New Haven Independent

Panel OKs New Trash Plan

by Melissa Bailey | February 26, 2008 7:57 AM | Permalink | Comments (14)

Aldermen got behind a new trash plan that the city says will help plug a $17 million budget shortfall and save millions of dollars in operating costs in the long run.

The plan is to create a public, independent authority to take over management of the transfer station on Middletown Avenue, where city trash and recyclables are dumped and sent away. Under city management, the facility has left the city suffocating in trash-induced debt, running up serious budget overruns for the past three fiscal years.

The new authority was pitched as a way to take a sinking operation off the city’s hands and replace it with a more efficient process. In a vote Monday night before the joint Finance Committee/City Services & Environmental Policy Committee, aldermen voted unanimously, with one abstention, to pursue the cost-cutting plan.

The plan to create a New Haven Solid Waste and Recycling Authority (as it has been redubbed) grew from an aldermanic initiative last year to look at long-term solutions to budgetary bloating. Paul Nuñez, the city’s deputy chief of staff, said the mayor is now counting on a $6 million windfall from the trash plan to plug a $17 million budget shortfall in Fiscal Year 08-09.

Creating the authority would save taxpayers money in two ways, said Isabelle Schroeder (pictured above). Schroeder is a consultant with New York-based firm Malcolm Pirnie, which the city hired to do a feasibility study. (Click here to read a power point presentation the consultants presented).

The first would be an up-front sum: The city expects to get $6 million by selling the leasing rights of the city transfer station to a new authority. That money would go to the city’s general fund, said budget director Larry Rusconi. Six million dollars calculates to 1.5 mills, he said, so getting that money would prevent the city from having to raise taxes another 1.5 mills this year.

The second, more meaningful impact would be in the long term. The city is obligated to pick up trash for every residential household of six units or fewer. Right now, the city pays an average of $330 per household, paid for by funds collected in property taxes. Schroeder predicted with more efficient management, that cost would be cut by $18 per home.

Schroeder projected annual savings of $12 million over 20 years, just from reduced operating costs. That’s assuming that New Haven can cut costs by increasing its dismal recycling rates, which it aims to do accomplish through reform and education.

The new authority would be overseen by a board of five directors, including four mayoral appointees and one aldermanic representative.

All city employees who currently work with city trash would keep their jobs and remain as city employees, Public Works Director John Prokop pledged. His department would still oversee trash collection, and charge the new authority a fee.

Brighter Trash Horizons?

Right now, the city contracts out transfer station operations and disposal services through two separate, not-so-cost-effective contracts.

“These vendors play these games,” Schroeder said. For example: Under the disposal contract with a company called Wheelabrator, the city gets gouged with extra charges when it exceeds a certain threshold of tonnage, she explained. The threshold was set in such a way that the city consistently exceeds it, she said.

Both long-term contracts are due to expire on Dec. 31, 2008, giving the city a good chance to find a better deal. Schroeder recommends the new authority buy into no more than a five-year contract, and combine the two services under one contract.

Prokop said there’s been “tremendous interest” from contractors yearning to haul away New Haven’s waste. At least 20 have called him to ask about the contract.

The trash world is apparently the only one that does not hold economic gloom for New Haven. The cost of getting rid of trash “is one of the few things in life that’s actually going down,” Rusconi said. He expected a 10 to 15 percent cost reduction on the new contract.

Lucky for cities dealing with trash, the Supreme Court just ruled that a public entity can mandate that all trash generated in its limits must be disposed at a publicly owned facility.

Alders also approved an ordinance to mandate waste flow to the transfer station, thus guaranteeing that businesses and big housing buildings send their trash there, too. Commercial waste would make up about half of the trash flow, consultants said.

Debt Passed Off

The lower operating cost would offset other liabilities the authority would have to take on, according to the city and consultants.

Right now, the city is bogged down with about $4.5 million in solid-waste-related debt. The authority would agree to take on $2.8 million of that debt, the amount directly related to the transfer station. It would also have to get rid of a crumbling incinerator building at a cost $400,000. Capital improvements in the next five years would total $5.6 million. To cover these costs, the authority would be allowed to bond out up to $10.5 million, according to the ordinance.

Wouldn’t that burden be passed on to taxpayers, when that authority raises rates to pay off its new debt? Aldermen Carl Goldfield and Jorge Perez asked.

Yes, answered Schroeder, the debt would be passed on to ratepayers, but the increased efficiency would still calculate to cheaper operating costs. Her prediction — the city would save half a million dollars per year in operating costs, and $12 million in 20 years — already factored in that debt, she said.

