Private trash haulers are not a new phenomenon in Falmouth. Public Works Director Tony Hayes figures about 40 percent of the residents in Falmouth contracted for curbside pickup with one of five private companies to haul their trash to the town’s landfill before it was closed in the late 1980’s.

Today there is one hauler under an exclusive contract with the town to provide curbside pick up to the town’s 3,400 households. Paid for by property taxes, the service currently costs the town $131,000 a year or about 75 cents a week per household. All of which is to say that the owner of a house assessed at $100,000 pays just under $40 a year in property taxes for the curbside service, figures Hayes.

The hauler is required to dispose of the trash 12 miles away in the incinerator of Regional Waste Systems. A pay-by-the bag system covers the cost of the tipping fee.

Hayes says the town looked briefly into getting into the business of hauling its residential trash when it closed down the landfill and signed on with RWS. "We looked at the numbers and figured we would only save about $5,000 to $10,000 a year in hauling it ourselves, and that was if everything went well and nothing broke down," says Hayes.

Falmouth has four termination clauses, including one which states that the town may terminate the contract should "the terms of the Falmouth Flow Control Ordinance become unenforceable due to court decisions or legislation;" and another that states it may do so, if "the town makes a fundamental change in its solid waste collection system which makes the system inconsistent with the contract."

Houlton (pop. 6,915): A History of Private Haulers

As Houlton Town Manager Allen Bean told the TOWNSMAN last year when it was researching an article on pay-by-the-bag, "We took off beyond Falmouth." Like Falmouth, Houlton was forced to close down its landfill; like Falmouth there was a history of curbside pickup by several private haulers before it closed the landfill. Like Falmouth, today, a single private hauler provides for the disposal of the town’s residential solid waste at a selected disposal site.

But unlike Falmouth, no property taxes are spent on the disposal of solid waste in Houlton; all costs are born by the individual households. All of which is to say, that unlike Falmouth, Houlton has gotten completely out of the business of paying for waste disposal.

In doing so it went out to bid and granted an exclusive franchise for seven years to the low bidder, Andino Inc. of Houlton, to provide solid waste collection and disposal services to the residents of the town. So completely out of the business that Andino and not the town, has the contract with the landfill where the waste is ultimately disposed of.

The current cost to residents is $3. 99 per household, per week. If residents wish to pay-by-the bag, they may drop it off at a transfer station, built, owned and operated by Andino at a cost of $1.24 a bag before it is hauled by Andino to the Tri-Community Landfill in nearby Fort Fairfield.

Temple (pop. 571): A Whole New Experience

It was pickup trucks and car trunks, when the Temple landfill was open. People hauled their own. All that changed in the late eighties when the landfill closed and Temple signed on with the Jay transfer station to accept its solid waste. To haul the trash there from some 200 households, the town hired a private contractor to provide curbside pickup service.

"We looked at the alternatives (pay-by-the bag) and although this wasn’t the cheapest way, it was the cleanest way, says Temple Selectman George Andrews, noting that "there are lots of back roads in Temple."

For approximately $16,000 a year, residents, through their property taxes, receive curbside pickup of trash once a week; for an additional $6,000 a year they receive bi-weekly pickup of their recyclables. At $22,000 a year, that comes to $110 per household per year or $2.10 a week per household.

In the event that the contract between the town and Jay is suspended or broken, the contract with the hauler is suspended. Until the town can find a new disposal site.

MUNICIPAL LICENSING

By far the most common system of curbside pickup today is where residents foot the bill directly out of their own pockets. As noted above, municipalities can choose to play a role in the relationship or not. The following is a sampling of the different roles towns have chosen .

Lamoine (pop. 1,334)

Lamoine Town Manager Stewart Marcoon guesstimates that about 40 to 50 percent of the 600 households in Lamoine have made private arrangements for haulers to pick up their trash and bring it to the town’s transfer station, paying $3 a week for the service. The town pays the tab for hauling and disposing of the trash at the PERC incinerator.

