Low bid for city's waste biz close to budget

LACONIA — Only two companies have bid to collect the city's trash and recyclables, but Casella Resource Solutions, the current contractor and likely low bidder, priced its service within the amount City Manager Scott Myers recommended in his 2014-2015 budget. Bids were opened at City Hall on May 22.
Casella bid $39,550 per month, or $474,600 per year while the other bidder, Waste Management, Inc. bid $67,007 per month, or $804,084. Once the bids are reviewed and confirmed the contract will be awarded.
The current one-year contract with Casella is set to expire on September 30. However, to address concerns expressed by Casella, Myers proposed shortening the term of the contract, inviting the bids in the spring and setting the term of the new contract to coincide with the city's fiscal year. Under the current contract, Casella collects recyclables at the curbside and empties the four remote bins for a flat cost of $10,000 per month, regardless of the tonnage. Casella found that the volume of recyclables taken to the remote locations has far exceeded the projections presented when the current contract was put out to bid, which the company claimed expanded the scope of the work.
This time around bidders were asked to price the collection of recyclables at the curbside and at the remote bins separately so that, together with the weekly collection of trash at the curbside, there are three components of the contract. Casella bid $10,000 per month to collect recyclables, irrespective of tonnage, at the curbside every other week and $3,750 per month to empty the remote bins for a total of $165,000 per year for the recycling component of the contract, which is $45,000 more than the current contract.

Based on an estimated annual volume of 4,200 tons, the company bid $25,800 per month, which represents $73.71 per ton and $309,600 a year, to collect trash at the curbside weekly.
When Myers prepared his budget proposal he projected the recycling program to cost $145,000, or $20,000 less than Casella's bid price. But, at the same time, he projected a modest increase in the volume of recycling that would further reduce the volume of trash collected at the curbside and consequently reduced the request of the Department of Public Works for weekly trash collection by $12,800, from $352,800 to $340,000. Altogether Myers budgeted $485,000 for the collection contract, $10,400 less than Casell's bid of $474,600.
The contract sustains the incentive to recycle. The cost of collecting, transporting and disposing of trash is approximately $152 per ton, which is spared by each ton that is recycled since the cost handling recyclables is fixed at $13,750 per month irrespective of the volume. Since 2009-2010 the recycling program has contributed significantly to stabilizing the expense of dealing with solid waste at approximately $1.6-million, but increases in the volume of recycling has yet to become sufficient to achieve net reductions in expenditures.