Dive Brief:
- San Bernardino, CA has approved a portion of the city’s bankruptcy plan to guarantee nearly $18 million in revenue by April 2017, which comes with a vote to outsource trash services to California contractor Burrtec. This decision will bring payments of $19.7 million to San Bernardino, plus $50 million in estimated revenue, based on current revenue and volume of materials to be recycled according to R3 Consulting, who advised the city regarding outsourcing.
- Burrtec will invest $500,000 to compensate employees who will help with transitioning to the model where solid waste, recycling, street sweeping, and right-of-way services are outsourced. The 58 full-time employees will be offered full-time jobs.
- Residential services will be $22.84 per month, the same as in 2009, until July 1, 2017. Increases thereafter will be capped at 5% per year, according to the agreement.
Dive Insight:
Many towns and cities have privatized trash collections, hoping to cut costs, improve efficiency and, ideally, generate revenue for the government.Overall, the city of San Bernardino reportedly welcomes Burrtec, feeling the decision to outsource, specifically with this California company, was a sound move.
Councilman Fred Shorett, who initially opposed outsourcing the trash services, has changed his vote, though he questioned the procedure leading to the decision.
"If the team (managing the outsourcing) was honest... there were some flawed areas with how we got to where we are,” Shorett said, at first. He originally brought attention to a letter from Athens Services, which stated that the company’s proposal would generate more revenue for the city.
Deputy City Manager Bill Manis favored Burrtec’s proposal.
"They had the strongest technical proposal — they have experience with similarly-sized cities; they have a robust right-of-way-program, a good employee transition plan ... and over the 10-year-term, their proposal is $5.6 million (in revenue to the city) higher than the next-highest proposer," he said.