And while the town does not license the five haulers who are providing the curbside pickup for the residents, it does have a "Policy Regarding the Use of the Lamoine Transfer Station by Commercial Trash Companies". As Marcoon explains it, the policy was needed in order to do something about the town’s low (28 percent) recycling rate.

Among other things, the policy mandates that each hauler bringing trash to the town’s transfer station participate in the town’s recycling program. And while it is up to the hauler to decide how to handle the recyclables, any load found to have an inordinate amount of recyclables in it, can be rejected in its entirety.

Haulers refusing to allow for an inspection of their load, will have their dumping privileges suspended for two years. The inspection looks for trash mixing; under the policy any hauler found mixing trash from other municipalities will be barred from using the transfer station for one year.

Presque Isle (pop.10,332)

Residents in Presque Isle currently pay one of two haulers licensed by the city $9 a month or a little more than $100 a year to pick up their solid waste curbside and transport it to the town’s landfill, which was constructed in 1982, two years after the town’s dump closed. The landfill serves seven neighboring communities at a cost of $25 per capita. The cost of the license is $50 per vehicle.

The license carries with it only two conditions: that the waste be only from the communities served by the landfill and that the recyclables be kept separate from the solid waste and be delivered to the recycling facility.

Until recently the haulers were not required to pay a tipping fee at the town’s landfill. Just last year, in an attempt to spread the cost of waste disposal more evenly in a city that is home to a large number of tax exempt entities, the town imposed a $3.50 per ton tipping fee for waste generated in Presque Isle. The haulers passed the fee on to their customers for about 50 cents a month.

Farmington (pop. 7,008)

Like Houlton, residents in Farmington pay out-of-pocket for all the costs associated with the disposal of their solid waste. In doing so they are free to choose among the five private haulers who are licensed by the town to dispose of their waste at a cost of $3 a bag. The $3 not only covers the cost of curbside pick-up, it also covers the cost of disposal. If they choose not to pay $3 for pick up and delivery, they can bring their solid waste directly to the hauler’s packer and pay a $2 a bag disposal fee. Farmington Town Manager Al Dixon figures this system saves the town $250,000 a year in property taxes.

Currently the five haulers serving the towns 3,700 households each pay a $100 annual application fee, plus a $25 annual fee for each truck covered by the town’s licensing system. While Farmington’s solid waste ordinance stipulates that the haulers dispose of their waste at Waste Management Inc.’s landfill in nearby Norridgewock, Dixon told the TOWNSMAN that the town is not enforcing that section of the ordinance in light of the Court’s 1994 ruling on flow control. He notes that while several of the haulers do go to nearby Norridgewock, the others work the "open market", looking for and obtaining lower tipping fees.

SOME ADVICE FROM THE VETERANS RE: YOUR RELATIONSHIP WITH TRASH HAULERS (SIDEBAR)

Meet with the haulers.

Before you go out to bid for curbside pickup hold a public meeting with all potential bidders, especially if you are new at it, say Falmouth’s Tony Hayes, noting that there is a lot to learn about the business, some of which you will never learn. But the meeting is not one-sided, says Hayes. "Haulers who are not familiar with your town will gain an understanding of what will be expected of them, especially when it comes to problem access roads where the contract may have to call for dumpsters at the end of the road instead of curbside pickup.

Such meetings are especially helpful to a town switching from individual to municipally-contracted private hauling services, says Hayes. "The town needs to learn what kind of service the haulers are already giving to its residents, as in the case of people paying extra for customized back door service.

Even if it’s just a policy governing the use of your transfer station, it’s a good idea to meet with the haulers who deliver to it, says Lamoine’s Stewart Marcoon, who met with the five haulers in town to see if they could live with the town’s new policy before it was adopted. They could.

Be fair.

These relationships are long-term so you want a reputation as being reasonably fair, says Falmouth’s Hayes. He suggests that a three year contract is a minimum; the contractor has to make an investment in equipment; you also want to be sure they have good equipment.

Hayes notes that in the name of fairness, Falmouth dropped the amount of its performance bond from $40,000 recently to only $5,000; the contract also allows the contractor to discontinue back door service when accounts become delinquent by 60 days.