A crowd of 14 aldermen gathered around the table asked many questions but generally appeared on board with the new vision for New Haven’s trash future. Two ordinances were voted on, one to create the authority, and one to mandate trash flow to New Haven’s station. Perez abstained from both votes, saying he needed more time to read about the complex plans.

After being approved by the committee, the items now pass to the full board for a first reading, then a final vote on March 17. The mayor is scheduled to unveil his budget proposal Thursday at 6 p.m. at the New Haven Free Public Library on Elm Street.

Share this story

Share |

Comments

Posted by: Paul Wessel | February 26, 2008 8:37 AM

While sad, this sounds interesting.

We continue to sell off assets to pay for our current operating costs.

And we continue to see outsourcing management - whether to an authority or a private vendor - as the means to correcting our past management failures.

Maybe the city is better run with more projects run by more autonomous authorities. The upside is the potential for management of these projects to have the ability to run their operations with more flexibility. That can also be the downside, especially when the projects don't pan out as projected by the consultants.

Which brings up a relevant point here: If the projections don't pan out, that is, if the authority doesn't increase capacity and reduce operating costs, who bears the risk? Will it be the private contractors who will likely be working for the authority? Or will it be the city?

The city and aldermen might be compelled to do this for the short term gain - we need the money now. It is wise to be aware of the long term risks - both in terms of service and costs - and to make sure they are mitigated as much as possible. It sounds like the aldermen are raising the right questions.

Posted by: Chris | February 26, 2008 9:02 AM

I feel a little better on this deal that the city is leasing the land and assets to the authority and has the power to close or reassume the authority. My real question is the capacity of the facility and potential to make money on non residential trash delivered to the site. In the past outside businesses such as Johns refuse regularly dumped at the transfer facility. I am a private contractor and pay 180.00 per ton to get rid of debris at wheeler recycling in the port of New Haven.
Can the authority surcharge outside refuse to lower operating cost, fund a department of sustainability, and provide community benefits to the neighborhoods impacted by the impacts of this new authority?

Posted by: Darnell | February 26, 2008 10:14 AM

Someone please explain this to me. As I understand it,
1. The city creates this PUBLIC entity called the trash authority that is controlled by the MAYOR.
2. The city then transfers all of the MAYOR controlled trash staff to this authority, the same staff that are MISMANAGING the current operation.
3. Then this MAYOR controlled authority assumes the debt the city currently has, and sells bonds, thereby INCREASING the DEBT.
4. The TAXPAYERS/HOMEOWNERS are then responsible for paying off this DEBT, which has now increased.
5. All the while, the MAYOR and the BOARD OF ALDERMEN can then say that they have BALANCED the books, and reduced the DEBT.
6. While all along we, the TAXPAYERS/HOMEOWNERS, not only do not have our DEBT reduced, but INCREASED, to an authority CREATED and CONTROLLED by the MAYOR and the BOA, similar to the WPCA, which is currently FORECLOSING on peoples homes for debts of less than $800.

How long will it be before this authority starts foreclosing on homes? And will the MAYOR remain silent and on the sidelines when this occurs?

What a crock!!!

Posted by: Esbe | February 26, 2008 11:32 AM

Paul Wessel makes a very good point -- this is an asset sale, a one-time 6 million dollar gain, that is going to be put directly as a one-time funding source into the general account. Every city does this sort of thing, but it just postpones the hard decisions about the budget.

Posted by: Gary Doyens | February 26, 2008 12:17 PM

Darnell: You are exactly right...and it gets worse. In the end, like the WPCA, taxpayers, homeowners and businesses will all pay more than they do now.

The alders should put this plan on ice, until they fully understand all the ramifications of what's going on. It took a consultant and months of back room dealing and number crunching for the mayor and his "braintrust" to cook up this latest asset sale scheme in order to avoid cutting spending. The alders should all take their time and have a number of briefings on this before signing up for it. Everytime this happens, and it's been going for years, the taxpayers are screwed. What that finally comes to light, the mayor's silent.

Posted by: Darnell | February 26, 2008 12:32 PM

Gary,

As usual, I agree with you 100% (sometimes it is only 98%). What do you suggest we do to try to slow this thing down?

Posted by: WEBblog 1 | February 26, 2008 2:28 PM

In July/August OF 2007 the finance department reported that the solid waste transfer station was seriously in the red due to over tonnage at the dump. Prokop Subsequently reported that this failure was to there only being one person at the site in a twenty four period. Smuts then proposed to hire another person at the weight station to verify tonnage.

