(Chuck Muth) – I attended a Las Vegas city staff workshop Monday morning in which the proposed extension of Republic Services’ residential and commercial monopoly franchise contract was discussed. From a process point of view, here’s how this could play out…
Next Wednesday the Las Vegas City Council will meet to hear and discuss – with public comment – a major change in the current city ordinance to allow “single stream” residential recycling. And in order to change the current ordinance, the current franchise agreement with Republic – which doesn’t expire for another four years – would need to be amended, as well.
That’s fine and dandy. However, in the process of amending the terms of the current agreement, Republic is also asking for an extension of the length of the agreement of 12 to 15 years.
The argument is that switching to single-stream residential recycling – which means you can put all of your recyclables in one big, new container instead of separating them into three separate crates – will require a big investment in new containers, as well as new trucks with mechanical arms to pick up and empty the new containers (though with one less worker on the truck).
The question, then, is whether or not it would take 12 to 15 years to recoup that investment – or whether a shorter extension length would be sufficient.
Another question – since it’s only residential pickup containers that will be changed, not commercial dumpsters – is why commercial waste hauling can’t be opened to competition while maintaining the franchise monopoly for residential collection?
Republic’s position is that they need to maintain the monopoly on commercial pickup to subsidize the residential service change; that without keeping all the commercial business in the city the cost for residential pickup would be higher.
Fine and dandy; however, I’d like to see some hard figures and estimates supporting this position – especially since Republic stands to gain significant savings on the residential side by reducing service from twice a week pickup to once a week and eliminating one worker per truck, along with extending the contract an additional 12 to 15 years.
I also found it interesting when city staff noted that an independent audit of the current franchise agreement had been conducted and the process for selecting the auditor had been opened to competitive bidding. Which raises the question: If competitive bidding was appropriate to choose an auditor, why is it not appropriate for choosing a waste hauling service?
Another interesting note – and this was something new I heard for the first time today – an amendment to the proposed ordinance has been added that will allow you to keep twice-a-week pickup service if you want, but you’ll have to pay an additional $13 and change per month for the privilege.
In other words, if you want to keep your current level of service you’ll have to pay almost double what you’re currently paying under the present contract that doesn’t expire for another four years.
Which brings us back to the bottom line: Maybe Republic’s figures and projections are correct. Maybe that’s the best deal out there. But maybe not. The only way to know for sure is to open the contract and its extension to competitive public bidding and see if there’s someone else out there that can do the job better and/or cheaper.
Competition is good. Competitive bidding is good government. Unfortunately, it increasingly appears the Las Vegas City Council is prepared to rubber-stamp this new ordinance AND franchise agreement at its meeting next Wednesday without opening the contract to an RFP (request for proposals).
I hope I’m wrong. There should be no rush to push this thing through – especially with so many unanswered questions about the dollar figures and with so many years left on the current contract – and the fact that elections for new council members occur the day before.
But it appears the die may already be cast.
Mr. Muth is president of Citizen Outreach, a free-market grassroots advocacy organization