Only St. Bernard's costs come close to what New Orleanians pay
Just days before Mayor Mitch Landrieu last week reopened New Orleans' two largest trash-collection contracts to competition, a similar solicitation in St. Charles Parish attracted a bid price that amounts to half of what New Orleans now pays.
SDT recently renegotiated its contract with New Orleans.SDT Waste & Debris Services offered to pick up trash at 18,000 locations in the suburban parish for $9.74 monthly per site.
That compares with monthly rates of $22 per site that Richard's Disposal charges the city to collect garbage at about 66,500 households and small businesses across Uptown, Central City and Algiers, and $18.15 per site that Metro Disposal charges to serve similar locations in Gentilly, Lakeview and eastern New Orleans.
While myriad factors contribute to unit prices -- from the cost of labor and equipment to the distance between service sites and the landfill -- the numbers illustrate a point Landrieu has pressed since he began trying to negotiate lower prices with New Orleans' three main sanitation vendors.
"You can find cost-per-household significantly lower in the metropolitan area than what we're paying these contractors," he said last week.
Comparing costs of collection
Indeed, a review by The Times-Picayune of sanitation costs in several local parishes and municipalities shows that only St. Bernard Parish, where SDT charges $20 per household to collect trash and haul it to River Birch Landfill in Jefferson Parish, pays similar prices to what Richard's and Metro charge New Orleans for twice-weekly garbage pick-up.
St. John the Baptist Parish pays $19.68 monthly per household for sanitation services, but the hefty price isn't a fair comparison because it includes the cost of landfill disposal, known in the industry as "tipping." Monthly site charges in Slidell and Mandeville, which fall well below the prices charged by Richard's and Metro, also include the landfill fee.
In New Orleans, officials tap the general fund to the tune of $5.5 million a year to cover tipping charges -- on top of what they pay to garbage collectors. That works out to roughly $4 per household and small business per month.
In St. Bernard, a 1/2-cent sales tax covers collection and disposal.
An attorney for both Richard's Disposal, left, and Metro Disposal, right, has said the city has no right to break legally binding contracts and he is prepared to take the city to court if new vendors are hired. Metro and Richard's will not bid on the new deals, lawyer Daniel Davillier has said.As in New Orleans, St. Bernard officials awarded SDT's contract shortly after Hurricane Katrina, when labor costs in particular had spiked and many companies hesitated to recommit to the ravaged region, especially for the years-long terms that tend to accompany public trash contracts.
When Jefferson Parish re-bid its trash-collection deal last year, IESI submitted the low bid of $13.31 per site per month to serve almost 114,000 household and small business locations across the sprawling parish. Included in that sum is the cost of operating four garbage drop-off stations and cleaning up after parades; under New Orleans' contracts with Richard's and Metro, those services cost extra.
While Jefferson pays another $5.2 million for landfill disposal, it recoups royalties from Waste Management, which runs the parish-owned landfill.
Landrieu proposes fee increase
Landrieu also has stressed that the fees that New Orleans residents pay for sanitation -- $12 for households and $24 for small businesses -- don't come close to covering the cost of the contracts held by Richard's and Metro, to say nothing of landfill costs.
His administration has proposed boosting the fees to $20 and $40, respectively, to make up some of the difference, and some City Council members have suggested increasing it even further to drive down the mayor's proposed 8.74-mill property tax increase.
Landrieu has said that to actually cover its costs, New Orleans would have to charge residents $23 a month. But if the city gets a new bid as low as that recently received in St. Charles, the fee might not even have to be raised at all.
Meanwhile, New Orleans' habit of tapping its general operating fund to pay for a portion of sanitation costs appears to be unusual. While most places collect user fees, property taxes in Jefferson Parish and Slidell cover a shortfall between the fees and actual costs. In Mandeville, the city actually collects $3.54 more per site than the cost of garbage collection and disposal; the extra money helps support other needs.
While Mandeville provides only once-weekly collection, New Orleans City Attorney Nannette Jolivette-Brown, who has been at the helm of negotiations with Richard's and Metro, said the firms insist that reducing the number of pick-up days in New Orleans would not save significant money.
"When you put your trash out once a week as opposed to two, they say their trucks fill up quicker and they have to go back to the landfill more and that it causes overtime because then their routes run longer," she said.
'Right price and the right value'
Pointing to his administration's success in cutting SDT's contract by 25 percent, Landrieu has said he will not ask New Orleans residents to pay for contracts he sees as out of step.
"I would really love for both of these individuals to have these two particular contracts to keep them for a whole bunch of different reasons," Landrieu said last week, referring to Richard's and Metro Disposal, which stand to lose the contracts if they're undercut when bids are submitted Nov. 29. Both firms are doing a good job, he said.
"But it has to be at the right price and the right value so the citizens of New Orleans are not being asked to shoulder the burden of what I would consider to be an indefensible price or a price that is higher than what we could be paying on the open market," the mayor added.
An attorney for the two firms has said the city has no right to break legally binding contracts and he is prepared to take the city to court if new vendors are hired. Metro and Richard's will not bid on the new deals, lawyer Daniel Davillier has said.
Davillier has disputed the idea that New Orleans' trash costs are out of step.He recently cited monthly per-site figures of $19 in Baton Rouge, $18.14 in St. Louis and $25.60 in Atlanta.
But Landrieu spokesman Ryan Berni countered that other cities of similar size pay far less per site monthly for trash pick-up than New Orleans: Tulsa, Okla., pays $13.44 per month per house, and Dallas pays $11.86, he said.
While Landrieu maintains he wants to keep Metro and Richard's in place, he said trimming the two contracts is a matter of priorities.
"The more you pay for one thing, the less you have to spend on another," he said. "And so if we spend $9 million more next year than we should, how many furloughs does that equal? How many layoffs does that equal? What's the increase in fees that people have to pay?
"I made the executive decision that as a matter of priority that we ought to renegotiate these contracts (in a way) that's more consistent with what the market should bear today."
Michelle Krupa can be reached at mkrupa@timespicayune.com or 504.826.3312.