Years before the July/august disclosure the dump was operated by the PWD and fully funded annually by the Mayor and the BOA, without question.

No one bothered to find out why this overage was occurring nor did the city look into DPW employees complaining that North Haven and East haven were dumping at sites in New Haven creating this overage.

Today, the city is proposing to sell off the dump site to a management Company AKA waste management to do that what the city has already accomplished:

WASTE, INEFFICINCY and LOSS PRODUCTION, costing more money to the taxpayer.

The problem here is fundamental poor planning by the Mayor and lack of oversight by the BOA. Both of these deficiencies were covered for years by tax increases.

Posted by: WEBblog 1 | February 26, 2008 2:32 PM

In July/August OF 2007 the finance department reported that the solid waste transfer station was seriously in the red due to over tonnage at the dump. Prokop Subsequently reported that this failure was due to only one person at the site in a twenty four hour period. Smuts then proposed to hire another person at the weight station to verify tonnage.

Years before the July/august disclosure the dump was operated by the PWD and fully funded annually by the Mayor and the BOA, without question.

Today, the city is proposing to sell off the dump site to a management Company AKA waste management to do that what the city has already accomplished:

WASTE, INEFFICINCY and LOSS PRODUCTION, costing more money to the taxpayer.

The problem here is fundamental poor planning by the Mayor and lack of oversight by the BOA. Both of these deficiencies were covered for years by tax increases.

Posted by: Gary Doyens | February 26, 2008 2:39 PM

The alders should agree to put this plan on ice. I know the budget process is getting underway for next year's spending. That should not be a consideration. Not one of these alders is an expert in solid waste or re-cycling. They are lay people struggling to understand very complex issues while most of them hold down full time jobs. They should schedule a number of hearings to air this thing out and make sure that what they're signing up for, is not a repeat of past failures designed to avoid tough spending decisions. We are all paying more for sewer bills than we used to - not because the collection rate is not as good as it should be, but because debt was piled on the WPCA and it was "sold" off with borrowed money to plug yet another annual revenue hole in DeStefano's budget.

Every citizen should call their alder and ask them to put this proposal on ice until it is fully vetted. I would not trust the vetting by city hall group thinkers.

Posted by: Darnell | February 26, 2008 3:08 PM

I agree with Gary, you can find your alds contact info at http://www.cityofnewhaven.com/Aldermen/index.asp

Posted by: PowertothePeople | February 26, 2008 3:26 PM

"Perez abstained from both votes, saying he needed more time to read about the complex plans."

I'll admit that I don't fully understand most of what this is about but my gut feeling is that the taxpayer will get screwed in the long run. What does concern me is the statement quoted above. Why is Perez the only one to admit that he doesn't have enough info to vote? Did he get the package and just didn't take the time to read it before the meeting or was there no package or a package with too little information? I've been to some of these meetings and it's always the same thing. Alders are voting on something for which they have little information.

I used to bristle when I saw some of you complaining about the "rubber stamping" of the BOA but now I'm with you. There are TOO many questions about this deal that have not been answered and it should not go forward until they are answered.

I've already called my alderman and told him to put away his "rubber stamp."

Posted by: cedarhillresident | February 26, 2008 4:50 PM

Darnell
Thank you for putting it in plain English! Also the fact about the sewer bill. Most do not realize that the deal was we get it cheap for 5 years. But after that 5 years is up the WPCA will be doubling there bill.

And my guess is that most do not read the NHI and will think great we are saving money. And we know main stream media will not do a story about it.

I don't think we will be able to stop it, but to have some control over the terms may be a compromise.

This is all on top of all the tax increases, Gas UI ect. My pay check just does not rise that fast! Unless people like me are not suppose to be living here in 5 years!

Posted by: Gary Doyens | February 27, 2008 6:41 AM

The NH Register today puts even more meat on the bone of this questionable idea - DeStefano, Smuts et all are pushing so hard on this because they need it done, according to the article by July 1. The plan is to borrow the full $10.5 million from the bond market - $6 million would be prepaid against a 20 year lease. But of course, the cost of that borrowing would be passed on to taxpayers. This is a shell game that this administration repeats time and again. In the end, the fees and taxes just go up.

Posted by: cedarhillresident | February 27, 2008 10:07 AM

Ok We need to start up a revenue commission and go after Yale like they did in the 1980's!! When Danial's sold us out!

Panel OKs New Trash Plan

Comments

Sorry, Comments are closed for this entry

Special Sections

Legal Notices

Some Favorite Sites

Government/ Community Links

Flyerboard

Sponsors

N.H.I. Site Design & Development

NHI Store

News Feed