In Greenbush (pop. 1,351), where a private contractor picks up rubbish curbside from over 400 households at a cost to the town of about $16,000 a year (that 66 cents a week per household) and hauls it to the PERC incinerator 40 miles away, if there is an increase of over five household pickups in a year, then the terms of the contract are to be renegotiated.

In Houlton, "the Contractor shall not be liable for the failure to perform its duties if such failure is caused by catastrophe, riot, war, government order or regulation, fire, accident, or act of God."

Write a tight contract.

Anxious about losing control of the municipal service at the time it wrote its contract, Bangor tried to compensate by writing a 30-page tightly worded contract administered by the director of public works. Among other things, there is a complete list of penalties ranging from $10 an occurrence every time the garbage cans and lids are not replaced properly to $100 every time collectable solid waste is not collected. In addition to a $250 penalty charge for failure to complete any route on the specified collection day, there is a $5,000 fine if the contractor includes waste from any other municipality when it delivers Bangor’s waste to the PERC incinerator.

Arthur Stockus, the director of public works, says everything is "going very well" and that he spends less than five percent of his time reviewing complaints and overseeing payments. He meets monthly with representatives of the company to review how customer complaints filed by phone with the contractor are being handled.

Holden’s contract notes that failure to maintain the collection schedule without just cause will cost the contractor $1 per stop not collected on the scheduled day. Failure to remedy a complaint which is found to be justified by the town within 24 hours will cost the contractor $50 per complaint.

Temple’s contract requires the hauler to provide adequate back-up equipment and personnel to assure collection should the primary equipment break down. And, should the contractor fall behind schedule by 24 hours, Temple can hire others to make the collection and to charge the contractor for those costs.

Don’t be afraid to shop around.

Holden recently took advantage of a provision in a three-year contract with BFI that required the company to get approval from the town before transferring its contract to another hauler. When BFI sold out to another company in the middle of the contract without notifying the town, the council decided to take the opportunity to look around and go out to bid and see what the new haulers in the area could offer.

With 20 pages of specifications, it received five bids and went with the second lowest bidder. Curbside trash pickup which had cost the town $4,500 a month now costs approximately $3,400 a month or a little more than $41,274 a year. Needless to say the company which held the contract with the town was not the hauler of choice this go-round. Bids for once a week curbside pickup ranged from a low of $28,000 a year to a high of $51,000 a year, with the fomer contractor bidding at $48,000 a year.

STATE LICENSING OF TRASH HAULERS (SIDEBAR)

Just how many trash haulers are there in the state of Maine? No one knows for sure. What is known is that there are about 545 licensed transporters of non-hazardous (solid, special or septage) waste that are currently licensed by the Department of Environmental Protection. And of that number, about 160 are licensed to transport municipal solid waste, which includes garbage, rubbish and refuse from domestic and commercial sources. (This number does not include those vehicles which do hauling expressly for their own waste generators, such as colleges, or towns, or industries.)

It should be noted that while the majority of these licensed haulers primarily are licensed to transport solid waste, a sprinkling of them are also licensed to transport septage and construction and demolition debris as well.

Licensing costs & conditions

But not everyone who transports municipal solid waste need be licensed by the DEP, notes department spokesman Bill Butler. You only need be licensed by the state if the vehicle you are hauling with weighs 10,001 pounds or more. The two-year license is $100 per vehicle for the first two vehicles, with a maximum fee of $2,000. Those licensed receive a sticker with an expiration date.

Butler say as solid waste facilities become more restrictive, those who do not have stickers ( the small packer trucks) are losing out. He guesstimates there are probably as many non-licensed haulers transporting municipal solid waste as there are licensed haulers.

In addition to the license fee, applicants must show proof of insurance and, registration and sign a disclosure statement indicating the applicant’s history for the past five years relating to any environmental violations, final judgments, and/or administrative orders relating to the handling of the non-hazardous waste.

Butler says that while the current rules do not require those transporting municipal solid waste to "manifest" their waste (to describe the type and quantity of waste they transport from the point of generation to the point of disposal), given municipal concerns over the mixing of solid waste, draft rules now in the pipeline will require them to file quarterly reports in the future.