The city should not take over operation of the landfill, city administrators recommended.
City Public Works Director Craig Cook made the recommendation after he presented the council with a financial analysis of the possible operations takeover during the council Nov. 19 work session.
“During the budget discussions in late August, a commitment was made to come back to you to talk about how we might spend the $2 million CO (certificate of obligation) that’s landfill-related. The first thing we wanted to do was analyze whether it was a good idea to take over what’s called landfill management, the compaction and covering of the trash that comes to the landfill each and every day, because Red River’s contract expires in January of 2021, so we wanted to be prepared for that,” Cook told the council.
Red River Waste Solutions is the private company contracted by the city for trash collection and landfill operations.
“At the time, staff believed some money could be saved if we performed that service in-house and left it out of the new contract that we would be bidding next summer,” he added.
Cook said the first step in the analysis was estimating annual expenses and the cost of equipment the city would need to buy to take over the compaction and covering.
“We came up with thinking that we would need eight pieces of equipment. Two of them are very significant, both in size and price. The maintenance of that equipment was estimated to be about $340,000. We also have to hire some operators for that equipment, a superintendent to oversee them and a mechanic, who would actually be in fleet services, but who would be hired specifically to maintain that equipment,” he said.
Cook said the total annual cost of maintenance and labor was estimated at $633,000.
The total price tag to buy the necessary equipment is currently estimated at $3.4 million, Cook added.
“We pay Red River $1.3 million (a year) to perform the service. They also collect the trash throughout town, both residential and commercial, and they or the new contractor would retain that function, but we would take over the compaction and cover of the trash at the landfill,” Cook said.
He said if the estimated cost of maintenance and labor at the landfill, $633,000, were subtracted from the $1.3 million paid to Red River annually, the city’s annual savings could be estimated at $667,000.
“When we presented this in late August, we said we wouldn’t want to do this at all if we couldn’t see a savings of at least $200,000, just because we’d be having to learn the process, get new equipment and learn how to operate that and such, so we took that $200,000 out of the calculus, leaving $467,000 to buy the equipment,” Cook said.
He said if the council wanted to further investigate taking over landfill operations, all of the equipment would have to be purchased right away.
Councilman Rowland Garza asked how many people the city has working at the landfill right now and noted the added staff for operations would be in addition to those currently working at the landfill.
“The people who are there now would continue to do what they are doing, which is not this work. This is entirely new work, therefore new employees,” Cook replied.
City Manager Matt Wojnowski said city employees operate the scale house at the entrance to the landfill site, and there are several heavy equipment operators on site as well.
Garza also asked Cook if he felt the city “could do better” on the next round of contract negotiations with Red River to reduce the current $1.3 million the city is paying for that contract.
“It all depends, councilman,” Cook said, adding the city “had trouble” getting sufficient bids for the landfill operations contract.
Cook said he would try to write “a more inclusive request for proposal” during the next round of negotiations, adding there are at least two other area providers of this type of service and saying he hoped they would express some interest in the contract during the next go-round.
“It’s pretty early to say whether the price is going to go up or down,” he added.
Wojnowski said the RFQs would be brought to council for review and that he supported doing everything possible to obtain multiple bids for the best price to the city.
“Given our track record; we don’t get bids on projects, and we can’t expect a miracle. Past results are pretty indicative of future ones, and getting people to bid projects in our area of the state is tough, and I anticipate you’re going to have no more than three bid on this next landfill project,” Garza said.
He then asked why the city stopped managing the landfill.
Landfill coordinator Rene Maldonado said he is not aware that the city was ever in charge of operations at the actual landfill cells.
“So, back in August, we talked about purchasing this equipment, and now we know that that purchase is about $3.4 million, so the $2 million CO you all approved as part of the rates discussion in September, that $2 million is part of that, and we need another $1.4 million to buy all eight of these pieces of equipment,” Cook said.
The public works director added there are refuse reserve funds available that “we can buy everything soon and plan to get it all here in December.”
“But there are plenty of other things that we, the city, need to do at the landfill without taking this on additionally,” Cook said.
In the end, Cook said, his recommendation is that the city not take over operation of the landfill.
“The recommendation is not to do it. The recommendation is not to take this risk, spend all this money, then fail by not having all of the equipment there, all of the employees on site and be ready to rock and roll in February of 2021. I don’t think that’s likely to happen, and we’ve got all these other things that we’ll be bringing to you that will spend the current CO money and things into the future,” Cook said.
Councilwoman Diana Bejarano Salgado asked if Cook ever envisioned a scenario in which the city could take over operations of the landfill.
Cook said his suggestion would be to write a contract similar to the one under which Red River is currently operating over the next summer and it will go on three or five years.
“And we wouldn’t want to revisit this until that contract is ended,” he said.
The council took no action on the recommendation and presentation.