City Handing Recycling to Private Firm

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Category: Local News

Created on Tuesday, 09 September 2014 22:34

By SHANNON HAUGLAND
Sentinel Staff Writer
    The city has turned the operation of all of its recycling operations to a private firm in a deal that officials say will save the city money, reduce liability and create incentives for improving efficiency.

Chris “Cricket” Jackson, with the city’s recycling program, points to the metal baler at the city scrap yard this morning. (Sentinel Photo by James Poulson)

    Public Works Director Michael Harmon said this is a prime opportunity to create a private-public partnership, and there may be others in the future.
    “There’s a general goal by the administrator to look throughout the city – we’re looking for possibilities for private-public partnerships to reduce costs and produce efficiencies,” he said.
    City Administrator Mark Gorman said he’s looking forward to seeing savings and improved efficiency with this new contract.
    “I think the opportunity to become more efficient with tax dollars is increased, the more we look at partnerships with the private sector,” he said.
    Alaska Pacific Environmental Services is the company that presently collects curbside garbage and runs the Jarvis Street transfer station. Under the new contract, APES will also run the recycling center on the old incinerator property, and the scrapyard at the Gary Paxton Industrial Park.
    At the recycling center, residents drop off recyclables sorted into separate bins for plastic, newspaper, cardboard, mixed paper, aluminum, glass and tin cans. The items, other than glass, are shipped south for recycling, with the proceeds going toward shipping costs. At the scrapyard, fees are charged for disposing of old cars, refrigerators and other “white goods,” tires, scrap metal and car batteries. Those items are also shipped south for recycling.
    Under the new contract, the city will receive credit for the commodities that are sold, as it has in the past. The contractor will then receive a check from the city for half of the cash equivalent of the credit. APES will keep 100 percent of any sales derived from high-grade sorting, above and beyond what the city typically does, Harmon said.
    “What will APES bring to the table?” Harmon asked. “We’re predicting at current (recyclables) prices, we’ll save $6,500 a month – that’s about $78,000 a year, depending on commodity prices. Plus they’re really motivated to do improved sorting, and they have ideas of how to run it better. The better they do it, the more money they’re going to make.”
    This is different from a city-run recycling center and scrapyard, where bonuses weren’t offered for improved sorting.
    Harmon said the timing was right, with the departure of the scrapyard supervisor. As staff turnover continues at city hall, the city will review whether it makes sense to create a public-private partnership, he said.
    He said not every city department is right for a private-public relationship.
    “It’s a puzzle – it’s challenging,” Harmon said. “Certain things fit well with a private public partnership, in particular things that generate their own revenue, things that can be run as their own business.”
    That includes enterprise funds, such as solid waste, the electric department and water department. City services such as police, fire and the library do not.
    “This is a good one – we’re looking at the low-hanging fruit,” Harmon said.
    He said in a memo to Gorman that the customer base will not see much change, but APES will be doing some “efficiency and high grade sorting changes to increase revenue.”
    The CBS will lease the property and will retain ownership of all the equipment, although this may change when the APES contract expires in April 2015.
    The city will continue to own the equipment, but APES will operate and take on all the liability of operating the equipment. The contractor will hire the present city employees (one full-time and one part-time), with pay and benefits commensurate with the city’s, Harmon said in his note to Gorman.
    Harmon gave credit in his email to Gary Baugher, city maintenance and operations superintendent, for “pulling all the challenging pieces together.”
    “I think Gary delivered on this point very well and I am pleased that we are projected to see a reduction in expenses as well. Great work!”
    Harmon said he’s pleased with the prospects for the new partnership, which he hopes will save the city money, eliminate the city labor within the solid waste fund, and increase recycling and revenues in the city.