Trash Tradeoff: You Lose Your Freedom to Choose, But Probably Keep More of Your Money
At Wednesday night’s Village Council meeting on November 18, 2009, Council will vote on the establishment of a single exclusive trash hauler for the Village of Granville. All residents will be forced to use that one trash hauler, and no other trash collection companies will be allowed to operate within the Village.
There are pluses and minuses to this proposed legislation. On the one hand, there is something of a Big Brother tone in the legislation that removes freedom and choice from the consumer and directs that only one trash hauler can be used, and in fact, must be used. On the other hand, the arrangement will provide a cost savings for many Village residents.
The contract is to be awarded to Big O at the cost of $14.65 per month, or $13.18 per month for senior households. The monthly fee includes trash pick up, a toter for the curbside trash, and recycling pickup. This compares favorably to Big O’s current price of $23.00 per month for the same service. It also compares favorably to Waste Management’s monthly pick up fee.
One local resident, Jim, pays a new rate of $68.53 per quarter for Waste Management. That translates to $22.84 per month for trash pick up, and it does not include a toter and does not include curbside recycling. Jim likes Waste Management because the company is reliable, does not leave trash everywhere, and always places the trash receptacle upside down so the can does not catch rain in bad weather. Jim knows he is paying a premium for Waste Management’s service, but he is happy to pay the difference.
On the other hand, under the proposed single trash hauler system that is up for vote Wednesday night, Jim will pay only $14.65, a savings of $8.19 per month. When Jim turns 65 years old, his rate will drop to $13.18 per month.
Some local residents bring their recycling to Denison Universities recycling center. When asked, a Denison representative was not sure how much of an impact the single trash hauler system with curbside recycling pick up will affect Denison’s recycling center. The director of facilities services speculated that the mandatory curb side recycling will have some effect, but probably not a huge impact. Granville Township went to mandatory curb side recycling some time earlier, and that change did not cause a large impact on the recycling center. Several township residents who have Big O’s curbside recycling still utilize Denison’s recycling center.
The proposed legislation has a twofold impact: not only can only one trash hauler operate in the Village, but also all Village residents must use this one trash hauler. However, a waiver can be obtained if a resident can prove to the Village Manager that another legitimate option is available for disposal of the waste. This provision addresses one resident’s concern at an earlier Council meeting, during which the resident explained that he operates a business outside of the Village and brings his residential trash to his business dumpster and, therefore, does not need local residential pick up.
Another provision in the bid specifications will help some residents who spend their winters out of town in warmer climates. Section 44 of the bid specifications provides that, if a residence is to be vacant for at least 30 days and notifies Big O of the absence, the trash collection can be suspended during the out of town absence.
One irritating provision in the bid specifications is that, while everyone else has to pay Big O for their trash pick up, the Village gets its trash picked up for free. Section 41 of the bid specifications provides that there will be no charge for the Village’s four toters at its main offices, and for the four dumpsters at the Street Department, at the Water Treatment Plant, at the Wastewater Treatment Plant, and at the Bryn Du Mansion.
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Trash contract makes sense
The Village is using its governmental power to give one company a competitive advantage over the others. The key advantage for a company is that one garbage truck collects more trash per mile, lowering the per unit cost.
What makes the deal work for Granville residents is that the Village government passes along (most of) this cost savings to customers/taxpayers. Generally, government intrusions into the market hurt consumers and leave the business cashing in on the advantage.
The difference here is competitive bidding. The Village auctioned the value of a three-year monopoly. It’s value, set by the market at auction, was about $9 per customer per month.
The Village also gets the benefit of fewer garbage trucks on its narrow streets — the reduction of an externality, in economic terms.
All around, a smart way to save Granville residents about $100 per year. Council member Steve Mershon played a key role in making the change happen.