Date: December 5, 2012
Source: NSWMA Illinois Chapter
An industry trade group is fighting an Illinois city's decision to create a waste franchise agreement applied to commercial customers. The Illinois chapter of the National Solid Wastes Management Association (NSWMA) opposes the City of Deerfield's desire to raise money by bidding out the exclusive right to collect all commercial waste in the city. They say that what Deerfield is proposing can lead to higher costs for residents and is inefficient for serving commercial customers. The trade group acknowledges that this is a viable program for residential waste and recycling collection but not for commercial customers because businesses often have very different needs based on the types of waste they generate, as well as other needs related to their type of business. Moreover, the "one-size fits all cookie-cutter approach" under a franchise system tends to limit recycling options that are often required by businesses with particular waste streams.
"In these tough economic times, municipal leaders should not force businesses to pay higher prices to fund another quasi-governmental organization like the Solid Waste Agency of Lake County (SWALCO) to provide services that are already provided by the private sector," said Peggy Macenas, regional manager of the chapter.
PRESS RELEASE
December 4, 2012
Waste Haulers Oppose Village of Deerfield Proposal for Commercial Franchise Agreement
Municipal Franchise Agreements Stifle Competition, Increase Prices for Residents
The National Solid Wastes Management Association's Illinois Chapter (NSWMA-IL) has issued the following statement opposing the Village of Deerfield's announcement to pursue a commercial franchise agreement for its wastes and recycling services:
"The waste and recycling industry understands a one-size fits all cookie-cutter approach, such as municipal franchise agreements, are inefficient when it comes to serving commercial customers and lead to higher costs for residents. Competition is a good thing and results in lower prices and better service. Unfortunately, the unilateral approach Deerfield is pursuing will have the opposite effect. In these tough economic times, municipal leaders should not force businesses to pay higher prices to fund another quasi-governmental organization like the Solid Waste Agency of Lake County (SWALCO) to provide services that are already provided by the private sector."
Peggy Macenas, Regional Manager of NSWMA-IL
During the past year, numerous municipalities have examined commercial waste franchises and most have elected not to move forward. Many municipalities considering waste franchises are looking for financial incentives or hoping to address perceived service concerns. After careful examination of such proposals and identification of the negative impacts a waste franchise may have, most of the proposals are not pursued.
There are a number of factors used to determine the price for waste collection and recycling for a commercial account including weight and volume. Although two businesses may be located next to one another and have the same size waste container, their waste disposal costs may be significantly different as a result of the type of waste they are generating.
The waste haulers awarded a commercial franchise under the partnership with SWALCO are required to pay fees annually back to the municipality as part of their contract. Other standard built-in costs for households in individual communities are governed by quasi-governmental agencies, such as SWALCO, incur additional fees each year. (Residents in SWALCO communities pay an additional monthly fee - resulting in thousands of dollars each year.) These fees are built into the prices the commercial customer pays, so the customer never sees the itemized fees on their bill.
In many cases, franchise agreements include a provision that the franchise hauler is required to grandfather rates lower than the franchised rates for a period of usually only one year. When the initial year has passed, customers who were grandfathered generally experience cost increases to get their pricing in line with the cost matrix created by the franchise.
The largest barrier to commercial recycling is not availability or cost, but difficulties in separately handling refuse and recyclable materials. Recycling programs tend to be more limited under franchised contracts because businesses are not able to customize their recycling. Many businesses currently have implemented internal recycling programs that exceed proposed recycling goals. These successful programs will have to be altered to meet the franchised contracts recycling rules.
For more information, contact:
Cally Eckles, 312-588-4102 or cally@macstrategiesgroup.com.
The National Solid Wastes Management Association Illinois Chapter (NSWMA-IL) represents solid waste and recycling companies conducting business in Illinois, particularly in the Chicagoland area. The mission of NSWMA is to advance, inform, educate and assist the private environmental services industry in the safe, cost-effective and environmentally responsible management of solid waste, recycles, discarded or residual materials. For more information, visit: www.illinoisgarbagefacts.com.
Sign up to receive our free Weekly News Bulletin