By Dan Christensen, BrowardBulldog.org
The declining cost of trash disposal in Broward is shrinking again – and could tumble further if enough cities decide to band together in a new purchasing co-op.
Miramar has spearheaded this summer’s push toward lower disposal rates by introducing to the purchasing mix something that’s been missing for decades: competition. The effort began after the county’s Resource Recovery Board failed last December to win approval of a long-term disposal deal in which it sought no competitive bids.
Last week, Miramar and four other Broward cities working with it took the next step in the plan by assembling what they say is an apples-to-apples price comparison gleaned from the two bidders who responded to a recent request for proposals.
Wheelabrator, the Waste Management subsidiary that has long had a stranglehold on the county’s solid waste disposal business, is the incumbent bidder. The upstart is a politically formidable new venture led by influential Davie developer Ron Bergeron. Bergeron has teamed his Bergeron Environmental and Recycling with Lantana-based Sun Recycling.
The comparison’s bottom line: if Miramar and other municipalities deliver a big enough pile of trash – 500,000 tons per year – they can collectively expect to save more than $7 million a year by ditching Wheelabrator and signing with “Sun Bergeron.”
At one million tons, the evaluation says, the estimated savings are about $35 million.
If the cities can only muster 300,000 tons a year, Wheelabrator ’s estimated five-year price is $2.5 million less than Sun Bergeron’s. Wheelabrator’s price is $200,000 less than Sun Bergeron’s at 100,000 delivered tons.
In an interview, a Wheelabrator executive expressed concern about the way the evaluation was conducted because Wheelabrator had found significant errors in the calculations.
“I don’t trust those numbers. We have found mistakes,” said Bill Roberts, who noted that Miramar appropriately adjusted its comparison after those mistakes were reported to it. One mistake, regarding the delivery of one million tons of trash, inflated the savings that Sun Bergeron offered over Wheelabrator by about $40 million, a Miramar official said.
A Sun Bergeron lobbyist declined to give an opinion about the evaluation process.
“Upon advice of counsel, since this is an active procurement, neither my client or I can comment,” said Fort Lauderdale attorney Ali Waldman.
Four cities are on Miramar’s bid evaluation board: Coconut Creek, Davie, Oakland Park and Hallandale Beach. Those cities together generated more than 260,000 tons of trash in 2008, the most recent statistics available.
A few questions more
Miramar has asked Wheelabrator and Sun Bergeron to clarify a few points in their proposals over the upcoming week. Then, representatives from Broward and its 27 cities will be given the information and asked to decide within 45 days whether they will participate.
“If you get every single city to commit there’s a substantial savings,” said Miramar Public Works director Tom Good. “We’re hoping for the best, that’s all I can tell you.”
Oakland Park Mayor Suzanne Boisvenue, a member of the county’s Resource Recovery Board, said it’s too soon to tell if what’s happening in Miramar is the solution to high trash disposal prices.
“I can’t say that today, but it looks like it’s leaning that way,” she said.
Miramar officials have indicated they are prepared to go it alone if others don’t want to join.
Rising discontent and change
Discontent with the high cost of trash disposal fueled a municipal rebellion last year that now appears to be supplanting the county’s Resource Recovery Board as Broward’s dominant authority on matters of solid waste disposal.
The board, whose members include elected officials from eight cities, is the governing body of Broward’s Solid Waste District. The district was created in the 1980s under the terms of an inter-local agreement (ILA) that expires in 2013.
Several other cities have expressed interest in what Miramar is doing, including the county’s biggest trash producer, the city of Fort Lauderdale.
In all, Broward ILA members generated 1.2 million tons in 2008.
The prices offered by Wheelabrator and Sun Bergeron differ because of the way their proposals are structured.
Wheelabrator is offering a flat disposal rate of $52.50 a ton for garbage hauled to its waste-to-energy plant off I-595 in southwest Fort Lauderdale. Sun Bergeron’s rates vary from $46.20 to $55.18 a ton depending on how many tons are delivered. Sun Bergeron’s bid does not say specifically where the trash would be deposited, but said it could be shipped to Palm Beach County.
An evaluation of the bids by Weston consultant Sandy Gutner included a projection of the five-year cost to use each bidder’s services. At 300,00o tons of delivered trash a year, Wheelabrator would charge $76.5 million and Sun Bergeron $79 million. If 500,000 tons are delivered, the evaluation said, Sun Bergeron offers cities the better deal — $120.4 million versus $127.4 million.
Those prices, however, are significantly lower than what most of Broward’s cities now pay, and have long paid, under the existing agreement
The earlier deal
Wheelabrator’s proposal to Miramar is also $4.50 a ton lower than the rate it negotiated with Broward County just six weeks ago as part of a two-year, $107.3 million interim deal. That short-term deal happened after the county commission refused last December to sign off on a long-term, $1.5 billion deal with Wheelabrator that was put together by the Resource Recovery Board without competitive bids.
Commissioners have instructed county staff to seek a long-term deal to take effect when the existing inter-local agreement expires. Should Miramar’s plan catch fire, however, that might become unnecessary.
Either way, it’s likely that downward price pressures will continue.
A study commissioned by the Resource Recovery Board of the Broward Southwest Regional Landfill, a 588 acre site just east of U.S. 27 and north of Sheridan Street, concluded last month that the county can operate the site as an expanded trash dump at a cost of $19 and $25 a ton. Further study has been ordered.