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Saving money by throwing away less

Good strategy all around.

As a committee mulls an ambitious and controversial “one bin” project that could overhaul recycling and waste collection in Houston, the city’s traditional mode of getting rid of trash just got cheaper.

A renegotiated contract with the city’s primary waste hauler, approved by City Council late last month with little fanfare amid a deluge of end-of-year requests, is set to save the city about $600,000 annually, according to the city’s Solid Waste Management Department.

The $226 million contract to handle much of the city’s waste belongs to BFI Waste Services of Texas, whose parent company is industry giant Republic Services. The coveted contract underwent a massive rewrite in 2009 that did away with a painful “put or pay” clause that meant the city had to deliver a guaranteed amount of waste or cough up the monetary difference. Through the life of the contract, those changes will save the city an estimated $70 million.

The most recent savings, smaller but still significant as the city whittles away at a looming budget deficit, come courtesy of lowered tipping fees – the amount, per ton of trash, the city pays at the gate to a company to process its waste at transfer stations and landfills. Those fees can add up, and in some large urban cities run more than $50 per ton. In Houston, the city has now scaled the fees back by about $1.50 per ton, amounting to about $23.50 per ton. Set annual price increases will continue as scheduled, but the city has essentially reset the clock on its landfill fees to a few years ago.

“We’ve been very mindful and particular with how we spend the public dollar,”Solid Waste Management DirectorHarry Hayes told City Council members last year during a budget meeting.

The city is Republic’s biggest local customer, deputy solid waste director of operations Victor Ayres said , which offers some leverage in negotiating lower rates. The city has sent less trash to the landfill during the past five years. In fiscal year 2014, the city sent 628,978 tons to the landfill, 10,000 tons fewer than the year before and about 21,000 tons fewer than in 2012.

Can you imagine having to pay more for not providing enough garbage to the landfill? It’s so wrong on so many levels I can’t even wrap my mind around it. The city is going in the right direction here, and saving a few bucks in the process, but there’s a lot more to be done. Recycling rates, or diversion rates if you prefer, are still well below the national average. A big part of it is that too many people just don’t have a recycling mindset. I get ill at the sight of so many aluminum cans, glass bottles, and plastic containers pitched into trash cans wherever I look. That’s part of the allure of the One Bin proposal, for which the RFPs are still being evaluated by the city. But whether we go that way or not – and please, I’m not looking to get bogged down in that debate right now – just having people think twice before they toss their beverage container or whatever into a waste bin would be nice. Throwing it away like that is wasteful in more ways than one.

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2 Comments

  1. Michael says:

    Aren’t there similar revenue protection clauses in toll road privitazation contracts? If we don’t get blah-blah-blah dollars and the speed limit on the public road we’re competing with is set at FOO, the state will pay us, $…

    I don’t like it there, either.

  2. Steven Houston says:

    City legal sure does a swell job allowing such clauses to be put in contracts. What was that about Feldman being such a genius again? lol